Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of December 31, 2023, the Company, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, completed an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) under the Exchange Act. In designing and evaluating its disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that objectives of the disclosure controls and procedures are met. The design of any disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential conditions. Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of December 31, 2023, were effective in providing reasonable assurance that information required to be disclosed in the Company’s reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified by the SEC’s rules and forms, and that such information is accumulated and communicated to management of the Company, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting
This annual report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
Attestation Report of Independent Auditor
In accordance with the JOBS Act enacted on April 5, 2012, the Company qualifies as an “emerging growth company,” which entitles the Company to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. Specifically, the JOBS Act defers the requirement to have the Company’s independent auditor assess the Company’s internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act. As such, the Company is exempted from the requirement to include an auditor attestation report in this Annual Report for so long as the Company remains an EGC, which may be for as long as five years following its initial registration in the United States.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
150
Table of Contents
Item 9B. Other Information
During the three months ended December 31, 2023, none of our directors or officers (as defined by Rule 16a-1(f) of the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or non-rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).
151
Table of Contents
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
152
Table of Contents
PART III
Item 10. Directors, Executive Officers, and Corporate Governance
Pursuant to General Instructions G(3) of Form 10-K, the information contained under the captions “The Board of Directors,” “Executive Officers,” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders is incorporated into this item by reference.
153
Table of Contents
Item 11. Executive Compensation
Pursuant to General Instructions G(3) of Form 10-K, the information contained under the captions “Executive Compensation,” “Director Compensation,” and “Compensation Committee Interlocks and Insider Participation” in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders is incorporated into this item by reference.
154
Table of Contents
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Security Ownership of Certain Beneficial Owners and Management
Pursuant to General Instructions G(3) of Form 10-K, the information contained under the caption “Security Ownership of Certain Beneficial Owners and Management” in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders is incorporated by reference.
Equity Compensation Plans
The following table sets forth securities authorized for issuance under the 2019 SIP, the 2023 SIP, and the 2023 ESPP as of December 31, 2023. Figures below are presented on an as-converted basis.
Plan Category Number of securities to be issued upon exercise of outstanding options, warrant and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by shareholders (1)
1,000 (1)
$ — (2)
499,000 (3)
Equity compensation plans not approved by shareholders
142,585 (4)
— (2)
— (5)
Total
143,585 $ — 499,000
(1) Consists of RSUs awarded under the 2023 SIP following its approval by shareholders at the Company’s 2023 annual meeting of shareholders on March 30, 2023.
(2) There is no weighted average exercise price to disclose because RSU awards do not have an exercise price.
(3) Includes 249,000 shares of common stock remaining available for future equity awards under the 2023 SIP at December 31, 2023, as well as 250,000 shares of common stock remaining available for issuance and delivery under the 2023 ESPP. The 2023 SIP and the 2023 ESPP both authorize up to 250,000 shares of Common Stock for issuance, increasing on an annual basis by an amount equal to the lesser of 1% of the Company’s common shares issued and outstanding on the last day of the immediately preceding fiscal years and such smaller number of Common Stock as may be determined by the Board. The 2023 SIP also includes share recycling to the extent that an award granted under the 2023 SIP or 2019 SIP terminates, expires, is canceled, or is forfeited for any reason, the shares associated with that award will become available for grant under the 2023 Plan. As of December 31, 2023, no shares have been recycled from the 2019 SIP. As of December 31, 2023, there was an open purchase period under the 2023 ESPP, which concluded on February 29, 2024. Participants purchased 6,380 aggregate shares during this purchase period.
(4) Includes RSUs awarded under the 2019 SIP prior to the adoption of the 2023 SIP. The 2019 SIP was originally adopted by the board of directors of Burke & Herbert Bank & Trust Company and was then subsequently adopted by the Board of the Company, as amended, on October 27, 2022, upon its commencement of operations as a bank holding company. The 2019 SIP is an omnibus equity incentive plan which allows for the grant of Common Stock, stock options, SARs, restricted stock, RSUs, dividend equivalent rights, and cash-based awards to employees, directors, and consultants of the Company and its affiliates. The only outstanding equity awards granted under the 2019 SIP are RSUs, which vest upon the completion of a service period, specific performance goal, and/or a combination thereof.
(5) The Company had no equity compensation plans not approved by the shareholders under which equity awards may have been granted at December 31, 2023, because no future awards could be granted under the 2019 SIP as of the date of the 2023 SIP’s approval.
155
Table of Contents
Item 13. Certain Relationships and Related Transactions, and Director Independence
Pursuant to General Instructions G(3) of Form 10-K, the information contained under the captions “The Board of Directors - Director Independence” and “Company Transactions With Related Parties” in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders is incorporated into this item by reference.
156
Table of Contents
Item 14. Principal Accounting Fees and Services
Pursuant to General Instructions G(3) of Form 10-K, the information contained under the captions “Audit Committee Report” in the Company’s Proxy Statement for the 2024 Annual Meeting of Stockholders is incorporated into this item by reference.
157
Table of Contents
Part IV
Item 15. Exhibit and Financial Statement Schedules
(a) FINANCIAL STATEMENTS: The following financial statements are included in Item 8 in Notes to Consolidated Financial Statements of this Form 10-K:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2023 , and 2022
Consolidated Statements of Income for the Years Ended December 31, 2023 , 2022 , and 2021
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2023 , 2022 , and 2021
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2023 , 2022 , and 2021
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 , 2022 , and 2021
Notes to the Consolidated Financial Statements
(b) EXHIBITS: The following exhibits are included as part of this Form 10-K:
Exhibit No. Description
2.1*
A gree ment and Plan of Re organization between Burke & Herbert Financial Services Corp. and Summit Financial Group , Inc. , dated as of August 24, 2023 (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed August, 25, 2023)
3.1* Articles of Incorporation of Burke & Herbert Financial Services Corp. (incorporated by reference to Exhibit 3.1 to the Form 10 Registration Statement, filed February 28, 2023)
3.2* Articles of Amendment to the Articles of Incorporation of Burke & Herbert Financial Services Corp . (incorporated by reference to Exhibit 3.2 to the Form 10/A Registration Statement, filed April 3, 2023)
3.3* Bylaws of Burke & Herbert Financial Services Corp. (incorporated by reference to Exhibit 3.2 to the Form 10 Registration Statement, filed February 28, 2023)
4.1* Specimen certificate for the Common Stock of Burke & Herbert Financial Services Corp. (incorporated by reference to Exhibit 4.1 to the Form 10/A Registration Statement, filed April 3, 2023)
4.2# D escription of the Securities
10.1*†
2019 Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Form 10 Registration Statement, filed February 28, 2023)
10.2*†
2019 Stock Incentive Plan as Amended October 27, 2022 (incorporated by reference to Exhibit 10.2 to the Form 10 Registration Statement, filed February 28, 2023)
10.3*†
2021 Amended & Restated Nonqualified Deferred Compensation Plan for Employers & Directors (incorporated by reference to Exhibit 10.3 to the Form 10 Registration Statement, filed February 28, 2023)
10.4*†
Amended & Restated Employment Agreement, dated as of September 1, 2022, by and among Burke & Herbert Bank & Trust, and David P. Boyle (incorporated by reference to Exhibit 10.4 to the Form 10 Registration Statement, filed February 28, 2023)
10.5*†
First Amendment to Employment Agreement, dated as of October 27, 2022, by and among Burke & Herbert Bank & Trust, and David P. Boyle (incorporated by reference to Exhibit 10.5 to the Form 10 Registration Statement, filed February 28, 2023)
10.6*†
Amended & Restated Employment Agreement, dated as of September 1, 2022, by and among Burke & Herbert Bank & Trust, and Roy E. Halyama (incorporated by reference to Exhibit 10.6 to the Form 10 Registration Statement, filed February 28, 2023)
10.7*†
First Amendment to Employment Agreement, dated as of October 27, 2022, by and among Burke & Herbert Bank & Trust, and Roy E. Halyama (incorporated by reference to Exhibit 10.7 to the Form 10 Registration Statement, filed February 28, 2023)
10.8*†
Change in Control Agreement, dated as of June 16 , 2014, by and among Burke & Herbert Bank & Trust and Jeffrey A. Welch (incorporated by reference to Exhibit 10.8 to the Form 10 Registration Statement, filed February 28, 2023)
158
Table of Contents
10.9*†
Burke & Herbert Bank & Trust Supplemental Executive Retirement Plan, effective January 23, 2014 (incorporated by reference to Exhibit 10.9 to the Form 10 Registration Statement, filed February 28, 2023)
10.10*†
Burke & Herbert Financial Services Corp. 2023 Employee Stock Purchase Plan (incorporated by reference to Exhibit 99.1 to the Form S-8, filed on May 26, 2023)
10.12*†
Burke & Herbert Financial Services Corp. 2023 Stock Incentive Plan (incorporated by reference to Exhibit 99.2 to the Form S-8, filed on May 26, 2023)
21.1#
Subsidiaries of Burke & Herbert Financial Services Corp.
23.1#
C onsent of Crowe LLP
24.1 Power of Attorney (included as part of the signature page to this report)
31.1#
R ule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer of Registrant
31.2#
Rule 13a-14(a)/15d-14(a) Certification of the Principal Fi nan cial Officer of Registrant
32.1#
S ection 1350 Certification of the Principal Executive Officer of Re gistrant
32.2#
Section 1350 Certification of the Principal Financial Officer of Registrant
97.1#
E xecutive Compensation Recovery Policy
101 The following materials from the registrant’s Annual Report on Form 10-K Report for the year ended December 31, 2023, formatted in Inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Income Statements, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements.
104
The cover page of the registrant’s Annual Report on Form 10-K for the year ended December 31, 2023, formatted in Inline XBRL (contained in Exhibit 101).
__________________
* Previously filed
† Management Contract or compensatory plan or arrangement
# Filed herewith
159
Table of Contents
Item 16. Form 10-K Summary
Not applicable.
160
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 22, 2024
Burke & Herbert Financial Services Corp.
By: /s/ David P. Boyle
Name: David P. Boyle
Title: Chairman of the Board, President, & Chief Executive Officer
BE IT KNOWN BY THESE PRESENT: Each of the undersigned directors and officers, has made, constituted, and appointed, and does hereby make, constitute, and appoint Roy E. Halyama and Kirtan Parikh, and each of them (with full power to each of them to act alone), with full power of substitution, his or her true and lawful attorneys-in-fact, for him or her and in his or her name, place and stead to affix his or her signature as director or officer or both, as the case may be, of the registrant, to any and all amendments to this Annual Report on Form 10-Kt and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorney-in-fact full power and authority to do and perform every act and thing whatsoever necessary to be done in the premises, as fully as he or she might or could do if personally present, hereby ratifying and confirming all that such attorney-in-fact shall lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 22, 2024.
By: /s/ David P. Boyle
Name: David P. Boyle
Title: Chairman of the Board, President & Chief Executive Officer (Principal Executive Officer)
By: /s/ Roy E. Halyama
Name: Roy E. Halyama
Title: Executive Vice President and Chief Financial Officer (Principal Financial Officer)
By: /s/ Kirtan Parikh
Name: Kirtan Parikh
Title: Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)
By: /s/ Mark G. Anderson
Name: Mark G. Anderson
Title: Director
By: /s/ Julian F. Barnwell, Jr.
Name: Julian F. Barnwell, Jr.
Title: Director
161
Table of Contents
By: /s/ Katherine D. Bonnafé
Name: Katherine D. Bonnafé
Title: Director
By: /s/ E. Hunt Burke
Name: E. Hunt Burke
Title: Director
By: /s/ James M. Burke
Name: James M. Burke
Title: Director
By: /s/ Nicolas Carosi III
Name: Nicolas Carosi III
Title: Director
By: /s/ S. Laing Hinson
Name: S. Laing Hinson
Title: Director
By: /s/ Michael D. Lubeley
Name: Michael D. Lubeley
Title: Director
By: /s/ Shawn P. McLaughlin
Name: Shawn P. McLaughlin
Title: Director
By: /s/ Jose D. Riojas
Name: Jose D. Riojas
Title: Director
162