Burke & Herbert Financial Services Corp.BHRB

Burke & Herbert Financial Services Corp. Goodwill & Intangibles Disclosure

10-KFiled Feb 27, 20262 min read
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, 2025December 31, 2024December 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, 2025December 31, 2024December 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 
202710,641 
20288,186 
20295,730 
20303,274 
Thereafter819 
Total$41,747 
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About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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