Burke & Herbert Financial Services Corp. reported a net income of $27.1 million for the first quarter of 2026, a slight increase from $27.0 million in the same period last year. The company's total interest income decreased by 4.8% to $105.5 million, primarily due to lower accretion income from loans, which fell to $6.8 million from $11.4 million. However, interest expense also declined to $33.6 million from $37.8 million, contributing to a net interest income of $71.8 million, down from $73.0 million year-over-year. The tax-adjusted net interest margin was reported at 4.09%, compared to 4.18% in the previous year.
Total assets for Burke & Herbert stood at $7.9 billion as of March 31, 2026, reflecting a marginal increase from $7.9 billion at the end of 2025. The loan portfolio remained stable, with net loans at $5.3 billion, while total deposits decreased by $71.7 million to $6.3 billion. The company also saw an increase in short-term borrowings, which rose to $525 million from $450 million. The allowance for credit losses was $68 million, representing 1.26% of gross loans, slightly up from 1.20% a year earlier.
In terms of strategic developments, Burke & Herbert is set to complete its merger with LINKBANCORP, Inc. on May 1, 2026. This merger is expected to enhance the company's market presence and operational capabilities. The company has also been focusing on expanding its geographic footprint, with over 77 branches across multiple states, including Virginia, West Virginia, and Maryland.
Operationally, the company reported a total of 830 full-time employees, a slight increase from 814 in the previous year. The non-performing assets increased to $81.7 million, up from $76.9 million at the end of 2025, with non-accrual loans rising to $74.4 million. The company continues to monitor its commercial real estate portfolio closely, which constitutes a significant portion of its loan portfolio, accounting for 51.9% of gross loans.
Looking ahead, Burke & Herbert's management remains optimistic about the company's growth prospects, particularly with the anticipated benefits from the LINKBANCORP merger. The company is focused on maintaining its capital adequacy, with a common equity tier 1 capital ratio of 13.78%, well above the regulatory minimum. Management is also committed to managing interest rate risk and ensuring liquidity to support ongoing operations and growth initiatives.
About Burke & Herbert Financial Services Corp.
Burke & Herbert Financial Services Corp. is a Virginia-based bank holding company owning Burke & Herbert Bank & Trust Company, a community-oriented commercial bank serving small to medium-sized businesses, professionals, non-profits, and individuals. It offers deposit accounts, commercial and residential loans, treasury management, and wealth services primarily in northern Virginia, West Virginia, and surrounding states. The company emphasizes personalized service, local decision-making, disciplined credit practices, and modern banking technology.
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