Burke & Herbert Financial Services : Earnings Release (d39579e4 70d6 490b a34c 3e7e0868d754)

Published: 2026-04-23 17:28:26 ET BHRB

Published on 04/23/2026 at 05:28 pm EDT

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."

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

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.

Ratios as of March 31, 2026, are estimated.

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

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.

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.

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

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.

(In thousands)

Taxable loans, including fees

$ 88,083

$ 97,031

$ 93,828

Tax-exempt loans, including fees

Taxable securities

9,758

9,487

8,955

Tax-exempt securities

6,082

3,267

5,295

Other interest income

1,493

955

3,018

Total interest income

105,456

110,786

111,140

Interest expense

Deposits

26,720

31,851

29,401

Short-term borrowings

4,590

3,192

4,471

Subordinated debt

2,269

2,729

2,320

Other interest expense

Total interest expense

33,613

37,799

36,218

Net interest income

71,843

72,987

74,922

Credit loss expense - loans and available-for-sale securities

213

900

135

Credit loss (recapture) - off-balance sheet credit exposures

(201)

(399)

Total provision for credit losses

501

136

Net interest income after credit loss expense

71,831

72,486

74,786

Non-interest income

Fiduciary and wealth management

3,227

2,443

2,923

Service charges and fees

1,855

2,178

2,002

Net gains (losses) on securities

1,799

(104)

Income from company-owned life insurance

1,479

1,193

2,803

Bank debit and other card revenue

2,835

2,884

3,164

Other non-interest income

1,658

1,324

837

Total non-interest income

12,853

10,023

11,625

Non-interest expense

Salaries and wages

21,413

20,941

20,332

Pensions and other employee benefits

5,370

5,136

4,889

Occupancy

4,027

4,045

3,396

Equipment rentals, depreciation and maintenance

4,188

4,084

3,733

Core deposit intangible amortization

3,684

4,298

3,684

ATM, card and network expense

1,134

1,132

1,107

FDIC and other regulatory assessments

1,140

914

926

Other operating

10,425

9,114

10,433

Total non-interest expense

51,381

49,664

48,500

Income before income taxes

33,303

32,845

37,911

Income tax expense

5,954

5,644

7,667

Net income

27,349

27,201

30,244

Preferred stock dividends

225

Net income applicable to common shares

$ 27,124

$ 26,976

$ 30,019

(In thousands)

‌Assets

March 31, 2026 December 31, 2025

(Unaudited) (Audited)

Cash and due from banks

$ 53,940

$ 53,497

Interest-earning deposits with banks

15,652

235,630

Cash and cash equivalents

69,592

289,127

Securities available-for-sale, at fair value

1,826,037

1,615,954

Restricted stock, at cost

45,811

42,187

Loans held-for-sale, at fair value

365

Loans

5,404,667

5,387,676

Allowance for credit losses

(67,955)

(67,823)

Net loans

5,336,712

5,319,853

Other real estate owned

3,106

2,689

Premises and equipment, net

136,806

136,809

Accrued interest receivable

37,625

35,442

Intangible assets

38,064

41,747

Goodwill

36,253

34,149

Company-owned life insurance

214,606

213,200

Other assets

183,099

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 deposits

4,965,215

5,067,561

Total deposits

6,332,265

6,403,941

Short-term borrowings

525,000

450,000

Subordinated debentures, net

71,510

70,222

Subordinated debentures owed to unconsolidated subsidiary trusts

17,331

17,268

Accrued interest and other liabilities

117,101

124,546

Total Liabilities

7,063,207

7,065,977

Shareholders' Equity

Preferred stock and surplus

10,413

Common stock

7,809

7,800

Common stock, additional paid-in capital

407,070

405,922

Retained earnings

535,798

517,058

Accumulated other comprehensive income (loss)

(69,002)

(58,960)

Treasury stock

(27,584)

Total Shareholders' Equity

864,504

854,649

Total Liabilities and Shareholders' Equity

$ 7,927,711

$ 7,920,626

‌Details of Net Interest Margin - Yield Percentages

March 31

December 31

September 30

June 30

March 31

2026

2025

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

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

3.86

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 assets

5.97 %

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 deposits

0.56

0.59

0.60

0.63

Taxable-equivalent net interest margin (non-GAAP1)

4.09 %

4.11 %

4.08 %

4.17 %

4.18 %

(In thousands)

Details of Net Interest Margin - Average Balances

March 31

December 31

September 30

June 30

March 31

2026

2025

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

‌March 31

December 31

September 30

June 30

March 31

2026

2025

Per common share information

Basic earnings

$ 1.80

$ 2.00

$ 1.98

$ 1.80

Diluted earnings

1.79

1.98

1.97

1.80

Cash dividends

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 value

1,826,037

1,615,954

1,598,407

1,522,611

1,436,869

Intangible assets

38,064

41,747

45,431

49,114

53,002

Goodwill

36,253

34,149

32,842

Non-interest-bearing deposits

1,367,050

1,336,380

1,358,250

1,363,617

1,382,427

Interest-bearing deposits

4,965,215

5,067,561

5,053,802

5,027,357

5,159,444

Deposits, total

6,332,265

6,403,941

6,412,052

6,390,974

6,541,871

Brokered deposits

3,431

64,410

124,386

132,098

246,902

Uninsured deposits

2,060,145

2,057,873

2,022,739

1,963,566

1,943,227

Short-term borrowings

525,000

450,000

650,000

300,000

Subordinated debt, net

88,841

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 equity

864,504

854,649

822,231

780,018

758,000

Total common equity

854,091

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

$ 136

$ 262

$ 624

$ 501

Net loan charge-offs (recoveries)

(84)

226

1,214

1,187

Allowance for credit losses

67,955

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

Includes Federal Home Loan Bank, Borrower-in-Custody (BIC), and correspondent bank availability.

Total delinquencies represent accruing loans 30 days or more past due.

Includes non-accrual loans and loans 90 days past due and still accruing.

March 31

2026

December 31

2025

September 30

2025

June 30

2025

March 31

2025

Income statement

Interest income

$ 105,456

$ 111,140

$ 111,209

$ 111,858

$ 110,786

Interest expense

33,613

36,218

37,439

37,625

37,799

Non-interest income

12,853

11,625

11,585

12,877

10,023

Total revenue (non-

GAAP1)

84,696

86,547

85,355

87,110

83,010

Non-interest expense

51,381

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 losses

136

262

624

501

Income before income

taxes

33,303

37,911

37,001

37,181

32,845

Income tax expense

5,954

7,667

7,037

7,284

5,644

Net income

27,349

30,244

29,964

29,897

27,201

Preferred stock dividends

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 %

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 ratio

60.67

56.03

56.34

56.60

59.83

Loan-to-deposit ratio

85.35

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 ratio

1.26

1.22

1.20

Allowance for credit

losses as a percentage of

non-performing loans

86.50

91.36

75.92

78.63

104.63

Non-performing loans as

a percentage of total loans

1.45

1.38

1.60

1.53

1.15

Non-performing assets as

a percentage of total

assets

1.03

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

Annualized return on

‌Operating net income, adjusted diluted EPS, and adjusted non-interest expense (non-GAAP1)

For the three months ended

March 31

December 31

September 30

June 30

March 31

2026

2025

Net income applicable to common shares

$ 27,124

$ 30,019

$ 29,739

$ 29,672

$ 26,976

Add back significant items (tax effected):

Merger-related

1,114

- - - -

Total significant items

1,114

- - - -

Operating net income

$ 28,238

$ 30,019

$ 29,739

$ 29,672

$ 26,976

Weighted average dilutive

15,131,481

15,139,792

15,112,413

15,023,807

15,026,376

Adjusted diluted EPS

1.87

$ 1.98

$ 1.97

$ 1.80

Non-interest expense

$ 51,381

$ 48,500

$ 48,092

$ 49,305

$ 49,664

Remove significant items:

Merger-related 1,410

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 31

2026

December 31

2025

September 30

2025

June 30

2025

March 31

2025

Interest income

Interest expense

105,456

33,613

111,140

36,218

111,209

37,439

111,858

37,625

110,786

37,799

Non-interest income

12,853

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.

Pretax, Pre-Provision Earnings (non-GAAP1)

For the three months ended

March 31

2026

December 31

2025

September 30

2025

June 30

2025

March 31

2025

Income before taxes

$ 33,303

$ 37,911

$ 37,001

$ 37,181

$ 32,845

Provision for (recapture of) credit losses

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 31

December 31

September 30

June 30

March 31

2026

2025

Common shareholders' equity

$ 854,091

$ 844,236

$ 811,818

$ 769,605

$ 747,587

Less:

Intangible assets

38,064

41,747

45,431

49,114

53,002

Goodwill

Tangible common equity

36,253

34,149

32,842

(non-GAAP1)

779,774

$ 768,340

$ 732,238

$ 686,342

$ 661,743

Shares outstanding at end of period

15,045,941

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.

Tangible Common Assets (non-GAAP1)

For the three months ended

March 31

December 31

September 30

June 30

March 31

2026

2025

Total assets

$ 7,927,711

$ 7,920,626

$ 7,889,037

$ 8,053,084

$ 7,838,090

Less:

Intangible assets

38,064

41,747

45,431

49,114

53,002

Goodwill

36,253

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.

Return and Adjusted Return on Average Tangible Common Equity and Average Assets (non-GAAP1)

For the three months ended

March 31

2026

December 31

2025

September 30

2025

June 30

2025

March 31

2025

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 intangibles

8,602

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 intangibles

8,602

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.

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 31

2026

December 31

2025

September 30

2025

June 30

2025

March 31

2025

Net interest income

$ 71,843

$ 74,922

$ 73,770

$ 74,233

$ 72,987

Taxable-equivalent adjustments

1,628

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.

Disclaimer

Burke & Herbert Financial Services Corp. published this content on April 23, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 23, 2026 at 21:19 UTC.