Burke & Herbert Financial Services Corp. (BHRB)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 delivered steady profitability: Net income applicable to common of $29.7M and diluted EPS of $1.97, flat vs Q2 and up vs Q3 2024, with ROAA 1.50% and ROAE 14.88% .
• EPS beat Wall Street consensus by $0.15 (actual $1.97 vs consensus $1.82), while total revenue (non-GAAP) of $85.4M was modestly below the $86.3M consensus; management cited lower loan accretion as a key driver of NIM compression QoQ . EPS consensus and revenue consensus values retrieved from S&P Global.*
• Balance sheet strength and liquidity remained a focal point: loan-to-deposit ratio 86.7%, total deposits increased sequentially, and total liquidity was ~$4.3B; CET1 rose to ~12.7% and leverage ratio to ~10.7% .
• Capital return steady: Board declared a regular quarterly dividend of $0.55 per share (unchanged from Q1 and Q2). Execution progress in Bethesda and newer Virginia markets serves as a narrative catalyst .

What Went Well and What Went Wrong

• What Went Well

  • Deposit growth and core deposit mix improved: total deposits +$21.1M QoQ; core deposits +$28.8M excluding brokered deposits decline .
  • Operating efficiency improved post-merger: non-interest expense fell to $48.1M from $49.3M QoQ; efficiency ratio 56.3% .
  • Management execution in new markets: “We recently opened our first branch in Bethesda, Maryland and our newer markets in Virginia, including Fredericksburg and Richmond, are exceeding our expectations.” — CEO David P. Boyle .

• What Went Wrong

  • Net interest margin (NIM) compressed to 4.08% from 4.17% QoQ, driven by lower loan accretion ($8.2M vs $11.5M in Q2), partially offset by higher securities yields and lower deposit costs .
  • Non-interest income fell sequentially to $11.6M (vs $12.9M in Q2), primarily due to prior-quarter life insurance proceeds tailwind of $1.8M .
  • Asset quality metrics edged weaker: nonperforming loans rose to $89.1M and NPLs/loans to 1.60% from 1.53% in Q2; allowance coverage of NPLs declined to ~75.9% .

Financial Results

Core P&L and Profitability Metrics

Q3 2025 Actuals vs Wall Street Consensus (S&P Global)

Values retrieved from S&P Global.*
Additional context: EPS consensus had 2 estimates; revenue consensus had 1 estimate.*

Net Interest Income and Non-Interest Income

Balance Sheet and Credit KPIs

Loan Portfolio Breakdown (Q3 2025)

Guidance Changes

Note: The company does not provide specific revenue/margin/expense guidance in these materials; forward-looking statements emphasize balance sheet strength and capital management .

Earnings Call Themes & Trends

Management Commentary

• “Our solid results reflect the teamwork in executing our strategy to be trusted advisors to our customers and to expand into attractive markets… We recently opened our first branch in Bethesda, Maryland and our newer markets in Virginia, including Fredericksburg and Richmond, are exceeding our expectations.” — David P. Boyle, Chair & CEO .
• “Our balance sheet remains well positioned with ample liquidity, solid capital ratios, and adequate loss reserves.” — David P. Boyle .
• “Our objective is to build and maintain a fortress balance sheet… Maintain credit discipline… Stay liquid… Manage capital for the long term…” — Company presentation (3Q25 update) .
• “We take the long-view and maintain a moderate risk profile through the economic cycle.” — Company presentation (Final Thoughts) .

Q&A Highlights

• Not available; a Q3 2025 earnings call transcript was not present in the document catalog. We will update if a transcript is furnished in the filings.

Estimates Context

• EPS: Actual $1.97 vs consensus $1.82 → bold beat of $0.15; consensus based on 2 estimates.*
• Revenue (Total revenue, non-GAAP): Actual $85.4M vs consensus $86.3M → modest miss of ~$1.0M; consensus based on 1 estimate.*
• Implications: Estimates may need minor upward revision to EPS forecasts (steady efficiency and lower deposit costs), while revenue models should reflect lower accretion-driven NIM and slightly lower non-interest income vs Q2 tailwinds .
  Values retrieved from S&P Global.*

Key Takeaways for Investors

• EPS resilience with operating efficiency gains offset NIM pressure from lower loan accretion; sequential EPS held at $1.97 despite margin compression .
• EPS beat and slight revenue miss vs consensus (thin estimate coverage) suggest limited immediate estimate risk, with model fine-tuning around accretion, securities yield, and deposit costs.*
• Deposit mix improved (core deposit growth, brokered deposits down), supporting cost of deposits decline to 1.87% and balance sheet stability .
• Capital ratios improved across 2025, and $30M sub debt redemption in Q3 underscores proactive capital management amid modest NPL uptick .
• Asset quality warrants monitoring (NPLs/loans at 1.60%), but allowance coverage and moderate risk profile remain consistent with the bank’s stated appetite .
• Strategic expansion is advancing (Bethesda opening; Virginia markets ahead of plan), providing medium-term growth optionality in affluent DMV corridors .
• Near-term trading: narrative likely centers on NIM trajectory and accretion normalization; medium-term thesis hinges on deposit growth/fee income, disciplined credit, and continued capital strength .

* S&P Global consensus values; source: GetEstimates.