Burke & Herbert Financial Services Corp. 10-Q

Item 1. Financial Statements Burke & Herbert Financial Services Corp. Consolidated Financial Statements: Page Consolidated Balance Sheets as of Septem ber 30, 2025 (Unaudited), and December 31, 2024 2 Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2025, and September 30, 2024 (Unaudited) 3 Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025, and September 30, 2024 (Unaudited) 4 Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended September 30, 2025, and September 30, 2024 (Unaudited) 5 Consolidated Statements of Cash Flows for the N ine Months Ended September 30, 2025, and September 30, 2024 (Unaudited) 7 Notes to the Consolidated Financial Statements (Unaudited) 9 1 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Balance Sheets (In thousands, except share and per share data) September 30, 2025 (Unaudited) December 31, 2024 (Audited) Assets Cash and due from banks $ 55,224 $ 35,554 Interest-earning deposits with banks 76,489 99,760 Cash and cash equivalents 131,713 135,314 Securities available-for-sale, at fair value 1,598,407 1,432,371 Restricted stock, at cost 42,187 33,559 Loans held-for-sale 1,303 2,331 Loans 5,559,479 5,672,236 Allowance for credit losses ( 67,604 ) ( 68,040 ) Net loans 5,491,875 5,604,196 Premises and equipment, net 136,117 132,270 Other real estate owned 2,742 2,783 Accrued interest receivable 35,444 34,454 Intangible assets 45,431 57,300 Goodwill 34,149 32,783 Company-owned life insurance 182,980 182,834 Other assets 186,689 161,990 Total Assets $ 7,889,037 $ 7,812,185 Liabilities and Shareholders’ Equity Liabilities Non-interest-bearing deposits $ 1,358,250 $ 1,379,940 Interest-bearing deposits 5,053,802 5,135,299 Total deposits 6,412,052 6,515,239 Short-term borrowings 450,000 365,000 Subordinated debentures, net 68,906 94,872 Subordinated debentures owed to unconsolidated subsidiary trusts 17,204 17,013 Accrued interest and other liabilities 118,644 89,904 Total Liabilities 7,066,806 7,082,028 Commitments and contingent liabilities (see Note 10) Shareholders’ Equity Preferred stock and related surplus, $ 1.00 par value per share; 2,000,000 shares authorized; 1,500 shares issued and outstanding at September 30, 2025; 1,500 shares issued and outstanding at December 31, 2024 10,413 10,413 Common Stock 7,800 7,770 $ 0.50 par value; 40,000,000 shares authorized, 15,599,814 shares issued and 15,028,524 shares outstanding at September 30, 2025; 40,000,000 shares authorized, 15,540,394 shares issued and 14,969,104 shares outstanding at December 31, 2024 Common stock, additional paid-in capital 404,656 401,172 Retained earnings 495,400 434,106 Accumulated other comprehensive income (loss) ( 68,454 ) ( 95,720 ) Treasury stock ( 27,584 ) ( 27,584 ) 571,290 shares, at cost, at September 30, 2025, and 571,290 shares, at cost, at December 31, 2024 Total Shareholders’ Equity 822,231 730,157 Total Liabilities and Shareholders’ Equity $ 7,889,037 $ 7,812,185 See Notes to Consolidated Financial Statements. 2 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Statements of Income (In thousands, except share and per share data) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Interest income Taxable loans, including fees $ 95,132 $ 103,682 $ 288,966 $ 213,400 Tax-exempt loans, including fees 47 48 136 81 Taxable securities 9,062 10,076 27,852 29,949 Tax-exempt securities 4,863 3,135 12,069 7,052 Other interest income 2,105 1,585 4,830 2,886 Total interest income 111,209 118,526 333,853 253,368 Interest expense Deposits 30,286 39,441 92,568 82,745 Short-term borrowings 4,379 3,080 12,009 10,806 Subordinated debt 2,748 2,798 8,207 4,658 Other interest expense 26 28 79 84 Total interest expense 37,439 45,347 112,863 98,293 Net interest income 73,770 73,179 220,990 155,075 Credit loss expense - loans and available-for-sale securities 574 85 2,191 19,515 Credit loss expense (recapture) - off-balance sheet credit exposures ( 312 ) 62 ( 804 ) 3,872 Total provision for credit losses 262 147 1,387 23,387 Net interest income after credit loss expense 73,508 73,032 219,603 131,688 Non-interest income Fiduciary and wealth management 2,664 2,352 7,532 5,982 Service charges and fees 2,070 2,509 6,195 4,977 Net gains on securities 212 — 251 613 Income from company-owned life insurance 1,152 1,330 5,327 2,799 Bank debit and other card revenue 3,192 3,119 9,100 6,708 Other non-interest income 2,295 1,306 6,080 3,296 Total non-interest income 11,585 10,616 34,485 24,375 Non-interest expense Salaries and wages 20,848 20,858 63,109 51,271 Pensions and other employee benefits 4,429 4,678 13,632 12,346 Occupancy 3,479 3,412 11,045 7,947 Equipment rentals, depreciation and maintenance 3,908 4,699 12,092 18,643 Core deposit intangible amortization 3,683 4,297 11,869 7,162 ATM, card and network expense 1,200 1,640 3,646 3,299 FDIC and other regulatory assessments 976 1,037 2,978 2,500 Other operating 9,569 10,205 28,690 33,255 Total non-interest expense 48,092 50,826 147,061 136,423 Income before income taxes 37,001 32,822 107,027 19,640 Income tax expense 7,037 5,200 19,965 3,725 Net income 29,964 27,622 87,062 15,915 Preferred stock dividends 225 225 675 450 Net income applicable to common shares $ 29,739 $ 27,397 $ 86,387 $ 15,465 Earnings per common share: Basic $ 1.98 $ 1.83 $ 5.76 $ 1.34 Diluted 1.97 1.82 5.74 1.33 See Notes to Consolidated Financial Statements. 3 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Statements of Comprehensive Income (In thousands, except share and per share data) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income $ 29,964 $ 27,622 $ 87,062 $ 15,915 Other comprehensive income (loss), net of tax: Unrealized gains (losses) on securities: Unrealized gain (loss) arising during period, net of tax of ($ 5,965 ) and ($ 7,610 ) for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of ($ 8,525 ) and ($ 7,714 ) for the nine months ended September 30, 2025, and September 30, 2024, respectively 19,970 28,628 28,540 29,019 Reclassification adjustment for loss (gain) on securities, net of tax of $ 49 and $ 0 for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of $ 58 and $ 129 for the nine months ended September 30, 2025, and September 30, 2024, respectively ( 163 ) — ( 193 ) ( 484 ) Reclassification adjustment for loss (gain) on fair value hedge, net of tax of $ 9 and $ 9 for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of $ 27 and $ 25 for the nine months ended September 30, 2025, and September 30, 2024, respectively ( 31 ) ( 32 ) ( 92 ) ( 95 ) Defined benefit pension plans: Changes in pension plan benefits, net of tax of $ — and $ — for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of $ 8 and — for the nine months ended September 30, 2025, and September 30, 2024, respectively — — ( 26 ) — Unrealized gain (loss) on cash flow hedge: Unrealized holding gain (loss) on cash flow hedge, net of tax of ($ 51 ) and $ 816 for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of ($ 142 ) and ($ 128 ) for the nine months ended September 30, 2025, and September 30, 2024, respectively 170 ( 3,071 ) 475 483 Reclassification adjustment for losses (gains) included in net income, net of tax $ 163 and $ 227 for the three months ended September 30, 2025, and September 30, 2024, respectively, net of tax of $ 430 and $ 315 for the nine months ended September 30, 2025, and September 30, 2024, respectively ( 546 ) ( 853 ) ( 1,438 ) ( 1,187 ) Total other comprehensive income (loss) 19,400 24,672 27,266 27,736 Comprehensive income (loss) $ 49,364 $ 52,294 $ 114,328 $ 43,651 See Notes to Consolidated Financial Statements. 4 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Statements of Changes in Shareholders’ Equity For the Three Months Ended September 30, 2025, and 2024 (In thousands, except share and per share data) (Unaudited) Preferred Stock and Surplus Common Stock Retained Earnings Comprehensive Income (Loss) Treasury Stock Shareholders’ Equity Shares Outstanding Amount Additional Paid-in Capital Balance June 30, 2025 $ 10,413 15,007,712 $ 7,790 $ 403,234 $ 474,019 $ ( 87,854 ) $ ( 27,584 ) $ 780,018 Net income — — — — 29,964 — — 29,964 Other comprehensive income (loss) — — — — — 19,400 — 19,400 (Purchase) sale of treasury stock, net — — — — — — — — Common stock cash dividends, declared — — — — ( 8,262 ) — — ( 8,262 ) Preferred stock cash dividends, declared — — — — ( 225 ) — — ( 225 ) Share-based compensation expense, net — 20,812 10 1,422 ( 96 ) — — 1,336 Balance September 30, 2025 $ 10,413 15,028,524 $ 7,800 $ 404,656 $ 495,400 $ ( 68,454 ) $ ( 27,584 ) $ 822,231 Balance June 30, 2024 $ 10,413 14,932,169 $ 7,752 $ 399,553 $ 403,422 $ ( 100,430 ) $ ( 27,584 ) $ 693,126 Net income — — — — 27,622 — — 27,622 Other comprehensive income (loss) — — — — — 24,672 — 24,672 (Purchase) sale of treasury stock, net — — — — — — — — Common stock cash dividends, declared — — — — ( 7,921 ) — — ( 7,921 ) Preferred stock cash dividends, declared — — — — ( 225 ) — — ( 225 ) Share-based compensation expense, net — 30,834 15 824 ( 54 ) — — 785 Balance September 30, 2024 $ 10,413 14,963,003 $ 7,767 $ 400,377 $ 422,844 $ ( 75,758 ) $ ( 27,584 ) $ 738,059 See Notes to Consolidated Financial Statements. 5 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Statements of Changes in Shareholders’ Equity For the Nine Months Ended September 30, 2025, and 2024 (In thousands, except share and per share data) (Unaudited) Preferred Stock and Surplus Common Stock Retained Earnings Comprehensive Income (Loss) Treasury Stock Shareholders’ Equity Shares Outstanding Amount Additional Paid-in Capital Balance December 31, 2024 $ 10,413 14,969,104 $ 7,770 $ 401,172 $ 434,106 $ ( 95,720 ) $ ( 27,584 ) $ 730,157 Net income — — — — 87,062 — — 87,062 Other comprehensive income (loss) — — — — — 27,266 — 27,266 (Purchase) sale of treasury stock, net — — — — — — — — Common stock cash dividends, declared — — — — ( 24,753 ) — — ( 24,753 ) Preferred stock cash dividends, declared — — — — ( 675 ) — — ( 675 ) Share-based compensation expense, net — 59,420 30 3,484 ( 340 ) — — 3,174 Balance September 30, 2025 $ 10,413 15,028,524 $ 7,800 $ 404,656 $ 495,400 $ ( 68,454 ) $ ( 27,584 ) $ 822,231 Balance December 31, 2023 $ — 7,428,710 $ 4,000 $ 14,495 $ 427,333 $ ( 103,494 ) $ ( 27,584 ) $ 314,750 Acquisition of Summit Financial Group, Inc. 10,413 7,405,772 3,703 383,329 — — — 397,445 Net income — — — — 15,915 — — 15,915 Other comprehensive income (loss) — — — — — 27,736 — 27,736 (Purchase) sale of treasury stock, net — — — — — — — — Common stock cash dividends, declared — — — — ( 19,729 ) — — ( 19,729 ) Preferred stock cash dividends, declared — — — — ( 450 ) — — ( 450 ) Share-based compensation expense, net — 128,521 64 2,553 ( 225 ) — — 2,392 Balance September 30, 2024 $ 10,413 14,963,003 $ 7,767 $ 400,377 $ 422,844 $ ( 75,758 ) $ ( 27,584 ) $ 738,059 See Notes to Consolidated Financial Statements. 6 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Statements of Cash Flows (In thousands, except share and per share data) (Unaudited) Nine Months Ended September 30, 2025 2024 Cash Flows from Operating Activities Net Income $ 87,062 $ 15,915 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of fixed assets 5,142 4,130 Amortization of other intangible assets 12,036 7,204 Amortization on assumed liabilities 5,297 6,324 Accretion income related to acquired loans ( 31,152 ) ( 28,836 ) Amortization of housing tax credits 5,276 4,117 Realized (gain) on sales of available-for-sale securities ( 251 ) ( 613 ) Realized (gain) loss on sales of OREO property 2 ( 172 ) Provision for credit losses 1,387 23,387 Income from company-owned life insurance ( 5,327 ) ( 2,799 ) Deferred tax expense (benefit) 10,341 ( 41,052 ) Loss on disposal of fixed assets 89 1,167 Accretion of securities ( 3,362 ) ( 2,743 ) Amortization of securities 7,286 7,072 Share-based compensation expense 3,642 2,184 Repayment of operating lease liabilities ( 1,900 ) ( 2,013 ) (Gain) on loans held-for-sale ( 274 ) ( 297 ) Proceeds from sale of loans held-for-sale 19,604 28,002 Change in fair value of loans held-for-sale — 28 Originations of loans held-for-sale ( 18,302 ) ( 30,452 ) (Increase) in accrued interest receivable ( 990 ) ( 104 ) (Increase) in other assets ( 48,903 ) ( 43,413 ) Increase in accrued interest payable and other liabilities 30,287 61,882 Net cash flows provided by operating activities $ 76,990 $ 8,918 Cash Flows from Investing Activities Proceeds from maturities, prepayments, and calls of securities available-for-sale, net 157,953 190,224 Proceeds from sale of securities available-for-sale, net 6,194 365,990 Purchases of securities available-for-sale, net ( 300,257 ) ( 530,863 ) Cash (paid) from merger, net — ( 750 ) Sales of restricted stock 29,071 24,914 Purchases of restricted stock ( 37,699 ) ( 35,781 ) Purchases of property and equipment, net of disposals ( 9,078 ) ( 4,273 ) Proceeds from company-owned life insurance 5,181 2,213 Proceeds from sale of OREO property 156 — Decrease in loans made to customers, net 142,087 190,979 Net cash flows provided by (used in) investing activities $ ( 6,392 ) $ 202,653 Cash Flows from Financing Activities Net (decrease) in non-interest-bearing accounts ( 21,690 ) ( 19,833 ) Net (decrease) in interest-bearing accounts ( 82,569 ) ( 85,295 ) Net increase in other short-term borrowings 85,000 158,485 Payment for call of subordinated debt ( 30,000 ) — Repayment of finance lease liabilities ( 170 ) ( 161 ) Cash dividends paid ( 25,428 ) ( 20,179 ) 7 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Statements of Cash Flows (In thousands, except share and per share data) (Unaudited) Proceeds from employee stock purchase program 523 62 Issuance of common stock 135 2,617 Sale of treasury stock — — Net cash flows provided by (used in) financing activities $ ( 74,199 ) $ 35,696 Increase (decrease) in cash and cash equivalents ( 3,601 ) 247,267 Cash and cash equivalents Beginning of period 135,314 44,498 End of period $ 131,713 $ 291,765 Supplemental Disclosures of Cash Flow Information Cash payments for: Interest paid to depositors $ 94,434 $ 78,835 Interest paid on short-term borrowings 13,896 19,157 Interest paid on subordinated debt and trust preferred securities 3,982 4,658 Interest paid on finance leases 79 83 Income taxes 6,543 775 Change in unrealized gains on available-for-sale securities 33,599 36,265 Lease liability arising from obtaining right-of-use assets — 11,130 Loans transferred to other real estate owned 117 — Common stock issued for merger, net — 387,032 Preferred stock issued for merger, net — 10,413 See Notes to Consolidated Financial Statements. 8 Table of Contents Notes to Consolidated Financial Statements Note 1— Nature of Business Activities and Significant Accounting Policies Nature of operations The consolidated financial statements include Burke & Herbert Financial Services Corp. (“Burke & Herbert”) and its wholly-owned subsidiary Burke & Herbert Bank & Trust Company (“the Bank”), together referred to as “the Company” for purposes of the Notes to the Financial Statements. Burke & Herbert Financial Services Corp. was organized as a Virginia corporation in 2022 to serve as the holding company for the Bank. Burke & Herbert became a bank holding company when it commenced operations on October 1, 2022, following a reorganization transaction in which it acquired control of the Bank under the Bank Holding Company Act of 1956 (“BHCA”). This transaction was treated as an internal reorganization as all shareholders of the Bank became shareholders of the Company. The Company has no material operations other than owning the Bank. In September 2023, the Company elected to become a financial holding company under the BHCA. As a financial holding company of a Virginia state bank, the Company is subject to regulation, supervision, and examination by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the Bureau of Financial Institutions of the Virginia State Corporation Commission (the “Virginia BFI”). The Bank is a Virginia chartered commercial bank that commenced operations in 1852. The Bank became a member of the Federal Reserve System on December 31, 2024. The Bank is subject to regulation, supervision, and examination by the Federal Reserve (through the Federal Reserve Bank of Richmond) and the Virginia BFI. The Bank’s primary market area includes northern Virginia and West Virginia, and it has over 77 branches and commercial loan offices across Delaware, Kentucky, Maryland, Virginia, and West Virginia. The Company’s branch locations accept business and consumer deposits from a diverse customer base. The Company’s deposit products include checking, savings, and term certificate accounts. The Company’s loan portfolio includes commercial and consumer loans, a substantial portion of which are secured by real estate. Merger with Summit Financial Group, Inc. Effective on May 3, 2024 (the “Closing Date”), the Company completed its merger (the “M erger”) with Summit Financial Group, Inc., a West Virginia corporation (“Summit”), pursuant to the Agreement and Plan of Reorganization and accompanying Plan of Merger dated August 24, 2023 between the Company and Summit (the “Merger Agreement”). Pursuant to the Merger Agreement, on the Closing Date, (i) Summit merged with and into the Company with the Company as the surviving entity, and (ii) immediately following the Merger, Summit Community Bank, Inc., a West Virginia chartered bank and wholly-owned subsidiary of Summit (“SCB”) merged with and into the Bank, with the Bank as the surviving bank. In the Merger, holders of Summit common stock outstanding at the effective time of the Merger received 0.5043 shares of the Company’s Common Stock for each share of Summit common stock they owned, subject to the payment of cash in lieu of fractional shares. The total aggregate consideration payable in the Merger was approximately 7,405,772 shares of the Company’s Common Stock. Additionally, each share of the 6.0 % Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series 2021 of Summit (the “Summit Series 2021 Preferred Stock”) issued and outstanding was converted into the right to receive a share of a newly created series of preferred stock of the Company, the Burke & Herbert Series 2021 Preferred Stock (the “Burke & Herbert Series 2021 Preferred Stock”). Summit’s results of operations are included from the Closing Date forward. Basis of Presentation The accompanying consolidated financial statements include Burke & Herbert Financial Services Corp. and its wholly owned subsidiary Burke & Herbert Bank & Trust Company and have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial reporting and with applicable quarterly reporting regulations of the U.S. Securities and Exchange Commission (“SEC”). The accounting and reporting policies of the Company conform to GAAP and reflect practices of the banking industry. They do not include all of the information and notes required by GAAP for complete financial statements. As such, these unaudited financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ending December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 17, 2025. 9 Table of Contents Note 1— Nature of Business Activities and Significant Accounting Policies (continued) The consolidated financial statements include the accounts of the Company and the Bank (as its wholly-owned subsidiary). All significant intercompany accounts and transactions between the Company and the Bank have been eliminated. In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the results of operations in these financial statements, have been made. The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for any other interim period or for the full year. All December 31, 2024, amounts and disclosures included in this quarterly report were derived from the Company’s audited consolidated financial statements. Certain items in the prior period have been reclassified to conform to the current presentation. These reclassifications had no effect on prior year net income or on shareholders’ equity. Newly issued not yet adopted accounting standards In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40): Reporting Comprehensive Income—Expense Disaggregation Disclosures. This ASU seeks to improve the disclosures about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. This ASU is not expected to have a material impact on our consolidated financial statements. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative . This ASU incorporates certain amendments to SEC disclosure requirements into the FASB Accounting Standards Codification. The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC’s removal of the related disclosure requirement becomes effective. For all other entities, the effective date will be two years after the date of such removal. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. We do not expect the adoption of ASU 2023-06 to have a material impact on our consolidated financial statements. Note 2— Securities The carrying amount of available-for-sale (“AFS”) securities and their approximate fair values at September 30, 2025, and December 31, 2024, are summarized as follows (in thousands): September 30, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Securities Available-for-Sale U.S. Treasuries and government agencies $ 164,474 $ — $ 10,240 $ 154,234 Obligations of states and municipalities 939,381 3,308 65,716 876,973 Residential mortgage backed - agency 58,072 427 3,024 55,475 Residential mortgage backed - non-agency 230,700 910 5,740 225,870 Commercial mortgage backed - agency 76,326 62 730 75,658 Commercial mortgage backed - non-agency 131,498 571 1,987 130,082 Asset-backed 54,457 154 645 53,966 Other 27,118 156 1,125 26,149 Total $ 1,682,026 $ 5,588 $ 89,207 $ 1,598,407 10 Table of Contents Note 2— Securities (continued) December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Securities Available-for-Sale U.S. Treasuries and government agencies $ 165,619 $ — $ 16,492 $ 149,127 Obligations of states and municipalities 777,181 846 79,303 698,724 Residential mortgage backed - agency 57,244 121 4,179 53,186 Residential mortgage backed - non-agency 259,964 44 12,132 247,876 Commercial mortgage backed - agency 33,791 27 747 33,071 Commercial mortgage backed - non-agency 158,621 2 4,112 154,511 Asset-backed 64,308 316 568 64,056 Other 32,861 302 1,343 31,820 Total $ 1,549,589 $ 1,658 $ 118,876 $ 1,432,371 At September 30, 2025, and December 31, 2024, AFS securities with amortized costs of $ 1.2 billion and $ 1.2 billion, respectively, and with estimated fair values of $ 1.1 billion and $ 1.1 billion, respectively, were pledged to serve as collateral for secured borrowings, derivative exposures, or to secure public deposits as required or permitted by law. The proceeds from sales, calls, and maturities of debt securities available-for-sale, including principal payments received, and the related gross gains and losses realized, for the nine months ended September 30, 2025, and September 30, 2024, were as follows (in thousands): Proceeds from Gross realized Nine Months Ended September 30, Sales Calls and maturities Principal Payments Gains Losses 2025 $ 6,194 $ 38,148 $ 119,805 $ 257 $ 6 2024 365,990 38,137 152,087 2,637 2,024 The tax benefit (provision) related to these net realized gains and losses for September 30, 2025, and September 30, 2024, was ($ 57.7 ) thousand, and ($ 128.7 ) thousand, respectively. The maturities of AFS securities at September 30, 2025, were as follows (in thousands): (Expected maturities of securities not due at a single maturity date are based on average life at estimated prepayment speed. Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay some obligations with or without call or prepayment penalties). September 30, 2025 Amortized Cost One Year or Less One to Five Years Five to Ten Years After Ten Years Total Securities Available-for-Sale U.S. Treasuries and government agencies $ 5,027 $ 159,447 $ — $ — $ 164,474 Obligations of states and municipalities 4,871 238,746 445,330 250,434 939,381 Residential mortgage backed - agency 17 23,368 24,546 10,141 58,072 Residential mortgage backed - non-agency 5,811 83,780 129,483 11,626 230,700 Commercial mortgage backed - agency — 22,351 53,975 — 76,326 Commercial mortgage backed - non-agency 34,947 64,391 32,160 — 131,498 Asset-backed 4,465 34,222 15,770 — 54,457 Other — 2,788 15,265 9,065 27,118 Total $ 55,138 $ 629,093 $ 716,529 $ 281,266 $ 1,682,026 11 Table of Contents Note 2— Securities (continued) September 30, 2025 Fair Value One Year or Less One to Five Years Five to Ten Years After Ten Years Total Securities Available-for-Sale U.S. Treasuries and government agencies $ 4,983 $ 149,251 $ — $ — $ 154,234 Obligations of states and municipalities 4,880 228,472 416,068 227,553 876,973 Residential mortgage backed - agency 17 23,332 21,594 10,532 55,475 Residential mortgage backed - non-agency 5,779 81,982 126,741 11,368 225,870 Commercial mortgage backed - agency — 21,907 53,751 — 75,658 Commercial mortgage backed - non-agency 34,629 63,430 32,023 — 130,082 Asset-backed 4,463 33,952 15,551 — 53,966 Other — 2,892 14,305 8,952 26,149 Total $ 54,751 $ 605,218 $ 680,033 $ 258,405 $ 1,598,407 At September 30, 2025, and December 31, 2024, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in any amount greater than 10% of shareholders’ equity. The following table shows the gross unrealized losses and fair value of the Company’s securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2025, and December 31, 2024. AFS securities in a continuous unrealized loss position for less than twelve months and more than twelve months are as follows (in thousands): September 30, 2025 Less Than Twelve Months More Than Twelve Months Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Unrealized Losses Securities Available-for-Sale U.S. Treasuries and government agencies $ — $ — $ 154,234 $ 10,240 $ 10,240 Obligations of states and municipalities 196,419 3,644 464,797 62,072 65,716 Residential mortgage backed - agency — — 42,825 3,024 3,024 Residential mortgage backed - non-agency 16,187 53 90,200 5,687 5,740 Commercial mortgage backed - agency 22,618 127 26,827 603 730 Commercial mortgage backed - non-agency 30,623 229 46,179 1,758 1,987 Asset-backed 12,172 84 25,029 561 645 Other — — 22,148 1,125 1,125 Total $ 278,019 $ 4,137 $ 872,239 $ 85,070 $ 89,207 12 Table of Contents Note 2— Securities (continued) December 31, 2024 Less Than Twelve Months More Than Twelve Months Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Unrealized Losses Securities Available-for-Sale U.S. Treasuries and government agencies $ — $ — $ 149,127 $ 16,492 $ 16,492 Obligations of states and municipalities 181,027 5,338 433,488 73,965 79,303 Residential mortgage backed - agency 203 2 42,233 4,177 4,179 Residential mortgage backed - non-agency 110,191 1,911 134,727 10,221 12,132 Commercial mortgage backed - agency 3,412 29 28,885 718 747 Commercial mortgage backed - non-agency 30,064 523 108,761 3,589 4,112 Asset-backed 4,140 4 29,243 564 568 Other 15,123 138 8,295 1,205 1,343 Total $ 344,160 $ 7,945 $ 934,759 $ 110,931 $ 118,876 The Company is required to conduct an impairment evaluation on AFS securities to determine whether the Company has the intent to sell the security or it is more likely than not that it will be required to sell the security before recovery. If these situations apply, the guidance requires the Company to reduce the security’s amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security’s decline in fair value below its amortized cost basis is due to credit factors. The evaluation is based upon factors such as the creditworthiness of the underlying borrowers, performance of the underlying collateral, if applicable, and the level of credit support in the security structure. Management also evaluates other factors and circumstances that may be indicative of a decline in the fair value of the security due to a credit factor. This includes, but is not limited to, an evaluation of the type of security, length of time and extent to which the fair value has been less than cost, and near-term prospects of the issuer. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost, an allowance for credit losses (“ACL”) is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis under the current expected credit loss (“CECL”) standard, and declines due to non-credit factors are recorded in accumulated other comprehensive income (“AOCI”), net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in accumulated other comprehensive income, net of taxes, in the Consolidated Balance Sheets. The Company did no t record an ACL on the AFS securities as of September 30, 2025, or December 31, 2024. The Company considers the unrealized losses on the AFS securities to be related to fluctuations in market conditions, primarily interest rates, and not reflective of deterioration in credit. The Company had 441 securities in an unrealized loss position as of September 30, 2025. The Company has evaluated AFS securities in an unrealized loss position for credit-related impairment at September 30, 2025, and concluded no impairment existed based on a combination of factors, which included: (1) the securities are of high credit quality, (2) unrealized losses are primarily the result of market volatility and increases in market interest rates, (3) the contractual terms of the investments do not permit the issuer(s) to settle the securities at a price less than the par value of each investment, (4) issuers continue to make timely principal and interest payments, and (5) the Company does not intend to sell any of the investments and the accounting standard of “more likely than not” has not been met for the Company to be required to sell any of the investments before recovery of its amortized cost basis. As such, there was no ACL on AFS securities at September 30, 2025. Securities of U.S. Treasury and Federal Agencies and Federal Agency Mortgage (Residential and Commercial) Backed Securities At September 30, 2025, the unrealized losses associated with 11 U.S. Treasuries and Government Agency securities, 12 Residential Mortgage Backed – Agency securities, and 13 Commercial Mortgage Backed – Agency securities were generally driven by changes in interest rates and not due to credit losses given the explicit or implicit guarantees provided by the U.S. government. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025. 13 Table of Contents Note 2— Securities (continued) Securities of U.S. States and Municipalities At September 30, 2025, the unrealized losses associated with 311 State and Municipal securities were primarily caused by changes in interest rates and not the credit quality of the securities. These securities are investment grade and were generally underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision. These securities will continue to be monitored as part of our ongoing impairment analysis but are expected to perform, even if the rating agencies reduce the credit rating of the bond insurers. As a result, we expect to recover the entire amortized cost basis of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025. Residential & Commercial Mortgage Backed – Non-Agency Securities At September 30, 2025, the unrealized losses associated with 57 Residential Mortgage Backed – Non-Agency securities and 13 Commercial Mortgage Backed – Non-Agency securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses. We assess for credit impairment by estimating the present value of expected cash flows. The key assumptions for determining expected cash flows include default rates, loss severities, and/or prepayment rates. Based on our assessment of the expected credit losses and the credit enhancement level of the securities, we expect to recover the entire amortized cost of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025. Asset-Backed Securities At September 30, 2025, the unrealized losses associated with 17 Asset-Backed securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses. We assess for credit impairment by estimating the present value of expected cash flows. The key assumptions for determining expected cash flows include default rates, loss severities, and/or prepayment rates. Based on our assessment of the expected credit losses and the credit enhancement level of the securities, we expect to recover the entire amortized cost of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025. Other Securities At September 30, 2025, the unrealized losses associated with 7 securities were primarily driven by interest rates and not the credit quality of the securities. These investments were underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision. Based on our assessment of the expected credit losses, we expect to recover the entire amortized cost basis of the securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at September 30, 2025. Restricted stock, at cost The Company’s investment in Federal Home Loan Bank (“FHLB”) stock totaled $ 26.8 million and $ 18.2 million at September 30, 2025, and December 31, 2024, respectively. The Company’s investment in Federal Reserve Bank stock totaled $ 14.8 million and $ 14.8 million at September 30, 2025, and December 31, 2024, respectively. FHLB and Federal Reserve stock are generally viewed as long-term investments and as restricted investment securities, which are carried at cost, because there is no market for the stocks other than member institutions. Therefore, when evaluating FHLB and Federal Reserve stock for impairment, their values are based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. The Company does not consider these investments to be impaired at September 30, 2025, and no impairment has been recognized. FHLB stock and Federal Reserve stock are included in a separate line item, restricted stock, at cost on the Consolidated Balance Sheets and are not part of the Company’s AFS securities portfolio. The Company’s restricted stock line item on the Consolidated Balance Sheets also includes an investment in Community Bankers’ Bank, totaling $ 111 thousand at September 30, 2025, and $ 111 thousand at December 31, 2024, which is carried at cost and is not impaired at September 30, 2025. The Company also has other restricted investments including Independent Community Bancorp, Inc. and WV Bankers Title which are included in restricted stock on the Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024. 14 Table of Contents Note 3— Loans The Company’s loan portfolio segments, as reported in the tables below, include (i) commercial real estate, (ii) owner-occupied commercial real estate, (iii) acquisition, construction & development, (iv) commercial & industrial, (v) single family residential (1-4 units), and (vi) consumer non-real estate and other. The risks associated with lending activities differ among the various loan segments and are subject to the impact of changes in interest rates, market conditions of collateral securing the loans, and general economic conditions. • Commercial real estate loans carry risk associated with either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral. Other risk factors include the credit-worthiness of the sponsor and the value of the collateral. • Owner-occupied commercial real estate loans carry risk associated with the operations of the business that occupies the property and the value of the collateral. • Acquisition, construction & development loans carry risk associated with the credit-worthiness of the borrower, project completion within budget including the potential impact of volatile construction costs, sale after completion, and the value of the collateral. • Commercial & industrial loans carry the risk associated with the operations of the business and the value of the collateral, if any. • Single family residential (1-4 units) loans for consumer purposes carry risk associated with the continued credit-worthiness of the borrower and the value of the collateral. Single family residential (1-4 units) loans for investment purpose carry risk associated with the continued credit-worthiness of the borrower, the value of the collateral, and either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral. • Consumer non-real estate and other loans, which includes overdrafts, carry risk associated with the credit-worthiness of the borrower and the value of the collateral, if any. Loan balances as of September 30, 2025, and December 31, 2024, by portfolio segment were as follows (in thousands): September 30, 2025 December 31, 2024 Commercial real estate $ 2,804,175 $ 2,637,802 Owner-occupied commercial real estate 612,560 614,362 Acquisition, construction & development 375,027 465,537 Commercial & industrial 534,731 613,085 Single family residential (1-4 units) 1,127,952 1,173,749 Consumer non-real estate and other 105,034 167,701 Loans, gross 5,559,479 5,672,236 Allowance for credit losses ( 67,604 ) ( 68,040 ) Loans, net $ 5,491,875 $ 5,604,196 Net deferred loan fees included in the above loan categories totaled $ 4.8 million and $ 4.4 million at September 30, 2025, and December 31, 2024, respectively. Note 4— Allowance for Credit Losses The Company’s ACL is calculated quarterly, with any adjustment recorded to the provision for credit losses in the Consolidated Statement of Income. Management calculates the quantitative portion of collectively evaluated loans for all loan categories using the weighted average remaining maturity (“WARM”) method. For purposes of estimating the Company’s ACL, management generally evaluates collectively evaluated loans by federal call code in order to group loans with similar risk characteristics. Loans that do not share similar risk characteristics are evaluated on an individual loan basis and are excluded from the collective evaluation for the ACL. Loans identified to be individually evaluated under CECL include loans on non-accrual 15 Table of Contents Note 4— Allowance for Credit Losses (continued) status and may include accruing loans that do not share similar risk characteristics to other accruing loans that are collectively evaluated on a loan pool basis. A specific reserve analysis may be applied to the individually evaluated loans, which considers collateral value, an observable market price, or the present value of the expected future cash flows. A specific reserve is assigned if the measured value of the loan using one of the before mentioned methods is less than the carrying value of the loan. Based on management’s analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond the information that is used to calculate a reasonable and supportable forecast and a reversion period forecast on collectively evaluated loans. Management may consider an additional or reduced reserve as warranted through qualitative risk factors based on the current and expected conditions as measured in supplemental information relative to the macroeconomic variable loss drivers used to calculate a reasonable and supportable forecast and a reversion period forecast. These qualitative risk factors considered by management are largely comparable to legacy factors prior to the adoption of CECL. The following tables present the activity in the ACL for the three and nine months ended September 30, 2025, and for the three and nine months ended September 30, 2024, including the impact of the allowance established for Purchase Credit Deteriorated (“PCD”) loans for the nine months ended September 30, 2024, (in thousands). Commercial real estate Owner-occupied commercial real estate Acquisition, construction & development Commercial & industrial Single family residential (1-4 units) Consumer non-real estate and other Total Three months ended September 30, 2025 Balance, beginning of period $ 28,113 $ 3,530 $ 12,085 $ 10,643 $ 12,208 $ 677 $ 67,256 Provision for (recapture of) credit losses ( 2,045 ) ( 455 ) 4,270 ( 1,947 ) 376 375 574 Charge-offs — — — ( 26 ) ( 171 ) ( 322 ) ( 519 ) Recoveries 6 20 — 10 96 161 293 Balance, end of period $ 26,074 $ 3,095 $ 16,355 $ 8,680 $ 12,509 $ 891 $ 67,604 September 30, 2024 Balance, beginning of period $ 27,304 $ 5,040 $ 18,639 $ 4,768 $ 11,648 $ 618 $ 68,017 Provision for (recapture of) credit losses ( 1,516 ) ( 1,073 ) 3,084 425 ( 1,006 ) 171 85 Charge-offs — — — ( 32 ) ( 67 ) ( 206 ) ( 305 ) Recoveries 3 — — 9 1 7 20 Balance, end of period $ 25,791 $ 3,967 $ 21,723 $ 5,170 $ 10,576 $ 590 $ 67,817 Commercial real estate Owner-occupied commercial real estate Acquisition, construction & development Commercial & Industrial Single family residential (1-4 units) Consumer non-real estate and other Total Nine months ended September 30, 2025 Balance, beginning of period $ 30,444 $ 3,261 $ 17,386 $ 6,633 $ 9,763 $ 553 $ 68,040 Provision for (recapture of) credit losses ( 4,292 ) 904 ( 1,031 ) 2,235 2,737 1,638 2,191 Charge-offs ( 116 ) ( 1,100 ) ( 1 ) ( 223 ) ( 208 ) ( 1,835 ) ( 3,483 ) Recoveries 38 30 1 35 217 535 856 Balance, end of period $ 26,074 $ 3,095 $ 16,355 $ 8,680 $ 12,509 $ 891 $ 67,604 September 30, 2024 Balance, beginning of period $ 20,633 $ 783 $ 368 $ 645 $ 2,797 $ 75 $ 25,301 Allowance established for acquired PCD loans 7,503 1,931 5,968 5,684 2,608 216 23,910 Provision for (recapture of) credit losses ( 2,145 ) 1,253 15,387 ( 990 ) 5,273 737 19,515 Charge-offs ( 210 ) — — ( 178 ) ( 104 ) ( 455 ) ( 947 ) Recoveries 10 — — 9 2 17 38 Balance, end of period $ 25,791 $ 3,967 $ 21,723 $ 5,170 $ 10,576 $ 590 $ 67,817 16 Table of Contents Note 4— Allowance for Credit Losses (continued) The recorded investment in loans excludes accrued interest receivable due to immateriality. The following table presents the aging of the recorded investment in past due loans as of September 30, 2025, and December 31, 2024, by portfolio segment (in thousands): September 30, 2025 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total Past Due Current Loans Total Loans 90 Days Past Due or More & Still Accruing Non-accrual loans Commercial real estate $ 11,649 $ 5,220 $ 21,157 $ 38,026 $ 2,766,149 $ 2,804,175 $ 268 $ 52,704 Owner-occupied commercial real estate 1,065 159 5,915 7,139 605,421 612,560 — 8,399 Acquisition, construction & development 5,768 2,631 765 9,164 365,863 375,027 616 11,995 Commercial & industrial 3,719 703 5,205 9,627 525,104 534,731 977 4,658 Single family residential (1-4 units) 6,069 2,887 4,114 13,070 1,114,882 1,127,952 1,669 7,368 Consumer non-real estate and other 469 121 369 959 104,075 105,034 4 393 Total $ 28,739 $ 11,721 $ 37,525 $ 77,985 $ 5,481,494 $ 5,559,479 $ 3,534 $ 85,517 December 31, 2024 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total Past Due Current Loans Total Loans 90 Days Past Due or More & Still Accruing Non-accrual loans Commercial real estate $ 10,974 $ — $ 8,440 $ 19,414 $ 2,618,388 $ 2,637,802 $ — $ 19,183 Owner-occupied commercial real estate 1,160 1,636 5,240 8,036 606,326 614,362 307 5,760 Acquisition, construction & development 5,210 38 1,243 6,491 459,046 465,537 812 1,098 Commercial & industrial 1,654 1,594 1,469 4,717 608,368 613,085 350 1,757 Single family residential (1-4 units) 20,724 4,379 3,420 28,523 1,145,226 1,173,749 1,012 7,857 Consumer non-real estate and other 637 300 195 1,132 166,569 167,701 16 216 Total $ 40,359 $ 7,947 $ 20,007 $ 68,313 $ 5,603,923 $ 5,672,236 $ 2,497 $ 35,871 Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, current economic information, and other factors. The Company analyzes loans individually by classifying the loans by credit risk. The Company internally grades all commercial loans at the time of origination. In addition, the Company performs an annual review on at least 50% of the Bank’s commercial credit exposure. The Company uses the following definitions for credit risk classifications: Pass : These include satisfactory loans that have acceptable levels of risk. Special Mention : Loans classified as special mention have a potential credit weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard : Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the orderly liquidation of debt. Loans classified as substandard are inadequately protected by sound net worth, payment capacity of the borrower, or of the collateral pledged. If weaknesses go uncorrected, there is potential for partial loss of principal and/or interest. Doubtful : Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and unlikely. Loss : Loans classified as a loss are considered to be uncollectible and cannot be justified to continue as viable assets. While there may be the possibility of some recovery in the future, it is not practical or desirable to defer writing off these loans at the present time. 17 Table of Contents Note 4— Allowance for Credit Losses (continued) The Company has a portfolio of smaller homogenous loans that are not individually risk rated that are included within the single family residential and consumer non-real estate and other loan classes. Generally, these loan classes are rated as “Pass” unless these loans are on non-accrual and are then classified as substandard. The following table presents the amortized cost basis of the loan portfolio, by year of origination, loan class, and credit quality, as of September 30, 2025, and December 31, 2024 (in thousands): September 30, 2025 Term Loans 2025 2024 2023 2022 2021 Prior Revolving Loans Total Commercial real estate Pass $ 169,052 $ 249,876 $ 427,514 $ 448,795 $ 360,970 $ 657,179 $ 118,403 $ 2,431,789 Special Mention — — — 26,212 10,858 27,134 2,460 66,664 Substandard — — 19,127 53,992 102,742 95,100 29,566 300,527 Doubtful — — — 3,238 — 1,747 — 4,985 Loss — — — — — — 210 210 Total $ 169,052 $ 249,876 $ 446,641 $ 532,237 $ 474,570 $ 781,160 $ 150,639 $ 2,804,175 Year to date gross charge-offs $ — $ — $ — $ — $ — $ 116 $ — $ 116 Owner-occupied commercial real estate Pass $ 55,671 $ 59,191 $ 65,745 $ 87,555 $ 118,573 $ 174,578 $ 31,460 $ 592,773 Special Mention — — — — 234 3,809 — 4,043 Substandard — — 524 1,932 1,116 5,030 72 8,674 Doubtful — — — 3,392 1,643 2,035 — 7,070 Loss — — — — — — — — Total $ 55,671 $ 59,191 $ 66,269 $ 92,879 $ 121,566 $ 185,452 $ 31,532 $ 612,560 Year to date gross charge-offs $ — $ — $ — $ 363 $ 10 $ 632 $ 95 $ 1,100 Acquisition, construction & development Pass $ 22,791 $ 23,981 $ 130,991 $ 61,775 $ 68,361 $ 15,727 $ 37,492 $ 361,118 Special Mention — — 396 — — 137 205 738 Substandard — — — 812 3,507 5,024 — 9,343 Doubtful — — — 3,516 — — 140 3,656 Loss 172 — — — — — — 172 Total $ 22,963 $ 23,981 $ 131,387 $ 66,103 $ 71,868 $ 20,888 $ 37,837 $ 375,027 Year to date gross charge-offs $ — $ — $ 1 $ — $ — $ — $ — $ 1 Commercial & industrial Pass $ 41,527 $ 72,353 $ 31,742 $ 28,751 $ 18,069 $ 30,047 $ 276,886 $ 499,375 Special Mention 511 265 263 12,730 — 1,107 2,229 17,105 Substandard 753 32 912 2,530 258 1,103 12,594 18,182 Doubtful — — — — — — — — Loss — — — — — 37 32 69 Total $ 42,791 $ 72,650 $ 32,917 $ 44,011 $ 18,327 $ 32,294 $ 291,741 $ 534,731 Year to date gross charge-offs $ — $ — $ 17 $ 8 $ — $ 14 $ 184 $ 223 Single family residential (1-4 units) Pass $ 34,118 $ 86,778 $ 140,415 $ 188,340 $ 128,771 $ 376,344 $ 165,504 $ 1,120,270 Special Mention — — — — — 202 — 202 Substandard — — 1,614 818 726 3,748 462 7,368 Doubtful — — — — — 95 16 111 Loss — — — — — 1 — 1 Total $ 34,118 $ 86,778 $ 142,029 $ 189,158 $ 129,497 $ 380,390 $ 165,982 $ 1,127,952 18 Table of Contents Note 4— Allowance for Credit Losses (continued) Year to date gross charge-offs $ — $ — $ — $ — $ — $ 36 $ 172 $ 208 Consumer non-real estate and other Pass $ 8,223 $ 12,556 $ 6,526 $ 3,344 $ 921 $ 2,109 $ 71,257 $ 104,936 Special Mention — — — — — — — — Substandard — 64 33 — — — — 97 Doubtful — — — — 1 — — 1 Loss — — — — — — — — Total $ 8,223 $ 12,620 $ 6,559 $ 3,344 $ 922 $ 2,109 $ 71,257 $ 105,034 Year to date gross charge-offs $ 1,480 $ 166 $ 122 $ 59 $ 2 $ 1 $ 5 $ 1,835 Totals $ 332,818 $ 505,096 $ 825,802 $ 927,732 $ 816,750 $ 1,402,293 $ 748,988 $ 5,559,479 December 31, 2024 Term Loans 2024 2023 2022 2021 2020 Prior Revolving Loans Total Commercial real estate Pass $ 248,023 $ 378,322 $ 482,195 $ 337,136 $ 153,187 $ 588,490 $ 96,914 $ 2,284,267 Special Mention — 7,148 30,018 52,885 7,154 57,255 28,211 182,671 Substandard — 2,232 49,752 39,636 2,999 52,740 23,505 170,864 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 248,023 $ 387,702 $ 561,965 $ 429,657 $ 163,340 $ 698,485 $ 148,630 $ 2,637,802 Year to date gross charge-offs $ — $ — $ — $ — $ — $ 382 $ — $ 382 Owner-occupied commercial real estate Pass $ 61,433 $ 72,571 $ 93,941 $ 126,700 $ 36,197 $ 170,809 $ 32,452 $ 594,103 Special Mention — — — 243 2,729 1,275 — 4,247 Substandard — — 5,192 1,496 5,499 3,594 82 15,863 Doubtful — — — — — 149 — 149 Loss — — — — — — — — Total $ 61,433 $ 72,571 $ 99,133 $ 128,439 $ 44,425 $ 175,827 $ 32,534 $ 614,362 Year to date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Acquisition, construction & development Pass $ 25,461 $ 109,751 $ 90,652 $ 147,702 $ 3,564 $ 16,312 $ 15,107 $ 408,549 Special Mention — — — 2,641 142 — — 2,783 Substandard — 13,115 4,467 3,326 21,372 63 11,564 53,907 Doubtful — — — — — — 298 298 Loss — — — — — — — — Total $ 25,461 $ 122,866 $ 95,119 $ 153,669 $ 25,078 $ 16,375 $ 26,969 $ 465,537 Year to date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial & industrial Pass $ 108,206 $ 57,280 $ 47,828 $ 35,189 $ 15,109 $ 28,019 $ 237,852 $ 529,483 Special Mention 365 — 35,237 10,898 1,505 — 16,856 64,861 Substandard 37 285 4,482 618 523 1,029 11,765 18,739 Doubtful — — — — — — — — Loss — — — — — 2 — 2 Total $ 108,608 $ 57,565 $ 87,547 $ 46,705 $ 17,137 $ 29,050 $ 266,473 $ 613,085 Year to date gross charge-offs $ — $ 10 $ 195 $ 87 $ — $ 9 $ — $ 301 Single family residential (1-4 units) 19 Table of Contents Note 4— Allowance for Credit Losses (continued) Pass $ 88,857 $ 152,438 $ 201,410 $ 142,719 $ 77,783 $ 332,025 $ 170,077 $ 1,165,309 Special Mention — — — — — 214 174 388 Substandard — 1,494 800 586 605 3,935 437 7,857 Doubtful — — — — — — — — Loss 93 — — — — 1 101 195 Total $ 88,950 $ 153,932 $ 202,210 $ 143,305 $ 78,388 $ 336,175 $ 170,789 $ 1,173,749 Year to date gross charge-offs $ — $ 39 $ 28 $ — $ — $ 123 $ — $ 190 Consumer non-real estate and other Pass $ 21,095 $ 10,796 $ 6,122 $ 1,836 $ 1,096 $ 2,797 $ 123,148 $ 166,890 Special Mention 15 — — — — — — 15 Substandard 363 90 17 — — 17 — 487 Doubtful — — — 5 3 — — 8 Loss 289 12 — — — — — 301 Total $ 21,762 $ 10,898 $ 6,139 $ 1,841 $ 1,099 $ 2,814 $ 123,148 $ 167,701 Year to date gross charge-offs $ 468 $ 71 $ 17 $ 1 $ — $ 20 $ 357 $ 934 Totals $ 554,237 $ 805,534 $ 1,052,113 $ 903,616 $ 329,467 $ 1,258,726 $ 768,543 $ 5,672,236 The following tables present information about collateral-dependent loans that were individually evaluated for purposes of determining the ACL as of September 30, 2025, and December 31, 2024 (in thousands): September 30, 2025 With Allowance With No Related Allowance Total Amortized Cost Related Allowance Amortized Cost Amortized Cost Related Allowance September 30, 2025 Commercial real estate $ 10,109 $ 3,213 $ 43,629 $ 53,738 $ 3,213 Owner-occupied commercial real estate 1,963 11 7,580 9,543 11 Acquisition, construction & development 3,944 1,570 8,722 12,666 1,570 Commercial & industrial 3,738 3,309 — 3,738 3,309 Single family residential (1-4 units) 253 30 3,838 4,091 30 Consumer non-real estate and other — — — — — Total $ 20,007 $ 8,133 $ 63,769 $ 83,776 $ 8,133 December 31, 2024 With Allowance With No Related Allowance Total Amortized Cost Related Allowance Amortized Cost Amortized Cost Related Allowance December 31, 2024 Commercial real estate $ 7,459 $ 4,791 $ 12,439 $ 19,898 $ 4,791 Owner-occupied commercial real estate — — 1,833 1,833 — Acquisition, construction & development 535 303 369 904 303 Commercial & industrial 983 734 348 1,331 734 Single family residential (1-4 units) 898 26 3,408 4,306 26 Consumer non-real estate and other — — — — — Total $ 9,875 $ 5,854 $ 18,397 $ 28,272 $ 5,854 20 Table of Contents Note 4— Allowance for Credit Losses (continued) Purchased Credit Deteriorated Loans The Company has purchased loans for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans, at acquisition, is as follows (in thousands): Amounts Purchase price of loans at acquisition $ 380,795 Allowance for credit losses at acquisition 23,910 Non-credit discount/(premium) at acquisition 37,640 Par value of acquired loans at acquisition $ 442,345 Loan Modifications On January 1, 2023, the Company adopted ASU 2022-02 on a modified retrospective basis. ASU 2022-02 eliminates the troubled debt restructuring (“TDR”) accounting model and requires that the Company evaluate, based on the accounting for loan modifications, whether the borrower is experiencing financial difficulty, and the modification results in a more-than-insignificant direct change in the contractual cash flows and represents a new loan or a continuation of an existing loan. This change required all loan modifications to be accounted for under the general loan modification guidance in ASC 310-20, Receivables — Nonrefundable Fees and Other Costs , and subjects entities to new disclosure requirements on loan modifications to borrowers experiencing financial difficulty. The Company may modify loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, interest rate reduction, or an other-than-insignificant payment delay. When principal forgiveness is provided, the amount of forgiveness is charged off against the ACL. The Company may also provide multiple types of modifications on an individual loan. For the nine months ended September 30, 2025, and for the year ended, December 31, 2024, the Company did not extend any modifications to borrowers experiencing financial difficulty that had a more-than-insignificant direct change in the contractual cash flows of the loan. Other Real Estate Owned Real estate owned activity was as follows for the nine months ended September 30, 2025, and for the year ended, December 31, 2024 (in thousands): September 30, 2025 December 31, 2024 Beginning balance $ 2,783 $ — Loans acquired/transferred to real estate owned 117 3,541 Capital expenditures — — Direct write-downs — — Sales of real estate owned ( 158 ) ( 758 ) End of period balance $ 2,742 $ 2,783 Note 5— Deposits The aggregate amount of time deposits that meet or exceed the FDIC Insurance Limit of $250,000, was approximately $ 295.9 million and $ 284.4 million on September 30, 2025, and December 31, 2024, respectively. Brokered time deposits, which are fully insured, totaled $ 124.4 million and $ 244.8 million as of September 30, 2025, and December 31, 2024, respectively. Time deposits through the Certificate of Deposit Account Registry Service (“CDARS”) program totaled $ 22.8 million at September 30, 2025, compared to $ 35.7 million at December 31, 2024. 21 Table of Contents Note 5— Deposits (continued) The remaining maturities of time deposits as of September 30, 2025 are as follows (in thousands): As of September 30, 2025 Remaining three months ending, December 31, 2025 $ 553,403 2026 528,180 2027 22,913 2028 9,924 2029 6,188 Thereafter 9,308 Total $ 1,129,916 At September 30, 2025, and December 31, 2024, amounts included in time deposits for individual retirement accounts totaled $ 114.6 million and $ 118.9 million, respectively. Overdrafts of $ 657.4 thousand and $ 1.6 million were reclassified to loans as of September 30, 2025, and the year ended December 31, 2024, respectively. Note 6— Borrowed Funds Short-term borrowings The Company had borrowings of $ 450.0 million and $ 365.0 million at September 30, 2025, and December 31, 2024, respectively. At September 30, 2025, the interest rate on this debt was 4.24 %. At December 31, 2024, the interest rate on this debt ranged from 4.43 % to 4.57 %. The average balance outstanding during the nine months ending September 30, 2025, and the year ending December 31, 2024, was $ 412.7 million and $ 422.5 million, respectively. The Company has a finance lease liability that is not included in these balances - see Note 7 - Leased Property for a discussion of this liability that is included in the accrued interest and other liabilities line in the Consolidated Balance Sheets. The Company has available secured lines of credit with the Federal Reserve Bank of Richmond, such as the Borrower-In-Custody program, the FHLB of Atlanta, and unsecured federal funds lines of credit from correspondent banking relationships. Through these sources, the Company has unused capacity of $ 4.2 billion in remaining borrowing capacity as of September 30, 2025. The advances on credit lines are secured by both securities and loans. The lendable collateral value of securities and loans pledged against available lines of credit as of September 30, 2025, and December 31, 2024, was $ 3.2 billion and $ 3.1 billion, respectively. As of September 30, 2025, all of the Company’s borrowings will mature within one calendar year. The contractual maturities of these borrowings, which all occur within one year of the reporting date, are as follows as of September 30, 2025, (in thousands): Due in 2025 $ 450,000 Total $ 450,000 Long-term borrowings Subordinated Debentures As part of the Merger, Burke & Herbert assumed $ 75.0 million of subordinated debentures, that were fair valued at $ 61.5 million with a $ 13.5 million discount being amortized into interest expense over the stated maturity. As of September 30, 2025, the net balance was $ 68.9 million. The subordinated debt qualifies as Tier 2 capital under Federal Reserve Board guidelines, until the debt is within 5 years of its maturity; thereafter, the amount qualifying as Tier 2 capital is reduced 20 % each year until maturity. The subordinated debentures were issued in the fourth quarter of 2021. This subordinated debt bears interest at a fixed rate of 3.25 % per year, from acquisition date to, but excluding, December 1, 2026, payable semi-annually in arrears. From and including, December 1, 2026 to, but excluding, the maturity date or earlier redemption date, the interest rate will reset quarterly at a variable rate equal to the then current three-month term Secured Overnight Financing Rate (“SOFR”), as published by the Federal Reserve Bank of New York, plus 230 basis points, payable quarterly 22 Table of Contents Note 6— Borrowed Funds (continued) in arrears. This debt has a 10 -year term, and generally, is not prepayable by us within the first 5 years from issuance, which was fourth quarter 2021. Through the Merger, Burke & Herbert also assumed $ 30 million of subordinated debentures that were fair valued at $ 29.8 million with a $ 0.2 million discount being amortized into interest expense over the stated maturity. This subordinated debt qualified as Tier 2 capital under Federal Reserve Board guidelines, until the debt was within 5 years of its maturity; thereafter, the amount qualifying as Tier 2 capital would have been reduced by 20 % each year until its maturity. The subordinated debentures were issued on September 22, 2020, had a 10 -year term, and generally, were not prepayable by us within the first 5 years from issuance, absent specific events. This subordinated debt bore interest at a fixed rate of 5.00 % per year from the date of assumption to, but excluding, September 30, 2025, payable quarterly in arrears. On September 30, 2025, the Company redeemed all $ 30 million aggregate principal amount of this subordinated debt. The redemption was made pursuant to the optional redemption provisions set forth in the indenture, at a redemption price equal to 100 % of the principal amount plus accrued and unpaid interest to the redemption date. The redemption was funded with available cash in the form of a dividend from the Company’s Bank subsidiary. Subordinated Debentures Owed to Unconsolidated Subsidiary Trusts As part of the Merger, Burke & Herbert became the sponsor for SFG Capital Trust I, SFG Capital Trust II, and SFG Capital Trust III. For each of these trusts, 100 % of the common equity is owned by us. SFG Capital Trust I issued $ 3.5 million in capital securities and $ 109 thousand in common securities and invested the proceeds in $ 3.6 million of debentures, which were assumed by Burke & Herbert in the Merger. SFG Capital Trust II issued $ 7.5 million in capital securities and $ 232 thousand in common securities and invested the proceeds in $ 7.7 million of debentures, which were assumed by Burke & Herbert in the Merger. SFG Capital Trust III issued $ 8.0 million in capital securities and $ 248 thousand in common securities and invested the proceeds in $ 8.3 million of debentures, which were assumed by Burke & Herbert in the Merger. Distributions on the capital securities issued by the trusts are payable quarterly at a variable rate equal to three-month term SOFR, plus 345 basis points for SFG Capital Trust I, three-month term SOFR, plus 280 basis points for SFG Capital Trust II, and three-month term SOFR, plus 145 basis points for SFG Capital Trust III, and equals the interest rate earned on the debentures held by the trusts and is recorded as interest expense by us. The capital securities are subject to mandatory redemption in whole, or in part, upon repayment of the debentures. We have entered into agreements which, taken collectively, fully and unconditionally guarantee the capital securities subject to the terms of the guarantee. The debentures of each Capital Trust are redeemable by us quarterly. The capital securities issued by SFG Capital Trust I, SFG Capital Trust II, and SFG Capital Trust III qualify as Tier 1 capital under the Federal Reserve guidelines. In accordance with these Guidelines, trust preferred securities are limited to 25% of Tier 1 capital elements, net of goodwill. The amount of trust preferred securities and certain other elements in excess of the limit can be included in Tier 2 capital. The remaining maturities of subordinated debentures as of September 30, 2025, are as follows (in thousands): Subordinated debentures Subordinated debentures owed to unconsolidated subsidiary trusts Remaining three months ending, December 31, 2025 $ — $ — 2026 — — 2027 — — 2028 — — 2029 — — Thereafter 75,000 19,589 Total $ 75,000 $ 19,589 Note 7— Leased Property Lessor Arrangements The Company enters into operating leases with customers to lease vacant space in certain owned premises that is not being used by the Company. These operating leases are typically payable in monthly installments with terms ranging from around one year to around ten years and may contain renewal options. The components of lease income, which were included in non-interest expense on the Consolidated Statements of Income, were as follows (in thousands): 23 Table of Contents Note 7— Leased Property (continued) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operating lease income $ 709 $ 565 $ 2,101 $ 1,696 Total lease income $ 709 $ 565 $ 2,101 $ 1,696 The remaining maturities of operating lease receivables as of September 30, 2025, are as follows (in thousands): Operating Leases Remaining three months ending, December 31, 2025 $ 696 2026 2,610 2027 2,369 2028 2,298 2029 2,098 Thereafter 2,922 Total lease receivables $ 12,993 Lessee Arrangements The Company has entered into leases for branches and office space. The leases are evaluated for whether the lease will be classified as either a finance or operating lease. Certain leases offer the option to extend the lease term, and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. Including renewal options, the terms of the Company’s leases range from less than one year to approximately thirteen years . The lease agreements do not provide for residual value guarantees and have no restrictions or covenants that would impact dividends or require incurring additional financial obligations. Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. These cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. The right-of-use asset and lease liability are included in other assets and other liabilities, respectively, in the Consolidated Balance Sheets. Right-of-use assets and liabilities by lease type, and the associated balance sheet classifications are as follows (in thousands): Balance Sheet Classification September 30, 2025 December 31, 2024 Right-of-use assets: Operating leases Other assets $ 14,267 $ 13,203 Finance leases Other assets 3,098 3,312 Total right-of-use assets $ 17,365 $ 16,515 Lease liabilities: Operating leases Other liabilities $ 14,806 $ 13,586 Finance leases Other liabilities 3,449 3,620 Total lease liabilities $ 18,255 $ 17,206 The components of total lease cost were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Finance lease cost Right-of-use asset amortization $ 71 $ 71 $ 214 $ 214 Interest expense 26 27 79 83 Operating lease cost 859 781 2,535 2,068 Total lease cost $ 956 $ 879 $ 2,828 $ 2,365 24 Table of Contents Note 7— Leased Property (continued) The Company’s future undiscounted lease payments for finance and operating leases with initial terms of one year or more as of September 30, 2025, are as follows (in thousands): Operating Leases Finance Leases Remaining three months ending, December 31, 2025 $ 824 $ 84 2026 3,205 340 2027 2,875 347 2028 2,330 354 2029 2,148 361 Thereafter 6,444 2,629 Total undiscounted lease payments 17,826 4,115 Less: discount ( 3,020 ) ( 666 ) Net lease liabilities $ 14,806 $ 3,449 The following table presents additional information about the Company’s leases as of September 30, 2025, and December 31, 2024. Supplemental lease information (dollars in thousands) September 30, 2025 December 31, 2024 Finance lease weighted average remaining lease term (years) 11.01 11.75 Finance lease weighted average discount rate 3.07 % 3.06 % Operating lease weighted average remaining lease term (years) 6.86 6.84 Operating lease weighted average discount rate 4.68 % 4.65 % Nine Months Ended September 30, Cash paid for amounts included in the measurement of lease liabilities 2025 2024 Operating cash flows from operating leases $ 2,380 $ 2,230 Operating cash flows from finance leases 79 83 Financing cash flows from finance leases 170 161 Right-of-use assets obtained in exchange for new finance lease liabilities — — Right-of-use assets obtained in exchange for new operating lease liabilities — 11,130 Note 8— Regulatory Capital Matters Banks and financial holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, “prompt corrective action” regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under the Basel III Framework, an entity must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The net unrealized gain or loss on AFS securities is not included in computing regulatory capital. Management believes as of September 30, 2025, the Company and the Bank meet all capital adequacy requirements to which they are subject. “Prompt corrective action” regulations provide five classifications: “well capitalized”, “adequately capitalized”, “undercapitalized”, “significantly undercapitalized”, and “critically undercapitalized”, although these terms are not used to represent overall financial condition. If “adequately capitalized”, regulatory approval is required to accept brokered deposits. If “undercapitalized”, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. As of September 30, 2025, and December 31, 2024, the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for “prompt corrective action.” 25 Table of Contents Note 8— Regulatory Capital Matters (continued) The following table presents the actual and required capital amounts and ratios for the Company and the Bank at September 30, 2025, and December 31, 2024 (in thousands except for ratios): Actual Minimum Required Capital - Basel III Minimum Required to be Well Capitalized Amount Ratio Amount Ratio Amount Ratio As of September 30, 2025 Total Capital to risk weighted assets Consolidated $ 977,560 15.44 % $ 664,953 ≥ 10.5 % $ 633,289 N/A Burke & Herbert Bank & Trust 960,208 15.20 663,166 ≥ 10.5 631,587 ≥ 10.0 % Tier 1 (Core) Capital to risk weighted assets Consolidated 837,855 13.23 538,296 ≥ 8.5 506,631 N/A Burke & Herbert Bank & Trust 889,409 14.08 536,849 ≥ 8.5 505,270 ≥ 8.0 Common Tier 1 (CET 1) to risk-weighted assets Consolidated 810,238 12.79 443,302 ≥ 7.0 411,638 N/A Burke & Herbert Bank & Trust 889,409 14.08 442,111 ≥ 7.0 410,532 ≥ 6.5 Tier 1 (Core) Capital to average assets (leverage ratio) Consolidated 837,855 10.71 312,836 ≥ 4.0 391,045 N/A Burke & Herbert Bank & Trust 889,409 11.40 312,172 ≥ 4.0 390,215 ≥ 5.0 As of December 31, 2024 Total Capital to risk weighted assets Consolidated $ 930,753 14.57 % $ 670,590 ≥ 10.5 % $ 638,658 N/A Burke & Herbert Bank & Trust 919,843 14.41 670,028 ≥ 10.5 638,122 ≥ 10.0 % Tier 1 (Core) Capital to risk weighted assets Consolidated 763,842 11.96 542,859 ≥ 8.5 510,926 N/A Burke & Herbert Bank & Trust 847,804 13.29 542,404 ≥ 8.5 510,498 ≥ 8.0 Common Tier 1 (CET 1) to risk-weighted assets Consolidated 736,416 11.53 447,060 ≥ 7.0 415,127 N/A Burke & Herbert Bank & Trust 847,804 13.29 446,686 ≥ 7.0 414,779 ≥ 6.5 Tier 1 (Core) Capital to average assets (leverage ratio) Consolidated 736,416 9.80 311,904 ≥ 4.0 389,880 N/A Burke & Herbert Bank & Trust 847,804 10.88 311,616 ≥ 4.0 389,520 ≥ 5.0 The Company’s principal source of funds for dividend payments is dividends received from the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. As of September 30, 2025, approximately $ 297.0 million of retained earnings was available for dividend declaration consistent with the Company’s capital plan. Note 9— Derivatives The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. Cash flow hedges of interest rate risk The Company’s objective in using interest rate derivatives is to add stability to net interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps, caps, and floors as part of its interest rate risk management strategy. Interest rate swaps, designated as cash flow hedges, involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of September 30, 2025, such derivatives 26 Table of Contents Note 9— Derivatives (continued) were used to hedge the variable cash flows associated with variable-rate liabilities. As of September 30, 2024, such derivatives were used to hedge the variable cash flows associated with variable-rate debt and variable-rate securities. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest expense or interest income in the same period(s) during which the hedged transaction affects earnings. During the next twelve months, the Company estimates that an additional $ 6.5 thousand will be reclassified as an increase in interest expense. Derivatives not designated as hedges The Company enters into interest rate swaps with its loan customers to facilitate their financing requests. Upon entering into swaps with our loan customers, the Company will enter into corresponding offsetting derivatives with third parties. These derivatives represent economic hedges and do not qualify as hedges for accounting. These back-to-back interest rate swaps are reported at fair value in other assets and accrued interest and other liabilities in the Company’s Consolidated Balance Sheets. Changes in the fair value of interest rate swaps are recorded in other non-interest expense and sum to zero because of offsetting terms of swaps with borrowers and swaps with dealer counterparties. The table below presents the fair value of the Company’s derivative financial instruments, which includes accrued interest, as well as their classification on the Consolidated Balance Sheets as of September 30, 2025, and December 31, 2024 (in thousands): September 30, 2025 Balance Sheet Location Notional Amount Fair Value Derivatives designated as hedges: Interest rate swaps related to cash flow hedges Other assets $ 200,000 $ 127 Interest rate swaps related to cash flow hedges Other liabilities 250,000 174 Derivatives not designated as hedges: Interest rate swaps related to customer loans Other assets $ 184,943 $ 2,373 Interest rate swaps related to customer loans Other liabilities 184,943 2,373 December 31, 2024 Balance Sheet Location Notional Amount Fair Value Derivatives designated as hedges: Interest rate swaps related to cash flow hedges Other assets $ 250,000 $ 1,368 Interest rate swaps related to cash flow hedges Other liabilities 50,000 165 Derivatives not designated as hedges: Interest rate swaps related to customer loans Other assets $ 99,899 $ 1,823 Interest rate swaps related to customer loans Other liabilities 99,899 1,823 27 Table of Contents Note 9— Derivatives (continued) The table below presents the effect of cash flow hedge accounting on AOCI for the three months ended September 30, 2025, and September 30, 2024 (in thousands): Derivatives in Cash Flow Hedging Relationships September 30, 2025 Location of Gain or (Loss) Reclassified from AOCI into Income September 30, 2025 Amount of Gain or (Loss) Recognized in OCI on Derivative Amount of Gain or (Loss) Recognized in OCI Included Component Amount of Gain or (Loss) Recognized in OCI Excluded Component Amount of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component Interest Rate Products $ — $ — $ — Interest Income $ — $ — $ — Interest Rate Products 221 221 — Interest Expense 709 709 — Total $ 221 $ 221 $ — $ 709 $ 709 $ — Derivatives in Cash Flow Hedging Relationships September 30, 2024 Location of Gain or (Loss) Reclassified from AOCI into Income September 30, 2024 Amount of Gain or (Loss) Recognized in OCI on Derivative Amount of Gain or (Loss) Recognized in OCI Included Component Amount of Gain or (Loss) Recognized in OCI Excluded Component Amount of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component Interest Rate Products $ — $ — $ — Interest Income $ — $ — $ — Interest Rate Products ( 3,887 ) ( 3,887 ) — Interest Expense 1,080 1,080 — Total $ ( 3,887 ) $ ( 3,887 ) $ — $ 1,080 $ 1,080 $ — The table below presents the effect of cash flow hedge accounting on AOCI for the nine months ended September 30, 2025, and September 30, 2024 (in thousands): Derivatives in Cash Flow Hedging Relationships September 30, 2025 Location of Gain or (Loss) Reclassified from AOCI into Income September 30, 2025 Amount of Gain or (Loss) Recognized in OCI on Derivative Amount of Gain or (Loss) Recognized in OCI Included Component Amount of Gain or (Loss) Recognized in OCI Excluded Component Amount of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component Interest Rate Products $ — $ — $ — Interest Income $ — $ — $ — Interest Rate Products 617 617 — Interest Expense 1,868 1,868 — Total $ 617 $ 617 $ — $ 1,868 $ 1,868 $ — Derivatives in Cash Flow Hedging Relationships September 30, 2024 Location of Gain or (Loss) Reclassified from AOCI into Income September 30, 2024 Amount of Gain or (Loss) Recognized in OCI on Derivative Amount of Gain or (Loss) Recognized in OCI Included Component Amount of Gain or (Loss) Recognized in OCI Excluded Component Amount of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component Interest Rate Products $ ( 19 ) $ ( 19 ) $ — Interest Income $ ( 611 ) $ ( 611 ) $ — Interest Rate Products 631 631 — Interest Expense 2,113 2,113 — Total $ 612 $ 612 $ — $ 1,502 $ 1,502 $ — 28 Table of Contents Note 9— Derivatives (continued) The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income for the three and nine months ended September 30, 2025, and September 30, 2024 (in thousands). Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Three months ended September 30, 2025 September 30, 2024 Interest Income Interest Expense Interest Income Interest Expense Total amounts of income and expense line items presented in the consolidated statements of income in which the effects of fair value or cash flow hedges are recorded $ 40 $ 709 $ 40 $ 1,080 The effects of fair value and cash flow hedging: Gain or (loss) on fair value hedging relationships in Subtopic 815-20 Interest contracts Hedged items (1) 40 — 40 — Derivatives designated as hedging instruments — — — — Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from AOCI into income — 709 — 1,080 Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring — — — — Amount of gain or (loss) reclassified from AOCI into income - included component — 709 — 1,080 Amount of gain or (loss) reclassified from AOCI into income - excluded component — — — — Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Nine months ended September 30, 2025 September 30, 2024 Interest Income Interest Expense Interest Income Interest Expense Total amounts of income and expense line items presented in the consolidated statements of income in which the effects of fair value or cash flow hedges are recorded $ 120 $ 1,868 $ ( 491 ) $ 2,113 The effects of fair value and cash flow hedging: Gain or (loss) on fair value hedging relationships in Subtopic 815-20 Interest contracts Hedged items (1) 120 — 120 — Derivatives designated as hedging instruments — — — — Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from AOCI into income — 1,868 ( 611 ) 2,113 Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring — — — — Amount of gain or (loss) reclassified from AOCI into income - included component — 1,868 ( 611 ) 2,113 Amount of gain or (loss) reclassified from AOCI into income - excluded component — — — — (1) The Company voluntarily discontinued a fair value hedging relationship and these amounts include the gain or (loss) and the hedging adjustment on a voluntary discontinued hedging relationship. The Company has allocated the basis adjustment to the remaining individual assets in the closed portfolio and will amortize the basis adjustment over a period consistent with amortization of other discounts or premiums on the assets. 29 Table of Contents Note 9— Derivatives (continued) Credit-risk-related Contingent Features As of September 30, 2025, the fair value of derivatives in a liability position, which includes accrued interest but excludes any adjustment for non-performance risk related to these agreements, was $ 174.2 thousand. As of December 31, 2024, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for non-performance risk related to these agreements, was $ 200.0 thousand. As of September 30, 2025, and as of December 31, 2024, the Company has posted the full amount of collateral related to these agreements. Note 10— Commitments and Contingencies Credit extension commitments The Company’s financial statements do not reflect various financial instruments which arise in the normal course of business and which involve elements of credit risk, interest rate risk, and liquidity risk. These financial instruments include commitments to extend credit (e.g., revolving lines of credit) and commercial letters of credit. Many of our lending relationships contain both funded and unfunded elements. The funded portion is reflected on our balance sheet. The unfunded portion of these commitments is not recorded on our balance sheet until a draw is made under the loan facility. Since many of our commitments to extend credit may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. A summary of the contractual amounts of the Company’s financial instruments outstanding at September 30, 2025, and December 31, 2024, is as follows (in thousands): September 30, 2025 December 31, 2024 Commitments to extend credit $ 852,242 $ 969,317 Commercial letters of credit 24,225 13,333 Commitments to extend credit and commercial letters of credit both include exposure to some credit loss in the event of non-performance of the customer. The Company’s credit policies and procedures for credit commitments and financial guarantees are the same as those for extensions of credit that are recorded on the Consolidated Balance Sheets. Many of these instruments have fixed maturity dates, and many of them will expire without being drawn upon; accordingly, they do not generally present any significant liquidity risk to the Company. Allowance for credit losses - off-balance-sheet credit exposures The Company recorded a recapture of credit losses on unfunded commitments of $ 312.0 thousand and provision for credit losses of $ 62.0 thousand on unfunded commitments for the three months ended September 30, 2025 and September 30, 2024, respectively. The Company recorded a recapture of credit losses on unfunded commitments of $ 804.0 thousand and a provision for credit losses of $ 3.9 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. The ACL on off-balance-sheet credit totaled $ 3.2 million and $ 4.0 million as of September 30, 2025, and December 31, 2024, and is included in accrued interest and other liabilities on the accompanying Consolidated Balance Sheets. Litigation The Company is a party to litigation, claims, and proceedings arising in the normal course of business that are ordinary and routine to the nature of the Company’s business and operations. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from any currently pending or threatened litigation, claims, or proceedings will not be material to the Company’s financial position as of September 30, 2025, and December 31, 2024, respectively. 30 Table of Contents Note 11— Fair Value Measurements Determination of Fair Value Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 – Significant unobservable inputs that reflect our own assumptions that market participants would use in pricing an asset or liability. In instances in which multiple levels of inputs are used to measure fair value, hierarchy classification is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company used the following methods and significant assumptions to estimate fair value: Investment securities The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2), using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on securities’ relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Equity Investments Equity investments are recorded at fair value on a recurring basis, with changes in fair value reported in net income. Through the Merger we acquired an investment in an S&P 500 index mutual fund that is traded on an exchange, and we classify it as Level 2 as of September 30, 2025. Through the Merger, we acquired perpetual preferred stock of a bank holding company issued in October 2022 in a private offering. The perpetual preferred stock does not trade on an exchange or in an active over-the-counter market; therefore, we estimate its fair value using the present value of its future cash flows using observed discount rates of similar publicly-traded securities, adjusted for a liquidity premium. We classify the perpetual preferred stock as Level 2. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment. Such equity securities are included in other assets on the accompanying Consolidated Balance Sheets. Derivatives The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). The Company has contracted with a third-party vendor to provide valuations for interest rate swaps using standard swap valuation techniques. The Company has considered counterparty credit risk in the valuation of its interest rate swap assets and has considered its own credit risk in the valuation of its interest rate swap liabilities. 31 Table of Contents Note 11— Fair Value Measurements (continued) Loans held-for-sale The fair value of loans held-for-sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan (Level 2). These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. 32 Table of Contents Note 11— Fair Value Measurements (continued) Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements at September 30, 2025, Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Financial assets Investment Securities U.S. Treasuries and government agencies $ 154,234 $ — $ — $ 154,234 Obligations of states and municipalities — 876,973 — 876,973 Residential mortgage backed - agency — 55,475 — 55,475 Residential mortgage backed - non-agency — 225,870 — 225,870 Commercial mortgage backed - agency — 75,658 — 75,658 Commercial mortgage backed - non-agency — 130,082 — 130,082 Asset-backed — 53,966 — 53,966 Other — 26,149 — 26,149 Total investment securities available-for-sale $ 154,234 $ 1,444,173 $ — $ 1,598,407 Loans held-for-sale $ — $ 1,303 $ — $ 1,303 Equity investments $ — $ 13,979 $ — $ 13,979 Derivatives $ — $ 2,500 $ — $ 2,500 Financial liabilities Derivatives $ — $ 2,547 $ — $ 2,547 Fair Value Measurements at December 31, 2024, Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Financial assets Investment Securities U.S. Treasuries and government agencies $ 149,127 $ — $ — $ 149,127 Obligations of states and municipalities — 698,724 — 698,724 Residential mortgage backed - agency — 53,186 — 53,186 Residential mortgage backed - non-agency — 247,876 — 247,876 Commercial mortgage backed - agency — 33,071 — 33,071 Commercial mortgage backed - non-agency — 154,511 — 154,511 Asset-backed — 64,056 — 64,056 Other — 31,820 — 31,820 Total investment securities available-for-sale $ 149,127 $ 1,283,244 $ — $ 1,432,371 Loans held-for-sale $ — $ 2,331 $ — $ 2,331 Equity investments $ — $ 12,407 $ — $ 12,407 Derivatives $ — $ 3,191 $ — $ 3,191 Financial liabilities Derivatives $ — $ 1,988 $ — $ 1,988 33 Table of Contents Note 11— Fair Value Measurements (continued) The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a non-recurring basis in the financial statements: Collateral dependent loans Loans for which the borrower is experiencing financial difficulty and repayment is dependent upon the operation or sale of collateral, are considered collateral-dependent. For collateral-dependent loans, the fair value is measured based on the value of the collateral securing the loans, less estimated costs of disposal. Collateral may be in the form of real estate or business assets, including equipment, inventory, and accounts receivable. The vast majority of the collateral underlying collateral-dependent loans is real estate, the fair value of which is measured through an appraisal. The appraisals of the collateral supporting collateral-dependent loans may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Any fair value adjustments are recorded in the period incurred as provision for (recapture of) credit losses on the Consolidated Statements of Income. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business. Other real estate owned Assets acquired through foreclosure or other proceedings are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The fair value of foreclosed properties is determined on a nonrecurring basis generally utilizing current appraisals performed by an independent, licensed appraiser applying an income or market value approach using observable market data. Updated appraisals of foreclosed properties are generally obtained if the existing appraisal is more than 18 months old or more frequently if there is a known deterioration in value. However, if a current appraisal is not available, the original appraised value is discounted, as appropriate, to compensate for the estimated depreciation in the value of the real estate since the date of its original appraisal. Such discounts are generally estimated based upon management’s knowledge of sales of similar property within the applicable market area and its knowledge of other real estate market-related data as well as general economic trends. Upon foreclosure, any fair value adjustment is charged against the allowance for credit losses on loans. Subsequent fair value adjustments are recorded in the period incurred and included in other noninterest expense in the Consolidated Statements of Income. Assets that were measured at fair value on a non-recurring basis during the period are summarized below (in thousands): Fair Value Measurements at September 30, 2025, Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Collateral dependent loans Commercial real estate $ — $ — $ 6,896 $ 6,896 Owner-occupied commercial real estate — — 1,952 1,952 Acquisition, construction & development — — 2,374 2,374 Commercial & industrial — — 429 429 Single family residential — — 223 223 Consumer non-real estate and other — — — — Other real estate owned — — 2,742 2,742 34 Table of Contents Note 11— Fair Value Measurements (continued) Fair Value Measurements at December 31, 2024, Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Collateral dependent loans Commercial real estate $ — $ — $ 2,668 $ 2,668 Owner-occupied commercial real estate — — — — Acquisition, construction & development — — 232 232 Commercial & industrial — — 249 249 Single family residential — — 872 872 Consumer non-real estate and other — — — — Other real estate owned — — 2,783 2,783 The following table presents quantitative information about Level 3 Fair Value Measurements for assets measured at fair value on a non-recurring basis at September 30, 2025, and December 31, 2024 (in thousands except for percentages): Description Fair Value Valuation Techniques Unobservable Inputs Range September 30, 2025 Collateral dependent loans $ 11,874 Appraisal of collateral Management adjustments (e.g., liquidity, selling costs, etc.) 5.0 % to 20.0 % for liquidity, 6.0 % to 8.0 % for selling costs Other real estate owned 2,742 Appraisal of collateral Management adjustments (e.g., liquidity, selling costs, etc.) 5.0 % to 20.0 % for liquidity, 6.0 % to 8.0 % for selling costs December 31, 2024 Collateral dependent loans $ 4,021 Appraisal of collateral Management adjustments (e.g., liquidity, selling costs, etc.) 5.0 % to 20.0 % for liquidity, 6.0 % to 8.0 % for selling costs Other real estate owned 2,783 Appraisal of collateral Management adjustments (e.g., liquidity, selling costs, etc.) 5.0 % to 20.0 % for liquidity, 6.0 % to 8.0 % for selling costs Fair value of financial instruments The carrying amounts and estimated fair values of financial instruments not carried at fair value, at September 30, 2025, and December 31, 2024, were as follows (in thousands): Fair Value Measurements at September 30, 2025, Using: Carrying Amount Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Financial Assets Cash and due from banks $ 55,224 $ 55,224 $ — $ — $ 55,224 Interest-earning deposits with banks 76,489 76,489 — — 76,489 Loans, net 5,491,875 — — 5,428,718 5,428,718 Accrued interest 35,444 — 35,444 — 35,444 Financial Liabilities Non-interest-bearing deposits $ 1,358,250 $ — $ 1,358,250 $ — $ 1,358,250 Interest-bearing deposits 5,053,802 — 5,048,177 — 5,048,177 Short-term borrowings 450,000 — 450,035 — 450,035 Subordinated debentures, net 68,906 — 69,473 — 69,473 Subordinated debentures owed to unconsolidated subsidiary trusts 17,204 — 16,476 — 16,476 Accrued interest 5,127 — 5,127 — 5,127 35 Table of Contents Note 11— Fair Value Measurements (continued) Fair Value Measurements at December 31, 2024, Using: Carrying Amount Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Financial Assets Cash and due from banks $ 35,554 $ 35,554 $ — $ — $ 35,554 Interest-bearing deposits with banks 99,760 99,760 — — 99,760 Loans, net 5,604,196 — — 5,465,722 5,465,722 Accrued interest 34,454 — 34,454 — 34,454 Financial Liabilities Non-interest-bearing deposits $ 1,379,940 $ — $ 1,379,940 $ — $ 1,379,940 Interest-bearing deposits 5,135,299 — 5,126,423 — 5,126,423 Short-term borrowings 365,000 — 364,985 — 364,985 Subordinated debentures, net 94,872 — 91,760 — 91,760 Subordinated debentures owed to unconsolidated subsidiary trusts 17,013 — 14,587 — 14,587 Accrued interest 6,157 — 6,157 — 6,157 Note 12— Accumulated Other Comprehensive Income (Loss) The following table presents changes in accumulated other comprehensive income (loss) by component, net of tax, for the three and nine months ended September 30, 2025, and September 30, 2024 (in thousands): Three months ended September 30, 2025 Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income Beginning Balance $ 324 $ ( 83,576 ) $ ( 4,602 ) $ ( 87,854 ) Net unrealized gains (losses) 170 19,970 — 20,140 Less: net realized (gains) losses reclassified to earnings ( 546 ) ( 194 ) — ( 740 ) Net change in pension plan benefits — — — — Ending Balance $ ( 52 ) $ ( 63,800 ) $ ( 4,602 ) $ ( 68,454 ) Three months ended September 30, 2024 Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income Beginning Balance $ 2,730 $ ( 97,415 ) $ ( 5,745 ) $ ( 100,430 ) Net unrealized gains (losses) ( 3,071 ) 28,628 — 25,557 Less: net realized (gains) losses reclassified to earnings ( 853 ) ( 32 ) — ( 885 ) Net change in pension plan benefits — — — — Ending Balance $ ( 1,194 ) $ ( 68,819 ) $ ( 5,745 ) $ ( 75,758 ) 36 Table of Contents Note 12— Accumulated Other Comprehensive Income (Loss) (continued) Nine months ended September 30, 2025 Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income Beginning Balance $ 911 $ ( 92,055 ) $ ( 4,576 ) $ ( 95,720 ) Net unrealized gains (losses) 475 28,540 — 29,015 Less: net realized (gains) losses reclassified to earnings ( 1,438 ) ( 285 ) — ( 1,723 ) Net change in pension plan benefits — — ( 26 ) ( 26 ) Ending Balance $ ( 52 ) $ ( 63,800 ) $ ( 4,602 ) $ ( 68,454 ) Nine months ended September 30, 2024 Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income Beginning Balance $ ( 490 ) $ ( 97,259 ) $ ( 5,745 ) $ ( 103,494 ) Net unrealized gains (losses) 483 29,019 — 29,502 Less: net realized (gains) losses reclassified to earnings ( 1,187 ) ( 579 ) — ( 1,766 ) Net change in pension plan benefits — — — — Ending Balance $ ( 1,194 ) $ ( 68,819 ) $ ( 5,745 ) $ ( 75,758 ) 37 Table of Contents Note 12— Accumulated Other Comprehensive Income (Loss) (continued) The following table presents amounts reclassified out of each component of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2025, and September 30, 2024 (in thousands). Details about Accumulated Other Comprehensive Income Components Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Statements of Income Three months ended Nine months ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Cash flow hedges: Interest rate contracts $ — $ — $ — $ ( 611 ) Interest income Interest rate contracts 709 1,080 1,868 2,113 Interest expense Tax effect ( 163 ) ( 227 ) ( 430 ) ( 315 ) Income tax expense (benefit) Net of tax $ 546 $ 853 $ 1,438 $ 1,187 Available-for-sale securities: Realized gains (losses) on securities $ 212 $ — $ 251 $ 613 Net gains/(losses) on securities Realized gains (losses) on basis adjustment for fair value hedges 40 41 119 120 Interest income Tax effect ( 58 ) ( 9 ) ( 85 ) ( 154 ) Income tax expense (benefit) Net of tax $ 194 $ 32 $ 285 $ 579 Defined benefit pension plan: Amortization of actuarial gain / (loss) — — 34 — Pension and other employee benefits Tax effect — — ( 8 ) — Income tax expense (benefit) Net of tax $ — $ — $ 26 $ — Total reclassifications, net of tax $ 740 $ 885 $ 1,749 $ 1,766 Net income Note 13— Other Operating Expense Other operating expense from the Consolidated Statements of Income for the three and nine months ended September 30, 2025, and September 30, 2024, is as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Historic tax credit amortization $ 435 $ 632 $ 1,305 $ 1,895 IT related 383 1,003 1,297 2,257 Consultant fees 661 1,585 2,115 5,865 Directors' fees 499 124 1,455 1,578 Audit expense 425 541 1,004 1,145 Legal expense 568 445 1,373 1,660 Virginia franchise tax 960 675 2,880 2,025 Marketing expense 387 427 1,156 1,134 Donation expense 37 26 121 5,145 Other 5,214 4,747 15,984 10,551 Total $ 9,569 $ 10,205 $ 28,690 $ 33,255 38 Table of Contents Note 13— Other Operating Expense (continued) The Company incurred Merger-related expenses of zero and $ 11.3 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. These expenses are included in the consultant fees, audit fees, legal expense, donation, and other line items detailed in other operating expenses. Note 14— Share-Based Compensation The Company has a share-based incentive plan described below that allows it to offer a variety of equity compensation awards subject to approval. Total compensation cost that has been charged against income for restricted stock unit awards granted was $ 1.1 million and $ 566.9 thousand for the three months ended September 30, 2025, and September 30, 2024, respectively. The total income tax benefit was $ 242.9 thousand and $ 119.0 thousand for the three months ended September 30, 2025, and September 30, 2024, respectively. Total compensation cost that has been charged against income for restricted stock unit awards granted was $ 3.5 million and $ 2.0 million for the nine months ended September 30, 2025, and September 30, 2024, respectively. The total income tax benefit was $ 806.1 thousand and $ 410.5 thousand for the nine months ended September 30, 2025, and September 30, 2024, respectively. 2019 Stock Incentive Plan In 2019, the Company’s Stock Incentive Plan (“2019 SIP”) was approved by the Bank’s Board of Directors (the “Bank Board”). The 2019 SIP provides for the issuance of share-based awards to directors and employees of the Company. The 2019 SIP authorized 240,000 units to be issued, and the Company’s practice is using authorized unissued shares to satisfy these share-based awards. Each unit represents a contingent right to receive one common share or an equivalent amount of cash, or a combination of the two, at the discretion of the Company. Currently, we have a sufficient number of authorized unissued shares to satisfy all outstanding equity awards. Under the 2019 SIP, the Company has issued restricted stock unit (“RSU”) awards that are both time-based and performance-based. Each RSU award will indicate the number of shares, the conditions (e.g., service, performance, and/or a combination), and the grant date. Compensation expense is recognized over the vesting period of the awards based on the fair value of the award at grant date. 2023 Stock Incentive Plan In 2023, a new stock incentive plan (“2023 SIP”) was approved by the Company’s Board of Directors (the “Board”) and shareholders. Upon the plan’s shareholder approval date of March 30, 2023, no further share-based awards will be issued under the 2019 SIP. The 2023 SIP provides for the issuance of share-based awards to directors and employees of the Company. The 2023 SIP authorized the issuance of 250,000 shares, subject to an annual increase in available shares and shares and shares recycled from the 2019 SIP that were cancelled. Based on our shares outstanding as of September 30, 2025, and awards that were recycled from the 2019 SIP, the total shares authorized for issuance under the plan as of September 30, 2025 was 324,887 . A total of 95,587 and 64,365 shares were issued during the nine months ended September 30, 2025, and September 30, 2024, respectively. For time-based RSUs, the fair value was determined by using the closing stock price on the date prior to the grant date. These RSUs vest over three to five years . The Board, from time to time, approves performance-based RSU awards that may be earned between a three to five year performance period. Whether or not units are earned at the end of the performance period will be determined based on the achievement of performance and/or market targets (e.g., market capitalization target) over the performance period. If the conditions are achieved, the grant recipient will receive 100 % of the units granted as these awards do not provide for a multiplier effect. The performance/market targets are determined by the Board. The fair value for performance-based RSU awards was determined by using a Monte Carlo simulation analysis to estimate the achievement of the market capitalization target determined by the Board. The Monte Carlo simulation analysis required the following inputs: (1) expected term, (2) expected volatility, (3) risk-free rate, and (4) dividend yield. The expected term was based on the stated performance period. Management used the expected volatility from a peer group. The risk-free interest rate is based on the U.S. Treasury yield curve over the performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. 39 Table of Contents Note 14— Share-Based Compensation (continued) The following is a summary of all the Company’s RSU awards issued under both the 2019 SIP and 2023 SIP: Non-vested Shares Shares Weighted-Average Grant-Date Fair Value Non-vested at December 31, 2024 134,202 $ 57.67 Granted 95,587 58.14 Vested ( 47,853 ) 52.25 Forfeited ( 7,947 ) 55.22 Non-vested at September 30, 2025 173,989 $ 59.53 As of September 30, 2025, there was $ 6.8 million of total unrecognized compensation costs related to non-vested shares granted under both the 2019 SIP and 2023 SIP. The cost is expected to be recognized over a weighted average period of 1.36 years. 2023 Employee Stock Purchase Plan In 2023, an employee stock purchase plan (“2023 ESPP”) was approved by the Board and shareholders. Upon the 2023 ESPP’s shareholder approval date of March 30, 2023, the 2023 ESPP reserved 250,000 shares of common stock for issuance to employees, subject to an annual increase in reserved shares. At September 30, 2025, 299,391 shares were available to be issued. Whole shares are sold to participants in the 2023 ESPP at 85 % of the lower of the stock price at the beginning or end of each semi-annual offering period. The first semi-annual offering period began on September 1, 2023, and the current semi-annual offering period began on September 1, 2025. Eligible employees may purchase shares in an amount that does not exceed the lesser of the IRS limit of $25,000 or 15 % of their annual salary. The following table presents information for the 2023 ESPP for the nine months ended September 30, 2025: September 30, 2025 Shares purchased 12,839 Weighted average price of shares purchased $ 53.01 Compensation expense recognized (in 000's) $ 137.5 Stock Appreciation Rights (“SARs”) Upon completion of the Merger and as a part of the Merger Agreement, Burke & Herbert assumed SAR awards that had been issued to existing employees that would continue with the same terms and conditions adjusted for the exchange ratio of 0.5043 . As part of the Merger, a significant portion of SAR awards accelerated their vesting and thus did not require any future service component. Management used the Black-Scholes option-pricing model to fair value these accelerated SAR awards and included this value as part of the purchase price consideration discussed in Note 16 - Business Combination . The Company also used the Black-Scholes option-pricing model to fair value the non-accelerated SAR awards that were not fully vested. The SAR awards that have been assumed by the Company, were issued in 2019, 2021, and 2023, and these SAR awards become exercisable ratably over seven years ( 14.3 % per year) and contractually expire ten years after the grant date. Upon completion of the Merger, the Company determined the fair value per SAR using the following assumptions: 2019 SAR 2021 SAR 2023 SAR # of years to full vesting 7 years 7 years 7 years Fair value $ 14.89 $ 16.92 $ 14.56 Risk-free interest rate 4.51 % 4.32 % 4.14 % Expected dividend yield 3.95 % 3.95 % 3.95 % Expected common stock volatility 32.56 % 32.56 % 32.56 % Expected contractual life (in years) 4.77 7.20 8.77 40 Table of Contents Note 14— Share-Based Compensation (continued) A summary of SAR and option activity during the nine months ended September 30, 2025, is as follows: Weighted Average Dollars in thousands, expect per share information SARs Aggregate Intrinsic Value Remaining Contractual Term (Yrs.) Exercise Price Outstanding, December 31, 2024 223,873 $ 2,862 5.44 $ 46.87 Granted (or acquired) — — — — Exercised 34,920 777 — 38.21 Forfeited 2,944 82 — 48.32 Expired — — — — Outstanding, September 30, 2025 186,009 $ 2,003 5.09 $ 48.48 Exercisable SARs: At September 30, 2025 156,427 $ 2,091 4.80 $ 48.32 The total fair value of SARs exercised was $ 731.1 thousand during the nine months ended September 30, 2025. The total fair value of SARs vested was $ 126.1 thousand during the nine months ended September 30, 2025. As of September 30, 2025, there was $ 354.8 thousand of total unrecognized compensation costs related to non-vested SARs acquired through the Merger. The cost is expected to be recognized over a weighted average period of 2.09 years. Note 15— Earnings Per Share Basic earnings per share excludes dilution and is computed by dividing net income applicable to common shares by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential impact of contingently issuable shares. The Company uses the treasury stock method as described by ASC 260 - Earnings Per Share for each dilutive instrument when computing diluted earnings per share. The following shows the weighted average number of shares used in computing earnings per share and the effect of weighted average number of shares dilutive potential common stock. Dilutive potential common stock has no effect on income available to common shareholders. Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income (loss) applicable to common shares (in thousands) $ 29,739 $ 27,397 $ 86,387 $ 15,465 Weighted average number of shares 15,021,852 14,944,962 14,999,230 11,529,953 Options effect of dilutive shares 90,561 95,183 37,675 61,830 Weighted average dilutive shares 15,112,413 15,040,145 15,036,905 11,591,783 Basic earnings (loss) per common share $ 1.98 $ 1.83 $ 5.76 $ 1.34 Diluted earnings (loss) per common share 1.97 1.82 5.74 1.33 Stock awards equivalent to 23,303 and 27,418 shares of common stock were not considered in computing diluted earnings per common share for the three months ended September 30, 2025, and September 30, 2024, respectively, because they are antidilutive. Stock awards equivalent to 31,173 and 51,094 shares of common stock were not considered in computing diluted earnings per share for the nine months ended September 30, 2025 and September 30, 2024, respectively, because they are antidilutive. 41 Table of Contents Note 16— Business Combination Effective on May 3, 2024, Burke & Herbert completed the Merger with Summit, pursuant to the Merger Agreement. In the Merger, holders of Summit common stock outstanding at the effective time of the Merger received 0.5043 shares of Burke & Herbert common stock for each share of Summit common stock they owned, subject to the payment of cash in lieu of fractional shares. The total aggregate consideration payable in the Merger was approximately 7,405,772 shares of Burke & Herbert common stock. Additionally, each share of Summit’s 6.0 % Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series 2021 issued and outstanding was converted into the right to receive a share of Burke & Herbert Series 2021 Preferred Stock. We accounted for the Merger using the acquisition method of accounting in accordance with ASC 805, Business Combinations, and accordingly, the assets and liabilities of Summit were recorded at their respective fair values on the date of completion of the Merger. We recognized goodwill of $ 34.1 million in connection with the acquisition, which is not amortized for financial reporting purposes, but is subject to annual impairment testing. The goodwill arising from the transaction is no t deductible for tax purposes and consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. The fair values of assets and liabilities are subject to refinement for up to one year after the acquisition date if any additional information relative to the acquisition date fair values becomes available. This one year period expired during the quarter ending June 30, 2025. The following table summarizes adjustments to goodwill subsequent to December 31, 2024 (in thousands): Goodwill Balance at December 31, 2024 $ 32,783 Adjustment to goodwill acquired in conjunction with the acquisition of Summit 1,366 Balance at June 30, 2025 $ 34,149 The adjustment to goodwill resulted in additional review of deferred tax asset and other compensation plan estimates that were established during the Merger and disclosed in the tables below. The core deposit intangible represents the value of long-term deposit relationships acquired in this transaction and will be amortized over an estimated weighted average life of 7 years using an accelerated method which approximates the estimated run-off of the acquired deposits. The fair value of intangible assets related to core deposits was $ 68.8 million on the date of acquisition. The fair value of purchased financial assets with credit deterioration was $ 380.8 million on the date of the acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $ 442.3 million. After the Merger, all of the securities, held-to-maturity, were reclassified as available-for-sale. The following table details the total consideration paid for Summit on May 3, 2024, the fair values of the assets acquired and liabilities assumed and the resulting goodwill at the acquisition date. 42 Table of Contents Note 16— Business Combination (continued) ($ in thousands, except share information) Consideration May 3, 2024 Common stock of Summit Financial Group, Inc. 14,686,738 Exchange ratio 0.5043 Expected Burke & Herbert common stock to be issued 7,406,522 Actual Burke & Herbert common stock issued 7,405,772 Fractional common stock to be paid in cash 750 Actual Burke & Herbert common stock issued 7,405,772 Price per share of Burke & Herbert common stock issued $ 51.67 Purchase price consideration for common stock issued 382,656 Fractional common stock to be paid in cash 750 Average 10 day closing price used to pay fractional common stock $ 53.66 Cash paid for fractional shares 40 Implied value of stock appreciation rights ("SARs") and restricted stock units 4,336 Fair value of preferred stock issued by Burke & Herbert 10,413 Fully diluted transaction value $ 397,445 Goodwill $ 34,149 43 Table of Contents Note 16— Business Combination (continued) As Recorded Estimated Estimated by Summit Fair Value Fair Value ($ in thousands) May 3, 2024 Adjustments May 3, 2024 Total purchase price consideration $ 397,445 Recognized amounts of identifiable assets acquired and liabilities assumed Cash and equivalents $ 53,357 $ — 53,357 Securities, available-for-sale, at fair value 491,608 — 491,608 Securities, held-to-maturity, at amortized cost 93,573 ( 7,430 ) 86,143 Equity and other investments 36,085 — 36,085 Loans, gross 3,707,940 ( 153,306 ) 3,554,634 Allowance for credit losses ( 49,471 ) 25,991 ( 23,480 ) Loans, net of allowance 3,658,469 ( 127,315 ) 3,531,154 Premises and equipment, net 62,255 13,276 75,531 Accrued interest receivable 19,610 — 19,610 Company-owned life insurance 86,363 — 86,363 Goodwill and intangibles 73,144 ( 4,384 ) 68,760 Other assets 43,169 11,263 54,432 Total identifiable assets acquired 4,617,633 ( 114,590 ) 4,503,043 Deposits 3,704,072 ( 7,136 ) 3,696,936 Borrowings 283,398 — 283,398 Subordinated debentures and trust preferred securities 123,533 ( 16,466 ) 107,067 Unfunded reserve liability 6,692 ( 3,190 ) 3,502 Accrued interest and other liabilities 47,537 1,307 48,844 Total liabilities 4,165,232 ( 25,485 ) 4,139,747 Total identifiable net assets 452,401 ( 89,105 ) 363,296 Goodwill $ 34,149 44 Table of Contents Note 17— Goodwill and Other Intangible Assets The following table presents the change in goodwill for the three and nine months ended September 30, 2025, and September 30, 2024, (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Beginning of period $ 34,149 $ 32,783 $ 32,783 $ — Acquired goodwill — — — 32,783 Goodwill adjustment — — 1,366 — Impairment — — — — End of period $ 34,149 $ 32,783 $ 34,149 $ 32,783 During the year ended December 31, 2024, the Company recorded $ 32.8 million of goodwill associated with the acquisition of Summit. See Note 16 - Business Combination to the consolidated financial statements for additional detail regarding this transaction. The Company performs the annual goodwill impairment test on September 30 every year. Other intangible assets consist of the core deposit intangible which is being amortized on an accelerated basis over its estimated useful life of 7 years. During the year ended December 31, 2024, the Company recorded $ 68.8 million of core deposit intangibles associated with the acquisition of Summit. The gross carrying amount and accumulated amortization of other intangible assets for the three and nine months ended September 30, 2025, and September 30, 2024, was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Beginning of period $ 49,114 $ 65,895 $ 57,300 $ — Core deposit intangible acquired — — — 68,760 Amortization ( 3,683 ) ( 4,297 ) ( 11,869 ) ( 7,162 ) Impairment — — — — Total core deposit intangible $ 45,431 $ 61,598 $ 45,431 $ 61,598 The Company reviews other intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Total amortization expense associated with intangible assets was $ 11.9 million for the nine months ended September 30, 2025. Estimated amortization expense for future years is as follows (in thousands): Estimated Amortization Remaining three months ending, December 31, 2025 $ 3,684 2026 13,097 2027 10,641 2028 8,186 2029 5,730 Thereafter 4,093 Total $ 45,431 45 Table of Contents Note 18— Segment Information Segment performance is evaluated using consolidated net income. The Company operates in one segment – Community Banking and the financial performance of this one segment is used to make resource allocations and performance decisions. The Company’s Chief Executive Officer is in charge of allocating the Company’s resources and assessing performance, and has been identified as the chief operating decision maker. While the chief operating decision-maker monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Individual operating results are not reviewed by senior management to make resource allocation or performance decisions. Therefore, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. 46 Table of Contents