Burke & Herbert Financial Services Corp.

Previous wording

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on current beliefs, expectations, or assumptions regarding the future of the business, future plans and strategies, operational results, and other future conditions of the Company. All statements other than statements of historical fact included in this Form 10-Q regarding the prospects of our industry or our prospects, plans, financial position, or business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “plans,” “expects” or “does not expect,” “is expected,” “look forward to,” “budget,” “scheduled,” “estimates,” “forecasts,” “will continue,” “intends,” “the intent of,” “have the potential,” “anticipates,” “does not anticipate,” “believes,” “should,” “should not,” or variations of such words and phrases that indicate that certain actions, events, or results “may,” “could,” “would,” “might,” or “will,” “be taken,” “occur,” or “be achieved,” or the negative of these terms or variations of them or similar terms. Additionally, forward–looking statements speak only as of the date they are made; the Company does not assume any duty, does not undertake, and specifically disclaims any obligation to update such forward–looking statements, whether written or oral, that may be made from time to time, whether because of new information, future events, or otherwise, except as required by law. Furthermore, because forward–looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in or implied by such forward-looking statements because of a variety of factors, many of which are beyond the control of the Company. Further, factors identified herein are not necessarily all of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm the Company. Accordingly, you should consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company and not place undue reliance on forward-looking statements. The risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to, the following: the possibility that the anticipated benefits of the LNKB Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from (if any), the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company does business; costs or difficulties associated with newly developed or acquired operation…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on current beliefs, expectations, or assumptions regarding the future of the business, future plans and strategies, operational results, and other future conditions of the Company. All statements other than statements of historical fact included in this Form 10-Q regarding the prospects of our industry or our prospects, plans, financial position, or business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “plans,” “expects” or “does not expect,” “is expected,” “look forward to,” “budget,” “scheduled,” “estimates,” “forecasts,” “will continue,” “intends,” “the intent of,” “have the potential,” “anticipates,” “does not anticipate,” “believes,” “should,” “should not,” or variations of such words and phrases that indicate that certain actions, events, or results “may,” “could,” “would,” “might,” or “will,” “be taken,” “occur,” or “be achieved,” or the negative of these terms or variations of them or similar terms. Additionally, forward-looking statements speak only as of the date they are made; the Company does not assume any duty, does not undertake, and specifically disclaims any obligation to update such forward-looking statements, whether written or oral, that may be made from time to time, whether because of new information, future events, or otherwise, except as required by law. Furthermore, because forward-looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in or implied by such forward-looking statements because of a variety of factors, many of which are beyond the control of the Company. Further, factors identified herein are not necessarily all of the factors that could cause the Company’s actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm the Company. Accordingly, you should consider all of these risks, uncertainties and other factors carefully in evaluating all such forward-looking statements made by the Company and not place undue reliance on forward-looking statements. The risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements include, but are not limited to, the following: the possibility that the anticipated benefits of the LNKB Merger will not be realized when expected or at all, including as a result of the impact of, or problems arising from (if any), the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where the Company does business; costs or difficulties associated with newly developed or acquired operation…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The Bank’s operations are conducted from it’s over 105 branches and commercial loan offices across Delaware, Kentucky, Maryland, Virginia, West Virginia, and Pennsylvania. 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.

Current wording

The Bank’s operations are conducted from its more than 100 branches and commercial loan offices across Delaware, Kentucky, Maryland, Virginia, West Virginia, and Pennsylvania. 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.

Previous wording

As of June 30, 2026, we had total consolidated assets of $11.0 billion, gross loans of $8.0 billion, total deposits of $9.0 billion, and total shareholders’ equity of $1.2 billion. As of June 30, 2026, we had 1,051 full-time employees. None of our employees are covered by a collective bargaining agreement.

Current wording

As of September 30, 2026, we had total consolidated assets of $11.0 billion, gross loans of $8.1 billion, total deposits of $9.0 billion, and total shareholders’ equity of $1.2 billion. As of September 30, 2026, we had 1,030 full-time equivalent employees. None of our employees are covered by a collective bargaining agreement.

Previous wording

For acquisitions, we are required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their respective fair values. The difference between consideration and the net fair value of assets acquired is recorded as goodwill. Management uses significant estimates and assumptions to value such items, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values. The allowance for credit losses for PCD and PSL loans is recognized within acquisition accounting. The allowance for credit losses for non-PCD assets is recognized as provision for credit losses in the same reporting period as the acquisition. Fair value adjustments are amortized or accreted into the income statement over the estimated life of the acquired assets or assumed liabilities. The purchase date valuations and any subsequent adjustments determine the amount of goodwill recognized in connection with the acquisition. The use of different assumptions could produce significantly different valuation results, which could have material positive or negative effects on our results of operations. The carrying value of goodwill recorded must be reviewed for impairment on an annual basis, as well as on an interim basis if events or changes indicate that the asset might be impaired. An impairment loss must be recognized for any excess of carrying value over fair value of the goodwill.

Current wording

For acquisitions, we are required to record the assets acquired, including identified intangible assets such as core deposit intangibles, and the liabilities assumed at their respective fair values. The difference between consideration and the net fair value of assets acquired is recorded as goodwill. Management uses significant estimates and assumptions to value such items, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values. The allowance for credit losses for PCD and PSL loans is recognized within acquisition accounting. The allowance for credit losses for non-PCD and non-PSL assets is recognized as provision for credit losses in the same reporting period as the acquisition. Fair value adjustments are amortized or accreted into the income statement over the estimated life of the acquired assets or assumed liabilities. The purchase date valuations and any subsequent adjustments determine the amount of goodwill recognized in connection with the acquisition. The use of different assumptions could produce significantly different valuation results, which could have material positive or negative effects on our results of operations. The carrying value of goodwill recorded must be reviewed for impairment on an annual basis, as well as on an interim basis if events or changes indicate that the asset might be impaired. An impairment loss must be recognized for any excess of carrying value over fair value of the goodwill.

Previous wording

The Company is using a third-party developed model that produces an estimate of the allowance for credit losses as the lifetime expected credit losses of the loan portfolio. This model uses a remaining useful life or WARM method within defined contractual terms by federal call codes. The model forecasts charge-off rates by call codes using ordinary least squares (“OLS”) regression models that use macroeconomic variables to forecast the Company’s charge-off rates. These models are used to produce reasonable and supportable forecasts of charge-off rates. The macroeconomic variables utilized by the Company are sourced from third parties and include variables that meet defined criteria in forecasting credit losses for our loan portfolio. These variables include, but are not limited to such items as equity market conditions or interest rates, as well as to portfolio-specific indicators, such as those that pertain to the commercial real estate or to the residential loan portfolios. To review the integrity of the modeled output, Management validates, validates the specific loan and macroeconomic data inputs.

Current wording

The Company is using a third-party developed model that produces an estimate of the allowance for credit losses as the lifetime expected credit losses of the loan portfolio. This model uses a remaining useful life or WARM method within defined contractual terms by federal call codes. The model forecasts charge-off rates by call codes using ordinary least squares (“OLS”) regression models that use macroeconomic variables to forecast the Company’s charge-off rates. These models are used to produce reasonable and supportable forecasts of charge-off rates. The macroeconomic variables utilized by the Company are sourced from third parties and include variables that meet defined criteria in forecasting credit losses for our loan portfolio. These variables include, but are not limited to such items as equity market conditions or interest rates, as well as to portfolio-specific indicators, such as those that pertain to the commercial real estate or to the residential loan portfolios. To review the integrity of the modeled output, Management validates the specific loan and macroeconomic data inputs.

Previous wording

The Bank continues to monitor its commercial real estate portfolio by reviewing various credit risk and concentration reports. The Bank’s exposure to CRE at June 30, 2026, was $3.9 billion, or 48.7%, of its gross loan portfolio, not including owner-occupied commercial real estate and acquisition, construction & development. CRE as a percent of total assets at June 30, 2026, was 35.5%, not including owner-occupied CRE and acquisition, construction & development. Including owner-occupied CRE and acquisition, construction & development, total exposure was at $5.5 billion, or 68.8%, of our total gross loans and 50.1% of total assets at June 30, 2026.

Current wording

The Bank continues to monitor its commercial real estate portfolio by reviewing various credit risk and concentration reports. The Bank’s exposure to CRE at September 30, 2026, was $4.0 billion, or 50.2%, of its gross loan portfolio, not including owner-occupied commercial real estate and acquisition, construction & development. CRE as a percent of total assets at September 30, 2026, was 36.7%, not including owner-occupied CRE and acquisition, construction & development. Including owner-occupied CRE and acquisition, construction & development, total exposure was $5.7 billion, or 70.3%, of our total gross loans and 51.3% of total assets at September 30, 2026.

Previous wording

The Bank believes its underwriting and monitoring standards for commercial real estate loans are sufficient to evaluate its loan portfolio and keep it from incurring significant losses. The largest concentration of the Bank’s commercial real estate loans are in Virginia (approximately 39.2%), and the Bank does not have significant exposure to any economic areas of the country that are underperforming the national economy. Additionally, the Bank’s overall exposure to the “Office Building / Condo” collateral type is 16.6% of total commercial real estate loans, including owner-occupied commercial real estate and acquisition, construction & development. The Bank believes that the combined loan portfolio is well-diversified, generally seasoned, manageable, and will outperform the industry in terms of performance through the economic cycle; however, our underwriting, review, and monitoring cannot eliminate all of the risks related to these loans. For further discussion see Part II, Item 1A. “Risk Factors”.

Current wording

The Bank believes its underwriting and monitoring standards for commercial real estate loans are sufficient to evaluate its loan portfolio and keep it from incurring significant losses. The largest concentration of the Bank’s commercial real estate loans, including owner-occupied commercial real estate and acquisition, construction & development, is in Virginia (approximately 39.9%), and the Bank does not have significant exposure to any economic areas of the country that are underperforming the national economy. Additionally, the Bank’s overall exposure to the “Office Building / Condo” collateral type is 17.0% of total commercial real estate loans, including owner-occupied commercial real estate and acquisition, construction & development. The Bank believes that the combined loan portfolio is well-diversified, generally seasoned, manageable, and will outperform the industry in terms of performance through the economic cycle; however, our underwriting, review, and monitoring cannot eliminate all of the risks related to these loans. For further discussion see Part II, Item 1A. “Risk Factors”.

Previous wording

Management believes that the current sources of liquidity are adequate to meet the Company’s requirements and plans for continued growth. See Note 6 - Borrowed Funds and Note 10 - Commitments and Contingencies, in Notes to Consolidated

Current wording

Management believes that the current sources of liquidity are adequate to meet the Company’s requirements and plans for continued growth. See Note 6— Borrowed Funds and Note 10— Commitments and Contingencies, in Notes to Consolidated Financial Statements for additional information regarding outstanding balances of sources of liquidity and contractual commitments and obligations.

Previous wording

Applicable capital rules under the Basel III Framework require the Company and the Bank to maintain minimum Common Equity Tier 1 (“CET 1”), Tier 1, and Total Capital ratios, along with a capital conservation buffer, effectively resulting in new minimum capital ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET 1 capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and counter-cyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. The Basel III Framework also provide for a “counter-cyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank.

Current wording

Applicable capital rules under the Basel III Framework require the Company and the Bank to maintain minimum Common Equity Tier 1 (“CET 1”), Tier 1, and Total Capital ratios, along with a capital conservation buffer, effectively resulting in new minimum capital ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET 1 capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and counter-cyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases, and compensation based on the amount of the shortfall. The Basel III Framework also provides for a “counter-cyclical capital buffer” that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank.

Previous wording

As a result of the LNKB Merger, as of May 1, 2026, we have total consolidated assets of $11.0 billion, compared to $7.9 billion as of December 31, 2025. The increase in the size of our assets will lead to additional scrutiny from governmental authorities. Banks with $10 billion or more in total assets are, among other things: examined directly by the Consumer Financial Protection Bureau (the “CFPB”) with respect to various federal consumer financial laws; subject to reduced dividends on any holdings of Federal Reserve Bank of Richmond common stock; subject to limits on interchange fees pursuant to Section 920 of the Electronic Funds Transfer Act (known as the Durbin Amendment); no longer treated as a “small institution” for FDIC deposit insurance assessment purposes; and no longer eligible to elect to be subject to the Community Bank Leverage Ratio. Compliance with these additional ongoing requirements may necessitate additional personnel, the design and implementation of additional internal controls, and the incurrence of significant expenses, which could have a significant adverse effect on the Company’s financial condition or results of operations.

Current wording

As a result of the LNKB Merger, the Company’s total consolidated assets exceeded $10.0 billion. As of September 30, 2026, total consolidated assets were $11.0 billion, compared to $7.9 billion as of December 31, 2025. The increase in the size of our assets will lead to additional scrutiny from governmental authorities. Banks with $10 billion or more in total assets are, among other things: examined directly by the Consumer Financial Protection Bureau (the “CFPB”) with respect to various federal consumer financial laws; subject to reduced dividends on any holdings of Federal Reserve Bank of Richmond common stock; subject to certain enhanced prudential standards, including the proprietary trading and covered fund restrictions of the Volcker Rule; subject to limits on interchange fees pursuant to Section 920 of the Electronic Funds Transfer Act (known as the Durbin Amendment); no longer treated as a “small institution” for FDIC deposit insurance assessment purposes; and no longer eligible to elect to be subject to the Community Bank Leverage Ratio. Compliance with these additional ongoing requirements may necessitate additional personnel, the design and implementation of additional internal controls, and the incurrence of significant expenses, which could have a significant adverse effect on the Company’s financial condition or results of operations.

Previous wording

The following table contains selected historical consolidated financial data as of the dates and for the periods shown. The selected balance sheet data as of June 30, 2026, and June 30, 2025, and the selected income statement data for the three and six months ended June 30, 2026, and June 30, 2025, have been derived from our consolidated financial statements included elsewhere in this Form 10-Q and in other filings we have submitted with the SEC and should be read in conjunction with the other information contained in this Form 10-Q.

Current wording

The following table contains selected historical consolidated financial data as of the dates and for the periods shown. The selected balance sheet data as of September 30, 2026, and September 30, 2025, and the selected income statement data for the three and nine months ended September 30, 2026, and September 30, 2025, have been derived from our consolidated financial statements included elsewhere in this Form 10-Q and in other filings we have submitted with the SEC and should be read in conjunction with the other information contained in this Form 10-Q.

Previous wording

(2) Return on average common equity computed using total average common equity at period-end.

Current wording

(2) Return on average common equity computed using total average common equity for the period.

Previous wording

(4) The net interest margin represents fully taxable-equivalent net interest income as a percent of average interest-earning assets for the period.

Current wording

(4) The net interest margin represents fully taxable-equivalent net interest income as a percent of average interest-earning assets for the period. Net interest margin on a fully taxable-equivalent basis is a non-GAAP financial measure; see “Results of Operations for the Nine Months Ended September 30, 2026, and September 30, 2025-Net Interest Income and Net Interest Margin” and “Results of Operations for the Three Months Ended September 30, 2026, and September 30, 2025-Net Interest Income and Net Interest Margin” for a reconciliation of FTE net interest income to GAAP net interest income and FTE net interest income.

Previous wording

Net income applicable to common shares for the six months ended June 30, 2026, was $36.4 million, compared to net income applicable to common shares of $56.6 million during the six months ended June 30, 2025. The $20.3 million decrease in net income applicable to common shares was primarily the result of an increase in merger-related expenses for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

Net income applicable to common shares for the nine months ended September 30, 2026, was $72.5 million, compared to net income applicable to common shares of $86.4 million during the nine months ended September 30, 2025. The $13.8 million decrease in net income applicable to common shares was primarily the result of an increase in merger-related expenses, which totaled $42.9 million, for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

Net interest income increased by $17.7 million to $164.9 million for the six months ended June 30, 2026, compared to $147.2 million for the six months ended June 30, 2025. The main driver for this increase was the impact of the LNKB Merger which resulted in an increase in the balance of interest-earning assets, in excess of the increase in interest-bearing liabilities.

Current wording

Net interest income increased by $48.9 million to $269.9 million for the nine months ended September 30, 2026, compared to $221.0 million for the nine months ended September 30, 2025. The main driver for this increase was the impact of the LNKB Merger which resulted in an increase in the balance of interest-earning assets that exceeded the increase in interest-bearing liabilities.

Previous wording

Non-interest income increased by $3.8 million, or 16.6%, to $26.7 million for the six months ended June 30, 2026, compared to $22.9 million for the six months ended June 30, 2025. All categories of non-interest income increased except service charges and fees and net (losses) gains on securities for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increases in income from fiduciary and wealth management income was driven by the acquisition of Burke & Herbert Wealth Services, LLC, while increases in company-owned life insurance, bank debit and other card revenue and other non-interest income were driven by the LNKB Merger, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

Non-interest income increased by $6.9 million, or 20.1%, to $41.4 million for the nine months ended September 30, 2026, compared to $34.5 million for the nine months ended September 30, 2025. All categories of non-interest income increased except net gains on securities for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase in fiduciary and wealth management income was driven by the acquisition of Burke & Herbert Wealth Services, LLC, while increases in company-owned life insurance, service charges and fees, bank debit and other card revenue, and other non-interest income were driven by the LNKB Merger, for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

Non-interest expense increased by $45.9 million, or 46.4%, to $144.9 million for the six months ended June 30, 2026, compared to $99.0 million for the six months ended June 30, 2025. The increase was primarily due to the effect of the LNKB Merger and included higher legal, consulting, audit, investment banking, software contract terminations, and change-in-control salary and benefit payments for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

Non-interest expense increased by $72.3 million, or 49.2%, to $219.4 million for the nine months ended September 30, 2026, compared to $147.1 million for the nine months ended September 30, 2025. The increase was primarily due to the effect of the LNKB Merger and included higher legal, consulting, audit, investment banking, software contract terminations, and change-in-control salary and benefit payments for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

Net interest income totaled $164.9 million for the six months ended June 30, 2026, compared to $147.2 million for the six months ended June 30, 2025. The increase in net interest income was primarily driven by the LNKB Merger and results reflecting higher average balances of interest-earning assets in excess of the higher average balances of interest-bearing liabilities. Accretion income associated with acquired loans totaled $16.1 million for the six months ended June 30, 2026, compared to $23.0 million for the six months ended June 30, 2025. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $2.9 million for the six months ended June 30, 2026, compared to $3.6 million for the six months ended June 30, 2025.

Current wording

Net interest income totaled $269.9 million for the nine months ended September 30, 2026, compared to $221.0 million for the nine months ended September 30, 2025. The $48.9 million increase in net interest income was primarily driven by the LNKB Merger and results reflecting higher average balances of interest-earning assets in excess of the higher average balances of interest-bearing liabilities. Accretion income associated with acquired loans totaled $25.4 million for the nine months ended September 30, 2026, compared to $31.2 million for the nine months ended September 30, 2025. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $4.4 million for the nine months ended September 30, 2026, compared to $5.0 million for the nine months ended September 30, 2025.

Previous wording

The yield for the taxable loan portfolio was 6.58% for the six months ended June 30, 2026, compared to 6.93% for the six months ended June 30, 2025. The decrease was primarily the result of an increase in the balance of lower yielding loans due to the LNKB Merger, as well as lower accretion income for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Current wording

The yield for the taxable loan portfolio was 6.63% for the nine months ended September 30, 2026, compared to 6.87% for the nine months ended September 30, 2025. The decrease was primarily the result of an increase in the average balance of lower yielding taxable loans due to the LNKB Merger, as well as lower accretion income for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

The tax-adjusted yield on the total investment securities portfolio was 4.23% for the six months ended June 30, 2026, compared to 3.90% for the six months ended June 30, 2025. The increase was mainly due to higher yields through reinvestment in our securities portfolio as well as an increase in balances due to the LNKB Merger.

Current wording

The tax-adjusted yield on the total investment securities portfolio was 4.25% for the nine months ended September 30, 2026, compared to 3.89% for the nine months ended September 30, 2025. The increase was mainly due to higher yields through reinvestment in our securities portfolio as well as an increase in balances due to the LNKB Merger.

Previous wording

The rate on interest-bearing deposits decreased to 2.21% during the six months ended June 30, 2026, from 2.47% during the six months ended June 30, 2025. The decrease was primarily due to the LNKB Merger which resulted in an increase in lower rate deposits and decreases in interest rates across the different categories of deposit liabilities as well as decreases in market rates.

Current wording

The rate on interest-bearing deposits decreased to 2.27% during the nine months ended September 30, 2026, from 2.44% during the nine months ended September 30, 2025. The decrease was primarily due to the LNKB Merger which resulted in an increase in lower rate deposits and decreases in interest rates across the different categories of deposit liabilities.

Previous wording

The rate on our short-term borrowings for the six months ended June 30, 2026, was 3.70%, compared to 3.90% for the six months ended June 30, 2025. The decrease was due to decreases in the Federal Funds Rate and other short-term market rates and the addition of derivative swaps that decreased our cost of borrowing. The rate on our subordinated debt was 9.68% for the six months ended June 30, 2026, compared to 9.73% for the six months ended June 30, 2025.

Current wording

The rate on our short-term borrowings for the nine months ended September 30, 2026, was 3.65%, compared to 3.88% for the nine months ended September 30, 2025. The decrease was due to decreases in the Federal Funds Rate in the last quarter of 2025 and other short-term market rates and the addition of derivative swaps that decreased our cost of borrowing. The rate on our subordinated debt was 9.60% for the nine months ended September 30, 2026, compared to 9.65% for the nine months ended September 30, 2025.

Previous wording

The following table sets forth the major components of net interest income and the related yields and rates for the six months ended June 30, 2026, and June 30, 2025, for comparison (dollars in thousands).

Current wording

The following table sets forth the major components of net interest income and the related yields and rates for the nine months ended September 30, 2026, and September 30, 2025, for comparison (dollars in thousands).

Previous wording

(5)The interest rate spread represents the difference between the fully taxable-equivalent weighted-average yield on interest-earning assets and the weighted-average rate of interest-bearing liabilities for the period.

Current wording

(5)The interest rate spread represents the difference between the fully taxable-equivalent weighted-average yield on interest-earning assets and the weighted-average rate of interest-bearing liabilities for the period. Taxable-equivalent net interest income is a non-GAAP measure; see below for a reconciliation of FTE net interest income to GAAP net interest income.

Previous wording

(6)The net interest margin represents FTE net interest income as a percent of average interest-earning assets for the period.

Current wording

(6)The net interest margin represents FTE net interest income as a percent of average interest-earning assets for the period. Net interest margin on a fully taxable-equivalent basis is a non-GAAP financial measure; see below for a reconciliation of FTE net interest income to GAAP net interest income and FTE net interest margin.

Previous wording

Taxable-equivalent net interest margin, as presented above, is calculated by dividing FTE net interest income by total average earning assets. Net interest income, on an FTE basis, is a non-GAAP financial measure that the Company believes provides a more accurate picture of the interest margin for comparative purposes. Management believes FTE net interest income is a standard practice in the banking industry, and when net interest income is adjusted on an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income. FTE net interest income is calculated by adding the tax benefit on certain financial interest-earning assets, whose interest is tax-exempt, to total interest income then subtracting total interest expense. As a non-GAAP measure, FTE net interest income should not be considered as a substitute for the nearest comparable GAAP measure, net interest income. Net interest income shown elsewhere in this presentation is GAAP net interest income. The following table reconciles GAAP net interest income to FTE net interest income (in thousands).

Current wording

Taxable-equivalent net interest margin, as presented above, is calculated by dividing FTE net interest income by total average earning assets. Net interest income, on an FTE basis, is a non-GAAP financial measure that the Company believes provides a more accurate picture of the interest margin for comparative purposes. Management believes FTE net interest income is a standard practice in the banking industry, and when net interest income is adjusted on an FTE basis, yields on taxable, nontaxable, and partially taxable assets are comparable; however, the adjustment to an FTE basis has no impact on net income. FTE net interest income is calculated by adding the tax benefit on certain financial interest-earning assets, whose interest is tax-exempt, to total interest income then subtracting total interest expense. As a non-GAAP measure, FTE net interest income should not be considered as a substitute for the nearest comparable GAAP measure, net interest income. Net interest income shown elsewhere in this Form 10-Q is GAAP net interest income. The following table reconciles GAAP net interest income to FTE net interest income (in thousands).

Previous wording

The following table sets forth the dollar difference in interest earned and paid for each major category of interest-earning assets and interest-bearing liabilities for the noted periods and the amount of such change attributable to changes in average balances (volume) or changes in average interest rates. Interest income and interest expense for the six months ended June 30, 2026, and June 30, 2025, are annualized using actual days over calendar year method. Volume variances are equal to the increase or decrease in average balance multiplied by current period rates, and rate variances are equal to the increase or decrease in rate times prior period average balances. Variances attributable to both rate and volume changes are calculated by multiplying the change in rate by the change in average balance and are allocated to the volume variance. See table below (in thousands).

Current wording

The following table sets forth the dollar difference in interest earned and paid for each major category of interest-earning assets and interest-bearing liabilities for the noted periods and the amount of such change attributable to changes in average balances (volume) or changes in average interest rates. Interest income and interest expense for the nine months ended September 30, 2026, and September 30, 2025, are annualized using actual days over calendar year method. Volume variances are equal to the increase or decrease in average balance multiplied by current period rates, and rate variances are equal to the increase or decrease in rate times prior period average balances. Variances attributable to both rate and volume changes are calculated by multiplying the change in rate by the change in average balance and are allocated to the volume variance. See table below (in thousands).

Previous wording

Total interest income was $242.4 million for the six months ended June 30, 2026, compared to $222.6 million for the six months ended June 30, 2025, an increase of 8.9%. The increase in interest income was primarily due to the LNKB Merger and an increase in the balance of interest-earning assets, partially offset by a decrease in accretion income, when compared to the six months ended June 30, 2025. Interest income on loans increased by $11.0 million and interest income on securities increased $8.8 million, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to a higher volume of interest earning assets and higher reinvestment rates in our securities portfolio. Accretion income associated with acquired loans totaled $16.1 million for the six months ended June 30, 2026, compared to $23.0 million for the six months ended June 30, 2025.

Current wording

Total interest income was $397.2 million for the nine months ended September 30, 2026, compared to $333.9 million for the nine months ended September 30, 2025, an increase of 19.0%. The increase in interest income was primarily due to the LNKB Merger and an increase in the balance of interest-earning assets, and higher rates on securities, partially offset by lower accretion income and lower rates on loans, when compared to the nine months ended September 30, 2025. Interest income on loans increased by $50.0 million and interest income on securities increased $13.4 million, for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, primarily due to a higher volume of interest earning assets and higher reinvestment rates in our securities portfolio. Accretion income associated with acquired loans totaled $25.4 million for the nine months ended September 30, 2026, compared to $31.2 million for the nine months ended September 30, 2025.

Previous wording

Total interest expense was $77.6 million for the six months ended June 30, 2026, compared to $75.4 million for the six months ended June 30, 2025. The increase in interest expense was due to results that reflect an increase in interest-bearing liabilities due to the LNKB Merger, partially offset by lower rates on interest-bearing liabilities. Interest expense on interest-bearing deposits decreased by $544.0 thousand for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Interest on subordinated debt was $5.3 million for the six months ended June 30, 2026, compared to $5.5 million for the six months ended June 30, 2025. Interest expense on short-term borrowings totaled $10.5 million for the six months ended June 30, 2026, compared to $7.6 million for the six months ended June 30, 2025. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $2.9 million for the six months ended June 30, 2026, compared to $3.6 million for the six months ended June 30, 2025.

Current wording

Total interest expense was $127.3 million for the nine months ended September 30, 2026, compared to $112.9 million for the nine months ended September 30, 2025. The increase in interest expense was due to results that reflect an increase in interest-bearing liabilities due to the LNKB Merger, partially offset by lower rates on interest-bearing liabilities. Interest expense on interest-bearing deposits increased by $10.4 million for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase was primarily due to higher balances of interest-bearing deposits resulting from the LNKB Merger. Interest on subordinated debt was $8.9 million for the nine months ended September 30, 2026, compared to $8.2 million for the nine months ended September 30, 2025. Interest expense on short-term borrowings totaled $15.2 million for the nine months ended September 30, 2026, compared to $12.0 million for the nine months ended September 30, 2025 primarily due to higher average balances of short-term borrowings. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $4.4 million for the nine months ended September 30, 2026, compared to $5.0 million for the nine months ended September 30, 2025.

Previous wording

The provision for credit losses was $1.4 million for the six months ended June 30, 2026, which was a small increase compared to a provision of $1.1 million for the six months ended June 30, 2025. For the six months ended June 30, 2026, the provision for off-balance sheet credit exposures was $2.0 million, compared to a recovery of $492.0 thousand, compared to the six months ended June 30, 2025. See Note 4 - Allowance for Credit Losses in Notes to Consolidated Financial Statements for further information.

Current wording

September 30, 2025. See Note 4— Allowance for Credit Losses in Notes to Consolidated Financial Statements for further information.

Previous wording

Non-interest income increased 16.6% for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. All categories of non-interest income increased except service charges and fees and net (losses) gains on securities increased for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increases in income from company-owned life insurance, bank debit and other card revenue and other non-interest income were driven by the LNKB Merger, while the increase in fiduciary and wealth management income was driven by the acquisition of Burke & Herbert Wealth Services, LLC.

Current wording

Non-interest income increased 20.1% for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. All categories of non-interest income increased except net gains on securities for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increases in service charges and fees, income from company-owned life insurance, bank debit and other card revenue, and other non-interest income were driven by the LNKB Merger, while the increase in fiduciary and wealth management income was driven by the acquisition of Burke & Herbert Wealth Services, LLC.

Previous wording

The largest percentage increase included a $1.8 million increase in other non-interest income for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, driven by increases in the utilization of services and fees in other non-interest income categories. The $1.5 million increase in fiduciary and wealth management income was driven by the acquisition of Burke & Herbert Wealth Services, LLC and the corresponding increase in wealth and fiduciary services in connection with such acquisition for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Net (losses) gains on securities decreased $108.0 thousand, and was driven by an increase in sales in our AFS securities portfolio for the six months ended June 30, 2026, compared to the six months ended June 30, 2025.

Current wording

The largest dollar increase was a $2.3 million increase in other non-interest income for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, driven by increases in the utilization of services and fees in other non-interest income categories. The $2.1 million increase in fiduciary and wealth management income was driven by the acquisition of Burke & Herbert Wealth Services, LLC, organic growth in our wealth management business and increased portfolio performance for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. Net gains on securities decreased $231.0 thousand, primarily driven by lower gains recognized on sales in our AFS securities portfolio for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

Non-interest expense increased $45.9 million, or 46.4%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Increases were noted in every non-interest expense category and were driven by the effect of the LNKB Merger and merger expenses which included higher legal, consulting, audit, investment banking, software contract terminations, and change-in-control salary and benefit payments for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The largest dollar increase for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was $20.5 million for salaries and wages, mostly driven by change-in-control salary and benefit payments and a larger company-wide headcount due to the LNKB Merger. See Note 13 — Other Operating Expense in Notes to Consolidated Financial Statements for further information on “Other” non-interest expense.

Current wording

Non-interest expense increased $72.3 million, or 49.2%, for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. Increases were noted in every non-interest expense category and were driven by the effect of the LNKB Merger and merger expenses which included higher legal, consulting, audit, investment banking, software contract terminations, and change-in-control salary and benefit payments for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The largest dollar increase for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was $32.5 million for salaries and wages, mostly driven by change-in-control salary and benefit payments and a larger company-wide headcount due to the LNKB Merger. See Note 13 — Other Operating Expense in Notes to Consolidated Financial Statements for further information on “Other” non-interest expense.

Previous wording

Income tax expense was $8.5 million for the six months ended June 30, 2026, a decrease of $4.5 million from income tax expense for the six months ended June 30, 2025. The decrease was due to the decrease in income before income taxes for the six months ended June 30, 2026, when compared to the six months ended June 30, 2025. For the six months ended June 30, 2026, the effective tax rate was 18.7%, while the effective tax rate was 18.5% for June 30, 2025.

Current wording

Income tax expense was $16.6 million for the nine months ended September 30, 2026, a decrease of $3.3 million from income tax expense for the nine months ended September 30, 2025. The decrease was due to the decrease in income before income taxes for the nine months ended September 30, 2026, when compared to the nine months ended September 30, 2025. For the nine months ended September 30, 2026, the effective tax rate was 18.5%, while the effective tax rate was 18.7% for the nine months ended September 30, 2025.

Previous wording

Net income applicable to common shares for the three months ended June 30, 2026, was $9.3 million, compared to net income applicable to common shares of $29.7 million during the three months ended June 30, 2025. The $20.4 million decrease in net income applicable to common shares was primarily the result of an increase in merger-related expenses for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

Net income applicable to common shares for the three months ended September 30, 2026, was $36.2 million, compared to net income applicable to common shares of $29.7 million during the three months ended September 30, 2025. The $6.4 million increase in net income applicable to common shares was primarily the result of an increase in net interest income for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, including a full quarter impact of the LNKB Merger.

Previous wording

Net interest income increased by $18.8 million to $93.0 million for the three months ended June 30, 2026, compared to $74.2 million for the three months ended June 30, 2025. The main driver for this increase was the impact of the LNKB Merger which resulted in an increase in the balance of interest-earning assets, in excess of the increase in interest-bearing liabilities.

Current wording

Net interest income increased by $31.2 million to $105.0 million for the three months ended September 30, 2026, compared to $73.8 million for the three months ended September 30, 2025. The main driver for this increase was the impact of the LNKB Merger which resulted in an increase in the balance of interest-earning assets, in excess of the increase in interest-bearing liabilities.

Previous wording

Non-interest income increased by $1.0 million, or 7.5%, to $13.8 million for the three months ended June 30, 2026, compared to $12.9 million for the three months ended June 30, 2025. All categories of non-interest income increased except net (losses) gains on securities, primarily due to the impact of the LNKB Merger, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

Non-interest income increased by $3.1 million, or 27.1%, to $14.7 million for the three months ended September 30, 2026, compared to $11.6 million for the three months ended September 30, 2025. All categories of non-interest income increased except net gains on securities, primarily due to the impact of the LNKB Merger, for the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

Non-interest expense increased by $44.2 million, or 89.6%, to $93.5 million for the three months ended June 30, 2026, as compared to $49.3 million for the three months ended June 30, 2025. The increase was primarily due to the effect of the LNKB Merger and included higher legal, consulting, audit, investment banking, software contract terminations, and change-in-control salary and benefit payments for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

Non-interest expense increased by $26.4 million, or 54.9%, to $74.5 million for the three months ended September 30, 2026, as compared to $48.1 million for the three months ended September 30, 2025. The increase was primarily driven by higher operating expenses associated with the larger organization resulting from the LNKB Merger, as well as merger-related expenses incurred for the three months ended September 30, 2026, compared to the three months ended September 30, 2025.

Previous wording

Net interest income totaled $93.0 million for the three months ended June 30, 2026, compared to $74.2 million for the three months ended June 30, 2025. The increase in net interest income was primarily driven by the LNKB Merger and results reflect higher average balances of interest-earning assets in excess of the higher average balances of interest-bearing liabilities. Accretion income associated with acquired loans totaled $9.3 million for the three months ended June 30, 2026, compared to $11.5 million for the three months ended June 30, 2025. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $1.5 million for the three months ended June 30, 2026, compared to $1.4 million for the three months ended June 30, 2025.

Current wording

Net interest income totaled $105.0 million for the three months ended September 30, 2026, compared to $73.8 million for the three months ended September 30, 2025. The increase in net interest income was primarily driven by the LNKB Merger, which resulted in higher average balances of interest-earning assets that exceeded the increase in interest-bearing liabilities. Accretion income associated with acquired loans totaled $9.3 million for the three months ended September 30, 2026, compared to $8.2 million for the three months ended September 30, 2025. Amortization expense associated with fair value marks for time deposits, subordinated debt, and trust preferred securities totaled $1.5 million for the three months ended September 30, 2026, compared to $1.4 million for the three months ended September 30, 2025.

Previous wording

The tax-adjusted net interest margin was 4.15% for the three months ended June 30, 2026, compared to 4.17% for the three months ended June 30, 2025. The decrease in tax-adjusted net interest margin was primarily driven by the LNKB Merger and the acquisition of additional lower yielding loans which led to lower rates on interest-earning assets and lower accretion income when compared to the three months ended June 30, 2025.

Current wording

The tax-adjusted net interest margin was 4.21% for the three months ended September 30, 2026, compared to 4.08% for the three months ended September 30, 2025. The increase in tax-adjusted net interest margin was primarily driven by the LNKB Merger and growth in average interest-earning assets that outpaced interest-bearing liabilities. While loan yields experienced downward pressure, overall earning asset yields improved due to an optimized asset mix and higher relative yields within the securities portfolio, which combined with reduced funding costs to expand the net interest spread when compared to the three months ended September 30, 2025.