What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-03-17 · 357 added, 276 removed, 1830 unchanged (26% of the section changed)

5 unchanged sentences

Consolidated Statements of Income for the Years Ended December 31, 202 5 , 202 4 , and 202 3

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 202 4 , 202 3 , and 202 2

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 202 5 , 202 4 , and 202 3

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 202 5 , 202 4 , and 202 3

6 unchanged sentences

Alexandria, Virginia

Opinion on the Financial Statements

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Burke & Herbert Financial Services Corp.

(the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principal

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for credit losses effective January 1, 2023, due to the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Codification No.326, Financial Instruments – Credit Losses (ASC 326).

The Company adopted the new credit loss standard using the modified retrospective method such that prior period amounts are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

(the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

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We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for credit losses - loans

As more fully described in Notes 1 and 4 of the financial statements, the allowance for credit losses reflects expected credit losses in the loan portfolio.

The Company is using the remaining useful life or weighted average remaining maturity methodology to calculate the quantitative component.

The quantitative component includes reasonable and supportable forecasts of loss rates over a two-year period.

In order to generate reasonable and supportable forecasts, the allowance for credit loss calculation utilizes macroeconomic variable loss drivers, which may include aggregate macroeconomic indicators pertaining to such items as equity market conditions or interest rates, as well as other variables that are portfolio-specific.

A straight-line reversion technique is used for the following four quarters which then reverts to historical average loss rates.

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.

Management may consider an additional or reduced reserve as warranted through the qualitative risk factors component based on the current and expected conditions.

Auditing the allowance for credit losses was especially challenging given the significant volume of data applied in the calculations.

The audit of the allowance for credit loss calculation involved significant audit effort, including the involvement of experienced audit personnel and our internal specialists, and a high degree of auditor judgment in applying the audit procedures.

The primary procedures we performed to address the critical audit matter included:

Testing the design and operating effectiveness of internal controls over management’s allowance for credit loss calculation, including controls over the:

• Completeness and accuracy of data, including the input, transfer, aggregation, and processing of information within the allowance for credit loss calculation.

• Mathematical accuracy of the allowance for credit loss calculation.

• Reasonableness of significant assumptions and judgments applied within the allowance for credit loss calculation.

Substantively testing management’s process to estimate the allowance for credit loss calculation, including:

• Testing the completeness and accuracy of the underlying internal data utilized to prepare the calculation.

• Evaluating the relevance and reliability of the underlying external data utilized to prepare the calculation.

• Testing the mathematical accuracy, including the transfer, aggregation, and processing of data and the application of assumptions, of the allowance for credit loss calculation.

• Evaluating the reasonableness of the significant judgments and assumptions utilized within the allowance for credit loss calculation.

/s/ Crowe LLP

1 unchanged sentence

Washington, D.C.

March 17, 2025

February 27, 2026

Burke & Herbert Financial Services Corp.

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Subordinated debentures, net 70,222 94,872

Subordinated debentures owed to unconsolidated subsidiary trusts 17,013 —

Subordinated debentures owed to unconsolidated subsidiary trusts, net 17,268 17,013

Accrued interest and other liabilities 124,546 89,904

4 unchanged sentences

2,000,000 shares authorized;

1,500 shares issued and outstanding at December 31, 2024, zero shares issued and outstanding at December 31, 2023

1,500 shares issued and outstanding at December 31, 2025, 1,500 shares issued and outstanding at December 31, 2024

10,413 10,413

Common stock 7,800 7,770

38 unchanged sentences

Income from company-owned life insurance 8,130 4,686 2,844

Bank debit and other card revenue 12,264 9,772 4,922

Other non-interest income 6,917 3,839 1,455

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Equipment rentals, depreciation and maintenance 15,825 23,174 5,770

Core deposit intangible amortization 15,553 11,460 —

ATM, card, and network expense

4,753 5,398 2,566

FDIC and other regulatory assessments 3,904 3,329 1,957

Other operating 39,123 48,620 21,460

10 unchanged sentences

Burke & Herbert Financial Services Corp.

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

Years Ended December 31, 2025, 2024, and 2023

2 unchanged sentences

Net income $ 117,306 $ 35,708 $ 22,692

Other comprehensive income (loss), net of tax:

Other comprehensive income, net of tax:

Unrealized gains (losses) on securities:

13 unchanged sentences

( 1,634 ) ( 1,681 ) 1,382

Total other comprehensive income (loss) 7,774 36,001 ( 146,450 )

Comprehensive income (loss)

Total other comprehensive income 36,760 7,774 36,001

Comprehensive income

$ 154,066 $ 43,482 $ 58,693

13 unchanged sentences

Net income — — — — 22,692 — — 22,692

Other comprehensive income (loss) — — — — — ( 146,450 ) — ( 146,450 )

CECL adjustment — — — — ( 3,439 ) — — ( 3,439 )

Other comprehensive income

— — — — — 36,001 — 36,001

(Purchase) sale of treasury stock, net — 2,950 — — — — 141 141

4 unchanged sentences

Net income — — — — 35,708 — — 35,708

CECL adjustment — — — — ( 3,439 ) — — ( 3,439 )

Other comprehensive income (loss) — — — — — 36,001 — 36,001

Acquisition of Summit Financial Group, Inc.

10,413 7,405,772 3,703 383,329 — — — 397,445

Other comprehensive income

— — — — — 7,774 — 7,774

(Purchase) sale of treasury stock, net — — — — — — — —

Cash dividends, declared — — — — ( 28,260 ) — — ( 28,260 )

Preferred stock cash dividends, declared — — — — ( 675 ) — — ( 675 )

Share-based compensation expense, net — 134,622 67 3,348 — — — 3,415

2 unchanged sentences

Net income — — — — 117,306 — — 117,306

Acquisition of Summit Financial Group, Inc.

Other comprehensive income

— — — — — 36,760 — 36,760

Other comprehensive income (loss) — — — — — 7,774 — 7,774

(Purchase) sale of treasury stock, net — — — — — — — —

Cash dividends, paid and accrued (1)

Cash dividends, declared

— — — — ( 33,018 ) — — ( 33,018 )

3 unchanged sentences

$ 10,413 15,028,524 $ 7,800 $ 405,922 $ 517,058 $ ( 58,960 ) $ ( 27,584 ) $ 854,649

(1) Cash dividends, paid and accrued for the year ending December 31, 2024, include dividends paid of $ 28.0 million and $ 299.0 thousand of dividends accrued on share-based compensation but unpaid as of December 31, 2024.

See Notes to Consolidated Financial Statements.

14 unchanged sentences

Realized (gain) on sales of OREO property 2 ( 172 ) —

Write-down on OREO property

Provision for (recapture of) credit losses 1,523 24,220 214

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Purchases of property and equipment, net of disposals ( 11,705 ) ( 4,567 ) ( 14,249 )

Proceeds from company-owned life insurance 2,213 1,171 1,231

(Purchases) proceeds from company-owned life insurance ( 22,236 ) 2,213 1,171

(Increase) decrease in loans made to customers, net 322,381 92,170 ( 200,535 )

Net cash flows provided by (used in) investing activities $ 136,720 $ 123,557 $ ( 43,168 )

Burke & Herbert Financial Services Corp.

Consolidated Statements of Cash Flows

Years Ended December 31, 2024, 2023, and 2022

(In thousands, except share and per share data)

Cash Flows from Financing Activities

2 unchanged sentences

Increase (decrease) in other short-term borrowings 85,000 93,000 ( 71,100 )

Burke & Herbert Financial Services Corp.

Consolidated Statements of Cash Flows

Years Ended December 31, 2025, 2024, and 2023

(In thousands, except share and per share data)

Payments for maturities and calls of subordinated debt

( 30,000 ) — —

Repayment of finance lease liabilities ( 236 ) ( 216 ) ( 119 )

14 unchanged sentences

Interest paid on finance lease 107 110 86

Income taxes 1,975 1,570 950

Income taxes paid (net of refunds)

6,029 1,900 1,245

West Virginia

1,175 160 275

District of Columbia

Change in unrealized gains on available-for-sale securities 45,355 8,275 41,415

Change in pension plan benefits 696 1,518 1,628

Transfers to OREO

Lease liability arising from obtaining right-of-use assets 775 12,329 1,214

Premises & equipment transferred to property held-for-sale — — 3,449

Transfers from portfolio loans to loans held-for-sale — — 19,594

Financing of sale from loans held-for-sale — — 9,000

Common stock issued for merger, net — 387,032 —

8 unchanged sentences

Intercompany transactions and balances are eliminated in consolidation.

As of close of the calendar year 2025, we ceased to be an emerging growth company and became a large accelerated filer.

Therefore, we are no longer exempt from the requirements under Section 404 of the Sarbanes-Oxley Act and are no longer able to take advantage of exemptions from various public company reporting requirements applicable to emerging growth companies.

Burke & Herbert was organized as a Virginia corporation in 2022 to serve as the holding company for the Bank.

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Merger with Summit Financial Group, Inc.

Effective on the Closing Date, Burke & Herbert completed the M erger with Summit, pursuant to the August 24, 2023 Merger Agreement.

Pursuant to the Merger Agreement, on the Closing Date, (i) Summit merged with and into Burke & Herbert with Burke & Herbert as the surviving entity, and (ii) immediately following the Merger, 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 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 the Summit Series 2021 Preferred Stock issued and outstanding was converted into the right to receive a share of the newly created Burke & Herbert Series 2021 Preferred Stock.

Summit’s results of operations are included from the Closing Date forward.

On May 3, 2024, the Company completed its merger with Summit Financial Group, Inc., a West Virginia corporation, pursuant to the Agreement and Plan of Reorganization and accompanying Plan of Merger dated August 24, 2023 between the Company and Summit.

Pending Merger with LINKBANCORP, Inc.

On December 18, 2025, the Company and LNKB entered into the Merger Agreement, which provides that, upon the terms and subject to the conditions set forth therein, LNKB will merge with and into the Company, with the Company as the surviving corporation.

The LNKB Merger Agreement further provides that immediately following the Holding Company Merger, LINKBANK will merge with and into the Bank, with the Bank as the surviving bank.

Completion of the LNKB Merger is subject to customary conditions, including receipt of the requisite approvals of the Company’s and LNKB’s shareholders, receipt of all required regulatory approvals.

Use of estimates

4 unchanged sentences

For purposes of reporting cash flows, cash and cash equivalents include cash on hand and amounts due from banks, including cash items in process of clearing with maturities fewer than 90 days.

Cash flows from customer loans, federal funds purchased, securities sold under agreements to repurchase, and deposits are reported on a net basis.

Cash flows from customer

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

loans, federal funds purchased, securities sold under agreements to repurchase, and deposits are reported on a net basis.

Restriction on cash

19 unchanged sentences

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security.

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists, and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis.

If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists, and an allowance for credit losses is recorded for the credit

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

loss, limited by the amount that the fair value is less than the amortized cost basis.

Any impairment that has not been recorded through an ACL is recognized in other comprehensive income.

1 unchanged sentence

Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on AFS debt securities totaled $ 10.3 million at December 31, 2024, and is excluded from the estimate of credit losses.

Accrued interest receivable on AFS debt securities totaled $ 13.4 million and $ 10.3 million at December 31, 2025, and December 31, 2024, respectively, and is excluded from the estimate of credit losses.

Equity securities

1 unchanged sentence

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 the identical, or a similar, investment.

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

Due to the nature of, and restrictions placed upon, certain equity securities have been classified as restricted stock and are carried at cost.

21 unchanged sentences

Changes in the fair value of derivatives not designated or that do not qualify for hedge accounting are reported currently in earnings as non-interest income.

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

Accrued settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense based on the item being hedged.

4 unchanged sentences

The Company formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items.

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.

The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.

When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as non-interest income.

6 unchanged sentences

Loans that the Company has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding unpaid principal balances, adjusted for partial charge-offs, the allowance for credit losses, and any deferred fees and costs on originated loans.

Accrued interest receivable totaled $ 24.1 million on the Consolidated Balance Sheets and is excluded from the estimate of credit losses.

Accrued interest receivable totaled $ 22.1 million and $ 24.1 million at December 31, 2025, and December 31, 2024, respectively, which is included on the Consolidated Balance Sheets and is excluded from the estimate of credit losses.

Interest income is accrued on the unpaid principal balance.

9 unchanged sentences

For all portfolio segments, loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, a history of on-time payments has again been established, and future payments are reasonably assured.

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

Concentration of credit risk

5 unchanged sentences

Allowance for credit losses - loans

The allowance for credit losses, in management’s judgement, reflects expected credit losses in the loan portfolio as of the balance sheet date.

The allowance for credit losses, in management’s judgment, reflects expected credit losses in the loan portfolio as of the balance sheet date.

The estimate for expected credit losses is based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions, and prepayment experience as related to credit contractual term information.

The ACL is measured and recorded upon the initial recognition of a financial asset.

The ACL is reduced by charge-offs, net of

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

recoveries of previous losses, and is increased or decreased by a provision for (or recapture of) credit losses, which is recorded in the Consolidated Statements of Income.

The ACL is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (or recapture of) credit losses, which is recorded in the Consolidated Statements of Income.

The ACL for expected credit losses is determined based on a quantitative assessment of two categories of loans:

6 unchanged sentences

Based on management’s analysis, adjustments may be applied for additional factors impacting the risk of loss in the loan portfolio beyond information used to calculate reasonable and supportable, reversion and post-reversion period forecasts on collectively evaluated loans.

As the reasonable and supportable and reversion period forecasts reflect the use of the macroeconomic variable loss drivers, management may consider that an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions, including those that utilize supplemental information relative to the macroeconomic variable loss drivers.

As the reasonable and supportable forecast and reversion period reflects the use of the macroeconomic variable loss drivers, management may consider that an additional or reduced reserve is warranted through qualitative risk factors based on current and expected conditions, including those that utilize supplemental information relative to the macroeconomic variable loss drivers.

Qualitative risk factors considered by management include the following:

• Nature and volume of loans;

• Concentrations of credit;

• Delinquency trends.

Loans that do not share similar risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation for the ACL.

• Concentrations of credit including the existence and effect of any concentrations of credit, and changes in the level of such concentrations and;

• Delinquency trends, including the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans.

Loans $250 thousand and over that do not share similar risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation for the ACL.

Loans identified to be individually evaluated under CECL include loans on non-accrual status and may include accruing loans that do not share similar risk characteristics to other accruing loans collectively evaluated.

A specific reserve analysis is 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 analysis is applied to the individually evaluated loans, which considers collateral value, an observable market price, or the present value of the

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

expected future cash flows.

A specific reserve may be assigned if the measured value of the loan using one of the before mentioned methods is less than the current carrying value of the loan.

5 unchanged sentences

For loans analyzed on the basis of projected future principal and interest cash flows, the Company will discount the expected cash flows at the effective interest rate of the loan, and an ACL would result if the present value of the expected cash flows was less than the amortized cost basis of the loan.

When the discounted cash flow method is used to determine the ACL,

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

management does not adjust the effective interest rate used to discount cash flows to incorporate expected prepayments.

When the discounted cash flow method is used to determine the ACL, management does not adjust the effective interest rate used to discount cash flows to incorporate expected prepayments.

Allowance for credit losses - off-balance sheet credit exposures

22 unchanged sentences

Transfers of financial assets are accounted for as sales when control over the assets has been relinquished.

Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company,

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Other real estate owned (OREO)

4 unchanged sentences

Revenue and expenses from the operations of foreclosed assets are included in other non-interest income and other operating expenses.

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

The Company accounts for income taxes in accordance with income tax accounting guidance.

20 unchanged sentences

Authoritative accounting literature also requires an employer to measure the funded status of a plan as of the date of its year-end balance sheet.

The guidance also requires additional disclosure in the notes to financial statements about certain effects on net periodic benefit cost for the next fiscal year that arises from delayed recognition of the gains or losses, prior service costs or credits, and a transition asset or obligation.

The guidance also requires additional disclosure in the notes to financial statements about certain effects on net periodic benefit cost for the next fiscal

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

year that arises from delayed recognition of the gains or losses, prior service costs or credits, and a transition asset or obligation.

401(k) plan & other plans

4 unchanged sentences

For the deferred compensation and supplemental retirement plan, the expense allocates the benefits over the years of service.

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

Earnings per common share

21 unchanged sentences

The Company’s leases do not contain residual value guarantees or material variable lease payments that will impact the Company’s ability to pay dividends or cause the Company to incur additional material expenses.

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

Operating lease expense consists of a single lease cost allocated over the remaining lease term on a straight-line basis, variable lease expense, and any impairment of the right-of-use asset.

4 unchanged sentences

Fair values of financial instruments are estimated using relevant market information and other assumptions.

Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk,

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

prepayments, and other factors, especially in the absence of broad markets for particular items.

Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.

Changes in assumptions or in market conditions could significantly affect the estimates.

23 unchanged sentences

Reclassifications had no effect on prior year net income or shareholder’s equity.

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

Adoption of new accounting standards

In March 2024, the FASB issued ASU 2024-01, Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards .

The amendments in this update seek to improve GAAP by adding an illustrative example that includes four fact patterns to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether a profits interest award should be accounted for in accordance with Topic 718.

The amendments in this update are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.

The Company adopted the standard with the fiscal year ending December 31, 2025, and it did not have a material impact on the financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU seeks to enhance the transparency and decision usefulness of the disclosures.

The amendments in this update address investor requests for more transparency about income tax information through improvements to disclosures primarily related to the rate reconciliation and income taxes paid information.

The amendments in this update are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted for annual consolidated financial statements that have not yet been issued.

The Company adopted the standard with the fiscal year ending December 31, 2025, and it did not have a material impact on the financial statements.

In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method .

These amendments permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.

The ASU is effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods with those fiscal years.

Early adoption is permitted for all entities in any interim period.

The amendments in this ASU must be applied on either a modified retrospective or a retrospective basis (except for Low-Income Housing Tax Credit (“LIHTC”) investments not accounted for using the proportional amortization method).

A reporting entity that has LIHTC investments that are no longer permitted to use (1) the cost method guidance in paragraph 323-740-25-2A, (2) the equity method example in paragraphs 323-740-55-8 through 55-9, or (3) the delayed equity contribution guidance in paragraphs 323-740-25-3 must either use its general transition method (modified retrospective or retrospective) or apply a prospective approach.

The Company adopted the standard with the fiscal year ending December 31, 2025, and it did not have a material impact on the financial statements.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurements (Topic 820):

Fair Value Measurements of Equity Securities Subject to Contractual Sale Restrictions .

ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

The amendments also require some additional disclosures for equity securities that are subject to contractual sale restrictions.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years.

The amendments in this ASU should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption.

The Company adopted the standard with the fiscal year ending December 31, 2025, and it did not have a material impact on the financial statements.

On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures .

53 unchanged sentences

Newly issued not yet adopted accounting standards

In November 2025, the FASB issued ASU 2025-08, Financial Instruments - Credit Losses (Topic 326):

Purchased Loans.

This ASU amends the accounting for certain acquired loans by expanding the use of the “gross‑up” approach under the CECL model to include purchased seasoned loans.

Under this approach, the allowance for expected credit losses is recognized at the acquisition date as an adjustment to the loan’s amortized cost basis, rather than through a provision for credit losses, thereby eliminating a “day‑one” credit loss expense for loans within the scope of the guidance.

The amendments do not change the accounting for purchased credit‑deteriorated loans, originated loans, credit card loans, or debt securities.

The amendments in this update are effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, and are to be applied on a prospective basis.

Early adoption is permitted.

The Company expects to early adopt this ASU based on the pending LNKB merger.

In November 2024, the FASB issued ASU 2024-03, Income Statement (Subtopic 220-40):

4 unchanged sentences

This ASU is not expected to have a material impact our consolidated financial statements.

In March 2024, the FASB issued ASU 2024-01, Stock Compensation (Topic 718):

Scope Application of Profits Interest and Similar Awards .

The amendments in this update are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.

The adoption of this pronouncement is not expected to have a material impact on our Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

This ASU seeks to enhance the transparency and decision usefulness of the disclosures.

The amendments in this update are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted for annual consolidated financial statements that have not yet been issued.

This ASU is not expected to have a material impact our consolidated financial statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

5 unchanged sentences

We do not expect the adoption of ASU 2023-06 to have a material impact on our consolidated financial statements.

In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method .

The ASU is effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods with those fiscal years.

Early adoption is permitted for all entities in any interim period.

The amendments in this ASU must be applied on either a modified retrospective or a retrospective basis (except for LIHTC investments not accounted for using the proportional amortization method).

Note 1— Nature of Business Activities and Significant Accounting Policies (continued)

retrospective or retrospective) or apply a prospective approach.

We do not expect the adoption of ASU 2023-02 to have a material impact on our consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurements (Topic 820):

Fair Value Measurements of Equity Securities Subject to Contractual Sale Restrictions .

The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

The amendments also require some additional disclosures for equity securities that are subject to contractual sale restrictions.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years.

The amendments in this ASU should be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption.

We do not expect the adoption of ASU 2022-03 to have a material impact on our consolidated financial statements.

Note 2— Securities

24 unchanged sentences

$ 1,549,589 $ 1,658 $ 118,876 $ 1,432,371

At December 31, 2024, and December 31, 2023, securities with amortized costs of $ 1.2 billion and $ 826.5 million, respectively, and with estimated fair values of $ 1.1 billion and $ 742.5 million, respectively, were pledged to serve as collateral for secured borrowings, derivative exposures, or to secure public deposits as required or permitted by law.

Note 2— Securities (continued)

At December 31, 2025, and December 31, 2024, securities with amortized costs of $ 1.1 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, and principal payments received of debt securities available-for-sale, and the related gross gains and losses realized for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, were as follows (in thousands):

5 unchanged sentences

The tax benefit (provision) related to these net realized gains and losses for 2025, 2024, and 2023 was $( 33.6 ) thousand, $( 312.1 ) thousand, and $ 23.5 thousand, respectively.

Note 2— Securities (continued)

The maturities of securities available-for-sale at December 31, 2025, were as follows (in thousands):

14 unchanged sentences

$ 35,659 $ 638,916 $ 703,890 $ 309,352 $ 1,687,817

Note 2— Securities (continued)

December 31, 2025

13 unchanged sentences

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 December 31, 2025, and December 31, 2024.

Note 2— Securities (continued)

Available-for-sale securities in a continuous unrealized loss position for less than twelve months and more than twelve months are as follows (in thousands):

12 unchanged sentences

$ 209,397 $ 2,135 $ 880,574 $ 78,547 $ 80,682

Note 2— Securities (continued)

December 31, 2024

14 unchanged sentences

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.

The evaluation is based upon factors such as the creditworthiness of the underlying borrowers, performance of the underlying

Note 2— Securities (continued)

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.

3 unchanged sentences

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 statements of financial condition.

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.

Prior to implementation of the CECL standard, unrealized losses caused by a credit event would require the direct write-down of the AFS security through the other-than-temporary impairment (“OTTI”) approach.

3 unchanged sentences

The Company has evaluated AFS securities in an unrealized loss position for credit-related impairment at December 31, 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

Note 2— Securities (continued)

required to sell any of the investments before recovery of its amortized cost basis.

As such, there was no ACL on AFS securities at December 31, 2025 and at December 31, 2024.

15 unchanged sentences

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.

Based on our assessment of the expected credit losses and the credit

Note 2— Securities (continued)

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 December 31, 2025.

1 unchanged sentence

At December 31, 2025, the unrealized losses associated with 18 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.

We assess 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.

8 unchanged sentences

The Company’s investment in FHLB stock totaled $ 26.8 million and $ 18.2 million at December 31, 2025, and 2024, respectively.

The Company’s investment in Federal Reserve Bank stock totaled $ 14.8 million and $ — at December 31, 2024, and 2023, respectively.

FHLB and Federal Reserve stock are generally viewed as long-term

Note 2— Securities (continued)

investments and as restricted investment securities, which are carried at cost, because there is no market for the stocks other than member institutions.

The Company’s investment in Federal Reserve Bank stock totaled $ 14.8 million and $ 14.8 million at December 31, 2025, and 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.

2 unchanged sentences

The Company’s Restricted stock line item on the Consolidated Balance Sheets also includes an investment in Community Bankers’ Bank, totaling $ 111 thousand at December 31, 2025, and $ 111 thousand December 31, 2024, which is carried at cost and is not impaired at December 31, 2025.

The Company also has other restricted investments including Independent Community Bankcorp, Inc.

and WV Bankers Title which are included in restricted stock on the Consolidated Balance Sheets as of December 31, 2024.

The Company also has other restricted investments including Independent Community Bancorp, Inc., Atlantic Community Bankers Bank, and WV Bankers Title which are included in restricted stock on the Consolidated Balance Sheets as of December 31, 2025.

Note 3— Loans

2 unchanged sentences

• 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.

Other risk factors include the creditworthiness 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, 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.

Note 3— Loans (continued)

• Acquisition, construction & development loans carry risk associated with the creditworthiness of the borrower, project completion within budget, 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 creditworthiness 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 creditworthiness 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 creditworthiness of the borrower and the value of the collateral, if any.

Loans at year-end by portfolio segment were as follows (in thousands):

15 unchanged sentences

All information presented as of December 31, 2025, and December 31, 2024, is in accordance with ASC 326.

All other information presented prior to January 1, 2023, is in accordance with previous applicable GAAP.

The Company’s ACL is calculated quarterly, with any adjustment recorded to the provision for credit losses in the Consolidated Statements of Income.

Management calculates the quantitative portion of collectively evaluated loans for all loan categories using the 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.

For purposes of estimating the Company’s ACL, management 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.

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 analysis may be applied to the individually evaluated loans, which considers collateral value, an observable market price, or the present value of the

Note 4— Allowance for Credit Losses (continued)

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 year ended December 31, 2024, including the impact of the allowance established for PCD loans, the activity in the ACL including the impact of the adoption of

Note 4— Allowance for Credit Losses (continued)

CECL for the year ended December 31, 2023, and the activity in the ACL for the year ended December 31, 2022 (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 Unallocated Total

The following tables present the activity in the ACL for the year ended December 31, 2025, including the impact of the allowance established for PCD loans, the activity in the ACL including the impact of the adoption of CECL for the year ended December 31, 2024, and the activity in the ACL for the year ended December 31, 2023 (in thousands).

December 31, 2025

Beginning balance, prior to adoption of CECL $ 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

Balance, beginning of period

$ 30,444 $ 3,261 $ 17,386 $ 6,633 $ 9,763 $ 553 $ 68,040

Provision for (recapture of) credit losses ( 4,180 ) 568 ( 165 ) 1,795 2,707 1,601 2,326

2 unchanged sentences

Balance, end of period $ 26,190 $ 2,760 $ 17,221 $ 8,227 $ 12,536 $ 889 $ 67,823

December 31, 2024

Balance, beginning of period $ 20,633 $ 783 $ 368 $ 645 $ 2,797 $ 75 $ 25,301

Impact of adoption CECL 2,686 ( 6 ) ( 640 ) 237 1,661 187 — 4,125

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 2,675 547 11,050 566 4,465 1,172 20,475

2 unchanged sentences

Balance, end of period $ 30,444 $ 3,261 $ 17,386 $ 6,633 $ 9,763 $ 553 $ 68,040

December 31, 2023

Balance, beginning of period $ 25,112 $ 611 $ 2,189 $ 165 $ 2,434 $ 18 $ 1,180 $ 31,709

Beginning balance, prior to adoption of CECL

$ 15,477 $ 635 $ 2,082 $ 438 $ 2,379 $ 28 $ 21,039

Impact of adoption CECL 2,686 ( 6 ) ( 640 ) 237 1,661 187 4,125

Provision for (recapture of) loan losses 2,432 154 ( 1,074 ) ( 1 ) ( 1,295 ) 19 235

28 unchanged sentences

The Company internally grades all commercial loans at the time of origination.

In addition, the Company performs an annual review on the top twenty-five non-homogenous commercial loan relationships as measured by total Company exposure to each borrower.

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:

117 unchanged sentences

Totals $ 554,237 $ 805,534 $ 1,052,113 $ 903,616 $ 329,467 $ 1,258,726 $ 768,543 $ 5,672,236

Loans for which the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral are considered to be collateral-dependent loans.

Collateral can have a significant financial effect in mitigating exposure to credit risk and, where there is sufficient collateral, an allowance for credit losses is not recognized or is minimal.

For collateral-dependent loans, the allowance for credit losses is individually assessed based on the fair value of the collateral less estimated costs of sale.

The Company's collateral-dependent loans are secured by real estate, inventory and equipment.

Collateral values are generally based on appraisals, which are adjusted for changes in market indices.

As of December 31, 2025 and December 31, 2024, the Company had $ 68.7 million and $ 28.3 million of collateral-dependent impaired loans, respectively.

The collateral-dependent loans at December 31, 2025 consisted of $ 38.2 million of commercial real estate loans, $ 9.0 million of owner-occupied commercial real estate loans, $ 13.3 million of acquisition, construction & development loans, $ 4.4 million of commercial & industrial loans, and $ 3.8 million of single family residential loans.

The collateral-dependent loans at December 31, 2024 consisted of $ 19.9 million of commercial real estate loans, $ 1.8 million of owner-occupied commercial real estate loans, $ 904.0 thousand of acquisition, construction & development loans, $ 1.3 million of commercial & industrial loans, and $ 4.3 million of single family residential loans.

For the years ended December 31, 2025 and December 31, 2024, there were no significant deterioration or changes in the collateral securing these loans.

Note 4— Allowance for Credit Losses (continued)

The following tables present information about collateral-dependent loans that were individually evaluated for purposes of determining the ACL as of December 31, 2025 and December 31, 2024 (in thousands).

10 unchanged sentences

Total $ 23,085 $ 9,632 $ 45,636 $ 68,721 $ 9,632

Note 4— Allowance for Credit Losses (continued)

Collateral Dependent Loans

19 unchanged sentences

ASU 2022-02 eliminates the 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.

This change required all loan modifications to be accounted for under the general loan modification guidance

Note 4— Allowance for Credit Losses (continued)

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.

Upon adoption of CECL, the Company loans classified as TDRs were individually evaluated for the ACL, and the measurement was done either using the collateral-dependent or the discounted cash flow method.

3 unchanged sentences

For the years ended December 31, 2025 and 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.

The Company did not extend any modifications that were defined as TDRs during the years ended December 31, 2022.

Note 4— Allowance for Credit Losses (continued)

Other Real Estate Owned

Real estate owned activity was as follows for the year ended December 31, 2024 (in thousands):

December 31, 2024

Real estate owned activity was as follows for the years ended December 31, 2025 and December 31, 2024 (in thousands):

December 31, 2025 December 31, 2024

Beginning balance $ 2,783 $ —

1 unchanged sentence

Capital expenditures — —

Direct write-downs —

Sales of real estate owned ( 158 ) ( 758 )

9 unchanged sentences

$ 136,809 $ 132,270

Depreciation and amortization (e.g.

leasehold improvements) expense for the years ended December 31, 2024, December 31, 2023, and December 31, 2022 was $ 5.9 million , $ 2.9 million, and $ 3.1 million , respectively.

In 2024, 2023, and 2022, the Company sold or disposed of premises that resulted in a loss of $ 2.2 million, a loss of $ 36.6 thousand , and a gain of $ 4.5 million, respectively, that is captured in other operating expenses on the Consolidated Statements of Income.

Depreciation and amortization (e.g., leasehold improvements) expense for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 was $ 6.9 million , $ 5.9 million, and $ 2.9 million , respectively.

In 2025, 2024, and 2023, the Company sold or disposed of premises that resulted in a loss of $ 225.1 thousand , a loss of $ 2.2 million , and a loss of $ 36.6 thousand, respectively, that is captured in other operating expenses on the Consolidated Statements of Income.

Note 6— Deposits

2 unchanged sentences

Time deposits through the Certificate of Deposit Account Registry Service (“CDARS”) program totaled $ 22.4 million at December 31, 2025, compared to $ 35.7 million at December 31, 2024.

Note 6— Deposits (continued)

At December 31, 2025, the scheduled maturities of brokered deposits and time deposits for the next five years, and for the years thereafter, were as follows (in thousands):

3 unchanged sentences

At December 31, 2025, and December 31, 2024, amounts included in time deposits for individual retirement accounts totaled $ 111.2 million and $ 118.9 million, respectively.

Overdrafts of $ 1.6 million and $ 110 thousand were reclassified to loans as of the year ended December 31, 2024, and December 31, 2023, respectively.

Overdrafts of $ 0.7 million and $ 1.6 million were reclassified to loans as of the year ended December 31, 2025, and December 31, 2024, respectively.

Note 7— Borrowed Funds

1 unchanged sentence

The Company had borrowings of $ 450.0 million and $ 365.0 million at December 31, 2025, and December 31, 2024, respectively.

At December 31, 2024, the interest rate on this debt ranged from 4.43 % to 4.57 %.

At December 31, 2025, the interest rate on this debt was 3.75 %.

At December 31, 2024, the interest rate on this debt ranged from 4.43 % to 4.57 %.

4 unchanged sentences

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 December 31, 2024, and December 31, 2023, was $ 3.1 billion and $ 797.8 million, respectively.

The lendable collateral value of securities and loans pledged against available lines of credit as of December 31, 2025, and December 31, 2024, was $ 3.2 billion and $ 3.1 billion, respectively.

As of December 31, 2025, all of the Company’s borrowings will mature within one calendar year.

The contractual maturities of these borrowings as of December 31, 2025, are as follows (in thousands):

Due in 2025 $ 365,000

Due in 2026 —

Note 7— Borrowed Funds (continued)

Long-term borrowings

Subordinated Debentures

As part of the Merger, Burke & Herbert assumed $ 75 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 part of the Summit merger, Burke & Herbert assumed $ 75 million of subordinated debentures, with a fair value of $ 61.5 million with a $ 13.5 million discount being amortized into interest expense over the stated maturity.

As of December 31, 2025, the net balance was $ 70.2 million.

2 unchanged sentences

The subordinated debentures were issued in the fourth quarter of 2021 and bear 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

Note 7— Borrowed Funds (continued)

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 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 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.

As of December 31, 2024, the net balance was $ 29.9 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 by 20 % each year until its maturity.

The subordinated debentures were issued in the third quarter of 2020 and bear 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.

From and including September 30, 2025, 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 SOFR plus 487 basis points, payable quarterly 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 third quarter 2020.

Through the merger with Summit, Burke & Herbert also assumed $ 30 million of subordinated debentures with fair value of $ 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 Bank.

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.

As part of the Summit 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 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 3 month LIBOR plus 345 basis points for SFG Capital Trust I, 3 months of LIBOR plus 280 basis points for SFG Capital Trust II, and 3 month LIBOR 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.

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.

2 unchanged sentences

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.

In accordance with these Guidelines, trust preferred securities

Note 7— Borrowed Funds (continued)

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.

5 unchanged sentences

Note 8— Income Taxes

The components of applicable income tax expense (benefit) for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, were as follows (in thousands):

The components of applicable income tax expense (benefit) from continuing operations for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, were as follows (in thousands):

December 31, 2025 December 31, 2024 December 31, 2023

3 unchanged sentences

$ 14,360 $ 5,697 $ 3,822

Deferred Expense:

Deferred Expense (Benefit):

Federal $ 12,899 $ ( 1,181 ) $ ( 1,422 )

2 unchanged sentences

Total $ 27,632 $ 4,190 $ 2,369

The Company did no t have any income tax expense or operations in foreign jurisdictions for the years presented.

Note 8— Income Taxes (continued)

The components of the effective tax rate:

amount (in thousands), and percent, for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 were as follows:

2025 2024 2023

Federal statutory income tax

$ 30,437 21.0 % $ 8,379 21.0 % $ 5,263 21.0 %

State and local income tax, net of federal benefit (1)

2,552 1.8 716 1.8 157 0.6

Tax credits (2)

Low income housing tax credits, net amortization

( 1,162 ) ( 0.8 ) ( 3,619 ) ( 9.1 ) ( 1,840 ) ( 7.3 )

Nontaxable or nondeductible items

Benefit of tax exempt income

( 3,455 ) ( 2.4 ) ( 1,143 ) ( 2.9 ) ( 363 ) ( 1.4 )

Nontaxable income from company owned life insurance

( 1,718 ) ( 1.2 ) ( 991 ) ( 2.5 ) ( 604 ) ( 2.4 )

Merger expense

186 0.1 280 0.7 382 1.5

Nondeductible compensation

744 0.5 530 1.3 — —

283 0.3 272 0.8 ( 602 ) ( 2.4 )

Other adjustments

( 235 ) ( 0.2 ) ( 234 ) ( 0.6 ) ( 24 ) ( 0.1 )

$ 27,632 19.1 % $ 4,190 10.5 % $ 2,369 9.5 %

(1) State taxes in West Virginia and Maryland make up the majority (greater than 50%) of the tax effect in this category for 2025 and 2024.

State taxes in Maryland made up the majority of the tax effect in this category for 2023.

(2) The tax credits category includes the effects of proportional amortization and other tax benefits.

Deferred income taxes are provided on the asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and net operating losses and deferred tax liabilities are recognized for taxable temporary differences.

7 unchanged sentences

The Company follows accounting guidance related to accounting for uncertainty in income taxes.

Under the “more likely than not” threshold guidelines, the Company’s uncertain tax position reserve was zero and $ 167 thousand as of December 31, 2024, and December 31, 2023, respectively.

The Company’s policy is to account for interest and penalties as a component of income tax expense.

The Company is no longer subject to examination by federal, state, and local taxing authorities for years before January 1, 2022.

The following reconciles the amount of reported income tax expense in the financial statements to taxes that would be computed by applying the federal statutory tax rates to income before taxes (in thousands):

December 31, 2024 December 31, 2023 December 31, 2022

Expected taxes using statutory rates $ 8,286 $ 5,263 $ 10,983

Benefit of tax-exempt municipal interest income, net of non-deductible interest

( 1,143 ) ( 363 ) ( 1,694 )

Nontaxable income from company-owned life insurance

( 991 ) ( 604 ) ( 570 )

Low income tax credits, net of amortization ( 3,619 ) ( 1,840 ) ( 1,840 )

State taxes, net of federal benefit 716 157 1,159

Merger-related 280 382 —

Non-deductible compensation 530 — —

Other adjustment, net 131 ( 626 ) 248

$ 4,190 $ 2,369 $ 8,286

Deferred income taxes reflect the impact of “temporary differences” between amounts of assets and liabilities for financial reporting purposes and such amounts as measured for tax purposes.

Deferred tax assets and liabilities represent the future tax return consequences of temporary differences, which will either be taxable or deductible when the related assets and liabilities are recovered or settled.

Deferred tax assets and liabilities

Note 8— Income Taxes (continued)

represent the future tax return consequences of temporary differences, which will either be taxable or deductible when the related assets and liabilities are recovered or settled.

The net deferred tax amounts in the accompanying Consolidated Balance Sheets include the following components (in thousands):

4 unchanged sentences

Compensation accruals 12,799 10,714

Other accruals 442 27

Partnership investments 2,718 2,587

2 unchanged sentences

Tax credit carryforward — 9,777

OPEB Liability 188 —

Other 974 630

Total deferred tax asset $ 78,759 $ 106,133

11 unchanged sentences

Employees hired prior to June 1, 2005 participate in the retirement plan on a non-contributing basis and were fully vested after five years of service.

Note 9— Defined Benefit Pension Plan (continued)

The following tables set forth the Plan’s status and related disclosures (in thousands):

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Amortization of net loss ( 394 ) ( 400 ) ( 630 )

Deferred tax expense (benefit) 349 342 ( 269 )

Deferred tax expense

Total recognized in accumulated other comprehensive (income) loss $ ( 537 ) $ ( 1,169 ) $ ( 1,286 )

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The Company has certain non-qualified Supplemental Executive Retirement Plans (“SERP”) with certain senior officers and directors, which provide participating officers with an income benefit payable at retirement age or death.

Upon the Merger, the Company assumed additional SERP plans along with an acceleration of benefits as part of the Merger.

Plan expenses for the years ending December 31, 2024, December 31, 2023, and December 31, 2022, amounted to $ 3.7 million, $ 522 thousand, and $ 290 thousand, respectively.

For the year ended December 31, 2024, the Summit merger was completed, and the Company assumed additional SERP plans along with an acceleration of benefits as part of the Summit merger.

Plan expenses for the years ending December 31, 2025, December 31, 2024, and December 31, 2023, amounted to $ 2.0 million, $ 3.7 million, and $ 522 thousand, respectively.

The Company has a deferred compensation plan (2021 Deferred Compensation Plan) for current directors and senior officers.

1 unchanged sentence

The trust investments consist of equity investments, fixed income investments, and cash.

The trust account balance totaled $ 1.3 million and $ 818 thousand at December 31, 2024, and December 31, 2023, respectively.

The trust account balance totaled $ 1.5 million and $ 1.3 million at December 31, 2025, and December 31, 2024, respectively.

This balance is included within other assets and is directly offset within accrued interest and other liabilities on the Company’s Consolidated Balance Sheets.

Amounts contributed to the trust and recorded as expense for the Company totaled $ 541 thousand and $ 341 thousand, respectively, in 2024 and 2023.

Amounts contributed to the trust and recorded as expense for the Company totaled $ 838 thousand, $ 541 thousand, and $ 341 thousand, respectively, in 2025, 2024 and 2023.

Note 11— 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 Company enters into operating leases with customers to lease vacant space in certain owned premises that are not being used by the Company.

These operating leases are typically payable in monthly installments with terms ranging from around one year to around nine years and may contain renewal options.

The components of lease income, which is included in non-interest expense on the Consolidated Statements of Income, were as follows for the year ending (in thousands):

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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 Company’s leases range from less than one year to around fourteen years .

Including renewal options, the Company’s leases range from less than one year to around 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.

113 unchanged sentences

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 an additional $ 1.0 million will be reclassified as a reduction to interest expense.

During the next twelve months, the Company estimates an additional $ 74.6 thousand will be reclassified as a reduction to interest expense.

Derivatives not designated as hedges

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Interest Rate Products $ ( 329 ) $ ( 329 ) $ — Interest Income $ ( 1,749 ) $ ( 1,749 ) $ —

Interest Rate Products ( 29 ) ( 29 ) — Interest Expense — — —

Total $ ( 358 ) $ ( 358 ) $ — $ ( 1,749 ) $ ( 1,749 ) $ —

23 unchanged sentences

As of December 31, 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 $ 340 thousand.

As of December 31, 2024, the Company has posted the full amount of collateral related to these agreements.

As of December 31, 2024, 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 $ 165 thousand.

As of December 31, 2025, and as of December 31, 2024, the Company has posted the full amount of collateral related to these agreements.

Note 14— Commitments and Contingencies

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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.

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.

12 unchanged sentences

Allowance for credit losses - off-balance-sheet credit exposures

The Company recorded a provision for credit losses on unfunded commitments of $ 3.7 million for the year ended December 31, 2024 and a recapture of $ 21 thousand for the year ended December 31, 2023.

The ACL on off-balance-sheet credit exposures totaled $ 4.0 million as of December 31, 2024, and $ 254 thousand as of December 31, 2023 and is included in accrued interest and other liabilities on the accompanying Consolidated Balance Sheets.

The Company recorded a recapture of credit losses on unfunded commitments of $ 0.8 million for the year ended December 31, 2025 and a provision for $ 3.7 million for the year ended December 31, 2024.

The ACL on off-balance-sheet credit exposures totaled $ 3.2 million as of December 31, 2025, and $ 4.0 million as of December 31, 2024 and is included in accrued interest and other liabilities on the accompanying Consolidated Balance Sheets.

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.

11 unchanged sentences

There were no loans to a related party that were considered classified loans at December 31, 2025, or December 31, 2024.

As of December 31, 2025, the ending balance of $ 163.0 million includes $ 12.6 million of undrawn credit line availability.

Deposits from related parties at years ended December 31, 2025, and December 31, 2024, were $ 132.3 million and $ 156.8 million.

1 unchanged sentence

Determination of Fair Value

Note 16— Fair Value Measurements (continued)

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.

15 unchanged sentences

Equity investments are recorded at fair value on a recurring basis, with changes in fair value reported in net income.

Through the Merger, at December 31, 2024, 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.

Through the Merger, we acquired perpetual preferred stock of a bank holding company issued in October 2022 in a private offering.

Through the Summit 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 December 31, 2025.

Through the Summit 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;

5 unchanged sentences

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.

The Company recognizes interest rate lock commitments at fair value.

Fair value of interest rate lock commitments is based on the price of underlying loans obtained from an investor for loans that will be delivered on a best effort basis (Level 2).

The Company has considered counterparty credit risk

Note 16— Fair Value Measurements (continued)

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.

Loans held-for-sale, at fair value

38 unchanged sentences

Loans held-for-sale, at fair value $ — $ 2,331 $ — $ 2,331

Equity investments $ — $ 12,407 $ — $ 12,407

Derivatives $ — $ 3,191 $ — $ 3,191

16 unchanged sentences

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.

Note 16— Fair Value Measurements (continued)

fair value adjustments are recorded in the period incurred and included in other noninterest expense in the consolidated statements of income.

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):

28 unchanged sentences

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

Note 16— Fair Value Measurements (continued)

30 unchanged sentences

Interest-bearing 5,135,299 — 5,126,423 — 5,126,423

Other borrowed funds 272,000 — 271,716 — 271,716

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

2 unchanged sentences

No other purchase or sale of the Company’s Common Stock occurred in 2025.

In 2023, the Company reissued 2,950 shares of treasury stock to satisfy the vesting of RSUs.

In 2024, the Company reissued zero shares of treasury stock to satisfy the vesting of RSUs.

No other purchase or sale of the Company’s Common Stock occurred in 2024.

On November 15, 2022, the Company effected a forty -for-one stock split of its Common Stock by issuing thirty-nine additional shares of Common Stock for each outstanding share of Common Stock of record as of November 9, 2022.

All share and earnings per share information have been retroactively adjusted to reflect the stock split within the financial statements and notes to the financial statements.

During 2022, the Company also reissued 2,000 shares of treasury stock to satisfy the vesting of RSUs.

During 2023, the Company reissued 2,950 shares of treasury stock to satisfy the vesting of RSUs.

No other purchase or sale of the Company’s Common Stock occurred in 2023.

Note 17— Common Stock Transactions (continued)

3 unchanged sentences

December 31, 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

Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income (Loss)

Beginning Balance $ 911 $ ( 92,055 ) $ ( 4,576 ) $ ( 95,720 )

4 unchanged sentences

December 31, 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

Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income (Loss)

Beginning Balance $ ( 490 ) $ ( 97,259 ) $ ( 5,745 ) $ ( 103,494 )

4 unchanged sentences

December 31, 2023

Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income

Gains and Losses on Cash Flow Hedges Unrealized Gains and Losses on Available-for-Sale Securities Defined Benefit Pension Items Accumulated Other Comprehensive Income (Loss)

Beginning Balance $ ( 1,589 ) $ ( 130,875 ) $ ( 7,031 ) $ ( 139,495 )

5 unchanged sentences

The following table presents amounts reclassified out of each component of accumulated other comprehensive income (loss) for the years ending December 31, 2025, December 31, 2024, and December 31, 2023 (in thousands).

Details about Accumulated Other Comprehensive Income Components Amount Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Statements of Income

Details about Accumulated Other Comprehensive Income (Loss) Components

Amount Reclassified From Accumulated Other Comprehensive Income (Loss)

Affected Line Item in the Statements of Income

December 31, 2025 December 31, 2024 December 31, 2023

27 unchanged sentences

Total liabilities

95,578 117,713

Total Shareholders’ Equity

4 unchanged sentences

Dividends from bank subsidiary $ 77,375 $ 23,869

All other income

Total Income 77,781 23,869

Salaries and employee benefit 6,949 2,052

Salaries and employee benefits 6,419 6,949

Interest expense 8,913 7,412

1 unchanged sentence

Total Expense

Income (loss) before income tax benefit and equity in undistributed income of subsidiaries

20,110 22,224

Income before income tax and equity in undistributed income of subsidiaries

Income tax benefit 3,936 4,718

Income (loss) before equity in undistributed income of subsidiaries 6,363 13,564

Income before equity in undistributed income of subsidiaries 61,607 6,363

Equity in undistributed earnings of subsidiary 55,699 29,345

18 unchanged sentences

Dividends paid ( 33,918 ) ( 28,636 )

Treasury stock transactions — 141

Repayment of subordinated debt

Common stock transactions 30 —

Net cash (used in) financing activities $ ( 63,209 ) $ ( 28,377 )

6 unchanged sentences

December 31, 2025 December 31, 2024 December 31, 2023

FDIC assessment $ 3,329 $ 1,957 $ 1,249

Historic tax credit amortization $ 1,741 $ 2,526 $ 2,526

1 unchanged sentence

Consultant fees 3,808 8,510 3,082

ATM, card, & network expense 5,398 2,566 2,244

Directors' fees 1,622 1,991 1,918

4 unchanged sentences

Donation expense 144 6,157 89

Core deposit intangible amortization 11,460 — —

(Gain) / loss on sale or disposal of assets 2,177 37 ( 4,533 )

Other 21,395 18,184 5,455

17 unchanged sentences

Service charges and fees (1)

Debit card fees $ 8,874 $ 4,175 $ 4,454

Deposit related fees $ 7,815 $ 6,575 $ 2,410

Wire fees 376 480 350

Other fees 6 144 86

7 unchanged sentences

8,130 4,686 2,844

Bank debit and other card revenue (1)

12,264 9,772 4,922

Other non-interest income (1)

FHLB dividend (2)

Merchant & credit card fees 897 748 801

Safety deposit fees 510 441 359

Servicing release premium 297 484 138

Wire fees 480 350 358

Customer loan swap fees

8 unchanged sentences

(2) Income excluded from the scope of ASC 606 - Revenue Recognition

(3) Includes income that arises from the Company electing the FVO as stated that is not within the scope of ASC 606.

A description of the Company’s revenue streams accounted for under ASC 606 follows:

3 unchanged sentences

Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.

Bank debit and other card revenue

Debit card fees and merchant & other credit fees charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges.

16 unchanged sentences

In some cases, the Company will retain servicing and that will result in investor servicing income being recognized monthly as interest payments are collected from the borrower.

Other items captured within here are recognized at a point in time such as merchant & debit card fees.

Part of the merger resulted in the Company recognizing a liability for the unfunded commitments that were assumed as part of the transaction.

Other items captured within this category are recognized at a point in time such as letter of credit fees.

Part of the Summit merger resulted in the Company recognizing a liability for the unfunded commitments that were assumed as part of the transaction.

As these commitments mature, the Company reduces this liability that is recorded, within “Accrued Interest and Other Liabilities” on the Consolidated Balance Sheets, and records non-interest income.

1 unchanged sentence

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 expense that has been charged against income for the share-based awards granted was $ 2.9 million, $ 2.4 million, and $ 2.0 million for 2024, 2023, and 2022, respectively.

The total income tax benefit was $ 605 thousand, $ 506 thousand, and $ 421 thousand for 2024, 2023, and 2022, respectively.

Total compensation expense that has been charged against income for restricted stock unit awards granted was $ 4.6 million, $ 2.9 million, and $ 2.4 million for 2025, 2024, and 2023, respectively.

The total income tax benefit was $ 1.1 million, $ 605 thousand, and $ 506 thousand for 2025, 2024, and 2023, respectively.

2019 Stock Incentive Plan

32 unchanged sentences

Non-vested at January 1, 2025

134,202 $ 57.67

Granted 96,287 58.15

7 unchanged sentences

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 December 31, 2024, 312,230 shares were available to be issued.

At December 31, 2025, total shares authorized for issuance were 473,978 and 449,082 shares were available to be issued.

Whole shares are sold to participants in the plan at 85 % of the lower of the stock price at the beginning or end of each semi-annual offering period.

1 unchanged sentence

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 year ended December 31, 2025.

December 31, 2025

3 unchanged sentences

Stock Appreciation Rights (“SAR”)

Upon completion of the Merger and as a part of the Merger Agreement, the Company 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

Upon completion of the Summit merger and as a part of the Summit merger agreement, the Company assumed SAR awards that had been issued to existing employees that would continue with the same terms and conditions

Note 23— Share-Based Compensation (continued)

value these accelerated SAR awards and included this value as part of the purchase price consideration discussed in Note 25 - Business Combination .

adjusted for the exchange ratio of 0.5043 .

As part of the Summit 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 25 - 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 7 years ( 14.3 % per year) and contractually expire 10 years after the grant date.

Upon completion of the Merger, the Company determined the fair value per SAR using the following assumptions:

Upon completion of the Summit merger, the Company determined the fair value per SAR using the following assumptions:

2019 SAR 2021 SAR 2023 SAR

11 unchanged sentences

Outstanding, December 31, 2024

223,873 $ 2,862 5.44 $ 46.87

Granted (or acquired) — — — —

3 unchanged sentences

Outstanding, December 31, 2025

184,719 $ 1,980 4.84 $ 48.48

Exercisable SARs:

At December 31, 2025 156,427 2,188 4.55 48.32

The total fair value of SARs exercised was $ 1.4 million during the year ended December 31, 2024.

The total fair value of SARs exercised was $ 841.0 thousand during the year ended December 31, 2025.

The total fair value of SARs vested was $ 126.1 thousand during the year ended December 31, 2025.

As of December 31, 2024, there was $ 538.2 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 2.27 years years.

As of December 31, 2025, there was $ 326.3 thousand of total unrecognized compensation costs related to non-vested SARs acquired through the Summit merger.

The cost is expected to be recognized over a weighted average period of 1.84 years.

Note 24— Earnings Per Share

15 unchanged sentences

7.72 2.82 3.02

Stock awards equivalent to 67,882 shares, 503 shares, and zero shares of Common Stock were not considered in computing diluted earnings per common share for 2024, 2023, and 2022, respectively, because they were antidilutive.

Stock awards equivalent to 25,679 shares, 67,882 shares, and 503 shares of Common Stock were not considered in computing diluted earnings per common share for 2025, 2024, and 2023, respectively, because they were antidilutive.

Note 25— Business Combination

Effective on May 3, 2024, Burke & Herbert completed the Merger with Summit, pursuant to the Merger Agreement.

The total aggregate consideration payable in the Merger was approximately 7,405,772 shares of Burke & Herbert Common Stock.

Effective on May 3, 2024, Burke & Herbert completed its merger with Summit.

In the Summit 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 Summit 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.

Summit’s results of operations from May 3, 2024, were included in the Company’s results beginning with reporting as of June 30, 2024.

Net interest income and pre-tax net income for Summit were estimated to be $ 99.9 million and $ 111.3 million, respectively, since the date of the acquisition through December 31, 2024, and are included in the Company’s Consolidated Statement of Income.

Pre-tax net income for Summit only includes income and expense that are still being recorded on Summit’s core operating system.

As the Company is merging data and processes, certain legacy Summit expenses, including occupancy and salaries, are now merged within the Company’s core system.

Merger-related costs of $ 36.5 million are included in non-interest expense in the Company’s income statement for the year ended, December 31, 2024.

A portion of these merger-related costs is captured in Other Operating Non-Interest Expense as further description in Note 20 - Other Operating Expense and an additional $ 19.5 million of such merger-related costs is captured in Salaries and Wages, Pensions and Other Employee Benefits, Occupancy, and Equipment rentals, depreciation and maintenance.

These costs captured in those line items represent change-in-control payments, acceleration of benefit due to the change-in-control, software breakage, and other lease breakage fees.

The fair value of the common shares issued as part of the consideration paid for Summit was determined in the basis of the closing price of the Company’s common shares on the date of completion of the Merger.

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 accounted for the Summit 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 Summit merger.

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.

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 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.

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):

Changes in Goodwill 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 Summit 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

Note 25— Business Combination (continued)

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.

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.

1 unchanged sentence

The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $ 442.3 million.

The Company estimates, on the date of the acquisition, that $ 23.9 million of the contractual cash flows specific to the purchased financial assets with credit deterioration will not be collected.

After the Summit 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.

43 unchanged sentences

Goodwill $ 34,149

Post Merger, all of the securities, held-to-maturity were reclassified as available-for-sale.

The following table presents supplemental pro forma information as if the Merger had occurred on January 1, 2024 and on January 1, 2023.

The unaudited pro forma information includes adjustments for interest income on loans and securities acquired, amortization of intangibles arising from the transaction, depreciation expense on property acquired, interest expense on deposits acquired, and the related income tax effects.

The pro forma financial information is not necessarily indicative of the results of operations that would have occurred had the transaction been effected on the assumed dates.

($ in thousands) June 30, 2024 June 30, 2023

Net Interest Income $ 287,481 $ 293,300

Net Income 110,122 55,453

Note 26— Goodwill and Other Intangible Assets

The following table presents the change in goodwill for the the years ended December 31, 2024, December 31, 2023, and December 31, 2022, (in thousands):

The following table presents the change in goodwill for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, (in thousands):

December 31, 2025 December 31, 2024 December 31, 2023

1 unchanged sentence

Acquired goodwill — 32,783 —

Goodwill adjustment

Impairment — — —

1 unchanged sentence

During the year ended, December 31, 2024, the Company recorded $ 32.8 million of goodwill associated with the acquisition of Summit.

See Note 25 - Business Combination to the consolidated financial statements for additional detail regarding this transaction.

See Note 25 - Business Combination to the consolidated financial statements for additional details 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.

Other intangible assets consist of the core deposit intangible which is amortized on an accelerated basis over its estimated useful life of 7 years.

At the date of acquisition, the Company recorded $ 68.8 million of core deposit intangibles associated with the acquisition of Summit.

The gross carrying amounts and accumulated amortization of other intangible assets for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, were as follows (in thousands):

6 unchanged sentences

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 $ 11.5 million for the year ended December 31, 2024.

Total amortization expense associated with intangible assets was $ 15.6 million and $ 11.5 million for the years ended December 31, 2025, and December 31, 2024, respectively.

Estimated amortization expense for future years is as follows (in thousands):

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data