EX-99.1 2 a1q2026earningspressrelease.htm EX-99.1 Document
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Burke & Herbert Financial Services Corp. Announces First Quarter 2026 Results and Declares Common Stock Dividend
For Immediate Release
April 23, 2026
Alexandria, VA – Burke & Herbert Financial Services Corp. (the “Company” or “Burke & Herbert”) (Nasdaq: BHRB) reported financial results for the quarter ended March 31, 2026. In addition, at its meeting on April 23, 2026, the board of directors declared a $0.55 per share regular cash dividend to be paid on June 1, 2026, to shareholders of record as of the close of business on May 15, 2026.
From David P. Boyle, Company Chair and Chief Executive Officer
"I’m pleased with our first quarter 2026 results which have put us on a good trajectory for the year. Our new loan originations were strong and we grew our loan portfolio while maintaining a solid core deposit base. Our balance sheet is well-positioned, asset quality metrics are in line with our moderate risk profile, and we delivered top quartile returns compared to our peers. We’re looking forward to our upcoming merger with LINKBANK and the benefits it will provide for our combined customers, employees, communities, and shareholders."
Q1 2026 Highlights
•For the quarter, net income applicable to common shares totaled $27.1 million; adjusted (non-GAAP1) operating net income applicable to common shares was $28.2 million.
•Diluted earnings per common share (“EPS”) was $1.79; adjusted (non-GAAP1) diluted EPS of $1.87.
•For the quarter, the annualized return on average assets (“ROA”) was 1.39%, the annualized return on average equity (“ROE”) was 12.62%, and the annualized return on average tangible common equity (“ROATCE”) (non-GAAP1) was 13.87%.
•On an adjusted basis (non-GAAP1), ROA was 1.45%, ROE was 13.30%, and ROATCE was 14.44%.
•Tangible common equity to tangible assets (non-GAAP1) was 9.93%.
•Ending total gross loans were $5.4 billion and ending total deposits were $6.3 billion; ending loan-to-deposit ratio was 85.4%. The net interest margin (non-GAAP1) was 4.09% for the three months ended March 31, 2026.
•The balance sheet remains strong with ample liquidity. Total liquidity, including all available borrowing capacity with cash and cash equivalents, totaled $4.8 billion at the end of the first quarter.
•Asset quality metrics remain within the Company’s moderate risk profile with adequate reserve coverage.
•The Company continues to be well-capitalized, ending the quarter with 13.8%2 Common Equity Tier 1 capital to risk-weighted assets, 16.5%2 Total risk-based capital to risk-weighted assets, and a leverage ratio of 11.3%.2
•On April 13, 2026, the Company and LINKBANCORP, Inc. (“LINK”) (Nasdaq: LNKB) announced receipt of regulatory approval required to complete the previously announced merger

(1) Non-GAAP financial measures referenced in this release are used by management to measure performance in operating the business that management believes enhances investors’ ability to better understand the underlying business performance and trends related to core business activities. Reconciliations of non-GAAP operating measures to the most directly comparable GAAP financial measures are included in the non-GAAP reconciliation tables in this release. Non-GAAP measures should not be used as a substitute for the closest comparable GAAP measurements.
(2) Ratios as of March 31, 2026, are estimated.
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pursuant to which Burke & Herbert will acquire LINK. The merger is expected to close on May 1, 2026, pending satisfaction of customary closing conditions.
Results of Operations
First Quarter 2026 compared to Fourth Quarter 2025
The Company reported first quarter 2026 net income applicable to common shares of $27.1 million, or $1.79 per diluted common share, compared to fourth quarter 2025 net income applicable to common shares of $30.0 million, or $1.98 per diluted common share.
•Period-end total gross loans were $5.4 billion at March 31, 2026, an increase of $17.0 million from December 31, 2025, as the Company originated $132.0 million of new, relationship-based loan commitments.
•Period-end total deposits were $6.3 billion at March 31, 2026, a decrease of $71.7 million from December 31, 2025. Excluding a $61.0 million decrease in brokered deposits, core deposits decreased $10.7 million.
•Net interest income for the quarter was $71.8 million compared to $74.9 million in the prior quarter due to a decrease in interest income of $5.7 million, partially offset by a decrease in interest expense of $2.6 million. The decrease in total interest expense was primarily driven by lower deposit costs from a decrease in the balance of brokered time deposits and lower rates on certain deposit products.
•Net interest margin on a fully taxable equivalent basis (non-GAAP1) decreased to 4.09% versus 4.11% in the fourth quarter of 2025, mainly attributable to a decrease in average volume and average rate on loans and an increase in average volume on short-term borrowings compared to the fourth quarter of 2025.
•Accretion income on loans during the quarter was $6.8 million, and the amortization expense impact on interest expense was $1.4 million, or 30.5 bps of net interest margin on an annualized basis in the first quarter of 2026. In the prior quarter, accretion income on loans during the quarter was $8.7 million, and the amortization expense impact on interest expense was $1.4 million, or 39.3 bps of net interest margin on an annualized basis.
•The cost of total deposits, including non-interest bearing deposits, was 1.71% in the first quarter of 2026, compared to 1.80% in the fourth quarter of 2025. The decrease in the cost of deposits was mostly due to a decrease in the rate paid on interest-bearing deposits compared to the fourth quarter of 2025.
•The Company recorded credit provision expense in the first quarter of 2026 of $213.0 thousand on loans and a recapture of $201.0 thousand on unfunded commitments and the Company’s allowance for credit losses at March 31, 2026, was $68.0 million, or 1.3% of total loans.
•Total non-interest income for the first quarter of 2026 was $12.9 million compared to $11.6 million in the prior quarter, primarily due to an increase in gains on securities of $1.9 million and a $821.0 thousand increase in other non-interest income, which was partially offset by a decrease of $1.3 million in income from company-owned life insurance in the first quarter of 2026 compared to the fourth quarter of 2025. In the prior quarter, collection of death proceeds from company-owned life insurance increased non-interest income by $1.7 million.
•Non-interest expense for the first quarter of 2026 was $51.4 million compared to $48.5 million in the fourth quarter of 2025, primarily due to an increase in salaries, wages and employee benefits



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of $1.6 million, an increase in occupancy costs of $631.0 thousand and an increase in equipment rentals, depreciation and maintenance of $455.0 thousand.
Regulatory capital ratios2
The Company continues to be well-capitalized with capital ratios that are above regulatory requirements. As of March 31, 2026, our Common Equity Tier 1 capital to risk-weighted asset and Total risk-based capital to risk-weighted asset ratios were 13.8%2 and 16.5%2, respectively, and significantly above the well-capitalized requirements of 6.5% and 10%, respectively. The leverage ratio was 11.3%2 compared to a 5% level to be considered well-capitalized.
Burke & Herbert Bank & Trust Company (“the Bank”), the Company’s wholly-owned bank subsidiary, also continues to be well-capitalized with capital ratios that are above regulatory requirements. As of March 31, 2026, the Bank’s Common Equity Tier 1 capital to risk-weighted asset and Total risk-based capital to risk-weighted asset ratios were 15.2%2 and 16.3%,2 respectively, and significantly above the well-capitalized requirements. In addition, the Bank’s leverage ratio of 12.0%2 is considered to be well-capitalized.
For more information about the Company’s financial condition, including additional disclosures pertinent to recent events in the banking industry, please see our financial statements and supplemental information attached to this release.
About Burke & Herbert
Burke & Herbert Financial Services Corp. is the financial holding company for Burke & Herbert Bank & Trust Company. Burke & Herbert Bank & Trust Company is the oldest continuously operating bank under its original name headquartered in the greater Washington, D.C. metropolitan area. With over 75 branches across Delaware, Kentucky, Maryland, Virginia, and West Virginia, Burke & Herbert Bank & Trust Company offers a full range of business and personal financial solutions designed to meet customers’ banking, borrowing, and investment needs. Learn more at investor.burkeandherbertbank.com.
Cautionary Note Regarding Forward-Looking Statements
This communication includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including with respect to (or based on) the beliefs, goals, intentions, and expectations of Burke & Herbert regarding its merger with LINKBANCORP, Inc. (the “proposed transaction”), revenues, earnings, earnings per share, loan production, asset quality, and capital levels, among other matters; our estimates of future costs and benefits of the actions we may take; our assessments of expected losses on loans; our assessments of interest rate and other market risks; our ability to achieve our financial and other strategic goals; the expected timing of completion of the proposed transaction; the expected cost savings, synergies, returns and other anticipated benefits from the proposed transaction; and other statements that are not historical facts. Forward–looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “will,” “should,” and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Forward-looking statements include, without limitation, those relating to the terms, timing and closing of the proposed transaction.
Additionally, forward–looking statements speak only as of the date they are made; Burke & Herbert does not assume any duty, and does not undertake, to update such forward–looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events, or otherwise. Furthermore, because forward–looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in or



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implied by such forward-looking statements as a result of a variety of factors, many of which are beyond the control of Burke & Herbert. Such statements are based upon the current beliefs and expectations of the management of Burke & Herbert and are subject to significant risks and uncertainties outside of its control. Caution should be exercised against placing undue reliance on forward-looking statements.
The factors that could cause actual results to differ materially include the following: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between Burke & Herbert and LINK; the outcome of any legal proceedings that may be instituted against Burke & Herbert or LINK; the possibility that the proposed transaction will not close due to a failure to meet customary conditions to the closing; the ability of Burke & Herbert and LINK to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Burke & Herbert and LINK do business; certain restrictions during the pendency of the proposed transaction that may impact the parties’ ability to pursue certain business opportunities or strategic transactions; the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management’s attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all and to successfully integrate LINK’s operations and those of Burke & Herbert; such integration may be more difficult, time-consuming or costly than expected; revenues following the proposed transaction may be lower than expected; Burke & Herbert’s success in executing its business plans and strategies and managing the risks involved in the foregoing; the dilution caused by Burke & Herbert’s issuance of additional shares of its capital stock in connection with the proposed transaction; effects of the announcement, pendency or completion of the proposed transaction on the ability of Burke & Herbert and LINK to retain customers and retain and hire key personnel and maintain relationships with their suppliers, and on their operating results and businesses generally; and risks related to the potential impact of global macroeconomic conditions and changes in general economic, political and market factors on the proposed transaction or our operations generally (either nationally or locally in the areas in which we conduct, or will conduct, business), including inflation, changes in interest rates, market volatility and monetary fluctuations, and changes in federal government policies and practices, including the impact with respect to spending on industries concentrated in our market area, as well as the impact from tariffs on the markets we serve; increased competition; changes in consumer confidence and demand for financial services, including changes in consumer borrowing, repayment, investment, and deposit practices; changes in asset quality and credit risk; our ability to control costs and expenses; adverse developments in borrower industries or declines in real estate values; changes in and compliance with federal and state laws and regulations that pertain to our business and capital levels; our ability to raise capital as needed; the impact, extent and timing of technological changes; emerging external focus among regulators and other officials related to risks in connection with the development and use of artificial intelligence; the effects of any cybersecurity breaches or events; the potential adverse effects of unusual and infrequently occurring events, such as weather-related disasters, terrorist acts, geopolitical conflicts and tensions, or public health events (such as pandemics), and of governmental and societal responses thereto; and the other factors discussed in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Burke & Herbert’s Annual Report on Form 10-K for the year ended December 31, 2025, and other reports Burke & Herbert files with the SEC.





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Burke & Herbert Financial Services Corp.
Consolidated Statements of Income (unaudited)
(In thousands)
Three Months Ended
March 31,December 31,
202620252025
Interest income
Taxable loans, including fees$88,083 $97,031 $93,828 
Tax-exempt loans, including fees40 46 44 
Taxable securities9,758 9,487 8,955 
Tax-exempt securities6,082 3,267 5,295 
Other interest income1,493 955 3,018 
Total interest income105,456 110,786 111,140 
Interest expense
Deposits26,720 31,851 29,401 
Short-term borrowings4,590 3,192 4,471 
Subordinated debt2,269 2,729 2,320 
Other interest expense34 27 26 
Total interest expense33,613 37,799 36,218 
Net interest income71,843 72,987 74,922 
Credit loss expense - loans and available-for-sale securities213 900 135 
Credit loss (recapture) - off-balance sheet credit exposures(201)(399)1 
Total provision for credit losses12 501 136 
Net interest income after credit loss expense71,831 72,486 74,786 
Non-interest income
Fiduciary and wealth management3,227 2,443 2,923 
Service charges and fees1,855 2,178 2,002 
Net gains (losses) on securities1,799 1 (104)
Income from company-owned life insurance1,479 1,193 2,803 
Bank debit and other card revenue2,835 2,884 3,164 
Other non-interest income1,658 1,324 837 
Total non-interest income12,853 10,023 11,625 
Non-interest expense
Salaries and wages21,413 20,941 20,332 
Pensions and other employee benefits5,370 5,136 4,889 
Occupancy4,027 4,045 3,396 
Equipment rentals, depreciation and maintenance4,188 4,084 3,733 
Core deposit intangible amortization3,684 4,298 3,684 
ATM, card and network expense1,134 1,132 1,107 
FDIC and other regulatory assessments1,140 914 926 
Other operating10,425 9,114 10,433 
Total non-interest expense51,381 49,664 48,500 
Income before income taxes33,303 32,845 37,911 
Income tax expense5,954 5,644 7,667 
Net income27,349 27,201 30,244 
Preferred stock dividends225 225 225 
Net income applicable to common shares$27,124 $26,976 $30,019 



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Burke & Herbert Financial Services Corp.
Consolidated Balance Sheets
(In thousands)
March 31, 2026December 31, 2025
(Unaudited)(Audited)
Assets
Cash and due from banks$53,940 $53,497 
Interest-earning deposits with banks15,652 235,630 
Cash and cash equivalents69,592 289,127 
Securities available-for-sale, at fair value1,826,037 1,615,954 
Restricted stock, at cost45,811 42,187 
Loans held-for-sale, at fair value— 365 
Loans5,404,667 5,387,676 
Allowance for credit losses(67,955)(67,823)
Net loans5,336,712 5,319,853 
Other real estate owned3,106 2,689 
Premises and equipment, net136,806 136,809 
Accrued interest receivable37,625 35,442 
Intangible assets38,064 41,747 
Goodwill36,253 34,149 
Company-owned life insurance214,606 213,200 
Other assets183,099 189,104 
Total Assets
$7,927,711 $7,920,626 
Liabilities and Shareholders’ Equity
Liabilities
Non-interest-bearing deposits$1,367,050 $1,336,380 
Interest-bearing deposits4,965,215 5,067,561 
Total deposits6,332,265 6,403,941 
Short-term borrowings525,000 450,000 
Subordinated debentures, net71,510 70,222 
Subordinated debentures owed to unconsolidated subsidiary trusts17,331 17,268 
Accrued interest and other liabilities117,101 124,546 
Total Liabilities 7,063,207 7,065,977 
Shareholders’ Equity
Preferred stock and surplus10,413 10,413 
Common stock7,809 7,800 
Common stock, additional paid-in capital407,070 405,922 
Retained earnings535,798 517,058 
Accumulated other comprehensive income (loss)(69,002)(58,960)
Treasury stock(27,584)(27,584)
Total Shareholders’ Equity 864,504 854,649 
Total Liabilities and Shareholders’ Equity $7,927,711 $7,920,626 




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Burke & Herbert Financial Services Corp.
Details of Net Interest Margin (unaudited)
For the three months ended
Details of Net Interest Margin - Yield Percentages
March 31December 31September 30June 30March 31
20262025202520252025
Interest-earning assets:
Loans:
Taxable loans
6.64 %6.79 %6.76 %6.90 %6.96 %
Tax-exempt loans
7.12 7.03 6.78 5.90 5.90 
Total loans
6.64 6.79 6.76 6.90 6.96 
Interest-earning deposits and fed funds sold
4.25 3.83 4.33 4.68 5.76 
Securities:
Taxable securities
3.78 3.78 3.86 3.83 3.85 
Tax-exempt securities
4.48 4.27 4.17 4.20 3.85 
Total securities
4.05 3.96 3.97 3.95 3.85 
Total interest-earning assets5.97 %6.06 %6.11 %6.25 %6.31 %
Interest-bearing liabilities:
Deposits:
Interest-bearing demand
1.98 %2.07 %2.18 %2.21 %2.16 %
Money market & savings
1.83 1.94 2.02 2.01 2.02 
Brokered CDs & time deposits
3.11 3.23 3.25 3.37 3.85 
Total interest-bearing deposits
2.16 2.28 2.37 2.41 2.53 
Borrowings:
Short-term borrowings
3.78 3.93 3.85 3.91 3.88 
Subordinated debt borrowings and other
10.46 10.62 9.49 9.62 9.85 
Total interest-bearing liabilities
2.44 %2.54 %2.63 %2.68 %2.76 %
Taxable-equivalent net interest spread
3.53 3.52 3.48 3.57 3.55 
Benefit from use of non-interest-bearing deposits0.56 0.59 0.60 0.60 0.63 
Taxable-equivalent net interest margin (non-GAAP1)
4.09 %4.11 %4.08 %4.17 %4.18 %

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Burke & Herbert Financial Services Corp.
Details of Net Interest Margin (unaudited)
For the three months ended
(In thousands)
Details of Net Interest Margin - Average Balances
March 31December 31September 30June 30March 31
20262025202520252025
Interest-earning assets:
Loans:
Taxable loans
$5,380,967 $5,482,574 $5,584,315 $5,627,236 $5,651,937 
Tax-exempt loans
2,903 3,159 3,511 3,737 4,057 
Total loans
5,383,870 5,485,733 5,587,826 5,630,973 5,655,994 
Interest-earning deposits and fed funds sold
70,361 222,990 100,445 81,369 40,757 
Securities:
Taxable securities
1,128,486 1,031,603 1,034,136 1,059,310 1,039,391 
Tax-exempt securities
696,580 623,417 586,129 476,586 435,789 
Total securities
1,825,066 1,655,020 1,620,265 1,535,896 1,475,180 
Total interest-earning assets$7,279,297 $7,363,743 $7,308,536 $7,248,238 $7,171,931 
Interest-bearing liabilities:
Deposits:
Interest-bearing demand
$2,286,206 $2,315,064 $2,278,587 $2,239,100 $2,216,243 
Money market & savings
1,675,034 1,705,028 1,660,401 1,648,338 1,633,307 
Brokered CDs & time deposits
1,044,605 1,100,215 1,135,546 1,173,213 1,253,841 
Total interest-bearing deposits
5,005,845 5,120,307 5,074,534 5,060,651 5,103,391 
Borrowings:
Short-term borrowings
496,501 453,436 453,486 457,775 336,245 
Subordinated debt borrowings and other
87,979 86,635 114,900 113,813 112,383 
Total interest-bearing liabilities
$5,590,325 $5,660,378 $5,642,920 $5,632,239 $5,552,019 
Non-interest-bearing deposits
$1,332,090 $1,358,798 $1,338,188 $1,352,785 $1,371,615 
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Burke & Herbert Financial Services Corp.
Supplemental Information (unaudited)
As of or for the three months ended
(In thousands, except ratios and per share amounts)


March 31December 31September 30June 30March 31
20262025202520252025
Per common share information
Basic earnings$1.80 $2.00 $1.98 $1.98 $1.80 
Diluted earnings1.79 1.98 1.97 1.97 1.80 
Cash dividends0.55 0.55 0.55 0.55 0.55 
Book value per common share
56.77 56.18 54.02 51.28 49.90 
Tangible book value per common share (non-GAAP1)
51.83 51.13 48.72 45.73 44.17 
Balance sheet-related (at period end, unless otherwise indicated)
Assets$7,927,711 $7,920,626 $7,889,037 $8,053,084 $7,838,090 
Average interest-earning assets
7,279,297 7,363,743 7,308,536 7,248,238 7,171,931 
Loans (gross)5,404,667 5,387,676 5,559,479 5,590,457 5,647,507 
Loans (net)5,336,712 5,319,853 5,491,875 5,523,201 5,579,754 
Securities, available-for-sale, at fair value1,826,037 1,615,954 1,598,407 1,522,611 1,436,869 
Intangible assets38,064 41,747 45,431 49,114 53,002 
Goodwill36,253 34,149 34,149 34,149 32,842 
Non-interest-bearing deposits1,367,050 1,336,380 1,358,250 1,363,617 1,382,427 
Interest-bearing deposits4,965,215 5,067,561 5,053,802 5,027,357 5,159,444 
Deposits, total6,332,265 6,403,941 6,412,052 6,390,974 6,541,871 
Brokered deposits3,431 64,410 124,386 132,098 246,902 
Uninsured deposits2,060,145 2,057,873 2,022,739 1,963,566 1,943,227 
Short-term borrowings525,000 450,000 450,000 650,000 300,000 
Subordinated debt, net88,841 87,490 86,110 114,692 113,289 
Unused borrowing capacity 3
4,683,943 4,556,923 4,153,137 4,075,313 4,082,879 
Total equity864,504 854,649 822,231 780,018 758,000 
Total common equity854,091 844,236 811,818 769,605 747,587 
Accumulated other comprehensive income (loss)(69,002)(58,960)(68,454)(87,854)(88,024)
Asset Quality
Provision for credit losses$12 $136 $262 $624 $501 
Net loan charge-offs (recoveries)
81 (84)226 1,214 1,187 
Allowance for credit losses67,955 67,823 67,604 67,256 67,753 
Total delinquencies 4
93,088 37,080 34,722 29,056 86,223 
Nonperforming loans 5
78,559 74,236 89,051 85,531 64,756 

(3) Includes Federal Home Loan Bank, Borrower-in-Custody (BIC), and correspondent bank availability.
(4) Total delinquencies represent accruing loans 30 days or more past due.
(5) Includes non-accrual loans and loans 90 days past due and still accruing.

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Burke & Herbert Financial Services Corp.
Supplemental Information (unaudited)
As of or for the three months ended
(In thousands, except ratios and per share amounts)



March 31December 31September 30June 30March 31
20262025202520252025
Income statement
Interest income$105,456 $111,140 $111,209 $111,858 $110,786 
Interest expense33,613 36,218 37,439 37,625 37,799 
Non-interest income12,853 11,625 11,585 12,877 10,023 
Total revenue (non-GAAP1)
84,696 86,547 85,355 87,110 83,010 
Non-interest expense51,381 48,500 48,092 49,305 49,664 
Pretax, pre-provision earnings (non-GAAP1)
33,315 38,047 37,263 37,805 33,346 
Provision for (recapture of) credit losses12 136 262 624 501 
Income before income taxes33,303 37,911 37,001 37,181 32,845 
Income tax expense5,954 7,667 7,037 7,284 5,644 
Net income27,349 30,244 29,964 29,897 27,201 
Preferred stock dividends225 225 225 225 225 
Net income applicable to common shares$27,124 $30,019 $29,739 $29,672 $26,976 
Ratios
Annualized return on average assets
1.39 %1.49 %1.50 %1.51 %1.41 %
Annualized return on average equity
12.62 14.14 14.88 15.50 14.57 
Net interest margin (non-GAAP1)
4.09 4.11 4.08 4.17 4.18 
Efficiency ratio60.67 56.03 56.34 56.60 59.83 
Loan-to-deposit ratio85.35 84.13 86.70 87.47 86.33 
Consolidated Common Equity Tier 1 (CET1) capital ratio 2
13.78 13.45 12.79 12.22 11.77 
Consolidated Total risk-based capital ratio 2
16.52 16.17 15.44 15.27 14.79 
Consolidated Leverage ratio2
11.27 10.92 10.71 10.42 10.12 
Allowance coverage ratio1.26 1.26 1.22 1.20 1.20 
Allowance for credit losses as a percentage of non-performing loans86.50 91.36 75.92 78.63 104.63 
Non-performing loans as a percentage of total loans1.45 1.38 1.60 1.53 1.15 
Non-performing assets as a percentage of total assets1.03 0.97 1.16 1.10 0.86 
Net charge-offs (recoveries) to average loans (annualized)
0.6 bps
-0.6 bps
1.6 bps
8.6 bps
8.5 bps

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Burke & Herbert Financial Services Corp.
Non-GAAP Reconciliations (unaudited)
(In thousands, except ratios and per share amounts)
Operating net income, adjusted diluted EPS, and adjusted non-interest expense (non-GAAP1)
For the three months ended
March 31December 31September 30June 30March 31
20262025202520252025
Net income applicable to common shares$27,124 $30,019 $29,739 $29,672 $26,976 
Add back significant items (tax effected):
Merger-related1,114 — — — — 
Total significant items1,114 — — — — 
Operating net income$28,238 $30,019 $29,739 $29,672 $26,976 
Weighted average dilutive shares15,131,481 15,139,792 15,112,413 15,023,807 15,026,376 
Adjusted diluted EPS
$1.87 $1.98 $1.97 $1.97 $1.80 
Non-interest expense$51,381 $48,500 $48,092 $49,305 $49,664 
Remove significant items:
Merger-related1,410 — — — — 
Total significant items$1,410 $— $— $— $— 
Adjusted non-interest expense$49,971 $48,500 $48,092 $49,305 $49,664 
Operating net income is a non-GAAP measure that is derived from net income adjusted for significant items. The Company believes that operating net income is useful in periods with certain significant items such as merger-related expenses. The operating net income is more reflective of management’s ability to grow the business and manage expenses. Adjusted non-interest expense also removes these significant items, such as merger-related expenses. Management believes it represents a more normalized non-interest expense total for periods with identified significant items.

Total Revenue (non-GAAP1)
For the three months ended
March 31December 31September 30June 30March 31
20262025202520252025
Interest income$105,456 $111,140 $111,209 $111,858 $110,786 
Interest expense33,613 36,218 37,439 37,625 37,799 
Non-interest income12,853 11,625 11,585 12,877 10,023 
Total revenue (non-GAAP1)
$84,696 $86,547 $85,355 $87,110 $83,010 
Total revenue is a non-GAAP measure and is derived from total interest income less total interest expense plus total non-interest income. We believe that total revenue is a useful tool to determine how the Company is managing its business and demonstrates how stable our revenue sources are from period to period.





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Burke & Herbert Financial Services Corp.
Non-GAAP Reconciliations (unaudited)
(In thousands, except ratios and per share amounts)
Pretax, Pre-Provision Earnings (non-GAAP1)
For the three months ended
March 31December 31September 30June 30March 31
20262025202520252025
Income before taxes$33,303 $37,911 $37,001 $37,181 $32,845 
Provision for (recapture of) credit losses12 136 262 624 501 
Pretax, pre-provision earnings (non-GAAP1)
$33,315 $38,047 $37,263 $37,805 $33,346 
Pretax, pre-provision earnings is a non-GAAP measure and is based on adjusting income before income taxes and to exclude provision for (recapture of) credit losses. We believe that pretax, pre-provision earnings is a useful tool to help evaluate the ability to provide for credit costs through operations and provides an additional basis to compare results between periods by isolating the impact of provision for (recapture of) credit losses, which can vary significantly between periods.

Tangible Common Equity (non-GAAP1)
For the three months ended
March 31December 31September 30June 30March 31
20262025202520252025
Common shareholders' equity$854,091 $844,236 $811,818 $769,605 $747,587 
Less:
Intangible assets38,064 41,747 45,431 49,114 53,002 
Goodwill36,253 34,149 34,149 34,149 32,842 
Tangible common equity (non-GAAP1)
$779,774 $768,340 $732,238 $686,342 $661,743 
Shares outstanding at end of period15,045,941 15,028,524 15,028,524 15,007,712 14,982,807 
Tangible book value per common share (non-GAAP1)
$51.83 $51.13 $48.72 $45.73 $44.17 
In management's view, tangible common equity measures are capital adequacy metrics that may be meaningful to the Company, as well as analysts and investors, in assessing the Company's use of equity and in facilitating comparisons with peers. These non-GAAP measures are valuable indicators of a financial institution's capital strength because they eliminate intangible assets from shareholders' equity and retain the effect of accumulated other comprehensive income/(loss) in shareholders' equity.

12
Burke & Herbert Financial Services Corp.
Non-GAAP Reconciliations (unaudited)
(In thousands, except ratios and per share amounts)
Tangible Common Assets (non-GAAP1)
For the three months ended
March 31December 31September 30June 30March 31
20262025202520252025
Total assets$7,927,711 $7,920,626 $7,889,037 $8,053,084 $7,838,090 
Less:
Intangible assets38,064 41,747 45,431 49,114 53,002 
Goodwill36,253 34,149 34,149 34,149 32,842 
Tangible assets (non-GAAP1)
$7,853,394 $7,844,730 $7,809,457 $7,969,821 $7,752,246 
Tangible common equity / tangible assets (non-GAAP1)
9.93 %9.79 %9.38 %8.61 %8.54 %
In management’s view, tangible common assets measures complement tangible common equity measures and may be meaningful to the Company, as well as analysts and investors, in assessing balance sheet composition and leverage and in facilitating comparisons with peers. These non‑GAAP measures enhance transparency by eliminating intangible assets from total assets, thereby providing additional insight into the relationship between the Company’s tangible asset base and its tangible common equity.
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Burke & Herbert Financial Services Corp.
Non-GAAP Reconciliations (unaudited)
(In thousands, except ratios and per share amounts)
Return and Adjusted Return on Average Tangible Common Equity and Average Assets (non-GAAP1)
For the three months ended
March 31December 31September 30June 30March 31
20262025202520252025
Average common shareholders' equity$861,274 $832,411 $782,577 $757,354 $740,417 
  Average goodwill and other intangibles(76,923)(79,338)(83,079)(85,562)(88,899)
  Average deferred tax liabilities on goodwill and other intangibles8,602 9,382 9,787 10,567 11,389 
Average tangible common equity (non-GAAP1)
$792,953 $762,455 $709,285 $682,359 $662,907 
Average total assets$7,913,098 $7,979,528 $7,890,929 $7,864,185 $7,768,738 
  Average goodwill and other intangibles(76,923)(79,338)(83,079)(85,562)(88,899)
  Average deferred tax liabilities on goodwill and other intangibles8,602 9,382 9,787 10,567 11,389 
Average tangible total assets (non-GAAP1)
$7,844,777 $7,909,572 $7,817,637 $7,789,190 $7,691,228 
Net income applicable to common shareholders$27,124 $30,019 $29,739 $29,672 $26,976 
Operating net income applicable to common shareholders (non-GAAP1)
$28,238 $30,019 $29,739 $29,672 $26,976 
Annualized return on average common equity
12.77 %14.31 %15.08 %15.71 %14.78 %
Annualized adjusted return on average common equity (non-GAAP1)
13.30 14.31 15.08 15.71 14.78 
Annualized return on average tangible common equity (non-GAAP1)
13.87 15.62 16.63 17.44 16.50 
Annualized adjusted return on average tangible common equity (non-GAAP1)
14.44 15.62 16.63 17.44 16.50 
Annualized return on average assets
1.39 1.49 1.50 1.51 1.41 
Annualized adjusted return on average assets (non-GAAP1)
1.45 1.49 1.50 1.51 1.41 
In management’s view, adjusted return on average common equity, return on average tangible common equity, adjusted return on average tangible common equity, and adjusted return on average assets are performance metrics that may be meaningful to the Company, as well as analysts and investors, in evaluating the Company’s profitability and efficiency in deploying capital and assets and in facilitating comparisons with peers. These non‑GAAP measures provide additional insight into the Company’s underlying operating performance by focusing on returns generated from common equity, tangible common equity, and total assets, as applicable.

14
Burke & Herbert Financial Services Corp.
Non-GAAP Reconciliations (unaudited)
(In thousands, except ratios and per share amounts)
The adjusted measures exclude the after‑tax effect of one‑time merger‑related expenses, which management believes enhances period‑to‑period comparability and provides a more representative view of the Company’s ongoing earnings performance. Return on average tangible common equity measures further isolate performance attributable to tangible capital by excluding the impact of intangible assets, while return on average assets reflects the Company’s effectiveness in generating earnings from its overall asset base. Management believes these measures, when considered together and alongside GAAP results, provide useful supplemental information for assessing profitability, capital efficiency, and operating trends.

Net Interest Margin & Taxable-Equivalent Net Interest Income (non-GAAP1)
As of or for the three months ended
March 31December 31September 30June 30March 31
20262025202520252025
Net interest income$71,843 $74,922 $73,770 $74,233 $72,987 
Taxable-equivalent adjustments1,628 1,420 1,305 1,059 881 
Net interest income (Fully Taxable-Equivalent - FTE)$73,471 $76,342 $75,075 $75,292 $73,868 
Average interest-earning assets
$7,279,297 $7,363,743 $7,308,536 $7,248,238 $7,171,931 
Net interest margin (non-GAAP1)
4.09 %4.11 %4.08 %4.17 %4.18 %
The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest income, we use net interest income on a fully taxable-equivalent (FTE) basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. FTE net interest income is calculated by adding the tax benefit on certain financial interest earning assets, whose interest is tax-exempt, to total interest income then subtracting total interest expense. Management believes FTE net interest income is a standard practice in the banking industry, and when net interest income is adjusted on an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income and this adjustment is not permitted under GAAP. FTE net interest income is only used for calculating FTE net interest margin, which is calculated by annualizing FTE net interest income and then dividing by the average earning assets. The tax rate used for this adjustment is 21%. Net interest income shown elsewhere in this presentation is GAAP net interest income.
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