Burke & Herbert Financial Services Corp. · NASDAQ:BHRB
Burke & Herbert Financial Services — Q1 2023 Earnings Presentation
18 slides from Burke & Herbert Financial Services's earnings presentation, May 26, 2023
Slide 1: 1Q23 Update
Burke & Herbert Financial Services Corp. 1Q23 Update (Nasdaq: BHRB) May 2023
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information ‘This presentation contains statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on curre
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. As a proud and flourishing community institution, we are headquartered in Old Town Alexandria, Virginia and have served the banking, borrowing
Slide 4: Key Takeaways
Key Takeaways Burke & Herbert Financial Services Corp. was established in September 2022 as the holding company for Burke & Herbert Bank & Trust Company, which has been offering banking services in Northern Virginia since 1852 We have a seasoned executive management team and an experienced Board of
Slide 5: Executive Team
Executive Team a SO David Boyle Chair, CEO, President 25+ years Ayears PNC Financial Services / National City Bank Roy Halyama EVP, Chief Financial Officer 25+ years 2years JP Morgan / PNC Financial Services / Fifth Third Bank Jeffrey Welch EVP, Chief Credit Officer 25+ years years ‘TD Bank / Sandy
Slide 6: Company Overview & Financial Performance
Company Overview & Financial Performance + The Bank was founded in 1852, making us the oldest, continuously operating Bank in Virginia + Our primary market area includes Virginia / Maryland / DC with 23 branches throughout Northern Virginia + David P, Boyle was appointed President & CEO in 2019 and
Slide 7: Loan Portfolio as of 1Q23
Loan Portfolio as of 1023 (sin o00s Poors Portfolio | $1,951,738, Residential Retail Real Estate $286,021 25% $518,775 Industrial / Warehouse 206,674 18% Office Buildings 202,392 18% Multi-Family 138,344 12% Hotels / Motels 123,844 11% Nursing-Assisted Living 39,199 3% once Restaurants and Gas Stati
Slide 8: Security Portfolio as of 1Q23
Security Portfolio as of 1Q23 5 ino00s) Portfolio FV. $1,362,785 other Asset-backed $8,528 $92,599 1% USS Treasury & agency $178,419 Non-Agency CMBS $183,225 ‘Agency CMBS $57,832 Municipal $468,362 Non-Agency RMBS $321,150 ‘Agency RMBS $52,670 fv Fairvalue *CiHB5 Commercial Mortgage-Backed Security
Slide 9: Funding Sources as of 1Q23
Funding Sources as of 1Q23 (¢inoo0s) Deposits $3,032,391 Time deposits & other $198,997 Brokered CDs $389,185 Demand (non: interest) $906,723 Money market & savings $998,813 Demand (interest) $538,673 Burke & Herbert Financial Services Corp. Demand (non-interest bearing) : Demand (interest bearing)
Slide 10: Capital Trends as of 1Q23
Capital Trends as of 1Q23 Common Equity Tier 1 Ratio Total Capital Ratio Fy20 Ft FD2 1023 Fy20 FL 22 1023 Tier 1 Capital Ratio ‘Average Equity to Average Assets Fv20 FL Fv22 1023 Fv20 Fan Fy22 1023 Burke & Herbert Financial Services Corp. pital N We take a forward-looking, disciplined approach to ca
Slide 11: Asset Quality as of 1Q23
Soli Performance Asset Quality as of 1023 coo cos / verge Loons + Our objective is to maintain a moderate risk profile through the economic cycle Allowance coverage ratio + Credit risk management is embedded in our risk culture and in our decision-making processes - Managed through specific policies
Slide 12: Market Footprint & Recent Expansion
Market Footprint & Recent Expansion Our Fe Ting, Perel ATELY 4 Ske pethesda August 2022 Ashburn |October 2021 A Sind ror eee S is = -~ selks Fredericksburg June 2021 ion i ies wom we » \J tel se hse . Lh ea PAS Richmond March 2022 Burke & Herbert Financial Services Corp. Market Demographics + Our ma
Slide 13: Transforming Digital Capabilities
Transforming Digital Capabilities SL SS Digital Transformation Using digital technology to create new revenue streams for the Company Digital Optimization Improving our existing operating processes and business models pte p= ‘Traditional Bank Digital-Frst Bank Large branch network Large marketplace
Slide 14: Fee-based Revenue
Fee-based Revenue + Building a culture to bring the full Burke & Herbert experience to customers + Launched new lackbox service in 2022 + 1023 year-over-year improvement ~ Credit card revenue up 30% Payables, Receivables & Sweep 2} Solutions Ua investments & Funding - Merchant services revenue up 26
Slide 15: Final Thoughts
Final Thoughts * Burke & Herbert Financial Services Corp. was established in September 2022 as the holding company for Burke & Herbert Bank & Trust Company * Burke & Herbert Bank & Trust Company is a $3.7 billion growth-oriented commercial bank headquartered in Alexandria, Virginia + We have a seaso
Slide 16: Appendix: Notes on non-GAAP financial measures
Appendix: Notes on non-GAAP financial measures Total Revenue: Total revenue is a non-GAAP measure and is derived from net interest income plus total non-interest income. We believe that total revenue is a useful tool to determine how the Company is managing its business and how stable our revenue so
Slide 17: Appendix: Notes on non-GAAP financial measures
Appendix: Notes on non-GAAP financial measures Net Interest Margin: 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
Slide 18: Appendix: Notes on non-GAAP financial measures
Appendix: Notes on non-GAAP financial measures Tangible Book Value per share (TBVPS) & TBVPS (excluding Securities AOCI): TBVPS represents the Company's tangible common equity at period-end divided by common shares at period-end. Currently, there are no adjustments from common equity to determine ta
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