Burke & Herbert Financial Services (BHRB) Q2 2024 earnings summary

Executive summary

• Completed merger with Summit Financial Group, creating an $8 billion institution with over 75 branches and 800+ employees across five states.

• Net loss of $17.1M for Q2 2024, driven by merger-related and CECL Day 2 provision expenses; adjusted operating net income was $25.0M.

• Net interest income and non-interest income more than doubled year-over-year due to the merger.

• Management team combines leadership from both organizations, supporting growth to $10 billion in assets.

• Declared $0.53 per share regular cash dividend, payable September 3, 2024.

Financial highlights

• Total assets reached $7.81B at June 30, 2024, up from $3.62B at year-end 2023.

• Net interest income for Q2 2024 was $59.8M, up from $23.8M in Q2 2023; net interest margin was 4.06%.

• Non-interest income for Q2 2024 was $9.5M, up 105.5% year-over-year.

• Non-interest expense for Q2 2024 was $64.4M, including $23.8M in merger-related charges.

• Provision for credit losses was $23.9M, including $29.5M CECL Day 2 non-PCD provision expense.

Outlook and guidance

• Management expects to realize cost savings, synergies, and increased value from the Summit merger.

• Second half 2024 net interest income expected between $141.0M and $149.0M.

• Noninterest income projected at $20.5–$22.0M; provision expense up to $5.0M.

• Core noninterest expense (non-GAAP) forecasted at $100–$104M; merger-related expense at $15–$17M.

• Effective tax rate expected between 17.0% and 18.5%.