Burke & Herbert Financial Services Corp. Announces Fourth Quarter and Full Year 2025 Results and Declares Common Stock Dividend

Core Viewpoint - Burke & Herbert Financial Services Corp. reported strong financial results for Q4 2025, highlighting disciplined execution and a solid foundation for future growth, including a regular cash dividend declaration of $0.55 per share [1][2]. Financial Performance - The company achieved a net income of $30.0 million for Q4 2025, translating to $1.98 per diluted common share, an increase from $29.7 million or $1.97 per diluted common share in Q3 2025 [4][5]. - For the full year 2025, net income applicable to common shares totaled $116.4 million, with diluted earnings per share at $7.72 [5]. - The annualized return on average assets was 1.48% and return on average equity was 14.76% for the year ended December 31, 2025 [5]. Balance Sheet and Asset Quality - Total gross loans were reported at $5.4 billion as of December 31, 2025, a decrease of $171.8 million from the previous quarter, primarily due to the exit of non-strategic loans [4][5]. - Total deposits stood at $6.4 billion, reflecting a decrease of $8.1 million from the previous quarter, with core deposits increasing by $51.9 million [5][11]. - The company maintained a strong liquidity position with total liquidity of $4.8 billion at the end of Q4 2025 [5]. Capital Ratios - The company ended Q4 2025 with a Common Equity Tier 1 capital ratio of 13.2% and a Total risk-based capital ratio of 15.9%, both significantly above regulatory requirements [7][8]. - The leverage ratio was reported at 10.9%, indicating a well-capitalized status [7][8]. Non-Interest Income and Expenses - Non-interest income for Q4 2025 was $11.6 million, consistent with the previous quarter, although there were fluctuations in various categories [11]. - Non-interest expenses increased slightly to $48.5 million in Q4 2025 from $48.1 million in Q3 2025, with all categories remaining relatively flat [11]. Strategic Initiatives - The company announced a definitive merger agreement with LINKBANCORP, which, if completed, will create a financial holding company with approximately $11 billion in assets and over 100 locations [5][11]. - The merger is subject to shareholder and regulatory approvals, with expectations of enhanced value creation for stakeholders [5][11].