Burke & Herbert Financial Services Corp. · NASDAQ:BHRB
Burke & Herbert Financial Services — Q3 2024 Earnings Presentation
16 slides from Burke & Herbert Financial Services's earnings presentation, October 2024
Slide 1: 3Q24 Update
3Q24 Update (Nasdaq: BHRB) October 2024 Please Note: Third quarter 2024 financial results reflect a full quarter following the May 3, 2024, completion of the merger of Summit Financial Group, Inc. with and into Burke & Herbert Financial Services Corp. and the merger of Summit Community Bank, Inc. wi
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information This presentation contains “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
Slide 3: Introduction
Introduction • Thank you for your interest in Burke & Herbert Financial Services Corp. and its wholly owned subsidiary Burke & Herbert Bank & Trust Company. A quintessential community banking institution, we are headquartered in Old Town Alexandria, Virginia and have served the banking, borrowing an
Slide 4: Business Model
Business Model • Our business model is built on customer service - Being a trusted advisor by understanding our customers’ financial goals and offering our diverse products and services to help them achieve financial prosperity • Our approach is concentrated on growing and deepening relationships ac
Slide 5: Strategic Rationale for the Merger with Summit
Strategic Rationale for the Merger with Summit Scale: Created an ~$8 billion bank with >75 branch locations across an attractive 5- 1 state Mid-Atlantic and Southeast footprint Management Strength: Culturally compatible organizations with combined 2 management depth supportive of growth to $10 billi
Slide 6: An Attractive Footprint
An Attractive Footprint Indicates higher than U.S. National Average (1) Greater Washington D.C. Charleston, WV Eastern Shore of MD (2) Capital of the U.S. Capital of West Virginia Population: 6.44mm Population: 70k Population: 252k Pop. CAGR: 1.01% Pop. CAGR: 0.24% Median HHI: $52k
Slide 7: Merger Announcement Estimates vs. Updated Estimates
Merger Announcement Estimates vs. Updated Estimates Estimate at Aug. 24, Estimate at May 3, • Gross CECL credit mark higher primarily due to higher loan (in millions) 20231 merger 2024 merger announcement closing balances at close and broader macroeconomic trends Day 2 – CECL reserve $16.6 $29.5 • I
Slide 8: 3Q24 Balance Sheet
3Q24 Balance Sheet Balance Sheet ($ in 000s) Sept. 30, 2024 June 30, 2024 Highlights Assets Cash and Cash Equivalents $ 291,765 $ 211,920 • Repositioned balance sheet post closing Investments 1,453,263 1,430,039 Loans Held for Sale 4,216 3,268 - Sold approximately $366 million of securities Gross Lo
Slide 9: 3Q24 Income Statement
3Q24 Income Statement Income Statement ($ in 000s) Sept. 30, 2024 3Q24 Operating Net Income1 Sept. 30, 2024 Interest income 3 months ended 9 months ended Net Income (loss) applicable to common shares $ 27,397 Loans $ 103,730 $ 213,481 Addback significant items (tax effected): Securities 13,211 37,00
Slide 10: Loan Portfolio as of 3Q24
Loan Portfolio as of 3Q24 ($ in 000s) Portfolio Commercial Real Estate Category $ by Asset Class % by Asset Class $5,574,037 Residential $1,197,245 Retail Real Estate $ 562,666 22% Multi-Family 496,257 20% Commercial Office Bldgs/Condos 407,027 16% Real Estate Hotels/Motels 383,396 15% $2,526,945 In
Slide 11: Security Portfolio as of 3Q24
Security Portfolio as of 3Q24 ($in 000s) Portfolio FV Net Unrealized $1,436,431 Category Amortized Cost WA Yield Losses Other U.S. Treasury & Agency $ 13,383 $ 166,000 1.31% Asset-Backed $37,547 U.S Treasury & Municipal 57,394 713,040 2.58% $70,635 Agency Agency RMBS 2,797 57,562 3.88% $152,617 Non-
Slide 12: Funding Sources as of 3Q24
Funding Sources as of 3Q24 ($ in 000s) Deposits $6,600,825 Category Average Rate QTD Demand (non-interest bearing) −% Time Deposits & Other Demand (non- Demand (interest bearing) 3.19% $971,271 interest) Money Market & Savings 1.43% $1,392,123 Brokered Certificate of Deposits 4.98% Time Deposits & O
Slide 13: Capital Ratio Trends
Capital Ratio Trends 1 Common Equity Tier 1 Ratio Total Capital Ratio Capital Management 18.0% 18.8% 18.9% 17.6% 17.9% 16.9% • We take a forward-looking, disciplined approach to 14.3% capital management that emphasizes acceptable risk- 11.3% adjusted returns over the long-term • Our capital manageme
Slide 14: Asset Quality Trends
Asset Quality Trends Allowance Coverage Ratio NCOs / Average Loans Credit Management • Our objective is to maintain a moderate risk profile through the economic cycle 1.82% • Credit risk management is embedded in our risk 1.11% 1.21% 1.22% culture and in our decision-making processes 0.18% - Managed
Slide 15: Final Thoughts
Final Thoughts • Our business model is built on customer service and being a trusted advisor • Our approach is concentrated on growing and deepening relationships across our businesses that meet our risk/return measures • We are focused on our strategic priorities which are designed to enhance value
Slide 16: Appendix: Notes on Non-GAAP Financial Measures
Appendix: Notes on Non-GAAP Financial Measures Total Common Equity, Tangible Book Value & Tangible Assets: 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 facilitati
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