10-Q · May 8, 2026
Burke & Herbert Financial Services Corp. reported steady earnings with diluted EPS of $1.87 for Q1 2026, matching the prior period yet slightly below forecasts. Revenues saw a minor decline to $84.7 million from $121…
Earnings analysis · 10-Q
BHRB earnings analysis
Filed August 7, 2026 · Our reading of the company's report
The latest report
The quarter showed strong merger-driven balance-sheet and net-interest-income growth, but profitability deteriorated sharply as merger-related costs drove non-interest expense up 89.6% and diluted EPS fell to $0.50 from…
Read full summary
The quarter showed strong merger-driven balance-sheet and net-interest-income growth, but profitability deteriorated sharply as merger-related costs drove non-interest expense up 89.6% and diluted EPS fell to $0.50 from $1.97. Credit metrics remain adequately reserved, although non-performing assets increased to $98.242 million and CRE exposure reached 68.8% of gross loans including related categories. The filing provides no quantitative guidance; management says liquidity is adequate for continued growth, while the $10 billion asset threshold introduces additional regulatory costs and future interchange-income pressure.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.5
- Segment
- Community Banking: sole reportable segment; three-month net interest income was $93.042 million and non-interest income was $13.849 million for total operating inflows of $106.891 million.
What stood out
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Net Interest Income Grew Strongly
Net interest income increased 25.3% year over year to $93.042 million from $74.233 million for the quarter, primarily because the LNKB Merger increased interest-earning assets. Six-month net interest income rose 12.0% to $164.885 million from $147.220 million.
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Fee Income Expanded
Non-interest income increased 7.5% year over year to $13.849 million from $12.877 million. Fiduciary and wealth management income rose to $3.100 million from $2.425 million, while other non-interest income increased to $3.703 million from $2.278 million.
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Capital Ratios Remain Strong
The company remained well capitalized: consolidated CET1 capital was $1.070 billion, or 11.78%, and the Bank's CET1 ratio was 13.32% as of June 30, 2026. The Bank was categorized as well capitalized under prompt corrective action standards.
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Merger Added Significant Scale
Loan and deposit scale expanded following the LNKB Merger. Gross loans increased to $7.9998 billion from $5.3877 billion at December 31, 2025, while deposits rose to $8.9681 billion from $6.4039 billion.
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Liquidity Capacity Is Substantial
Liquidity resources remain substantial, with $167.153 million of cash and cash equivalents and $6.0 billion of unused borrowing capacity as of June 30, 2026. Management stated that current liquidity sources are adequate to meet requirements and planned growth.
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Charge-Offs Declined Year Over Year
Net charge-offs declined to $1.893 million for the six months ended June 30, 2026, from $2.964 million in the prior-year period, while the allowance coverage ratio was 1.18% and allowance coverage of non-performing loans was 99.12%.
What to watch
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Merger Costs Depressed Earnings
Quarterly net income applicable to common shares fell 68.8% to $9.257 million from $29.672 million, and diluted EPS declined to $0.50 from $1.97. Management attributed the decline primarily to LNKB Merger-related expenses, which totaled $33.7 million for the six months ended June 30, 2026.
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Operating Expense Spike
Non-interest expense increased 89.6% year over year to $93.506 million from $49.305 million in the quarter, including salaries and wages of $41.378 million versus $21.320 million and other operating expense of $24.258 million versus $10.007 million.
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Significant CRE Concentration
Commercial real estate concentration remains material: CRE exposure was $3.898 billion, or 48.7% of gross loans, excluding owner-occupied CRE and acquisition, construction and development. Including those categories, total exposure was $5.5 billion, or 68.8% of gross loans.
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Non-Performing Assets Increased
Asset quality weakened in absolute terms after the merger. Non-performing assets increased to $98.242 million from $76.925 million at December 31, 2025, including non-accrual loans of $88.388 million versus $70.613 million.
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Crossing $10B Raises Costs
The company crossed the $10 billion asset threshold, ending the quarter with $10.991 billion of assets. Management expects additional CFPB oversight, higher compliance requirements and expenses, while Durbin Amendment interchange-fee limits beginning July 1, 2027 are expected to cause a meaningful reduction in debit-card interchange revenue.
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Greater Interest-Rate Sensitivity
Interest-rate sensitivity increased materially: a 200-basis-point rate increase was estimated to reduce economic value of equity by 15.6% as of June 30, 2026, compared with an 8.3% reduction at December 31, 2025.
Management's outlook
No quantitative revenue or EPS guidance was provided in the 10-Q. Management stated that current liquidity sources are adequate to meet requirements and plans for continued growth, but did not provide numeric outlook targets.
Earlier filings 4
10-K · February 27, 2026
Burke & Herbert positions itself as a community-focused bank emphasizing local decision-making, personalized service and organic growth augmented by M&A (Summit closed May 3, 2024; LNKB merger pending). The company…
10-Q · May 9, 2025
For the first quarter ended March 31, 2025, Burke & Herbert Financial Services Corp. reported a notable increase in revenue and earnings per share compared to the previous year. Revenue stood at $121M with a gross…
10-Q · November 13, 2024
Burke & Herbert reported a strong quarter driven by the Summit merger: total quarter revenue (net interest income after provision + non-interest income) of $83,648,000 and diluted EPS of $1.82, up sharply from the…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.