Burke & Herbert Financial Services Corp. announced its financial results for the second quarter and first half of 2025, showcasing significant year-over-year growth in key financial metrics. For the second quarter ended June 30, 2025, net income applicable to common shares was $29.7 million, or $1.97 per diluted common share, an increase from $27.0 million, or $1.80 per diluted common share, in the first quarter of 2025.
The first half of 2025 saw net income applicable to common shares surge to $56.6 million, a dramatic increase from a net loss of $11.9 million in the prior-year period. Net interest income for the first half of 2025 increased by $65.3 million, or 79.8%, to $147.2 million. The tax-adjusted net interest margin expanded to 4.17% for the first half of 2025, up from 3.56% in the prior year, and the efficiency ratio improved significantly to 58.18% from 89.49%.
The company reported an increase in non-performing assets to $88.3 million at June 30, 2025, from $41.2 million at December 31, 2024, with the allowance for credit losses as a percentage of non-performing loans decreasing to 78.63% from 207.10%. Total deposits decreased by $124.3 million, primarily due to a $112.7 million reduction in brokered deposits, reflecting strategic funding management. Burke & Herbert maintained robust liquidity with $4.10 billion in unused borrowing capacity.
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