Burke & Herbert Raises $100 Million in Subordinated Notes Offering

ALEXANDRIA, Va., Sept. 28, 2026 /CourierPR/ -- Burke & Herbert Financial Services Corp. has announced the successful pricing of a $100.0 million public offering of its 7.00% Fixed-to-Floating Rate Subordinated Notes due 2036. The price to the public for these notes is 100% of the principal amount. The notes will mature on October 1, 2036. Interest on the notes initially will accrue at a rate equal to 7.00% per annum from and including September 30, 2026, to, but excluding, October 1, 2031, payable semiannually in arrears. From and including October 1, 2031, to, but excluding, October 1, 2036, or the earlier redemption date, interest will accrue at a floating rate per annum equal to the Three-Month Term SOFR, or other applicable Benchmark rate, plus a spread of 222 basis points, payable quarterly in arrears.

The notes are intended to qualify as Tier 2 capital for regulatory purposes. The offering is expected to close on September 30, 2026, subject to the satisfaction of customary closing conditions. Beginning with the interest payment date of October 1, 2031, and on any interest payment date thereafter, the company may, at its option, redeem the notes, in whole or in part, at a redemption price equal to 100.00% of par, plus accrued and unpaid interest to but excluding the date of redemption. The company may also redeem the notes, in whole but not in part, at any time, including prior to October 1, 2031, upon the occurrence of certain specified events.

Keefe, Bruyette & Woods, A Stifel Company, acted as the sole book-running manager for the notes offering. The company intends to use the net proceeds from this offering, plus cash on hand, for the following purposes: (i) to repay $4.5 million aggregate principal amount of its outstanding 6.875% Subordinated Note, which matures on April 1, 2028 (the “2028 Note”); (ii) to repay $18.1 million aggregate principal amount of its outstanding 6.00% Fixed-to-Floating Rate Subordinated Notes, which currently bear interest at the Three-Month Term SOFR plus 590 basis points and mature on July 1, 2030 (the “July 2030 Notes”); (iii) to repay $20.0 million aggregate principal amount of its outstanding 5.00% Fixed-to-Floating Rate Subordinated Notes, which currently bear interest at the Three-Month Term SOFR plus 475 basis points and mature on October 1, 2030; (iv) to potentially repay all or part of its outstanding $75.0 million aggregate principal amount of 3.25% Fixed-to-Floating Rate Subordinated Notes, which currently bear interest at the fixed rate of 3.25% per year and mature on December 1, 2031; (v) to potentially redeem all or part of its outstanding $15.0 million aggregate liquidation preference of 2021 Preferred Stock, which has dividends payable in arrears, when, as and if authorized and declared by the board of directors of the company out of legally available funds, on a non-cumulative basis at the $10,000 per share purchase price, at an annual rate equal to 6.00%; and (vi) for general corporate purposes, including providing capital to the bank to support its growth.

A conditional notice of redemption was delivered to the holders of the company’s July 2030 Notes with respect to the redemption of all of the outstanding principal amount of such notes. The redemption of the company’s July 2030 Notes is contingent on this offering of the notes and the amount of proceeds resulting from this offering. A notice of prepayment was delivered to the holder of the 2028 Note but is not contingent on this offering of the notes.