Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of December 31, 2024, 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, 2024, 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
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s CEO and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 using the criteria set forth in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013 framework). Based on the assessment using those criteria, management concluded that the internal control over financial reporting was effective on December 31, 2024.
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 period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Item 9B. Other Information
During the three months ended December 31, 2024, 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).
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Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers, and Corporate Governance
The Company has an insider trading policy governing the purchase, sale and other dispositions of the Company’s securities that applies to all Company personnel, including directors, officers, employees, and other covered persons. The Company believes that its insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of the Company’s insider trading policy is filed as Exhibit 19.1 to this Form 10-K.
Pursuant to General Instructions G(3) of Form 10-K, the information contained under captions “Proposal 1 Election of Directors,” “The Board of Directors,” “Executive Officers,” “Delinquent Section 16(a) Reports” and “The Board of Directors - Code of Ethics” in the Company’s Proxy Statement for the 2025 Annual Meeting of Shareholders is incorporated into this item by reference.
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Item 11. Executive Compensation
Pursuant to General Instructions G(3) of Form 10-K, the information contained under the caption “Executive Compensation,” “Executive Compensation - Director Compensation,” and “Executive Compensation - Compensation Committee Interlocks and Insider Participation” in the Company’s Proxy Statement for the 2025 Annual Meeting of Shareholders is incorporated into this item by reference.
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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 2025 Annual Meeting of Shareholders 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, 2024. 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)
100,510 (1) $ — (2) 536,607 (3)
Equity compensation plans not approved by shareholders 33,692 (4) — (2) — (5)
Total 134,202 $ — 536,607
(1) Consists of 100,510 shares of common stock issuable pursuant to outstanding RSUs awarded under the 2023 SIP.
(2) Since RSU awards do not have an exercise price, they are not included in the weighted average exercise price.
(3) Includes 224,377 shares of common stock remaining available for future equity awards under the 2023 SIP at December 31, 2024, as well as 312,230 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 (not to exceed 250,000 for the 2023 ESPP) 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. The maximum number of shares of common stock available for issuance under both the 2023 SIP and the 2023 ESPP was increased by 74,287 shares on January 1, 2024. As of December 31, 2024, 600 shares have been recycled from the 2019 SIP. As of December 31, 2024, there was an open purchase period under the 2023 ESPP, which concluded on February 28, 2025. Participants purchased 7,020 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 the Bank 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. The table does not include information for the Summit Financial Group, Inc. Long-Term Incentive Plan (the “Summit LTIP”) assumed by the Company upon completion of the Merger. As of December 31, 2024, 118 shares of common stock are issuable pursuant to outstanding RSUs issued under the Summit LTIP, and 136,943 shares of common stock are issuable, based upon our December 31, 2024, closing price of $62.36, with respect to 183,971 SAR awards exercisable at December 31, 2024, under the Summit LTIP. No further grants may be made under the Summit LTIP.
(5) No further awards may be granted under either the 2019 SIP or the Summit LTIP.
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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 2025 Annual Meeting of Shareholders is incorporated into this item by reference.
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Item 14. Principal Accounting Fees and Services
Pursuant to General Instructions G(3) of Form 10-K, the information contained under the caption “Proposal 2 Ratification of Appointment of Independent Registered Public Accounting Firm” in the Company’s Proxy Statement for the 2025 Annual Meeting of Shareholders is incorporated into this item by reference.
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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, 202 4 , and 202 3
Consolidated Statements of Income for the Years Ended December 31, 202 4 , 202 3 , and 202 2
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 202 4 , 202 3 , and 202 2
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 202 4 , 202 3 , and 202 2
Consolidated Statements of Cash Flows for the Years Ended December 31, 202 4 , 202 3 , and 202 2
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 greement and Plan of Reorganization 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 Form 8-K filed on August 25, 2023)
3.1* Articles of Incorporation of Burke & Herbert Financial Services Corp. , as amended (incorporated by reference to Exhibit 3.1 to the Form 10-Q, filed August 13, 2024)
3.3* Bylaws of Burke & Herbert Financial Services Corp. (incorporated by reference to Exhibit 3.4 to the Form 10-Q, filed May 10, 2024)
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*
Description of Burke & Herbert Financial Serv ices Corp. Securities (incorporated by reference to Exhibit 4.1 to the Form S-3 Registration Statement, Filed November 15, 2024)
4.3*
Summit Financial Group, Inc., Form of 5.00% Fixed-to-Floating Rate Subordinated Notes due 2030 (included as Exhibit A to the Form of Subordinated Note Purchase Agreement dated as of September 22, 2020, by and between Summit Financial Group, Inc. and each of the Purchasers) (incorporated by reference to Exhibit 10.1 to Summit Financial Group, Inc.’s Form 8-K filed on September 23, 2020 (File No. 000-16587))
4.4*
Summit Financial Group, Inc., Forms of 3.25% Fixed-to-Floating Rate Subordinated Note due 2031 (included as Exhibit A-1 and Exhibit A-2 to the Indenture, dated as of November 16, 2021, by and between Summit Financial Group, Inc. and UMB Bank, N.A., as Trustee) (incorporated by reference to Exhibit 4.1 to Summit Financial Group, Inc.’s Form 8-K filed on November 17, 2021 (File No. 000-16587))
4.5*
Indenture, date d as of November 16, 2021, by and between Summit Financial Group, Inc. and UMB Bank, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to Summit Financial Group, Inc.’s Form 8-K filed on November 17, 2021 (File No. 000-16587))
10.1*†
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)
10.2*†
2021 Amended & Restated Nonqualified Deferred Compensation Plan for Employe es & Directors (incorporated by reference to Exhibit 10.3 to the Form 10 Registration Statement, filed February 28, 2023)
10.3*†
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)
10.4*†
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)
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10.5*†
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)
10.6*†
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)
10.7*†
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)
10.8*†
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)
10.9*†
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)
10.10*†
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)
10.11*†
Employment Agreement, dated as of August 24, 2023, by and between Burke & Herbert Bank & Trust Company and H. Charles Maddy, III (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on May 3, 2024)
10.12*†
Burke & Herbert Bank 2024-2025 Merger Incentive Plan (incorporated by reference to Exhibit 10.4 to the Form 8-K filed on May 3, 2024)
10.13*†
Burke & Herbert Bank 2024-2025 Merger Incentive Plan Form of Performance-Based Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.5 to the Form 8-K filed on May 3, 2024 )
10.14#†
Separation Agreement and Release of Claims, dated as of January 2, 2025, by and between Burke & Herbert Bank & Trust Company and Jeffrey Welch
10.15*†
Summit Financial Group, Inc. 2014 Long- Term Incentive Plan (incorporated by reference to Summit Financial Group, Inc.’s Form S-8 filed on September 25, 2014 (File No. 333-198939))
10.16*†
F orm of Summit Fina ncial Group, Inc. 201 4 Long-Term Incentive Plan Stock Settled Stock Appreciation Rights Agreement 2015 Award (incorporated by reference to Exhibit 10.1 to Summit Financial Group, Inc.’s Form 8-K filed April 29, 2015 (File No. 000-16587))
10.17*†
Form of Summit Financial Group, Inc. 2014 Long-Term Incentive Plan Stock Settled Stock Appreciation Rights Agreement 201 7 Award (incorporated by reference to Exhibit 10.3 to Summit Financial Group, Inc.’s Form 8-K filed February 15, 2017(File No. 000-16587))
10.18*†
Form of Summit Financial Group, Inc. 2014 Long-Term Incentive Plan Stock Settled Stock Appreciation Rights Agreement 201 9 Award (incorporated by reference to Exhibit 10.3 to Summit Financial Group, Inc.’s Form 8-K filed February 7, 2019 (File No. 000-16587))
10.19*†
Form of Summit Financial Group, Inc. 2014 Long-Term Incentive Plan Stock Settled Stock Appreciation Rights Agreement 20 21 Award (incorporated by reference to Exhibit 10.2 to Summit Financial Group, Inc.’s Form 8-K filed July 21, 2021 (File No. 000-16587))
10.20†#
Form of Summit Financial Group, Inc. 2014 Long-Term Incentive Plan Stock Settled Stock Appreciation Rights Agreement 2023 Award
19.1#
Burk e & Herbert Financial Services Corp. Insider Trading Policy
21.1#
Subsidiaries of Burke & Herbert Financial Services Corp.
23.1#
Consent of Crowe LLP
31.1#
Rule 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 Financial Officer of Registrant
32.1#
Section 1350 Certification of the Principal Executive Officer of Registrant
32.2#
Section 1350 Certification of the Principal Financial Officer of Registrant
97.1*
Executive Compensation Recovery Policy (incorporated by reference to Exhibit 97.1 to the Form 10-K filed on March 22, 2024)
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101 The following materials from the registrant’s Annual Report on Form 10-K Report for the year ended December 31, 2024, formatted in Inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Changes in Shareholders’ 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, 2024, formatted in Inline XBRL (contained in Exhibit 101).
__________________
* Previously filed
† Management Contract or compensatory plan or arrangement
# Filed herewith
(c) FINANCIAL STATEMENT SCHEDULES. All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable or pertain to items as to which the required disclosures have been made elsewhere in the financial statements and notes thereto, and therefore have been omitted.
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Item 16. Form 10-K Summary
Not applicable.
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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 17, 2025
Burke & Herbert Financial Services Corp.
By: /s/ David P. Boyle
Name: David P. Boyle
Title: Chairman of the Board and Chief Executive Officer
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 17, 2025.
By: /s/ David P. Boyle
Name: David P. Boyle
Title: Chairman of the Board and 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 Interim Chief Accounting Officer (Principal Accounting Officer)
By: /s/ H. Charles Maddy, III
Name: H. Charles Maddy, III
Title: President and Director
By: /s/ Mark G. Anderson
Name: Mark G. Anderson
Title: Director
By: /s/ Julian F. Barnwell, Jr.
Name: Julian F. Barnwell, Jr.
Title: Director
By: /s/ Oscar M. Bean
Name: Oscar M. Bean
Title: Director
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By: /s/ Katherine D. Bonnafé
Name: Katherine D. Bonnafé
Title: Director
By: /s/ James M. Burke
Name: James M. Burke
Title: Director
By: /s/ James P. Geary, II
Name: James P. Geary, II
Title: Director
By: /s/ Georgette R. George
Name: Georgette R. George
Title: Director
By: /s/ Gary L. Hinkle
Name: Gary L. Hinkle
Title: Director
By: /s/ S. Laing Hinson
Name: S. Laing Hinson
Title: Director
By: /s/ Jason A. Kitzmiller
Name: Jason A. Kitzmiller
Title: Director
By: /s/ Shawn P. McLaughlin
Name: Shawn P. McLaughlin
Title: Director
By: /s/ Charles S. Piccirillo
Name: Charles S. Piccirillo
Title: Director
By: /s/ Jose D. Riojas
Name: Jose D. Riojas
Title: Director
By: /s/ Jill S. Upson
Name: Jill S. Upson
Title: Director
164