Burke & Herbert Financial Services Corp. · NASDAQ:BHRB
Burke & Herbert Financial Services — Q2 2024 Earnings Presentation
17 slides from Burke & Herbert Financial Services's earnings presentation, July 2024
Slide 1: 2Q24 Update (Nasdaq: BHRB)
2Q24 Update (Nasdaq: BHRB) July 2024 1
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: Executive Team
Executive Team David Boyle Charlie Maddy Roy Halyama Rob Tissue Joe Hager Lauren Kimlel Chief Executive Officer President Chief Financial Officer EVP of Financial Strategy Chief Operating Officer EVP Branch Banking Served as the President and CEO of BHRB Served as the President and Chief Serve
Slide 6: 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 7: 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 8: Announcement Estimates vs. Updated Estimates
Announcement Estimates vs. Updated Estimates Estimate at Estimate at • Gross CECL credit mark higher primarily due to higher loan (in millions) Aug. 24, 20231 May 3, 2024 balances at close and broader macroeconomic trends Day 2 – CECL reserve $16.6 $29.5 • Amortizing marks more favorable than modele
Slide 9: 2Q24 Balance Sheet
2Q24 Balance Sheet Balance Sheet ($ in 000s) June 30, 2024 Highlights Assets Cash and Cash Equivalents $ 211,920 • Repositioned balance sheet post closing Investments 1,430,039 Loans Held for Sale 3,268 - Sold approximately $366 million of securities Gross Loans, (excluding HFS loans) 5,616,724 - Re
Slide 10: 2Q24 Income Statement
2Q24 Income Statement Income Statement ($ in 000s) June 30, 2024 2Q24 Operating Net Income1 Interest income 3 months ended 6 months ended Net Income (loss) applicable to common Loans $ 81,706 $ 109,751 shares $ (17,144) Securities 13,486 23,790 Other Interest Income 905 1,301 Addback significant ite
Slide 11: Loan Portfolio as of 2Q24
Loan Portfolio as of 2Q24 ($ in 000s) Portfolio Commercial Real Estate Category $ by Asset Class % by Asset Class $5,616,724 Residential $1,219,984 Retail Real Estate $ 580,335 23% Multi-Family 488,718 19% Commercial Office Bldgs/Condos 408,472 16% Real Estate Hotels/Motels 375,190 15% $2,543,668 In
Slide 12: Security Portfolio as of 2Q24
Security Portfolio as of 2Q24 ($in 000s) Portfolio FV Net Unrealized $1,414,870 Category Amortized Cost WA Yield Losses Other U.S. Treasury & Agency $ 18,950 $ 166,380 1.31% Asset-Backed $36,848 U.S Treasury & Municipal 76,695 714,449 2.58% $76,952 Agency Agency RMBS 3,936 58,104 4.07% $147,430 Non-
Slide 13: Funding Sources as of 2Q24
Funding Sources as of 2Q24 ($ in 000s) Deposits $6,639,571 Category Average Rate QTD Demand (non-interest bearing) −% Time Deposits & Other Demand (non- Demand (interest bearing) 3.00% $934,775 interest) Money Market & Savings 1.53% $1,397,030 Brokered Certificate of Deposits 4.53% Time Deposits & O
Slide 14: 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 13.8% capital management that emphasizes acceptable risk- 10.9% adjusted returns over the long-term • Our capital manageme
Slide 15: 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% 1.21% culture and in our decision-making processes 0.18% - Managed
Slide 16: 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 17: 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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