Burke & Herbert Financial Services Corp. reported significant growth in its financial performance for the third quarter and the nine months ended September 30, 2024, largely attributed to its merger with Summit Financial Group, Inc., which was completed on May 3, 2024.

As of September 30, 2024, total assets surged to $7.86 billion, up from $3.62 billion at the end of 2023. Total deposits also increased dramatically to $6.60 billion, compared to $3.00 billion at December 31, 2023. The company’s net loans reached $5.51 billion, a substantial rise from $2.06 billion at the end of the previous fiscal year. This growth reflects the integration of Summit's loan portfolio, which contributed significantly to the overall increase.

Interest income for the three months ended September 30, 2024, was $118.53 million, a remarkable increase of 218% from $37.27 million in the same period of 2023. For the nine months, interest income rose to $253.37 million from $108.72 million year-over-year. Net interest income for the third quarter was $73.18 million, compared to $22.89 million in the prior year, while for the nine months, it reached $155.08 million, up from $71.46 million.

Despite the positive revenue growth, net income applicable to common shares for the three months ended September 30, 2024, was $27.40 million, a significant increase from $4.06 million in the same period of 2023. However, for the nine months, net income decreased to $15.92 million from $17.61 million, primarily due to merger-related expenses totaling $27.5 million and a one-time provision for credit losses associated with the merger.

Non-interest income also saw a substantial increase, reaching $10.62 million for the third quarter, up from $4.29 million in 2023, and $24.38 million for the nine months, compared to $13.13 million in the previous year. This growth was driven by higher service charges and fees, as well as gains from securities.

Total non-interest expenses for the three months ended September 30, 2024, were $50.83 million, a significant rise from $22.42 million in the same period of 2023, largely due to merger-related costs. The company’s effective tax rate for the nine months increased to 19.0% from 9.6% in the previous year.

The merger has also impacted the company’s capital structure, with total shareholders’ equity increasing to $738.06 million from $314.75 million at the end of 2023. The company remains well-capitalized, meeting all regulatory capital requirements as of September 30, 2024.

Overall, Burke & Herbert's strategic merger with Summit has positioned the company for substantial growth, reflected in its financial metrics, while also presenting challenges related to integration and increased expenses.