Burke & Herbert Financial Services Corp. 10-K

Item 8. Financial Statements and Supplementary Data Burke & Herbert Financial Services Corp. Audited Consolidated Financial Statements: Page Report of Independent Registered Public Accounting Firm (PCAOB No.: 173 ) 95 Consolidated Balance Sheets as of December 31, 202 5 , and 202 4 98 Consolidated Statements of Income for the Years Ended December 31, 202 5 , 202 4 , and 202 3 99 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 202 5 , 202 4 , and 202 3 100 Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 202 5 , 202 4 , and 202 3 101 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 5 , 202 4 , and 202 3 102 Notes to the Consolidated Financial Statements 104 94 Table of Contents Crowe LLP Independent Member Crowe Global REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and the Board of Directors of Burke & Herbert Financial Services Corp. Alexandria, Virginia 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, 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. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. 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. 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. 95 Table of Contents 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. 96 Table of Contents • 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 We have served as the Company's auditor since 2021. Washington, D.C. February 27, 2026 97 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Balance Sheets December 31, 2025, and 2024 (In thousands, except share and per share data) 2025 2024 Assets Cash and due from banks $ 53,497 $ 35,554 Interest-bearing deposits with banks 235,630 99,760 Cash and cash equivalents 289,127 135,314 Securities available-for-sale, at fair value 1,615,954 1,432,371 Restricted stock, at cost 42,187 33,559 Loans held-for-sale, at fair value 365 2,331 Loans 5,387,676 5,672,236 Allowance for credit losses ( 67,823 ) ( 68,040 ) Net loans 5,319,853 5,604,196 Other real estate owned 2,689 2,783 Premises and equipment, net 136,809 132,270 Accrued interest receivable 35,442 34,454 Intangible assets 41,747 57,300 Goodwill 34,149 32,783 Company-owned life insurance 213,200 182,834 Other assets 189,104 161,990 Total Assets $ 7,920,626 $ 7,812,185 Liabilities and Shareholders' Equity Liabilities Non-interest-bearing deposits $ 1,336,380 $ 1,379,940 Interest-bearing deposits 5,067,561 5,135,299 Total deposits 6,403,941 6,515,239 Short-term borrowings 450,000 365,000 Subordinated debentures, net 70,222 94,872 Subordinated debentures owed to unconsolidated subsidiary trusts, net 17,268 17,013 Accrued interest and other liabilities 124,546 89,904 Total Liabilities 7,065,977 7,082,028 Commitments and contingent liabilities (see Note 14) Shareholders’ Equity Preferred stock and related surplus, $ 1.00 par value per share; 2,000,000 shares authorized; 1,500 shares issued and outstanding at December 31, 2025, 1,500 shares issued and outstanding at December 31, 2024 10,413 10,413 Common stock 7,800 7,770 $ 0.50 par value; 40,000,000 shares authorized, 15,599,814 shares issued and 15,028,524 shares outstanding at December 31, 2025; 40,000,000 shares authorized, 15,540,394 shares issued and 14,969,104 shares outstanding at December 31, 2024 Common stock, additional paid-in capital 405,922 401,172 Retained earnings 517,058 434,106 Accumulated other comprehensive income (loss) ( 58,960 ) ( 95,720 ) Treasury stock ( 27,584 ) ( 27,584 ) 571,290 shares, at cost, at December 31, 2025, and 571,290 shares, at cost, at December 31, 2024 Total Shareholders' Equity 854,649 730,157 Total Liabilities and Shareholders' Equity $ 7,920,626 $ 7,812,185 See Notes to Consolidated Financial Statements. 98 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Statements of Income Years Ended December 31, 2025, 2024, and 2023 (In thousands, except share and per share data) 2025 2024 2023 Interest income Taxable loans, including fees $ 382,794 $ 311,303 $ 101,800 Tax-exempt loans, including fees 180 118 — Taxable securities 36,807 39,817 37,179 Tax-exempt securities 17,364 10,243 5,615 Other interest income 7,848 5,582 2,945 Total interest income 444,993 367,063 147,539 Interest expense Deposits 121,969 118,664 39,195 Short-term borrowings 16,480 14,189 13,856 Subordinated debt 10,527 7,412 — Other interest expense 105 111 86 Total interest expense 149,081 140,376 53,137 Net interest income 295,912 226,687 94,402 Credit loss expense (recapture) - loans and available-for-sale securities 2,326 20,475 235 Credit loss expense (recapture) - off-balance sheet credit exposures ( 803 ) 3,745 ( 21 ) Total provision for (recapture of) credit losses 1,523 24,220 214 Net interest income after credit loss expense 294,389 202,467 94,188 Non-interest income Fiduciary and wealth management 10,455 8,411 5,354 Service charges and fees 8,197 7,199 2,846 Net gains (losses) on securities 147 1,357 ( 112 ) 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 Total non-interest income 46,110 35,264 17,309 Non-interest expense Salaries and wages 83,441 77,089 39,247 Pensions and other employee benefits 18,521 17,186 9,401 Occupancy 14,441 11,577 6,035 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 Total non-interest expense 195,561 197,833 86,436 Income before income taxes 144,938 39,898 25,061 Income tax expense 27,632 4,190 2,369 Net income 117,306 35,708 22,692 Preferred stock dividends 900 675 — Net income applicable to common shares $ 116,406 $ 35,033 $ 22,692 Earnings per common share: Basic $ 7.76 $ 2.83 $ 3.05 Diluted 7.72 2.82 3.02 See Notes to Consolidated Financial Statements. 99 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Statements of Comprehensive Income Years Ended December 31, 2025, 2024, and 2023 (In thousands, except share and per share data) 2025 2024 2023 Net income $ 117,306 $ 35,708 $ 22,692 Other comprehensive income, net of tax: Unrealized gains (losses) on securities: Unrealized gain (loss) arising during period, net of tax of $( 10,416 ) for 2025, $( 1,903 ) for 2024, and ($ 8,721 ) for 2023 37,434 6,372 32,718 Reclassification adjustment for loss (gain) on securities, net of tax of $ 34 for 2025, $ 312 for 2024, and ($ 24 ) for 2023 ( 113 ) ( 1,045 ) 88 Reclassification adjustment for loss (gain) on fair value hedge, net of tax of $ 37 for 2025, $ 37 for 2024, and $( 215 ) for 2023 ( 123 ) ( 123 ) 810 Defined benefit pension plans: Changes in pension plan benefits, net of tax of $( 160 ) for 2025, ($ 349 ) for 2024, and ($ 342 ) for 2023 537 1,169 1,286 Unrealized gain (loss) on cash flow hedge Unrealized holding gain (loss) on cash flow hedge, net of tax of $( 195 ) for 2025, $( 920 ) for 2024, and $ 75 for 2023 659 3,082 ( 283 ) Reclassification adjustment for losses (gains) included in net income, net of tax of $ 485 for 2025, $ 502 for 2024, and $( 367 ) for 2023 ( 1,634 ) ( 1,681 ) 1,382 Total other comprehensive income 36,760 7,774 36,001 Comprehensive income $ 154,066 $ 43,482 $ 58,693 See Notes to Consolidated Financial Statements. 100 Table of Contents Burke & Herbert Financial Services Corp. Consolidated Statements of Changes in Shareholders’ Equity Years Ended December 31, 2025, 2024, and 2023 (In thousands, except share and per share data) Common Stock Paid-in Capital Retained Earnings Comprehensive Income (Loss) Treasury Stock Shareholders’ Equity Preferred Stock and Surplus Shares Outstanding Amount Balance December 31, 2022 $ — 7,425,760 $ 4,000 $ 12,282 $ 424,391 $ ( 139,495 ) $ ( 27,725 ) $ 273,453 Net income — — — — 22,692 — — 22,692 CECL adjustment — — — — ( 3,439 ) — — ( 3,439 ) Other comprehensive income — — — — — 36,001 — 36,001 (Purchase) sale of treasury stock, net — 2,950 — — — — 141 141 Cash dividends, declared — — — — ( 16,298 ) — — ( 16,298 ) Share-based compensation expense, net — — — 2,213 ( 13 ) — — 2,200 Balance December 31, 2023 $ — 7,428,710 $ 4,000 $ 14,495 $ 427,333 $ ( 103,494 ) $ ( 27,584 ) $ 314,750 Net income — — — — 35,708 — — 35,708 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 Balance December 31, 2024 $ 10,413 14,969,104 $ 7,770 $ 401,172 $ 434,106 $ ( 95,720 ) $ ( 27,584 ) $ 730,157 Net income — — — — 117,306 — — 117,306 Other comprehensive income — — — — — 36,760 — 36,760 (Purchase) sale of treasury stock, net — — — — — — — — Cash dividends, declared — — — — ( 33,018 ) — — ( 33,018 ) Preferred stock cash dividends, declared — — — — ( 900 ) — — ( 900 ) Share-based compensation expense, net — 59,420 30 4,750 ( 436 ) — — 4,344 Balance December 31, 2025 $ 10,413 15,028,524 $ 7,800 $ 405,922 $ 517,058 $ ( 58,960 ) $ ( 27,584 ) $ 854,649 See Notes to Consolidated Financial Statements. 101 Table of Contents 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) 2025 2024 2023 Cash Flows from Operating Activities Net Income $ 117,306 $ 35,708 $ 22,692 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of fixed assets 6,941 5,865 2,872 Amortization of other intangible assets 15,775 11,542 — Amortization on assumed liabilities 6,702 10,172 — Accretion income related to acquired loans ( 39,819 ) ( 40,876 ) — Amortization of housing tax credits 6,984 5,432 5,591 Realized (gain) loss on sales of available-for-sale securities ( 147 ) ( 1,357 ) 112 Realized (gain) on sales of OREO property 2 ( 172 ) — Write-down on OREO property 195 — — Provision for (recapture of) credit losses 1,523 24,220 214 Income from company-owned life insurance ( 8,130 ) ( 4,686 ) ( 2,844 ) Deferred tax expense (benefit) 13,272 ( 1,507 ) ( 1,453 ) (Gain) loss on disposal of fixed assets 225 2,177 37 Accretion of securities ( 4,594 ) ( 3,746 ) ( 1,615 ) Amortization of securities 9,761 9,496 9,161 Share-based compensation expense 4,777 2,879 2,464 Repayment of operating lease liabilities ( 2,541 ) ( 2,705 ) ( 3,137 ) (Gain) on loans held-for-sale ( 297 ) ( 484 ) ( 138 ) Proceeds from sales of loans held-for-sale 23,003 37,099 14,205 Change in fair value of loans held-for-sale — 28 ( 28 ) Originations of loans held-for-sale ( 20,740 ) ( 37,477 ) ( 15,536 ) (Increase) decrease in accrued interest receivable ( 988 ) 3,030 ( 414 ) (Increase) decrease in other assets ( 58,017 ) ( 32,499 ) 3,851 Increase in accrued interest payable and other liabilities 36,740 63,660 6,475 Net cash flows provided by operating activities $ 107,933 $ 85,799 $ 42,509 Cash Flows from Investing Activities Proceeds from maturities, prepayments, and calls of securities available-for-sale, net 209,584 257,877 112,025 Proceeds from sales of securities available-for-sale, net 22,083 372,370 77,780 Purchases of securities available-for-sale, net ( 374,915 ) ( 622,760 ) ( 33,221 ) Net cash from merger — 52,607 — Sales of restricted stock 29,071 40,572 29,880 Purchases of restricted stock ( 37,699 ) ( 67,683 ) ( 19,402 ) Proceeds from sales of OREO properties 156 758 — Proceeds from sales of property and equipment — — 3,383 Purchases of property and equipment, net of disposals ( 11,705 ) ( 4,567 ) ( 14,249 ) (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 ) Cash Flows from Financing Activities Net increase (decrease) in non-interest-bearing accounts ( 43,560 ) ( 27,493 ) ( 130,372 ) Net increase (decrease) in interest-bearing accounts ( 68,835 ) ( 158,696 ) 211,853 Increase (decrease) in other short-term borrowings 85,000 93,000 ( 71,100 ) 102 Table of Contents 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 ) Proceeds from employee stock purchase program 679 259 206 Cash dividends paid ( 33,918 ) ( 28,636 ) ( 15,747 ) Issuance of common stock 30 3,242 — Treasury stock transactions — — 141 Net cash flows provided by (used in) financing activities $ ( 90,840 ) $ ( 118,540 ) $ ( 5,138 ) (Decrease) increase in cash and cash equivalents 153,813 90,816 ( 5,797 ) Cash and cash equivalents Beginning of year 135,314 44,498 50,295 End of year $ 289,127 $ 135,314 $ 44,498 Supplemental Disclosures of Cash Flow Information Cash payments for: Interest paid to depositors $ 123,891 $ 114,741 $ 37,573 Interest paid on short-term borrowings 18,680 17,049 7,975 Interest paid on subordinated debt and trust preferred securities 4,922 7,412 — Interest paid on finance lease 107 110 86 Income taxes paid (net of refunds) Federal 6,029 1,900 1,245 State West Virginia 1,606 100 — Maryland 1,175 160 275 New York 520 — — District of Columbia 330 75 50 Other 367 — — 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 259 — — Lease liability arising from obtaining right-of-use assets 775 12,329 1,214 Common stock issued for merger, net — 387,032 — Preferred stock issued for merger, net — 10,413 — Fair value of assets purchased in merger — 4,503,043 — Fair value of liabilities assumed in merger — 4,139,747 — See Notes to Consolidated Financial Statements. 103 Table of Contents Note 1— Nature of Business Activities and Significant Accounting Policies Nature of operations and principles of consolidation The consolidated financial statements include Burke & Herbert Financial Services Corp. (“Burke & Herbert”) and its wholly-owned subsidiary Burke & Herbert Bank & Trust Company (“the Bank”), together referred to as “the Company” for purposes of the Notes to the Financial Statements. 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. Burke & Herbert became a bank holding company when it commenced operations on October 1, 2022, following a reorganization transaction in which it acquired control of the Bank under the BHCA. This transaction was treated as an internal reorganization as all shareholders of the Bank became shareholders of Burke & Herbert. Burke & Herbert has no material operations other than owning the Bank. In September 2023, the Burke & Herbert elected to become a financial holding company under the BHCA. As a financial holding company of a Virginia state bank, Burke & Herbert is subject to regulation, supervision, and examination by the Federal Reserve and the Virginia BFI. The Bank is a Virginia chartered commercial bank that commenced operations in 1852. The Bank became a member of the Federal Reserve System on December 31, 2024. The Bank is subject to regulation, supervision, and examination by the Federal Reserve (through the Federal Reserve Bank of Richmond) and the Virginia BFI. The Bank’s primary market area includes northern Virginia and West Virginia, and it has over 77 branches and commercial loan offices across Delaware, Kentucky, Maryland, Virginia, and West Virginia. The Company’s branch locations accept business and consumer deposits from a diverse customer base. The Company’s deposit products include checking, savings, and term certificate accounts. The Company’s loan portfolio includes commercial and consumer loans, a substantial portion of which are secured by real estate. Merger with Summit Financial Group, Inc. 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 To prepare financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management makes estimates and assumptions based on available information that affects the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash, cash equivalents, and cash flows 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 104 Table of Contents 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 No reserve balances were required at December 31, 2025, and December 31, 2024. There was no reserve requirement with the Federal Reserve as of December 31, 2025, or December 31, 2024. Debt securities Management determines the appropriate classification of debt securities at the time of purchase. Debt securities that the Company has both the positive intent and ability to hold to maturity are classified as held to maturity and are reported at cost, adjusted for amortization of premiums and accretion of discounts. Debt securities that the Company intends to hold for an indefinite period of time, but not necessarily to maturity, are classified as available-for-sale and are reported at fair value. Unrealized gains and losses on investments classified as available-for-sale have been accounted for as a separate component of accumulated other comprehensive income or loss, net of the related deferred tax effect. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are recognized in interest income over the terms of the securities. Any decision to sell a security classified as available-for-sale would be based on various factors, including significant movements in interest rates, changes in the maturity mix of the Company’s assets and liabilities, liquidity needs, regulatory capital considerations, and other similar factors. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. A debt security is placed on non-accrual status at the time any principal or interest payments become more than 90 days delinquent. Interest accrued but not received for a security placed on non-accrual is reversed against interest income. Allowance for credit losses (“ACL”) - available-for-sale debt securities Management evaluates all available-for-sale (“AFS”) debt securities in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. The Company first assesses whether it intends to sell or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. 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 105 Table of Contents 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. Changes in the ACL are recorded as credit loss expense (or recapture). 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 $ 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 Equity securities are carried at fair value with changes in fair value reported in net income. 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. Due to the nature of, and restrictions placed upon, certain equity securities have been classified as restricted stock and are carried at cost. These equity securities are not subject to the classifications above. Loan commitments and related financial instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Loans held-for-sale Loans held-for-sale are those loans the Company has the intent to sell in the foreseeable future. The Company has elected to use the fair value accounting option (“FVO”) for loans held-for-sale. Gains and losses on sales of loans are recognized at settlement dates and are determined by the difference between the sales proceeds and the fair value of the loans. All sales are made without recourse and are sold with servicing released. Mortgage banking derivatives The Company enters into commitments to originate loans whereby the interest rate on the loan is determined prior to funding (interest rate lock commitments). Interest rate lock commitments on mortgage loans to be held-for-sale are accounted for as free-standing derivatives. The period of time between issuance of a loan commitment and closing and sale of the loan generally ranges from 15 to 90 days. The Company protects itself from changes in interest rates through the use of best-efforts forward delivery commitments, whereby the Company commits to sell a loan at the time the borrower commits to an interest rate with the intent that the buyer has assumed interest rate risk on the loan. As a result, the Company is not exposed to significant losses, nor will it realize significant gains related to rate lock commitments due to changes in interest rates. The Company has elected to use the FVO for best effort forward sales commitments. Derivatives At the inception of a derivative contract, the Company designates the derivative as one of three types based on the Company’s intentions and belief as to the likely effectiveness as a hedge. These three types are (1) a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment (“fair value hedge”), (2) a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”), or (3) an instrument with no hedging designation (“stand-alone derivative”). For a fair value hedge, the gain or loss on the derivative, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings as respective fair values changes. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. 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. 106 Table of Contents 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. Accrued settlements on derivatives not designated or that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged. The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking fair value or cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. 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. 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. When a fair value hedge is discontinued, the hedged asset or liability is no longer adjusted for changes in fair value and the existing basis adjustment is amortized or accreted over the remaining life of the asset or liability. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still probable of occurring, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods in which the hedged transactions will affect earnings. The Company is exposed to losses if a counterparty fails to make its payments under a contract in which the Company is in the net receiving position. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements. All of the contracts to which the Company is a party settle monthly or quarterly. In addition, the Company obtains collateral above certain thresholds of the fair value of its derivatives for each dealer counterparty based upon their credit standing and the Company has netting agreements with the dealers with which it does business. Loans 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 $ 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. Loan origination fees, net of certain direct original costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. For all loan portfolio segments, the accrual of interest income is discontinued at the time the loan becomes 90 days delinquent, unless the loan is well-secured and in process of collection. Loans also are placed on non-accrual if collection of principal or interest is considered impaired. Past-due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest income accrued, but not received, for loans placed on non-accrual is reversed against interest income. Interest income received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Under the cost-recovery method, interest income is not recognized until the loan balance is reduced to zero. Under the cash-basis method, interest income is recorded when the payment is received in cash. 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. 107 Table of Contents Note 1— Nature of Business Activities and Significant Accounting Policies (continued) Concentration of credit risk Substantially all of the Company’s loans and commitments have been granted to customers in the Company’s market area; therefore, the Company’s exposure to credit risk is significantly affected by changes in the market area’s economy. Our customers are general depositors of the Company from the same market area. Some investments in state and municipal securities also involve governmental entities within the Company’s market area. The distribution of commitments to extend credit approximates the distribution of loans outstanding. Allowance for credit losses - loans 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 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: collectively evaluated loans and individually evaluated loans. In addition, the ACL also includes a qualitative component which adjusts the CECL model for risk factors that are not considered within the CECL model, but are relevant in assessing the expected credit losses within the loan portfolio. The Company is using a remaining useful life or weighted average remaining maturity (“WARM”) methodology to estimate its current expected credit losses. For purposes of calculating reserves in collectively evaluated loans, the ACL calculation segments the Company’s loan portfolio using federal call codes to group loans which share similar risk characteristics. In order to generate reasonable and supportable forecasts of loss rates over a two-year period, the ACL 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, such as those that pertain to the commercial real estate or residential loan portfolios. A straight-line reversion technique is used for the following four quarters, and in following quarters, the ACL calculation reverts to historical average loss rates. 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 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 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 108 Table of Contents 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. Under CECL, for collateral-dependent loans, the Company has adopted the practical expedient to measure the ACL based on the fair value of the collateral. A loan is considered collateral-dependent when the Company determines foreclosure is probable or the borrower is experiencing financial difficulty and the Company expects repayment to be provided substantially through the operation or sale of the collateral. Collateral could be in the form of real estate, equipment, or business assets. An ACL may result for a collateral-dependent loan if the fair value of the underlying collateral, as of the reporting date, adjusted for expected costs to repair or sell, was less than the amortized cost basis of the loan. If repayment of the loan is instead dependent only on the operation, rather than the sale of the collateral, the measure of the ACL does not incorporate estimated costs to sell. 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, 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 On a quarterly basis, the Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The ACL on off-balance sheet credit exposures is adjusted through the provision for credit losses on the Consolidated Statements of Income. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life by loan segment at each balance sheet date under the CECL model using the same methodology as the loan portfolio. The ACL for unfunded commitments is included in accrued interest and other liabilities on the Company’s Consolidated Balance Sheets. Purchased credit deteriorated (PCD) loans The Company has purchased loans, some of which have experienced more than insignificant credit deterioration since origination. PCD loans are recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to the individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount of premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through credit loss expense . Premises and equipment Land is carried at cost. Premises and equipment are stated at cost, less accumulated depreciation. Buildings and related components are depreciated using the straight-line method with useful lives up to 40 years. Furniture, fixtures and equipment are depreciated using the straight-line method (or accelerated) method with useful lives ranging from 3 to 10 years. Maintenance and repairs are charged to expense as incurred and major improvements are capitalized. Company-owned life insurance The Company has purchased life insurance policies on certain employees. Company-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Transfers of financial assets 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, 109 Table of Contents 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) Assets acquired through foreclosure or other proceedings are initially recorded at fair value at the date of foreclosure less estimated costs of disposal, which establishes a new cost. After foreclosure, valuations periodically are performed by management and the foreclosed assets held-for-sale are carried at the lower of cost or fair value less estimated costs of disposal. Any write-down to fair value at the time of transfer to foreclosed assets is charged to the allowance for credit losses. All subsequent gains on sale, losses on sale, and additional write-downs are included in net gains/(losses) on other real estate owned. Revenue and expenses from the operations of foreclosed assets are included in other non-interest income and other operating expenses. Income taxes The Company accounts for income taxes in accordance with income tax accounting guidance. The Company has adopted the accounting guidance related to accounting for uncertainty in income taxes, which sets out a consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions. The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more likely than not recognition threshold is initially, and subsequently, measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more likely than not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes interest and penalties on income taxes as a component of income tax expense. Pension plan The Company has a non-contributory defined benefit pension plan that was frozen to new participants on June 1, 2005. The Company’s funding policy for the defined benefit plan is to make annual contributions to the Plan in amounts that are determined based on actuarial valuations and recommendations and which meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974. Authoritative accounting literature requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its balance sheet and to recognize changes in the funded status in the year in which the changes occur through comprehensive income. The funded status of a benefit plan will be measured as the difference between plan assets at fair value and the benefit obligation. For a pension plan, the benefit obligation is the projected benefit obligation. For any other postretirement plan, the benefit obligation is the accumulated postretirement benefit obligation. 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 110 Table of Contents 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 The Company maintains the 401(k) plans of both legacy Summit and Burke & Herbert. Under both of these plans, eligible employees may contribute a percentage of their compensation, and the Company matches a portion of the employee’s contribution based on the specific 401(k) plan. The contribution amounts matched by the Company depend on the 401(k) plan. The 401(k) expense is the amount of the matching contributions. For the deferred compensation and supplemental retirement plan, the expense allocates the benefits over the years of service. Earnings per common share Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period. The Company’s capital structure includes a share-based incentive plan, and an employee stock purchase plan, which may be dilutive to earnings per share (“EPS”). Diluted EPS is calculated by assuming dilution of common shares and adjusting common shares for compensation cost attributable to the share-based compensation plan and employee stock purchase plan. Earnings and dividends per share are restated for all stock splits and stock dividends through the date of issuance of the financial statements. Trust assets and fees Assets of the trust department, other than trust cash on deposit at the Company, are not included in these financial statements because they are not assets of the Company. Trust fees are recognized in income using the accrual method. Loss contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that there are currently any such matters that will have a material effect on the financial statements. Comprehensive income (loss) Comprehensive income (loss) consists of net income and other comprehensive income (loss), net of tax. Other comprehensive income (loss) includes unrealized gains and losses on securities available-for-sale, unrealized gains and losses on cash flow hedges, and changes in the funded status of the pension plan, which are also recognized as separate components of equity. Leases Leases are classified as operating or finance leases at the lease commencement date. The Company leases certain locations for its operations. The Company records leases on the balance sheet in the form of a lease liability for the present value of future minimum payments under the lease terms and a right-of-use asset equal to the lease liability adjusted for items such as deferred or prepaid rent, lease incentives, and any impairment of the right-of-use asset. The discount rate used in determining the lease liability is based upon incremental borrowing rates the Company could obtain for similar loans as of the date of commencement or renewal. The Company does not record short-term leases with an initial lease term of one year or less on the Consolidated Balance Sheets. At lease inception, the Company determines the lease term by considering the non-cancelable lease term and all optional renewal periods that the Company is reasonably certain to renew. The lease term is also used to calculate straight-line lease expense. Leasehold improvements are amortized over the shorter of the useful life and the estimated lease term. 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. 111 Table of Contents 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. Lease expense is included in occupancy expense on the Company’s Consolidated Statements of Income. The Company’s variable lease expense includes rent escalators that are based on market conditions defined in the lease agreements. The amortization of the right-of-use asset arising from finance leases is expensed through occupancy expense and the interest on the related lease liability is expensed through other interest expense on the Company’s Consolidated Statements of Income. Fair value of financial instruments 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, 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. Goodwill and other intangible assets Goodwill arises from business combinations and is determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a business combination and determined to have indefinite useful life are not amortized but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that an impairment test should be performed. The Company has selected September 30 as the date to perform the annual impairment test. Intangible assets with finite useful lives are amortized over their estimated useful lives to their estimated residual values. Amortized intangibles must be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset (group) might not be recoverable. An impairment loss related to intangible assets with finite useful lives is recognized if the carrying amount of the intangible asset is not recoverable and its carrying amount exceeds its fair value. After the impairment loss is recognized, the adjusted carrying amount of the intangible asset shall be its new accounting basis. Goodwill is the only intangible asset with an indefinite life on our balance sheet. Other intangible assets consists of core deposit and acquired customer relationship intangible assets arising from whole bank and branch acquisitions and are amortized on an accelerated method over their estimated useful lives, which range from 7 to 10 years . Share-based compensation Compensation cost is recognized for restricted stock units (“RSUs”) issued to employees, based on the fair value of these awards at the date of grant. The Company RSUs awards are all classified as equity under U.S. GAAP. Compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The Company’s accounting policy is to recognize forfeitures as they occur for all share-based compensation plans. Operating segment reporting The Company operates in one segment – Community Banking and the financial performance of this one segment is used to make resource allocations and performance decisions. The Company’s Chief Executive Officer is in charge of allocating the Company’s resources and assessing performance, and has been identified as the chief operating decision maker. While the chief decision-maker monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Individual operating results are not reviewed by senior management to make resource allocation or performance decisions. Therefore, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. Reclassifications Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or shareholder’s equity. 112 Table of Contents 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 . The amendments “improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.” In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other 113 Table of Contents Note 1— Nature of Business Activities and Significant Accounting Policies (continued) disclosure requirements. The purpose of the amendments is to enable “investors to better understand an entity’s overall performance” and assess “potential future cash flows.” The ASU applies to all public entities that are required to report segment information in accordance with ASC 280. The enhanced segment disclosure requirements apply “retrospectively to all prior periods presented in the financial statements.” The significant segment expense and other segment item amounts “disclosed in prior periods shall be based on the significant segment expense categories identified and disclosed in the period of adoption.” The amendments in ASU 2023-07 were effective for all public entities for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted the standard with the fiscal year ending December 31, 2024, and it did not have a material impact on the financial statements. On January 1, 2023, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”), as amended, which replaces the incurred loss methodology with an expected credit loss methodology that is referred to as the current expected credit loss methodology. The CECL methodology requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, as well as future forecasts, including reasonable and supportable forecasts and other forecast periods. CECL generally applies to financial assets measured at amortized cost and some off-balance sheet credit exposures, such as unfunded commitments to extend credit. Financial assets measured at amortized cost are presented as the net amount expected to be collected. In addition, CECL made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities if management does not intend to sell and does not believe that it is more likely than not that they will be required to sell. The Company adopted ASC 326 and all related subsequent amendments thereto effective January 1, 2023, using the modified retrospective approach for all financial assets measured at amortized cost and off-balance sheet credit exposures. The adoption of the new CECL standard resulted in a cumulative-effect adjustment that increased the allowance for credit losses for loans by $ 4.1 million and increased the allowance for unfunded commitments by $ 274.8 thousand. Retained earnings, net of deferred taxes, decreased by $ 3.4 million. Results for reporting periods beginning after January 1, 2023, are presented under ASU 2016-13, while prior period amounts continue to be reported in accordance with the incurred loss model under the previously applicable GAAP. 114 Table of Contents Note 1— Nature of Business Activities and Significant Accounting Policies (continued) The following table illustrates the impact of the adoption of CECL, and the transition away from the incurred loss method, on January 1, 2023. The impact to the ACL is presented at the loan segment level (in thousands): January 1, 2023 Reserves under Incurred Loss Model Reserves under CECL Model Impact of CECL Adoption Financial Assets: Commercial real estate $ 15,477 $ 18,163 $ 2,686 Owner-occupied commercial real estate 635 629 ( 6 ) Acquisition, construction & development 2,082 1,442 ( 640 ) Commercial & industrial 438 675 237 Single family residential (1-4 units) 2,379 4,040 1,661 Consumer non-real estate and other 28 215 187 Unallocated reserve — — — Allowance for credit losses on loans $ 21,039 $ 25,164 $ 4,125 Financial Liabilities: Allowance for credit losses on off-balance sheet credit exposure $ — $ 275 $ 275 The Company adopted ASC 326 using the prospective transition approach for debt securities for which other-than-temporary impairment had been recognized prior to January 1, 2023. As of December 31, 2022, the Company did not have any other-than-temporarily impaired investment securities. The Company did not record an ACL for securities upon adoption. The Company elected not to measure an ACL for accrued interest receivable and instead elected to reverse interest income on loans or securities that are placed on non-accrual status, which generally occurs when the instrument is 90 days past due, or earlier if the Company believes the collection of interest is doubtful. The Company has concluded that this policy results in the timely reversal of uncollectible interest. On January 1, 2023, the Company adopted Accounting Standard Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures . ASU 2022-02 addresses areas identified by the FASB as part of its implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings (“TDRs”) by creditors that have adopted the CECL model and enhance the disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the amendments require that the Company disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. The Company adopted the standard prospectively, and it did not have a material impact on the financial statements. In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815), Fair Value Hedging - Portfolio Layer Method . ASU 2022-01 clarifies the guidance in ASC 815 on fair value hedge accounting of interest rate risk for portfolios of financial assets and is intended to better align hedge accounting with an organization’s risk management strategies. In 2017, FASB issued ASU 2017-12 to better align the economic results of risk management activities with hedge accounting. One of the major provisions of that standard was the addition of the last-of-layer hedging method. For a closed portfolio of fixed-rate-prepayable financial assets of one or more beneficial interests secured by a portfolio of prepayable financial instruments, such as mortgages or mortgage-backed securities, the last-of-layer method allows an entity to hedge its exposure to fair value changes due to the changes in interest rates for a portion of the portfolio that is not expected to be affected by prepayments, defaults, and other events affecting 115 Table of Contents Note 1— Nature of Business Activities and Significant Accounting Policies (continued) the timing and amount of cash flows. ASU 2022-01 renames that method the portfolio layer method. ASU 2022-01 was effective January 1, 2023. 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): Reporting Comprehensive Income—Expense Disaggregation Disclosures. This ASU seeks to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. This ASU is not expected to have a material impact our consolidated financial statements. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative . This ASU incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification. The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. We do not expect the adoption of ASU 2023-06 to have a material impact on our consolidated financial statements. 116 Table of Contents Note 2— Securities The carrying amount of available-for-sale securities and their approximate fair values at December 31, 2025, and December 31, 2024, are summarized as follows (in thousands): December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Securities Available-for-Sale U.S. Treasuries and government agencies $ 159,088 $ — $ 8,964 $ 150,124 Obligations of states and municipalities 977,104 5,414 59,944 922,574 Residential mortgage backed — agency 57,731 464 2,810 55,385 Residential mortgage backed — non-agency 221,443 1,860 5,211 218,092 Commercial mortgage backed — agency 74,253 250 607 73,896 Commercial mortgage backed — non-agency 112,082 584 1,557 111,109 Asset-backed 53,954 89 577 53,466 Other 32,162 158 1,012 31,308 Total $ 1,687,817 $ 8,819 $ 80,682 $ 1,615,954 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Securities Available-for-Sale U.S. Treasuries and government agencies $ 165,619 $ — $ 16,492 $ 149,127 Obligations of states and municipalities 777,181 846 79,303 698,724 Residential mortgage backed — agency 57,244 121 4,179 53,186 Residential mortgage backed — non-agency 259,964 44 12,132 247,876 Commercial mortgage backed — agency 33,791 27 747 33,071 Commercial mortgage backed — non-agency 158,621 2 4,112 154,511 Asset-backed 64,308 316 568 64,056 Other 32,861 302 1,343 31,820 Total $ 1,549,589 $ 1,658 $ 118,876 $ 1,432,371 At 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): Proceeds from Gross realized For the year ended December 31, Sales Calls and maturities Principal Payments Gains Losses 2025 $ 22,083 $ 48,987 $ 160,597 $ 258 $ 111 2024 372,370 46,434 211,443 3,381 2,024 2023 77,780 1,797 110,228 772 884 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. 117 Table of Contents Note 2— Securities (continued) The maturities of securities available-for-sale at December 31, 2025, were as follows (in thousands): (Expected maturities of securities not due at a single maturity date are based on average life at estimated prepayment speed. Expected maturities may differ from contractual maturities because borrowers have the right to call or prepay some obligations with or without call or prepayment penalties). December 31, 2025 Amortized Cost One Year or Less One to Five Years Five to Ten Years After Ten Years Total Securities Available-for-Sale U.S. Treasuries and government agencies $ — $ 159,088 $ — $ — $ 159,088 Obligations of states and municipalities 6,326 286,277 437,303 247,198 977,104 Residential mortgage backed - agency 18 24,459 23,217 10,037 57,731 Residential mortgage backed - non-agency 4,064 59,742 132,672 24,965 221,443 Commercial mortgage backed - agency — 24,723 40,851 8,679 74,253 Commercial mortgage backed - non-agency 17,175 62,903 32,004 — 112,082 Asset-backed 8,076 18,924 17,567 9,387 53,954 Other — 2,800 20,276 9,086 32,162 Total $ 35,659 $ 638,916 $ 703,890 $ 309,352 $ 1,687,817 December 31, 2025 Fair Value One Year or Less One to Five Years Five to Ten Years After Ten Years Total Securities Available-for-Sale U.S. Treasuries and government agencies $ — $ 150,124 $ — $ — $ 150,124 Obligations of states and municipalities 6,323 275,493 411,447 229,311 922,574 Residential mortgage backed - agency 18 24,487 20,434 10,446 55,385 Residential mortgage backed - non-agency 3,961 57,234 131,624 25,273 218,092 Commercial mortgage backed - agency — 24,319 40,872 8,705 73,896 Commercial mortgage backed - non-agency 17,093 62,113 31,903 — 111,109 Asset-backed 8,113 18,599 17,383 9,371 53,466 Other — 2,882 19,475 8,951 31,308 Total $ 35,508 $ 615,251 $ 673,138 $ 292,057 $ 1,615,954 At year-end 2025 and 2024, there were no holdings of securities of any one issuer, other than U.S. Government and its agencies, in any amount greater than 10% of shareholders’ equity. The following table shows the gross unrealized losses and fair value of the Company’s securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2025, and December 31, 2024. 118 Table of Contents 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): December 31, 2025 Less Than Twelve Months More Than Twelve Months Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Unrealized Losses Securities Available-for-Sale U.S. Treasuries and government agencies $ — $ — $ 150,124 $ 8,964 $ 8,964 Obligations of states and municipalities 134,143 1,852 513,623 58,092 59,944 Residential mortgage backed - agency 4,461 4 24,832 2,806 2,810 Residential mortgage backed - non-agency 11,545 17 85,750 5,194 5,211 Commercial mortgage backed - agency 14,987 93 26,032 514 607 Commercial mortgage backed - non-agency 29,730 131 30,175 1,426 1,557 Asset-backed 14,531 38 27,750 539 577 Other — — 22,288 1,012 1,012 Total $ 209,397 $ 2,135 $ 880,574 $ 78,547 $ 80,682 December 31, 2024 Less Than Twelve Months More Than Twelve Months Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Total Unrealized Losses Securities Available-for-Sale U.S. Treasuries and government agencies $ — $ — $ 149,127 $ 16,492 $ 16,492 Obligations of states and municipalities 181,027 5,338 433,488 73,965 79,303 Residential mortgage backed - agency 203 2 42,233 4,177 4,179 Residential mortgage backed - non-agency 110,191 1,911 134,727 10,221 12,132 Commercial mortgage backed - agency 3,412 29 28,885 718 747 Commercial mortgage backed - non-agency 30,064 523 108,761 3,589 4,112 Asset-backed 4,140 4 29,243 564 568 Other 15,123 138 8,295 1,205 1,343 Total $ 344,160 $ 7,945 $ 934,759 $ 110,931 $ 118,876 The Company is required to conduct an impairment evaluation on AFS securities to determine whether the Company has the intent to sell the security or it is more likely than not that it will be required to sell the security before recovery. If these situations apply, the guidance requires the Company to reduce the security's amortized cost basis down to its fair value through earnings. The Company also evaluates the unrealized losses on AFS securities to determine if a security's decline in fair value below its amortized cost basis is due to credit factors. The evaluation is based upon factors such as the creditworthiness of the underlying borrowers, performance of the underlying 119 Table of Contents 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. This includes, but is not limited to, an evaluation of the type of security, length of time, and extent to which the fair value has been less than cost and near-term prospects of the issuer. If this assessment indicates that a credit loss exists, the present value of the expected cash flows of the security is compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost, an ACL is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis under the CECL standard, and declines due to non-credit factors are recorded in accumulated other comprehensive income (“AOCI”), net of taxes. If a credit loss is recognized in earnings, subsequent improvements to the expectation of collectability will be recognized through the ACL. If the fair value of the security increases above its amortized cost, the unrealized gain will be recorded in accumulated other comprehensive income, net of taxes, in the Consolidated Balance Sheets. 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. The Company did no t record an ACL on the AFS securities as of December 31, 2025 and as of December 31, 2024. The Company considers the unrealized losses on the AFS securities to be related to fluctuations in market conditions, primarily interest rates, and not reflective of deterioration in credit. The Company had 403 securities in an unrealized loss position as of December 31, 2025. 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 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. Securities of U.S. Treasury and Federal Agencies and Federal Agency Mortgage (Residential and Commercial) Backed Securities At December 31, 2025, the unrealized losses associated with 10 U.S. Treasuries and Government Agency securities, 8 Residential Mortgage Backed – Agency securities, and 13 Commercial Mortgage Backed – Agency securities were generally driven by changes in interest rates and not due to credit losses given the explicit or implicit guarantees provided by the U.S. government. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at December 31, 2025. Securities of U.S. States and Municipalities At December 31, 2025, the unrealized losses associated with 284 State and Municipal securities were primarily caused by changes in interest rates and not the credit quality of the securities. These investments are investment grade and were generally underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision. These securities will continue to be monitored as part of our ongoing impairment analysis but are expected to perform, even if the rating agencies reduce the credit rating of the bond insurers. As a result, we expect to recover the entire amortized cost basis of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at December 31, 2025. Residential & Commercial Mortgage Backed – Non-Agency Securities At December 31, 2025, the unrealized losses associated with 53 Residential Mortgage Backed – Non-Agency securities and 10 Commercial Mortgage Backed – Non-Agency securities were generally driven by changes in interest rates, credit spreads, and projected collateral losses. We assess for credit impairment by estimating the present value of expected cash flows. The key assumptions for determining expected cash flows include default rates, loss severities, and/or prepayment rates. Based on our assessment of the expected credit losses and the credit 120 Table of Contents 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. Asset-Backed Securities 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 credit impairment by estimating the present value of expected cash flows. The key assumptions for determining expected cash flows include default rates, loss severities, and/or prepayment rates. Based on our assessment of the expected credit losses and the credit enhancement level of the securities, we expect to recover the entire amortized cost of these securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at December 31, 2025. Other Securities At December 31, 2025, the unrealized losses associated with 7 securities were primarily driven by interest rates and not the credit quality of the securities. These investments are underwritten in accordance with our own investment standards prior to the decision to purchase, without relying on a bond insurer’s guarantee in making the investment decision. Based on our assessment of the expected credit losses, we expect to recover the entire amortized cost basis of the securities. Therefore, the Company has concluded that the unrealized losses for these securities do not require an ACL at December 31, 2025. Restricted stock, at cost 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 $ 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. The Company does not consider these investments to be impaired at December 31, 2025, and no impairment has been recognized. FHLB stock and Federal Reserve stock are included in a separate line item, Restricted stock, at cost, on the Consolidated Balance Sheets and are not part of the Company’s AFS investment securities portfolio. The Company’s Restricted stock line item on the Consolidated Balance Sheets also includes an investment in Community Bankers’ Bank, totaling $ 111 thousand at 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 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 The Company’s loan portfolio segments, as reported in the tables below, include (i) commercial real estate, (ii) owner-occupied commercial real estate, (iii) acquisition, construction & development, (iv) commercial & industrial, (v) single family residential (1-4 units), and (vi) consumer non-real estate and other. The risks associated with lending activities differ among the various loan segments and are subject to the impact of changes in interest rates, market conditions of collateral securing the loans, and general economic conditions. • Commercial real estate loans carry risk associated with either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral. Other risk factors include the 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. 121 Table of Contents 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): December 31, 2025 December 31, 2024 Commercial real estate $ 2,769,287 $ 2,637,802 Owner-occupied commercial real estate 593,120 614,362 Acquisition, construction & development 386,870 465,537 Commercial & industrial 461,921 613,085 Single family residential (1-4 units) 1,127,684 1,173,749 Consumer non-real estate and other 48,794 167,701 Loans, gross 5,387,676 5,672,236 Allowance for credit losses ( 67,823 ) ( 68,040 ) Loans, net $ 5,319,853 $ 5,604,196 Net deferred loan fees included in the above loan categories totaled $ 6.2 million and $ 4.4 million at December 31, 2025, and December 31, 2024, respectively. Note 4— Allowance for Credit Losses On January 1, 2023, the Company adopted the CECL methodology as required under ASC 326. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables. For further discussion on the Company’s accounting policies and policy elections related to the accounting standards update refer to Note 1 — Nature of Business Activities and Significant Accounting Policies in these Notes to Consolidated Financial Statements. All information presented as of December 31, 2025, and December 31, 2024, is in accordance with ASC 326. 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 evaluates collectively evaluated loans by federal call code in order to group loans with similar risk characteristics. Loans that do not share similar risk characteristics are evaluated on an individual loan basis and are excluded from the collective evaluation for the ACL. Loans identified to be individually evaluated under CECL include loans on non-accrual status and may include accruing loans that do not share similar risk characteristics to other accruing loans that are collectively evaluated on a loan pool basis. A specific reserve analysis may be applied to the individually evaluated loans, which considers collateral value, an observable market price, or the present value of the 122 Table of Contents 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 reversion period. 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, 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). Commercial real estate Owner-occupied commercial real estate Acquisition, construction & development Commercial & industrial Single family residential (1-4 units) Consumer non-real estate and other Total December 31, 2025 Balance, beginning of period $ 30,444 $ 3,261 $ 17,386 $ 6,633 $ 9,763 $ 553 $ 68,040 Provision for (recapture of) credit losses ( 4,180 ) 568 ( 165 ) 1,795 2,707 1,601 2,326 Charge-offs ( 116 ) ( 1,100 ) ( 1 ) ( 238 ) ( 232 ) ( 2,148 ) ( 3,835 ) Recoveries 42 31 1 37 298 883 1,292 Balance, end of period $ 26,190 $ 2,760 $ 17,221 $ 8,227 $ 12,536 $ 889 $ 67,823 Commercial real estate Owner-occupied commercial real estate Acquisition, construction & development Commercial & industrial Single family residential (1-4 units) Consumer non-real estate and other Total December 31, 2024 Balance, beginning of period $ 20,633 $ 783 $ 368 $ 645 $ 2,797 $ 75 $ 25,301 Allowance established for acquired PCD loans 7,503 1,931 5,968 5,684 2,608 216 23,910 Provision for (recapture of) credit losses 2,675 547 11,050 566 4,465 1,172 20,475 Charge-offs ( 382 ) — — ( 301 ) ( 190 ) ( 934 ) ( 1,807 ) Recoveries 15 — — 39 83 24 161 Balance, end of period $ 30,444 $ 3,261 $ 17,386 $ 6,633 $ 9,763 $ 553 $ 68,040 Commercial real estate Owner-occupied commercial real estate Acquisition, construction & development Commercial & industrial Single family residential (1-4 units) Consumer non-real estate and other Total December 31, 2023 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 Charge-offs — — — ( 29 ) — ( 165 ) ( 194 ) Recoveries 38 — — — 52 6 96 Balance, end of period $ 20,633 $ 783 $ 368 $ 645 $ 2,797 $ 75 $ 25,301 123 Table of Contents Note 4— Allowance for Credit Losses (continued) The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. The following table presents the aging of the recorded investment in past due loans as of December 31, 2025, and December 31, 2024, by portfolio segment (in thousands). December 31, 2025 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total Past Due Current Loans Total Loans 90 Days Past Due & Still Accruing Non-accrual loans Commercial real estate $ 4,535 $ 1,676 $ 37,891 $ 44,102 $ 2,725,185 $ 2,769,287 $ 677 $ 37,318 Owner-occupied commercial real estate 1,251 1,091 6,310 8,652 584,468 593,120 177 7,800 Acquisition, construction & development 578 699 13,243 14,520 372,350 386,870 559 12,793 Commercial & industrial 2,008 2,354 5,629 9,991 451,930 461,921 512 5,512 Single family residential (1-4 units) 14,823 7,541 3,594 25,958 1,101,726 1,127,684 1,694 6,802 Consumer non-real estate and other 395 151 346 892 47,902 48,794 4 388 Total $ 23,590 $ 13,512 $ 67,013 $ 104,115 $ 5,283,561 $ 5,387,676 $ 3,623 $ 70,613 December 31, 2024 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total Past Due Current Loans Total Loans 90 Days Past Due & Still Accruing Non-accrual loans Commercial real estate $ 10,974 $ — $ 8,440 $ 19,414 $ 2,618,388 $ 2,637,802 $ — $ 19,183 Owner-occupied commercial real estate 1,160 1,636 5,240 8,036 606,326 614,362 307 5,760 Acquisition, construction & development 5,210 38 1,243 6,491 459,046 465,537 812 1,098 Commercial & industrial 1,654 1,594 1,469 4,717 608,368 613,085 350 1,757 Single family residential (1-4 units) 20,724 4,379 3,420 28,523 1,145,226 1,173,749 1,012 7,857 Consumer non-real estate and other 637 300 195 1,132 166,569 167,701 16 216 Total $ 40,359 $ 7,947 $ 20,007 $ 68,313 $ 5,603,923 $ 5,672,236 $ 2,497 $ 35,871 Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, current economic information, and other factors. The Company analyzes loans individually by classifying the loans by credit risk. The Company internally grades all commercial loans at the time of origination. In addition, the Company performs an annual review on at least 50% of the Bank’s commercial credit exposure. The Company uses the following definitions for credit risk classifications: Pass : These include satisfactory loans that have acceptable levels of risk. Special Mention : Loans classified as special mention have a potential credit weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard : Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the orderly liquidation of debt. Loans classified as substandard are inadequately protected by sound net worth, payment capacity of the borrower, or of the collateral pledged. If weaknesses go uncorrected, there is potential for partial loss of principal and/or interest. Doubtful : Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and unlikely. 124 Table of Contents Note 4— Allowance for Credit Losses (continued) Loss : Loans classified as a loss are considered to be uncollectible and cannot be justified to continue as viable assets. While there may be the possibility of some recovery in the future, it is not practical or desirable to defer writing off these loans at the present time. The Company has a portfolio of smaller homogenous loans that are not individually risk rated that are included within the single family residential and consumer non-real estate and other loan classes. Generally, these loan classes are rated as “Pass,” unless these loans are on non-accrual, and are then classified as substandard. The following table presents the amortized cost basis of the loan portfolio by year of origination, loan class, and credit quality, as of December 31, 2025 (in thousands). Term Loans 2025 2024 2023 2022 2021 Prior Revolving Loans Total Commercial real estate Pass $ 324,565 $ 245,763 $ 377,142 $ 437,116 $ 383,808 $ 620,673 $ 128,260 $ 2,517,327 Special Mention — 5,395 5,224 13,941 — 34,172 2,468 61,200 Substandard — — 15,675 50,300 50,745 53,091 16,058 185,869 Doubtful — — — 3,156 — 1,735 — 4,891 Loss — — — — — — — — Total $ 324,565 $ 251,158 $ 398,041 $ 504,513 $ 434,553 $ 709,671 $ 146,786 $ 2,769,287 Year to date gross charge-offs $ — $ — $ — $ — $ — $ 116 $ — $ 116 Owner-occupied commercial real estate Pass $ 72,903 $ 57,923 $ 61,402 $ 75,692 $ 91,329 $ 175,545 $ 32,434 $ 567,228 Special Mention — — 274 6,182 232 3,421 — 10,109 Substandard 459 — 521 2,002 1,113 6,391 73 10,559 Doubtful — — — 3,404 1,820 — — 5,224 Loss — — — — — — — — Total $ 73,362 $ 57,923 $ 62,197 $ 87,280 $ 94,494 $ 185,357 $ 32,507 $ 593,120 Year to date gross charge-offs $ — $ — $ — $ 363 $ 10 $ 632 $ 95 $ 1,100 Acquisition, construction & development Pass $ 51,546 $ 27,499 $ 139,222 $ 56,766 $ 32,792 $ 13,664 $ 48,012 $ 369,501 Special Mention — — 3,511 — — 137 91 3,739 Substandard — — 258 812 4,062 4,974 — 10,106 Doubtful — — — 3,415 — — 109 3,524 Loss — — — — — — — — Total $ 51,546 $ 27,499 $ 142,991 $ 60,993 $ 36,854 $ 18,775 $ 48,212 $ 386,870 Year to date gross charge-offs $ — $ — $ 1 $ — $ — $ — $ — $ 1 Commercial & industrial Pass $ 63,901 $ 66,758 $ 27,018 $ 25,659 $ 16,991 $ 26,677 $ 206,654 $ 433,658 Special Mention 1,814 2,086 637 13,788 — 1,238 1,009 20,572 Substandard 704 64 855 2,286 192 1,083 2,463 7,647 Doubtful — — — — — — — — Loss — — — — — 37 7 44 Total $ 66,419 $ 68,908 $ 28,510 $ 41,733 $ 17,183 $ 29,035 $ 210,133 $ 461,921 Year to date gross charge-offs $ — $ — $ 32 $ 8 $ — $ 14 $ 184 $ 238 Single family residential (1-4 units) Pass $ 66,662 $ 82,957 $ 131,349 $ 180,837 $ 125,345 $ 362,811 $ 168,043 $ 1,118,004 Special Mention — 283 134 788 401 503 673 2,782 125 Table of Contents Note 4— Allowance for Credit Losses (continued) Substandard 115 — 1,615 589 713 3,434 336 6,802 Doubtful — — — — — 95 — 95 Loss — — — — — 1 — 1 Total $ 66,777 $ 83,240 $ 133,098 $ 182,214 $ 126,459 $ 366,844 $ 169,052 $ 1,127,684 Year to date gross charge-offs $ — $ — $ — $ — $ — $ 60 $ 172 $ 232 Consumer non-real estate and other Pass $ 9,612 $ 10,961 $ 5,543 $ 2,804 $ 687 $ 1,645 $ 17,335 $ 48,587 Special Mention — — 92 — 33 — — 125 Substandard — 62 20 — — — — 82 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 9,612 $ 11,023 $ 5,655 $ 2,804 $ 720 $ 1,645 $ 17,335 $ 48,794 Year to date gross charge-offs $ 1,750 $ 195 $ 133 $ 62 $ 2 $ 1 $ 5 $ 2,148 Totals $ 592,281 $ 499,751 $ 770,492 $ 879,537 $ 710,263 $ 1,311,327 $ 624,025 $ 5,387,676 The following table presents the amortized cost basis of the loan portfolio by year of origination, loan class, and credit quality, as of December 31, 2024 (in thousands). Term Loans 2024 2023 2022 2021 2020 Prior Revolving Loans Total Commercial real estate Pass $ 248,023 $ 378,322 $ 482,195 $ 337,136 $ 153,187 $ 588,490 $ 96,914 $ 2,284,267 Special Mention — 7,148 30,018 52,885 7,154 57,255 28,211 182,671 Substandard — 2,232 49,752 39,636 2,999 52,740 23,505 170,864 Doubtful — — — — — — — — Loss — — — — — — — — Total $ 248,023 $ 387,702 $ 561,965 $ 429,657 $ 163,340 $ 698,485 $ 148,630 $ 2,637,802 Year to date gross charge-offs $ — $ — $ — $ — $ — $ 382 $ — $ 382 Owner-occupied commercial real estate Pass $ 61,433 $ 72,571 $ 93,941 $ 126,700 $ 36,197 $ 170,809 $ 32,452 $ 594,103 Special Mention — — — 243 2,729 1,275 — 4,247 Substandard — — 5,192 1,496 5,499 3,594 82 15,863 Doubtful — — — — — 149 — 149 Loss — — — — — — — — Total $ 61,433 $ 72,571 $ 99,133 $ 128,439 $ 44,425 $ 175,827 $ 32,534 $ 614,362 Year to date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Acquisition, construction & development Pass $ 25,461 $ 109,751 $ 90,652 $ 147,702 $ 3,564 $ 16,312 $ 15,107 $ 408,549 Special Mention — — — 2,641 142 — — 2,783 Substandard — 13,115 4,467 3,326 21,372 63 11,564 53,907 Doubtful — — — — — — 298 298 Loss — — — — — — — — Total $ 25,461 $ 122,866 $ 95,119 $ 153,669 $ 25,078 $ 16,375 $ 26,969 $ 465,537 Year to date gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — 126 Table of Contents Note 4— Allowance for Credit Losses (continued) Commercial & industrial Pass $ 108,206 $ 57,280 $ 47,828 $ 35,189 $ 15,109 $ 28,019 $ 237,852 $ 529,483 Special Mention 365 — 35,237 10,898 1,505 — 16,856 64,861 Substandard 37 285 4,482 618 523 1,029 11,765 18,739 Doubtful — — — — — — — — Loss — — — — — 2 — 2 Total $ 108,608 $ 57,565 $ 87,547 $ 46,705 $ 17,137 $ 29,050 $ 266,473 $ 613,085 Year to date gross charge-offs $ — $ 10 $ 195 $ 87 $ — $ 9 $ — $ 301 Single family residential (1-4 units) Pass $ 88,857 $ 152,438 $ 201,410 $ 142,719 $ 77,783 $ 332,025 $ 170,077 $ 1,165,309 Special Mention — — — — — 214 174 388 Substandard — 1,494 800 586 605 3,935 437 7,857 Doubtful — — — — — — — — Loss 93 — — — — 1 101 195 Total $ 88,950 $ 153,932 $ 202,210 $ 143,305 $ 78,388 $ 336,175 $ 170,789 $ 1,173,749 Year to date gross charge-offs $ — $ 39 $ 28 $ — $ — $ 123 $ — $ 190 Consumer non-real estate and other Pass $ 21,095 $ 10,796 $ 6,122 $ 1,836 $ 1,096 $ 2,797 $ 123,148 $ 166,890 Special Mention 15 — — — — — — 15 Substandard 363 90 17 — — 17 — 487 Doubtful — — — 5 3 — — 8 Loss 289 12 — — — — — 301 Total $ 21,762 $ 10,898 $ 6,139 $ 1,841 $ 1,099 $ 2,814 $ 123,148 $ 167,701 Year to date gross charge-offs $ 468 $ 71 $ 17 $ 1 $ — $ 20 $ 357 $ 934 Totals $ 554,237 $ 805,534 $ 1,052,113 $ 903,616 $ 329,467 $ 1,258,726 $ 768,543 $ 5,672,236 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. 127 Table of Contents 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). Collateral Dependent Loans With Allowance With No Related Allowance Total Amortized Cost Related Allowance Amortized Cost Amortized Cost Related Allowance December 31, 2025 Commercial real estate $ 14,316 $ 3,939 $ 23,857 $ 38,173 $ 3,939 Owner-occupied commercial real estate — — 8,987 8,987 — Acquisition, construction & development 4,071 1,431 9,276 13,347 1,431 Commercial & industrial 4,440 4,227 — 4,440 4,227 Single family residential (1-4 units) 258 35 3,516 3,774 35 Consumer non-real estate and other — — — — — Total $ 23,085 $ 9,632 $ 45,636 $ 68,721 $ 9,632 Collateral Dependent Loans With Allowance With No Related Allowance Total Amortized Cost Related Allowance Amortized Cost Amortized Cost Related Allowance December 31, 2024 Commercial real estate $ 7,459 $ 4,791 $ 12,439 $ 19,898 $ 4,791 Owner-occupied commercial real estate — — 1,833 1,833 — Acquisition, construction & development 535 303 369 904 303 Commercial & industrial 983 734 348 1,331 734 Single family residential (1-4 units) 898 26 3,408 4,306 26 Consumer non-real estate and other — — — — — Total $ 9,875 $ 5,854 $ 18,397 $ 28,272 $ 5,854 Purchased Credit Deteriorated Loans The Company has purchased loans for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans, at acquisition, is as follows (in thousands): Amounts Purchase price of loans at acquisition $ 380,795 Allowance for credit losses at acquisition 23,910 Non-credit discount/(premium) at acquisition 37,640 Par value of acquired loans at acquisition $ 442,345 Loan Modifications On January 1, 2023, the Company adopted ASU 2022-02 on a modified retrospective basis. ASU 2022-02 eliminates the 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 128 Table of Contents 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. The Company may modify loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, interest rate reduction, or an other-than-insignificant payment delay. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. The Company may also provide multiple types of modifications on an individual loan. For the 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. Other Real Estate Owned 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 $ — Loans acquired/transferred to real estate owned 259 3,541 Capital expenditures — — Write-downs ( 195 ) — Sales of real estate owned ( 158 ) ( 758 ) End of period balance $ 2,689 $ 2,783 Note 5— Premises and Equipment Premises and equipment are included in the Balance Sheet at December 31, 2025, and December 31, 2024, were as follows (in thousands): December 31, 2025 December 31, 2024 Cost: Land $ 31,822 $ 29,654 Premises 107,228 111,415 Furniture and equipment 23,154 29,257 162,204 170,326 Less: Accumulated depreciation ( 25,395 ) ( 38,056 ) Total $ 136,809 $ 132,270 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. 129 Table of Contents Note 6— Deposits The aggregate amount of time deposits that meet or exceed the FDIC Insurance limit of $250,000, was approximately $ 295.4 million and $ 284.4 million on December 31, 2025, and December 31, 2024, respectively. Brokered time deposits, which are fully insured, totaled $ 64.4 million and $ 244.8 million at December 31, 2025, and December 31, 2024, respectively. 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. 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): Years ending December 31, 2026 $ 1,018,237 2027 26,619 2028 10,387 2029 6,177 2030 5,583 Thereafter 5,073 Total $ 1,072,076 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 $ 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 Short-term borrowings The Company had borrowings of $ 450.0 million and $ 365.0 million at December 31, 2025, and December 31, 2024, respectively. 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 %. The average balance outstanding during 2025 and 2024 was $ 422.1 million and $ 422.5 million, respectively. The Company has a finance lease liability that is not included in these balances - See Note 11 — Leased Property for a discussion of this liability that is included in the accrued interest and other liabilities line in the Consolidated Balance Sheets. The Company has available lines of credit with the Federal Reserve Bank of Richmond, such as the Borrower-In-Custody program, the FHLB of Atlanta, and unsecured federal funds lines of credit from correspondent banking relationships. Through these sources, the Company has unused borrowing capacity of $ 4.6 billion as of December 31, 2025. The advances on credit lines are secured by both securities and loans. The lendable collateral value of securities and loans pledged against available lines of credit as of 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 2026 $ 450,000 Total $ 450,000 130 Table of Contents Note 7— Borrowed Funds (continued) Long-term borrowings Subordinated Debentures 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. The subordinated debt qualifies as Tier 2 capital under Federal Reserve Board guidelines, until the debt is within 5 years of its maturity; thereafter, the amount qualifying as Tier 2 capital is reduced 20 % each year until maturity. The subordinated debentures were issued in the fourth quarter of 2021 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 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 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 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 Summit 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 Summit 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 Summit merger. Distributions on the capital securities issued by the trusts are payable quarterly at a variable rate equal to three-month term SOFR plus 345 basis points for SFG Capital Trust I, three-month term SOFR plus 280 basis points for SFG Capital Trust II, and three-month term SOFR plus 145 basis points for SFG Capital Trust III, and equals the interest rate earned on the debentures held by the trusts and is recorded as interest expense by us. The capital securities are subject to mandatory redemption in whole, or in part, upon repayment of the debentures. We have entered into agreements which, taken collectively, fully and unconditionally guarantee the capital securities subject to the terms of the guarantee. The debentures of each Capital Trust are redeemable by us quarterly. The capital securities issued by SFG Capital Trust I, SFG Capital Trust II, and SFG Capital Trust III qualify as Tier 1 capital under the Federal Reserve guidelines. In accordance with these Guidelines, trust preferred securities 131 Table of Contents 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. The remaining maturities of subordinated debentures as of December 31, 2025, are as follows (in thousands): Subordinated debentures Subordinated debentures owed to unconsolidated subsidiary trusts 2026 $ — $ — 2027 — — 2028 — — 2029 — — 2030 — — Thereafter 75,000 19,589 Total $ 75,000 $ 19,589 Note 8— Income Taxes 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 Current Expense: Federal $ 11,502 $ 4,464 $ 3,592 State 2,858 1,233 230 $ 14,360 $ 5,697 $ 3,822 Deferred Expense (Benefit): Federal $ 12,899 $ ( 1,181 ) $ ( 1,422 ) State 373 ( 326 ) ( 31 ) $ 13,272 $ ( 1,507 ) $ ( 1,453 ) 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. 132 Table of Contents 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 Amount Percent Amount Percent Amount Percent 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 — — Other, net 283 0.3 272 0.8 ( 602 ) ( 2.4 ) Other adjustments ( 235 ) ( 0.2 ) ( 234 ) ( 0.6 ) ( 24 ) ( 0.1 ) Total $ 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. Temporary differences are the differences between the reported amounts of assets and liabilities and net operating loss carry-forwards and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deferred tax assets. The Company follows accounting guidance related to accounting for uncertainty in income taxes. 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. 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 133 Table of Contents 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): December 31, 2025 December 31, 2024 Deferred tax assets: Provision for credit losses $ 16,096 $ 16,387 Lease liability 4,278 3,914 Compensation accruals 12,799 10,714 Partnership investments 2,718 2,587 Purchase accounting adjustments 25,593 35,497 Unrealized losses on securities available-for-sale 16,301 26,627 Tax credit carryforward — 9,777 Other 974 630 Total deferred tax asset $ 78,759 $ 106,133 Deferred tax liabilities: Tax over book depreciation $ ( 6,014 ) $ ( 6,003 ) Pension accrual ( 415 ) ( 458 ) Unrealized gains on interest rate swaps ( 881 ) ( 833 ) Purchase accounting adjustments ( 11,735 ) ( 16,588 ) Right of use asset ( 4,055 ) ( 3,757 ) Mortgage servicing rights ( 440 ) ( 460 ) Total deferred tax liability $ ( 23,540 ) $ ( 28,099 ) Net deferred tax asset $ 55,219 $ 78,034 Note 9— Defined Benefit Pension Plan The Company provides pension benefits for eligible employees through a defined benefit pension plan. 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. 134 Table of Contents Note 9— Defined Benefit Pension Plan (continued) The following tables set forth the Plan’s status and related disclosures (in thousands): December 31, 2025 December 31, 2024 Changes in benefit obligation: Benefit obligation at beginning of year $ 28,600 $ 31,500 Service cost 400 445 Interest cost 1,550 1,456 Actuarial (gain) loss 779 ( 3,040 ) Distributions ( 1,587 ) ( 1,761 ) Benefit obligation at end of year $ 29,742 $ 28,600 Change in plan assets: Fair value of plan assets at beginning of year $ 30,614 $ 33,181 Adjustment to beginning of year fair value — — Actual return on plan assets 2,116 ( 806 ) Employer contribution — — Distributions ( 1,587 ) ( 1,761 ) Fair value of plan assets at end of year $ 31,143 $ 30,614 Funded status recognized as accrued pension cost $ 1,401 $ 2,014 Amounts recognized in accumulated other comprehensive (income) loss: Net loss $ 5,058 $ 5,755 Deferred income tax benefit ( 1,019 ) ( 1,179 ) Total amount recognized $ 4,039 $ 4,576 Accumulated benefit obligation $ 28,006 $ 26,930 At December 31, 2025, December 31, 2024, and December 31, 2023, the assumptions used to determine the pension benefit obligation were as follows: December 31, 2025 December 31, 2024 December 31, 2023 Discount rate 5.42 % 5.49 % 4.80 % Rate of compensation increase 3.50 3.00 3.00 135 Table of Contents Note 9— Defined Benefit Pension Plan (continued) Components of net periodic benefit cost and other amounts recognized in other comprehensive income (in thousands): December 31, 2025 December 31, 2024 December 31, 2023 Components of net periodic pension cost: Service cost $ 400 $ 445 $ 469 Interest cost 1,550 1,456 1,471 Expected return on plan assets ( 1,035 ) ( 1,115 ) ( 879 ) Amortization of prior service costs — — — Amortization of net loss 394 400 630 Net periodic pension costs $ 1,309 $ 1,186 $ 1,691 Other changes recognized in other comprehensive (income) loss Net loss $ ( 303 ) $ ( 1,118 ) $ ( 998 ) Amortization of net loss ( 394 ) ( 400 ) ( 630 ) Deferred tax expense 160 349 342 Total recognized in accumulated other comprehensive (income) loss $ ( 537 ) $ ( 1,169 ) $ ( 1,286 ) Total recognized in net periodic pension costs and other comprehensive loss $ 772 $ 17 $ 405 For the years ended December 31, 2025, December 31, 2024, and December 31, 2023, the assumptions used to determine net periodic pension cost were as follows: December 31, 2025 December 31, 2024 December 31, 2023 Discount rate 5.42 % 5.49 % 4.80 % Expected long-term rate of return on plan assets 4.00 4.00 3.75 Annual salary increase 3.50 3.00 3.00 The expected long-term return on plan assets assumption was developed as a weighted average rate based on the target asset allocation of the plan and the long-term capital market assumptions. The overall return for each asset class was developed by combining a long-term inflation component and the associated expected real rates. The development of the capital market assumptions utilized a variety of methodologies, including, but not limited to, historical analysis, stock valuation models, such as dividend discount models, and earnings yield models, expected economic growth outlook, and market yields analysis. The Company’s pension plan asset allocations at December 31, 2025, and December 31, 2024, were as follows: December 31, 2025 December 31, 2024 Equity securities 10.1 % 9.9 % Debt securities & cash equivalents 89.9 % 90.1 % Total 100.0 % 100.0 % 136 Table of Contents Note 9— Defined Benefit Pension Plan (continued) As of December 31, 2025, and December 31, 2024, the fair value of plan assets was as follows (in thousands): December 31, 2025 Fair Value Measurements Using Level 1 Level 2 Level 3 Assets at Fair Value Cash and cash equivalents $ — $ — $ — $ — Equity securities — 3,137 — 3,137 Debt securities — 28,006 — 28,006 Total pension assets $ — $ 31,143 $ — $ 31,143 December 31, 2024 Fair Value Measurements Using Level 1 Level 2 Level 3 Assets at Fair Value Cash and cash equivalents $ — $ — $ — $ — Equity securities — 3,040 — 3,040 Debt securities — 27,574 — 27,574 Total pension assets $ — $ 30,614 $ — $ 30,614 Assets are valued using a combination of methods including quoted prices for similar assets in active or non-active markets. The fund is sufficiently diversified to maintain a reasonable level of risk without imprudently sacrificing return. Investments are selected by officers experienced in financial matters and risk management, and implementation of approved investment strategies is monitored on a regular basis. Both actively and passively managed investment strategies are considered, and funds are allocated across asset classes to develop an efficient investment structure. It is the responsibility of the trustee to consider costs in administering the portfolio, while maintaining high quality investments. Costs include, but are not limited to, management and custodial fees, consulting fees, transaction costs, and other administrative costs which may be charged to the trust. The Company does not expect to contribute to its pension plan in 2026. Estimated future benefit payments, which reflect expected future service, as appropriate, are as follows (in thousands): Years ending December 31, 2026 $ 1,545 2027 1,545 2028 1,648 2029 1,694 2030 1,774 Following 5 years 9,875 Note 10— Other Post-Retirement Plans Investment and Savings Plan As of December 31, 2025, the Company maintained the 401(k) plans of both legacy Summit and Burke & Herbert. Under both of these plans, eligible employees may contribute a percentage of their compensation, and the Company matched a portion of the employee’s contribution based on the specific 401(k) plan. The contribution amounts matched by the Company depend on the 401(k) plan. The Company’s total contributions in 2025, 2024, and 137 Table of Contents Note 10— Other Post-Retirement Plans (continued) 2023 totaled $ 2.0 million, $ 1.7 million, and $ 1.0 million, respectively, which were included within pensions and other employee benefits on the Consolidated Statements of Income. Other Retirement Plans 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. 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. The plan is funded with director fees and salary reductions which are placed in a trust account invested by the Company. The trust investments consist of equity investments, fixed income investments, and cash. 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 $ 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 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): December 31, 2025 December 31, 2024 December 31, 2023 Operating lease income $ 2,810 $ 2,597 $ 2,301 Total lease income $ 2,810 $ 2,597 $ 2,301 The remaining maturities of operating lease receivables as of December 31, 2025, are as follows (in thousands): Operating Leases 2026 $ 2,640 2027 2,400 2028 2,330 2029 2,130 2030 1,585 Thereafter 1,370 Total lease receivables $ 12,455 Lessee Arrangements The Company has entered into leases for branches and office space. The leases are evaluated for whether the lease will be classified as either a finance or operating lease. Certain leases offer the option to extend the lease term, and the Company has included such extensions in its calculation of the lease liabilities to the extent the options are reasonably assured of being exercised. Including renewal options, the 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. 138 Table of Contents Note 11— Leased Property (continued) Lease liabilities represent the Company’s obligation to make lease payments and are presented at each reporting date as the net present value of the remaining contractual cash flows. These cash flows are discounted at the Company’s incremental borrowing rate in effect at the commencement date of the lease. The right-of-use asset and lease liability are included in other assets and other liabilities, respectively, in the Consolidated Balance Sheets. In the fourth quarter of 2022 the Company sold two buildings in separate transactions and entered into sale-leaseback agreements to lease back the properties for up to one year . The lease terms were at market with third-parties and resulted in $ 655 thousand of operating lease expense in 2023. Right-of-use assets and liabilities by lease type, and the associated balance sheet classifications are as follows (in thousands): Balance Sheet Classification December 31, 2025 December 31, 2024 Right-of-use assets: Operating leases Other assets $ 14,096 $ 13,203 Finance leases Other assets 3,795 3,312 Total right-of-use assets $ 17,891 $ 16,515 Lease liabilities: Operating leases Other liabilities $ 14,717 $ 13,586 Finance Leases Other liabilities 4,158 3,620 Total lease liabilities $ 18,875 $ 17,206 The components of total lease cost were as follows for the period ending (in thousands): December 31, 2025 December 31, 2024 December 31, 2023 Finance lease cost Right-of-use asset amortization $ 292 $ 285 $ 244 Interest expense 107 110 86 Operating lease cost 3,390 2,864 3,210 Total lease cost $ 3,789 $ 3,259 $ 3,540 The Company’s future undiscounted lease payments for finance and operating leases with initial terms of one year or more as of December 31, 2025, are as follows (in thousands): Operating Leases Finance Leases 2026 $ 3,356 $ 426 2027 3,015 435 2028 2,451 444 2029 2,240 454 2030 1,680 463 Thereafter 4,862 2,764 Total undiscounted lease payments 17,604 4,986 Less: discount ( 2,887 ) ( 828 ) Net lease liabilities $ 14,717 $ 4,158 139 Table of Contents Note 11— Leased Property (continued) The following table presents additional information about the Company’s leases as of December 31, 2025, and December 31, 2024. Supplemental lease information (dollars in thousands) December 31, 2025 December 31, 2024 Finance lease weighted average remaining lease term (years) 10.61 11.75 Finance lease weighted average discount rate 3.32 % 3.06 % Operating lease weighted average remaining lease term (years) 6.66 6.84 Operating lease weighted average discount rate 4.64 % 4.65 % Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 3,189 $ 3,087 Operating cash flows from finance leases 107 110 Financing cash flows from finance leases 236 216 Right-of-use assets obtained in exchange for new finance lease liabilities 775 — Right-of-use assets obtained in exchange for new operating lease liabilities 3,672 12,329 Note 12— Regulatory Capital Matters Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, “prompt corrective action” regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under the Basel III Framework, an entity must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The net unrealized gain or loss on AFS securities is not included in computing regulatory capital. Management believes as of December 31, 2025, the Company and the Bank meet all capital adequacy requirements to which they are subject. “Prompt corrective action” regulations provide five classifications: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized,” although these terms are not used to represent overall financial condition. If “adequately capitalized,” regulatory approval is required to accept brokered deposits. If “undercapitalized,” capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. As of December 31, 2025, and December 31, 2024, the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for “prompt corrective action.” 140 Table of Contents Note 12— Regulatory Capital Matters (continued) The table below presents the actual and required capital amounts and ratios for the Company and the Bank at December 31, 2025, and December 31, 2024 (in thousands except for ratios). Actual Minimum Required Capital - Basel III Minimum Required to be Well Capitalized Amount Ratio Amount Ratio Amount Ratio As of December 31, 2025 Total Capital to risk-weighted assets Consolidated $ 1,004,898 16.17 % $ 652,648 ≥ 10.5 % $ 621,570 N/A Burke & Herbert Bank & Trust 986,269 15.92 650,649 ≥ 10.5 619,665 ≥ 10.0 % Tier 1 (Core) Capital to risk-weighted assets Consolidated 863,657 13.89 528,334 ≥ 8.5 497,256 N/A Burke & Herbert Bank & Trust 915,250 14.77 526,716 ≥ 8.5 495,732 ≥ 8.0 Common Tier 1 (CET 1) to risk-weighted assets Consolidated 835,976 13.45 435,099 ≥ 7.0 404,020 N/A Burke & Herbert Bank & Trust 915,250 14.77 433,766 ≥ 7.0 402,782 ≥ 6.5 Tier 1 (Core) Capital to average assets (leverage ratio) Consolidated 863,657 10.92 316,492 ≥ 4.0 395,615 N/A Burke & Herbert Bank & Trust 915,250 11.59 315,898 ≥ 4.0 394,873 ≥ 5.0 As of December 31, 2024 Total Capital to risk-weighted assets Consolidated $ 930,753 14.57 % $ 670,590 ≥ 10.5 % $ 638,658 N/A Burke & Herbert Bank & Trust 919,843 14.41 670,028 ≥ 10.5 638,122 ≥ 10.0 % Tier 1 (Core) Capital to risk-weighted assets Consolidated 763,842 11.96 542,859 ≥ 8.5 510,926 N/A Burke & Herbert Bank & Trust 847,804 13.29 542,404 ≥ 8.5 510,498 ≥ 8.0 Common Tier 1 (CET 1) to risk-weighted assets Consolidated 736,416 11.53 447,060 ≥ 7.0 415,127 N/A Burke & Herbert Bank & Trust 847,804 13.29 446,686 ≥ 7.0 414,779 ≥ 6.5 Tier 1 (Core) Capital to average assets (leverage ratio) Consolidated 736,416 9.80 311,904 ≥ 4.0 389,880 N/A Burke & Herbert Bank & Trust 847,804 10.88 311,616 ≥ 4.0 389,520 ≥ 5.0 The Company’s principal source of funds for dividend payments is dividends received from the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. As of December 31, 2025, approximately $ 335.6 million of retained earnings was available for dividend declaration consistent with the Company’s capital plan. Note 13— Derivatives The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. 141 Table of Contents Note 13— Derivatives (continued) Cash flow hedges of interest rate risk The Company’s objectives in using interest rate derivatives is to add stability to net interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps, caps, and floors as part of its risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During 2025, such derivatives were used to hedge the variable cash flows associated with variable-rate liabilities and assets. 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 $ 74.6 thousand will be reclassified as a reduction to interest expense. Derivatives not designated as hedges The Company enters into interest rate swaps with its loan customers to facilitate their financing requests. Upon entering into swaps with our loan customers, the Company will enter into corresponding offsetting derivatives with third parties. These derivatives represent economic hedges and do not qualify as hedges for accounting. These back-to-back interest rate swaps are reported at fair value in “other assets” and “other liabilities” in the Company’s Consolidated Balance Sheets. Changes in the fair value of interest rate swaps are recorded in other non-interest expense and sum to zero because of offsetting terms of swaps with borrowers and swaps with dealer counterparties. The table below presents the fair value of the Company’s derivative financial instruments, which includes accrued interest, as well as their classification on the Consolidated Balance Sheets as of December 31, 2025, and December 31, 2024 (in thousands): December 31, 2025 Balance Sheet Location Notional Amount Fair Value Derivatives designated as hedges: Interest rate swaps related to cash flow hedges Other assets $ 150,000 $ 273 Interest rate swaps related to cash flow hedges Other liabilities 400,000 340 Derivatives not designated as hedges: Interest rate swaps related to customer loans Other assets $ 203,904 $ 2,331 Interest rate swaps related to customer loans Other liabilities 203,904 2,331 December 31, 2024 Balance Sheet Location Notional Amount Fair Value Derivatives designated as hedges: Interest rate swaps related to cash flow hedges Other assets $ 250,000 $ 1,368 Interest rate swaps related to cash flow hedges Other liabilities 50,000 165 Derivatives not designated as hedges: Interest rate swaps related to customer loans Other assets $ 99,899 $ 1,823 Interest rate swaps related to customer loans Other liabilities 99,899 1,823 142 Table of Contents Note 13— Derivatives (continued) The table below presents the effect of cash flow hedge accounting on AOCI for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 (in thousands): December 31, 2025 December 31, 2025 Derivatives in Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in OCI on Derivative Amount of Gain or (Loss) Recognized in OCI Included Component Amount of Gain or (Loss) Recognized in OCI Excluded Component Location of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component Interest Rate Products $ — $ — $ — Interest Income $ — $ — $ — Interest Rate Products 854 854 — Interest Expense 2,119 2,119 — Total $ 854 $ 854 $ — $ 2,119 $ 2,119 $ — December 31, 2024 December 31, 2024 Derivatives in Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in OCI on Derivative Amount of Gain or (Loss) Recognized in OCI Included Component Amount of Gain or (Loss) Recognized in OCI Excluded Component Location of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component Interest Rate Products $ ( 19 ) $ ( 19 ) $ — Interest Income $ ( 611 ) $ ( 611 ) $ — Interest Rate Products 4,021 4,021 — Interest Expense 2,794 2,794 — Total $ 4,002 $ 4,002 $ — $ 2,183 $ 2,183 $ — December 31, 2023 December 31, 2023 Derivatives in Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in OCI on Derivative Amount of Gain or (Loss) Recognized in OCI Included Component Amount of Gain or (Loss) Recognized in OCI Excluded Component Location of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component Interest Rate Products $ ( 329 ) $ ( 329 ) $ — Interest Income $ ( 1,749 ) $ ( 1,749 ) $ — Interest Rate Products ( 29 ) ( 29 ) — Interest Expense — — — Total $ ( 358 ) $ ( 358 ) $ — $ ( 1,749 ) $ ( 1,749 ) $ — 143 Table of Contents Note 13— Derivatives (continued) The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income as of December 31, 2025, December 31, 2024, and December 31, 2023 (in thousands). Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships December 31, 2025 December 31, 2024 December 31, 2023 Interest Income Interest Expense Interest Income Interest Expense Interest Income Interest Expense Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded. $ 160 $ 2,119 $ ( 451 ) $ 2,794 $ ( 895 ) $ — The effects of fair value and cash flow hedging: Gain or (loss) on fair value hedging relationships in Subtopic 815-20 Interest contracts Hedging items (1) 160 — 160 — ( 1,025 ) — Derivatives designated as hedging instruments — — — — 1,879 — Gain or (loss) on cash flow hedging relationships in Subtopic 815-20 Interest contracts Amount of gain or (loss) reclassified from AOCI into income — 2,119 ( 611 ) 2,794 ( 1,749 ) — Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring — — — — — — Amount of Gain or (Loss) Reclassified from AOCI into Income - Included Component — 2,119 ( 611 ) 2,794 ( 1,749 ) — Amount of Gain or (Loss) Reclassified from AOCI into Income - Excluded Component — — — — — — (1) The Company voluntarily discontinued a fair value hedging relationship and these amounts include the gain or (loss) and the hedging adjustment on a voluntary discontinued hedging relationship. The Company has allocated the basis adjustment to the remaining individual assets in the closed portfolio and will amortize the basis adjustment over a period consistent with the amortization of other discounts or premiums on the hedged assets. Credit-risk-related Contingent Features 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 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 Credit extension commitments The Company’s financial statements do not reflect various financial instruments which arise in the normal course of business and which involve elements of credit risk, interest rate risk, and liquidity risk. These financial instruments include commitments to extend credit (e.g., revolving lines of credit) and commercial letters of credit. Many of our lending relationships contain both funded and unfunded elements. The funded portion is reflected on our balance sheet. The unfunded portion of these commitments is not recorded on our balance sheet until a draw is made under the loan facility. Since many of our commitments to extend credit may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. 144 Table of Contents Note 14— Commitments and Contingencies (continued) A summary of the contractual amounts of the Company’s financial instruments outstanding at December 31, 2025, and December 31, 2024, is as follows (in thousands): December 31, 2025 December 31, 2024 Commitments to extend credit $ 970,255 $ 969,317 Commercial letters of credit 23,959 13,333 Commitments to extend credit and commercial letters of credit both include exposure to some credit loss in the event of non-performance of the customer. The Company’s credit policies and procedures for credit commitments and financial guarantees are the same as those for extensions of credit that are recorded on the Consolidated Balance Sheets. Many of these instruments have fixed maturity dates, and many of them will expire without being drawn upon; accordingly, they do not generally present any significant liquidity risk to the Company. Allowance for credit losses - off-balance-sheet credit exposures The Company recorded a recapture of credit losses on unfunded commitments of $ 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. Litigation The Company is a party to litigation, claims, and proceedings arising in the normal course of business that are ordinary and routine to the nature of the Company’s business and operations. Management, after consultation with legal counsel, believes that the liabilities, if any, arising from any currently pending or threatened litigation, claims, or proceedings will not be material to the Company’s financial position. Note 15— Transactions with Related Parties Loans to directors and principal officers, including their immediate families and affiliated companies in which they have a direct or indirect material interest, are considered to be related parties. Aggregate loan balances with related parties were as follows (in thousands): December 31, 2025 Balance, beginning $ 157,292 New loans 13,601 Effect of changes in composition of related parties ( 8 ) Repayments ( 7,861 ) Balance, ending $ 163,024 None of the loans are past due, on non-accrual status, or have been restructured to provide a reduction or deferral of interest or principal because of deterioration in the financial position of the borrower. 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. 145 Table of Contents Note 16— Fair Value Measurements Determination of Fair Value Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 – Significant unobservable inputs that reflect our own assumptions that market participants would use in pricing an asset or liability. In instances in which multiple levels of inputs are used to measure fair value, hierarchy classification is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company used the following methods and significant assumptions to estimate fair value: Investment securities The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2), using matrix pricing. Matrix pricing is a mathematical technique commonly used to price debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on securities’ relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Equity Investments Equity investments are recorded at fair value on a recurring basis, with changes in fair value reported in net income. Through the 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; therefore, we estimate its fair value using the present value of its future cash flows using observed discount rates of similar publicly-traded securities, adjusted for a liquidity premium. We classify the perpetual preferred stock as Level 2. Equity securities without readily determinable fair values are carried at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment. Such equity securities are included in Equity Investments on the accompanying Consolidated Balance Sheets. Derivatives The fair values of derivatives are based on valuation models using observable market data as of the measurement date (Level 2). The Company has contracted with a third-party vendor to provide valuations for interest rate swaps using standard swap valuation techniques. The Company has considered counterparty credit risk 146 Table of Contents 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 The fair value of loans held-for-sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan (Level 2). These loans currently consist of one-to-four family residential loans originated for sale in the secondary market. Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements at December 31, 2025 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Financial assets Investment Securities U.S. Treasuries and government agencies $ 150,124 $ — $ — $ 150,124 Obligations of state and municipalities — 922,574 — 922,574 Residential mortgage backed - agency — 55,385 — 55,385 Residential mortgage backed - non-agency — 218,092 — 218,092 Commercial mortgage backed - agency — 73,896 — 73,896 Commercial mortgage backed - non-agency — 111,109 — 111,109 Asset backed — 53,466 — 53,466 Other — 31,308 — 31,308 Total investment securities available-for-sale $ 150,124 $ 1,465,830 $ — $ 1,615,954 Loans held-for-sale, at fair value $ — $ 365 $ — $ 365 Equity investments $ — $ 14,201 $ — $ 14,201 Derivatives $ — $ 2,604 $ — $ 2,604 Financial liabilities Derivatives $ — $ 2,671 $ — $ 2,671 147 Table of Contents Note 16— Fair Value Measurements (continued) Fair Value Measurements at December 31, 2024 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Financial assets Investment Securities U.S. Treasuries and government agencies $ 149,127 $ — $ — $ 149,127 Obligations of state and municipalities — 698,724 — 698,724 Residential mortgage backed - agency — 53,186 — 53,186 Residential mortgage backed - non-agency — 247,876 — 247,876 Commercial mortgage backed - agency — 33,071 — 33,071 Commercial mortgage backed - non-agency — 154,511 — 154,511 Asset backed — 64,056 — 64,056 Other — 31,820 — 31,820 Total investment securities available-for-sale $ 149,127 $ 1,283,244 $ — $ 1,432,371 Loans held-for-sale, at fair value $ — $ 2,331 $ — $ 2,331 Equity investments $ — $ 12,407 $ — $ 12,407 Derivatives $ — $ 3,191 $ — $ 3,191 Financial liabilities Derivatives $ — $ 1,988 $ — $ 1,988 The following describes the valuation techniques used by the Company to measure certain assets recorded at fair value on a non-recurring basis in the financial statements: Collateral dependent loans Loans for which the borrower is experiencing financial difficulty and repayment is dependent upon the operation or sale of collateral, are considered collateral-dependent. For collateral-dependent loans, the fair value is measured based on the value of the collateral securing the loans, less estimated costs of disposal. Collateral may be in the form of real estate or business assets, including equipment, inventory, and accounts receivable. The vast majority of the collateral underlying collateral-dependent loans is real estate, the fair value of which is measured through an appraisal. The appraisals of the collateral supporting collateral-dependent loans may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Any fair value adjustments are recorded in the period incurred as provision for credit losses on the Consolidated Statements of Income. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business. Other real estate owned Assets acquired through foreclosure or other proceedings are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. The fair value of foreclosed properties is determined on a nonrecurring basis generally utilizing current appraisals performed by an independent, licensed appraiser applying an income or market value approach using observable market data. Updated appraisals of foreclosed properties are generally obtained if the existing appraisal is more than 18 months old or more frequently if there is a known deterioration in value. However, if a current appraisal is not available, the original appraised value is discounted, as appropriate, to compensate for the estimated depreciation in the value of the real estate since the date of its original appraisal. Such discounts are generally estimated based upon management’s knowledge of sales of similar property within the applicable market area and its knowledge of other real estate market-related data as well as general economic trends. 148 Table of Contents Note 16— Fair Value Measurements (continued) Upon foreclosure, any fair value adjustment is charged against the allowance for credit losses on loans. Subsequent fair value adjustments are recorded in the period incurred and included in other noninterest expense in the Consolidated Statements of Income. Assets that were measured at fair value on a non-recurring basis during the period are summarized below (in thousands): Fair Value Measurements at December 31, 2025 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Collateral dependent loans Commercial real estate $ — $ — $ 10,377 $ 10,377 Owner-occupied commercial real estate — — — — Acquisition, construction & development — — 2,640 2,640 Commercial & industrial — — 213 213 Single family residential — — 223 223 Consumer non-real estate and other — — — — Other real estate owned — — 2,689 2,689 Fair Value Measurements at December 31, 2024 Using: Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Collateral dependent loans Commercial real estate $ — $ — $ 2,668 $ 2,668 Owner-occupied commercial real estate — — — — Acquisition, construction & development — — 232 232 Commercial & industrial — — 249 249 Single family residential — — 872 872 Consumer non-real estate and other — — — — Other real estate owned — — 2,783 2,783 The following table presents quantitative information about Level 3 Fair Value Measurements for assets measured at fair value on a non-recurring basis at December 31, 2025, and December 31, 2024 (in thousands except for percentages): Description Fair Value Valuation Techniques Unobservable Inputs Range December 31, 2025 Collateral dependent loans $ 13,453 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 2,689 Appraisal of collateral Management adjustments (e.g., liquidity, selling costs, etc.) 5.0 % to 20.0 % for liquidity, 6.0 % to 8.0 % for selling costs December 31, 2024 Collateral dependent loans $ 4,021 Appraisal of collateral Management adjustments (e.g., liquidity, selling costs, etc.) 5.0 % to 20.0 % for liquidity, 6.0 % to 8.0 % for selling costs Other real estate owned 2,783 Appraisal of collateral Management adjustments (e.g., liquidity, selling costs, etc.) 5.0 % to 20.0 % for liquidity, 6.0 % to 8.0 % for selling costs 149 Table of Contents Note 16— Fair Value Measurements (continued) Fair value of financial instruments The carrying amounts and estimated fair values of financial instruments not carried at fair value, at December 31, 2025, and December 31, 2024, were as follows (in thousands): Fair Value Measurements at December 31, 2025 Using: Carrying Amount Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Financial Assets Cash and due from banks $ 53,497 $ 53,497 $ — $ — $ 53,497 Interest-bearing deposits with banks 235,630 235,630 — — 235,630 Loans, net 5,319,853 — — 5,284,210 5,284,210 Accrued interest 35,442 — 35,442 — 35,442 Financial liabilities Non-interest-bearing $ 1,336,380 $ — $ 1,336,380 $ — $ 1,336,380 Interest-bearing 5,067,561 — 5,062,925 — 5,062,925 Short-term borrowings 450,000 — 450,005 — 450,005 Subordinated debentures, net 70,222 — 70,800 — 70,800 Subordinated debentures owed to unconsolidated subsidiary trusts 17,268 — 16,494 — 16,494 Accrued interest 4,447 — 4,447 — 4,447 Fair Value Measurements at December 31, 2024 Using: Carrying Amount Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (Level 1) (Level 2) (Level 3) Total Financial Assets Cash and due from banks $ 35,554 $ 35,554 $ — $ — $ 35,554 Interest-bearing deposits with banks 99,760 99,760 — — 99,760 Loans, net 5,604,196 — — 5,465,772 5,465,772 Accrued interest 34,454 — 34,454 — 34,454 Financial liabilities Non-interest-bearing $ 1,379,940 $ — $ 1,379,940 $ — $ 1,379,940 Interest-bearing 5,135,299 — 5,126,423 — 5,126,423 Short-term borrowings 365,000 — 364,985 — 364,985 Subordinated debentures, net 94,872 — 91,760 — 91,760 Subordinated debentures owed to unconsolidated subsidiary trusts 17,013 — 14,587 — 14,587 Accrued interest 6,157 — 6,157 — 6,157 Note 17— Common Stock Transactions In 2025, the Company reissued zero shares of treasury stock to satisfy the vesting of RSUs and SARs. No other purchase or sale of the Company’s Common Stock occurred in 2025. 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. 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. 150 Table of Contents Note 17— Common Stock Transactions (continued) During 2025, 2024, and 2023, the Company declared and paid cash dividends of $ 2.20 , $ 2.14 , and $ 2.12 per share, respectively. Note 18— Accumulated Other Comprehensive Income (Loss) The following table presents changes in accumulated other comprehensive income (loss) by component, net of tax, for the years ending December 31, 2025, December 31, 2024, and December 31, 2023 (in thousands): 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 (Loss) Beginning Balance $ 911 $ ( 92,055 ) $ ( 4,576 ) $ ( 95,720 ) Net unrealized gains (losses) 659 37,434 — 38,093 Less: net realized (gains) losses reclassified to earnings ( 1,634 ) ( 236 ) — ( 1,870 ) Net change in pension plan benefits — — 537 537 Ending Balance $ ( 64 ) $ ( 54,857 ) $ ( 4,039 ) $ ( 58,960 ) 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 (Loss) Beginning Balance $ ( 490 ) $ ( 97,259 ) $ ( 5,745 ) $ ( 103,494 ) Net unrealized gains (losses) 3,082 6,372 — 9,454 Less: net realized (gains) losses reclassified to earnings ( 1,681 ) ( 1,168 ) — ( 2,849 ) Net change in pension plan benefits — — 1,169 1,169 Ending Balance $ 911 $ ( 92,055 ) $ ( 4,576 ) $ ( 95,720 ) 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 (Loss) Beginning Balance $ ( 1,589 ) $ ( 130,875 ) $ ( 7,031 ) $ ( 139,495 ) Net unrealized gains (losses) ( 283 ) 32,718 — 32,435 Less: net realized (gains) losses reclassified to earnings 1,382 898 — 2,280 Net change in pension plan benefits — — 1,286 1,286 Ending Balance $ ( 490 ) $ ( 97,259 ) $ ( 5,745 ) $ ( 103,494 ) 151 Table of Contents Note 18— Accumulated Other Comprehensive Income (Loss) (continued) 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 (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 Cash flow hedges: Interest rate contracts $ — $ ( 611 ) $ ( 1,749 ) Interest income Interest rate contracts 2,119 2,794 — Interest expense Tax effect ( 485 ) ( 502 ) 367 Income tax expense (benefit) Net of Tax $ 1,634 $ 1,681 $ ( 1,382 ) Available-for-sale securities: Realized gains (losses) on securities $ 147 $ 1,357 $ ( 112 ) Net gains/(losses) on securities Realized gains (losses) on basis adjustment for fair value hedges 160 160 ( 1,025 ) Interest income Tax effect ( 71 ) ( 349 ) 239 Income tax expense (benefit) Net of Tax $ 236 $ 1,168 $ ( 898 ) Defined benefit pension plan: Amortization of actuarial gain / (loss) $ ( 697 ) $ ( 1,518 ) $ ( 1,628 ) Pension and other employee benefits Tax effect 160 349 342 Income tax expense (benefit) Net of Tax $ ( 537 ) $ ( 1,169 ) $ ( 1,286 ) Total reclassifications, net of tax $ 1,333 $ 1,680 $ ( 3,566 ) Net income Note: The Defined benefit pension plan items are included in the computation of net periodic pension cost. See Note 9 — Defined Benefit Pension Plan , for additional information. 152 Table of Contents Note 19— Parent Company Financial Information The following tables summarize condensed financial statements for Burke & Herbert Financial Services Corp., which commenced operations as a holding company on October 1, 2022, as of and for the years ended December 31, 2025, and December 31, 2024 (in thousands): Parent Company Only Condensed Balance Sheet December 31, 2025 December 31, 2024 Assets Cash and cash equivalents $ 7,674 $ 8,320 Investment in banking subsidiary 924,099 833,630 Other assets 18,454 5,920 Total assets $ 950,227 $ 847,870 Liabilities Subordinated debentures, net 70,222 94,872 Subordinated debentures owed to unconsolidated subsidiary trusts 17,268 17,013 Accrued expenses and other liabilities $ 8,088 $ 5,828 Total liabilities 95,578 117,713 Total Shareholders’ Equity 854,649 730,157 Total Liabilities and Shareholders’ Equity $ 950,227 $ 847,870 Parent Company Only Condensed Statement of Income December 31, 2025 December 31, 2024 Income Dividends from bank subsidiary $ 77,375 $ 23,869 All other income 406 — Total Income 77,781 23,869 Expense Salaries and employee benefits 6,419 6,949 Interest expense 8,913 7,412 Other operating expenses 4,778 7,863 Total Expense 20,110 22,224 Income before income tax and equity in undistributed income of subsidiaries 57,671 1,645 Income tax benefit 3,936 4,718 Income before equity in undistributed income of subsidiaries 61,607 6,363 Equity in undistributed earnings of subsidiary 55,699 29,345 Net Income 117,306 35,708 Preferred stock dividends 900 675 Net income applicable to common shares $ 116,406 $ 35,033 153 Table of Contents Note 19— Parent Company Financial Information (continued) Parent Company Only Condensed Statement of Cash Flows December 31, 2025 December 31, 2024 Cash Flows from Operating Activities Net income $ 117,306 $ 35,708 Adjustments to reconcile net income to net cash provided by operating activities: Equity in undistributed income of subsidiaries ( 55,699 ) ( 29,345 ) Share-based compensation 4,777 2,879 Deferred income taxes ( 1,934 ) ( 773 ) Net change in other assets ( 2,206 ) 24,446 Net change in other liabilities 319 3,498 Net cash flows provided by operating activities $ 62,563 $ 36,413 Cash Flows from Investing Activities — — Net cash (used in) provided by investing activities $ — $ — Cash Flows from Financing Activities Proceeds from employee stock purchase program 679 259 Dividends paid ( 33,918 ) ( 28,636 ) Repayment of subordinated debt ( 30,000 ) — Common stock transactions 30 — Net cash (used in) financing activities $ ( 63,209 ) $ ( 28,377 ) Increase in cash and cash equivalents $ ( 646 ) $ 8,036 Cash and cash equivalents Beginning of the year $ 8,320 $ 284 End of the year 7,674 8,320 154 Table of Contents Note 20— Other Operating Expense Other operating expense from the Consolidated Statements of Income for years ended December 31, 2025, December 31, 2024, and December 31, 2023, is as follows (in thousands): December 31, 2025 December 31, 2024 December 31, 2023 Historic tax credit amortization $ 1,741 $ 2,526 $ 2,526 IT related 1,712 2,835 1,961 Consultant fees 3,808 8,510 3,082 Directors' fees 1,622 1,991 1,918 Audit expense 1,373 1,905 1,124 Legal expense 2,315 2,131 2,245 Virginia franchise tax 3,105 2,487 2,601 Marketing expense 1,908 1,894 459 Donation expense 144 6,157 89 Other 21,395 18,184 5,455 Total $ 39,123 $ 48,620 $ 21,460 The Company incurred merger-related expenses of $ 1.0 million and $ 17.0 million for the year ended December 31, 2025, and December 31, 2024, respectively. These expenses are included in the consultant fees, audit fees, legal expense, donation, and other line items detailed in other operating expenses. Note 21— Qualified Affordable Housing Project and Historic Tax Investments The Company invests in qualified affordable housing projects. At December 31, 2025, and December 31, 2024, the balance of the investment for qualified affordable housing projects was $ 29.5 million and $ 23.2 million, respectively. These balances are reflected in the other assets line on the Consolidated Balance Sheets. Total unfunded commitments related to the investments in qualified affordable housing projects totaled $ 41.4 million and $ 7.6 million at December 31, 2025, and December 31, 2024, respectively. The Company expects to fulfill the majority of these commitments by 2027. During the year ended December 31, 2025, December 31, 2024, and December 31, 2023, the Company recognized amortization expense of $ 7.0 million, $ 5.4 million, and $ 5.6 million, respectively, which $ 5.2 million, $ 2.9 million, and $ 3.1 million, respectively, qualified for the proportional amortization method and was included in income tax expense on the Consolidated Statements of Income . During the year ended December 31, 2025, December 31, 2024, and December 31, 2023, $ 1.7 million, $ 2.5 million, and $ 2.5 million, respectively, was included in other non-interest expense on the Consolidated Statements of Income related to historic tax credit investments that do not qualify for the proportional amortization method. Note 22— Revenue from Contracts with Customers All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. ASC 606 is applicable to non-interest revenue streams, such as trust and wealth management income, deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. 155 Table of Contents Note 22— Revenue from Contracts with Customers (continued) The following table presents the components of non-interest income 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 Service charges and fees (1) Deposit related fees $ 7,815 $ 6,575 $ 2,410 Wire fees 376 480 350 Other fees 6 144 86 Fiduciary and wealth management (1) Trust fees 6,122 4,919 3,074 Advisory fees 2,677 2,385 1,866 Other fees 1,656 1,107 414 Net gains (losses) on securities (2) 147 1,357 ( 112 ) Income from life insurance (2) 8,130 4,686 2,844 Bank debit and other card revenue (1) 12,264 9,772 4,922 Other non-interest income (1) Safety deposit fees 510 441 359 Servicing release premium 297 484 138 Customer loan swap fees 731 556 414 Investor servicing income 492 345 — Letter of credit fees 465 364 89 Unfunded commitment purchase accounting adjustment (2) 156 547 — Other non-interest (3) 4,266 1,102 455 Total non-interest income $ 46,110 $ 35,264 $ 17,309 __________________ (1) Income within the scope of ASC 606 - Revenue Recognition (2) Income excluded from the scope of ASC 606 - Revenue Recognition . A description of the Company’s revenue streams accounted for under ASC 606 follows: Service charges and fees Service charges and fees on deposit accounts consist of monthly service fees, check orders, and other deposit account related fees. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied at a point in time, and the related revenue recognized. 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. Debit and credit card income is primarily comprised of interchange fees earned whenever the Company’s debit and credit cards are processed through card payment networks such as Visa. Merchant services income mainly consists of fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Company’s performance obligation is largely satisfied, and the related revenue is recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. 156 Table of Contents Note 22— Revenue from Contracts with Customers (continued) Income from fiduciary & wealth management activities Fiduciary and wealth management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. The Company does not earn performance-based incentives. Optional services are transactional-based with the Company’s performance obligation being satisfied at a point in time (i.e., as incurred), and that allows the Company to recognize the related revenue associated with that transaction. Payment is received shortly after services are rendered. Other non-interest income Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon receipt of payment. The Company determined that since rentals and renewals occur fairly consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. The Company earns a servicing release premium for residential loans sold with servicing released to third-party investors. 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 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. Note 23— Share-Based Compensation The Company has a share-based incentive plan described below that allows it to offer a variety of equity compensation awards, subject to approval. Total compensation 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 In 2019, the Company’s Stock Incentive Plan (“2019 SIP”) was approved by the Bank’s Board. The 2019 SIP provides for the issuance of share-based awards to directors and employees of the Company. The 2019 SIP authorized 240,000 units to be issued and the Company’s practice is using authorized unissued shares to satisfy these awards. Each unit represents a contingent right to receive one common share or an equivalent amount of cash, or a combination of the two, at the discretion of the Company. Currently, we have a sufficient number of authorized unissued shares to satisfy outstanding equity awards. Under the 2019 SIP, the Company has issued restricted stock unit (“RSU”) awards that are both time-based and performance-based. Each RSU award will indicate the number of shares, the conditions (e.g., service, performance, and/or a combination), and the grant date. Compensation expense is recognized over the vesting period of the awards based on the fair value of the award at grant date. 2023 Stock Incentive Plan In 2023, a new stock incentive plan (“2023 SIP”) was approved by the Board and shareholders. Upon the plan’s shareholder approval date of March 30, 2023, no further share-based awards have been issued under the 2019 SIP. The 2023 SIP provides for the issuance of share-based awards to directors and employees of the Company. The 2023 SIP authorized the issuance of 250,000 shares, subject to an annual increase in available shares and shares recycled from the 2019 SIP that were cancelled. Based on our shares outstanding as of December 31, 2024, and awards that were recycled from the 2019 SIP, the total shares authorized for issuance under the plan as of December 31, 2025 was 474,578 . 157 Table of Contents Note 23— Share-Based Compensation (continued) A total of 96,287 , 100,665 , and 25,705 shares were issued in 2025, 2024, and 2023, respectively. For time-based RSUs, the fair value was determined by using the closing stock price on the date prior to the grant date. These RSUs vest over three to five years . The Board, from time to time, approves performance-based RSU awards that may be earned between a three to five year performance period. Whether units are earned at the end of the performance period will be determined based on the achievement of performance and/or market targets (e.g., market capitalization target) over the performance period. If the conditions are achieved, the grant recipient will receive 100 % of the units granted as these awards do not provide for a multiplier effect. The performance/market targets are determined by the Board. The fair value for performance-based RSU awards was determined by using a Monte Carlo simulation analysis to estimate the achievement of the market capitalization target determined by the Board. The Monte Carlo simulation analysis required the following inputs: (1) expected term, (2) expected volatility, (3) risk-free rate, and (4) dividend yield. The expected term was based on the stated performance period. Management used the expected volatility from a peer group. The risk-free interest rate is based on the U.S. Treasury yield curve over the performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. The following is a summary of all the Company’s RSU awards issued under both the 2019 SIP and 2023 SIP: Non-vested Shares Shares Weighted-Average Grant-Date Fair Value Non-vested at January 1, 2025 134,202 $ 57.67 Granted 96,287 58.15 Vested ( 47,853 ) 52.25 Forfeited ( 1,787 ) 50.99 Non-vested at December 31, 2025 180,849 $ 59.43 As of December 31, 2025, there was $ 6.0 million of total unrecognized compensation costs related to non-vested shares granted under the 2019 SIP and 2023 SIP. The cost is expected to be recognized over a weighted average period of 1.11 years. 2023 Employee Stock Purchase Plan In 2023, a new employee stock purchase plan (“2023 ESPP”) was approved by the Board and shareholders. Upon the 2023 ESPP’s shareholder approval date of March 30, 2023, the 2023 ESPP reserved 250,000 shares of common stock for issuance to employees, subject to an annual increase in reserved shares. At 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. The first semi-annual offering period began on September 1, 2023 and the current semi-annual offering period began on September 1, 2025. Eligible employees may purchase shares in an amount that does not exceed the lesser of the IRS limit of $25,000 or 15 % of their annual salary. The following table presents information for the 2023 ESPP for the year ended December 31, 2025. December 31, 2025 Shares purchased 12,839 Weighted average price of shares purchased $ 53.01 Compensation expense recognized (in 000's) 186.4 Stock Appreciation Rights (“SAR”) 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 158 Table of Contents Note 23— Share-Based Compensation (continued) 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 Summit merger, the Company determined the fair value per SAR using the following assumptions: 2019 SAR 2021 SAR 2023 SAR # of years to full vesting 7 years 7 years 7 years Fair value $ 14.89 $ 16.92 $ 14.56 Risk-free interest rate 4.51 % 4.32 % 4.14 % Expected dividend yield 3.95 % 3.95 % 3.95 % Expected common stock volatility 32.56 % 32.56 % 32.56 % Expected contractual life (in years) 4.77 7.20 8.77 A summary of SAR and option activity during the year ended December 31, 2025, is as follows: Weighted Average Dollars in thousands, except per share information SARs Aggregate Fair Value Remaining Contractual Term (Yrs.) Exercise Price Outstanding, December 31, 2024 223,873 $ 2,862 5.44 $ 46.87 Granted (or acquired) — — — — Exercised ( 34,920 ) ( 841 ) — 38.21 Forfeited ( 4,234 ) ( 41 ) — 48.32 Expired — — — — 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 $ 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, 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 Basic earnings per share excludes dilution and is computed by dividing net income applicable to common shares by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential impact of contingently issuable shares. The Company uses the treasury stock method as described by ASC 260 - Earnings Per Share for each dilutive instrument when computing diluted earnings per share. 159 Table of Contents Note 24— Earnings Per Share (continued) The following shows the weighted average number of shares used in computing earnings per share and the effect of the weighted average number of shares of dilutive potential Common Stock. Dilutive potential Common Stock has no effect on income available to common shareholders. December 31, 2025 December 31, 2024 December 31, 2023 Net income applicable to common shares (in thousands) $ 116,406 $ 35,033 $ 22,692 Weighted average number of shares 15,006,614 12,393,677 7,428,042 Options effect of dilutive shares 67,245 48,154 78,813 Weighted average dilutive shares 15,073,859 12,441,831 7,506,855 Basic earnings per common share $ 7.76 $ 2.83 $ 3.05 Diluted earnings per common share 7.72 2.82 3.02 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 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. 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 transaction is no t deductible for tax purposes and consisted largely of synergies and the cost savings resulting from the combining of the operations of the companies. The fair values of assets and liabilities are subject to refinement for up to one year after the acquisition date if any additional information relative to the acquisition date fair values becomes available. This one year period expired during the quarter ending June 30, 2025. The following table summarizes adjustments to goodwill subsequent to December 31, 2024 (in thousands): 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 160 Table of Contents Note 25— Business Combination (continued) approximates the estimated run-off of the acquired deposits. The fair value of intangible assets related to core deposits was $ 68.8 million on the date of acquisition. The fair value of purchased financial assets with credit deterioration was $ 380.8 million on the date of the acquisition. The gross contractual amounts receivable relating to the purchased financial assets with credit deterioration was $ 442.3 million. After the 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. ($ in thousands, except share information) Consideration May 3, 2024 Common stock of Summit Financial Group, Inc. 14,686,738 Exchange ratio 0.5043 Expected Burke & Herbert common stock to be issued 7,406,522 Actual Burke & Herbert common stock issued 7,405,772 Fractional common stock to be paid in cash 750 Actual Burke & Herbert common stock issued 7,405,772 Price per share of Burke & Herbert common stock issued $ 51.67 Purchase price consideration for common stock issued $ 382,656 Fractional common stock to be paid in cash 750 Average 10 day closing price used to pay fractional common stock $ 53.66 Cash paid for fractional shares $ 40 Implied value of stock appreciation rights ("SARs") and restricted stock units 4,336 Fair value of preferred stock issued by Burke & Herbert 10,413 Fully diluted transaction value 397,445 Goodwill $ 34,149 161 Table of Contents Note 25— Business Combination (continued) As Recorded Estimated Estimated by Summit Fair Value Fair Value ($ in thousands) May 3, 2024 Adjustments May 3, 2024 Total purchase price consideration $ 397,445 Recognized amounts of identifiable assets acquired and liabilities assumed Cash and equivalents $ 53,357 $ — $ 53,357 Securities, available-for-sale, at fair value 491,608 — 491,608 Securities, held-to-maturity, at amortized cost 93,573 ( 7,430 ) 86,143 Equity and other investments 36,085 — 36,085 Loans, gross 3,707,940 ( 153,306 ) 3,554,634 Allowance for credit losses ( 49,471 ) 25,991 ( 23,480 ) Loans, net of allowance 3,658,469 ( 127,315 ) 3,531,154 Premises and equipment, net 62,255 13,276 75,531 Accrued interest receivable 19,610 — 19,610 Company-owned life insurance 86,363 — 86,363 Goodwill and intangibles 73,144 ( 4,384 ) 68,760 Other assets 43,169 11,263 54,432 Total identifiable assets acquired 4,617,633 ( 114,590 ) 4,503,043 Deposits 3,704,072 ( 7,136 ) 3,696,936 Borrowings 283,398 — 283,398 Subordinated debentures and trust preferred securities 123,533 ( 16,466 ) 107,067 Unfunded reserve liability 6,692 ( 3,190 ) 3,502 Accrued interest and other liabilities 47,537 1,307 48,844 Total liabilities 4,165,232 ( 25,485 ) 4,139,747 Total identifiable net assets $ 452,401 $ ( 89,105 ) $ 363,296 Goodwill $ 34,149 162 Table of Contents Note 26— Goodwill and Other Intangible Assets 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 Beginning of period $ 32,783 $ — $ — Acquired goodwill — 32,783 — Goodwill adjustment 1,366 — — Impairment — — — End of period $ 34,149 $ 32,783 $ — During the year ended, December 31, 2024, the Company recorded $ 32.8 million of goodwill associated with the acquisition of Summit. See Note 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 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): December 31, 2025 December 31, 2024 December 31, 2023 Beginning of period $ 57,300 $ — $ — Acquired core deposit intangible — 68,760 — Amortization ( 15,553 ) ( 11,460 ) — Impairment — — — Total core deposit intangible $ 41,747 $ 57,300 $ — 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 $ 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): Estimated Amortization 2026 $ 13,097 2027 10,641 2028 8,186 2029 5,730 2030 3,274 Thereafter 819 Total $ 41,747 163 Table of Contents Note 27— Segment Information Accounting policies for segments are the same as those described in Note 1. Segment performance is evaluated using consolidated net income. The Company operates in one segment – Community Banking and the financial performance of this one segment is used to make resource allocations and performance decisions. The Company’s Chief Executive Officer is in charge of allocating the Company’s resources and assessing performance, and has been identified as the chief operating decision maker. While the chief decision-maker monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Individual operating results are not reviewed by senior management to make resource allocation or performance decisions. Therefore, all of the financial service operations are considered by management to be aggregated in one reportable operating segment. 164 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. 165 Table of Contents