BUCHANAN, Va., July 31, 2025 /PRNewswire/ -- Buchanan -based Bank of Botetourt (OTCPK: BORT and BORTP) announced today its unaudited financial results for the three and six months-ended June 30, 2025. The Bank produced net income amounting to $3,168,000 or $1.55 per basic share in the second quarter. This amount compares to net income of $2,193,000 or $1.06 per share, for the same period last year. For the six months-ended the Bank produced net income amounting to $5,212,000 or $2.53 per basic share. This amount compares to a net income of $4,021,000 or $1.94 per share, for the same period last year.
At June 30, 2025, select financial information and key highlights include:
- Return on average assets of 1.20%
- Return on average equity of 12.26%
- Book value of $41.32
- Total deposit growth of 2.60%
- Total asset growth of 3.14%
- Total loan growth of 4.43%
- Community Bank Leverage Ratio of 10.42%
- Net Interest Margin of 3.70%
The Board of Directors voted to pay the 7.00% preferred dividend, which calculates to $0.49 per share on August 8, 2025, to preferred shareholders of record August 1, 2025. Furthermore, the Board of Directors voted to pay the $0.225 per share quarterly dividend, or $0.90 per share annualized, which is payable on August 18, 2025, to common shareholders of record August 11, 2025. President & CEO Michelle Austin stated, "It's an incredible honor to step into this role and lead an organization with such a strong legacy. I'm proud to report another quarter of solid earnings, a testament to the dedication of our team and the trust of our customers. As we continue delivering value to our shareholders, we remain deeply committed to serving our community because our success means little without the people and places that made it possible."
Results of Operations
Net income for the three months ended June 30, 2025, was $3,168,000 compared to $2,193,000 for the same period last year, representing an increase of $975,000 or 44.46%. Basic and diluted earnings per share increased $0.49 from $1.06 at June 30, 2024, to $1.55 at June 30, 2025. The increase in net income is primarily due to $1,759,000 more interest income, $300,000 more noninterest income, $25,000 less interest expense on deposits, offset by $640,000 more noninterest expense, and $259,000 more income tax expense.
For the three months ended June 30, 2025, the Bank recorded a provision for credit loss expense of $8,000 and a reserve for unfunded commitments of $(99,000), which is included in other expenses. This compares to $36,000 for the same period last year, representing a decrease of $28,000. The provision recorded during the quarter mainly reflected allocations necessitated by net loan growth and adjustments to historical loss factors to better represent expectations for future credit losses. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.18% at the end of the quarter, down two basis points from the prior quarter and unchanged from one year prior.
At June 30, 2025, net loans increased 4.43%. Interest and fees on loans at June 30, 2025, increased $1,759,000 over the same three-month period of 2024. Interest expense decreased by $25,000 from $3,855,000 at June 30, 2024, to $3,830,000 at June 30, 2025. The lower interest expense is a result of lower interest rates paid on the balances of interest-bearing deposits than for the same period of 2024 and a decrease of interest on borrowed funds.
Noninterest income increased by $300,000, or 22.51%, to $1,633,000 for the three months ended June 30, 2025, compared to $1,333,000 for same period of 2024. The increase is attributed to an increase in service charges on deposit accounts, income from title insurance subsidiaries, and an increase in gain on sale of mortgage loans.
Noninterest expense increased $640,000 from $4,934,000 at June 30, 2024, to $5,574,000 at June 30, 2025. The increase is primarily related to increases in salary and employee benefits, debit card expense, and core processing expenses.
Income tax expense for the three months ended June 30, 2025, was $827,000 compared to $568,000 one year prior. The increase in tax expense is due to more revenue for the quarter.
Financial Condition
At June 30, 2025, total assets amounted to $886,260,000, an increase of 3.14% above total assets at December 31, 2024 of $859,237,000, an increase of $27,023,000. Total net loans increased $29,747,000 or 4.43% from $671,590,000 at December 31, 2024, to $701,337,000 at June 30, 2025. Total deposits at December 31, 2024, amounted to $769,386,000, compared to $789,387,000 at June 30, 2025, an increase of 2.60% or $20,001,000.
Stockholders' equity totaled $87,788,000 at June 30, 2025, compared to $82,510,000 at December 31, 2024. The $5,278,000 increase during the period is net income for 2025, net proceeds from the issuance of common stock from the Dividend Reinvestment and Stock Purchase Plan, and a decrease in accumulated other comprehensive loss, partially offset by dividends paid.
Asset Quality
Bank of Botetourt's asset quality remained strong for the second quarter of 2025. Provision for credit losses for the second quarter of 2025 was $8,000 compared with $354,000 in the previous quarter and $36,000 in the same quarter of 2024.
The Bank had no foreclosed properties at December 31, 2024, and June 30, 2025, respectively. Therefore, non-performing assets only consisted of nonaccrual loans. Non-performing assets increased at June 30, 2025, from $51,000 at December 31, 2024 to $629,000 at June 30, 2025. The increase is attributable to the addition of three commercial and industrial loans. The commercial and industrial additions are collateralized by commercial vehicles and a blanket UCC on equipment. Three commercial and industrial loans totaling $584,000 were added to nonaccrual loans during the second quarter. The increase in nonaccrual loans is attributable to the new additions and the charge-off and payment activity of the aforementioned loans.
Net charge-offs during the second quarter of 2025 were $78,000 or four basis point annualized on total average loans outstanding. Net charge-offs for the second quarter of 2025 were comprised of charge-offs of $161,000, partially offset by recoveries of $84,000. Compared to December 31, 2024, net charge-offs decreased $119,000 or seven basis points annualized on total average loans outstanding.
Capital Ratios
Bank of Botetourt qualified for and adopted the optional, simplified measure of capital adequacy and, the community bank leverage ratio framework, consistent with Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. A qualifying community banking organization is defined as having less than $10 billion in total consolidated assets, a leverage ratio greater than 9%, off-balance sheet exposures of 25% or less of total consolidated assets, and trading assets and liabilities of 5% or less of total consolidated assets. It also cannot be an Advanced Approaches institution. Bank of Botetourt qualified to opt-in to the Community Bank Leverage Ratio ("CBLR"). As of June 30, 2025, Bank of Botetourt reported its CBLR ratio at 10.42% which meets the required regulatory minimum ratio. This compares to a CBLR ratio of 10.25% at December 31, 2024.
About Bank of Botetourt
Bank of Botetourt was chartered in 1899 and operates fourteen retail offices in Botetourt, Rockbridge, Roanoke, and Franklin counties, the City of Salem, Roanoke City, and the Towns of Vinton and Rocky Mount, all in Virginia. Bank of Botetourt also operates a mortgage division, Virginia Mountain Mortgage and a financial services division, Botetourt Wealth Management.
Bank of Botetourt | ||||
(unaudited) | (audited) | |||
June 30, | December 31, | |||
2025 | 2024 | |||
Assets | ||||
Cash and Due from banks | $ 14,862,000 | $ 12,390,000 | ||
Interest-bearing deposits with banks | 52,457,000 | 53,430,000 | ||
Federal funds sold | 784,000 | 936,000 | ||
Total cash and cash equivalents | 68,103,000 | 66,756,000 | ||
Debt securities held to maturity, net of allowance | 9,982,000 | 9,982,000 | ||
for credit losses of $18,000 at June 30, 2025 and | ||||
December 31, 2024, respectively | ||||
Debt securities available for sale | 67,103,000 | 73,159,000 | ||
Loans, net of allowance for credit losses of $8,350,000 at | 701,337,000 | 671,590,000 | ||
June 30, 2025 and $7,989,000 at December 31, 2024. | ||||
Loans held for sale | 1,360,000 | - | ||
Premises and fixed assets, net | 17,808,000 | 17,356,000 | ||
Investment in unconsolidated subsidiaries | 3,499,000 | 3,257,000 | ||
Other assets | 17,068,000 | 17,137,000 | ||
Total assets | $ 886,260,000 | $ 859,237,000 | ||
Liabilities and Stockholders' Equity | ||||
Liabilities | ||||
Noninterest-bearing deposits | $ 182,535,000 | $ 181,585,000 | ||
Interest-bearing deposits | 606,852,000 | 587,801,000 | ||
Total deposits | 789,387,000 | 769,386,000 | ||
Other liabilities | 9,085,000 | 7,341,000 | ||
Total liabilities | 798,472,000 | 776,727,000 | ||
Commitments and contingencies | - | - | ||
Stockholders' Equity | ||||
Preferred stock, $1.00 par value; 1,000,000 shares | ||||
authorized; 243,659 issued and outstanding | ||||
at June 30, 2025 and at December 31, 2024, respectively | 244,000 | 244,000 | ||
Common stock, $1.50 par value; 5,000,000 shares | ||||
authorized; 1,966,209 and 1,960,879 issued and | ||||
outstanding at June 30, 2025 and at December 31, 2024 | ||||
respectively | 2,949,000 | 2,941,000 | ||
Additional paid-in capital | 24,361,000 | 24,198,000 | ||
Retained earnings | 63,368,000 | 59,277,000 | ||
Accumulated other comprehensive loss | (3,134,000) | (4,150,000) | ||
Total stockholders' equity | 87,788,000 | 82,510,000 | ||
Total liabilities and stockholders' equity | $ 886,260,000 | $ 859,237,000 | ||
Bank of Botetourt | |||||||
Six Months Ended | Three Months Ended | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Interest income | |||||||
Loans and fees on loans | $ 21,304,000 | $ 17,756,000 | $ 10,861,000 | $ 9,102,000 | |||
Securities: | |||||||
U.S. Treasury and Government Agencies | 301,000 | 394,000 | 147,000 | 191,000 | |||
Mortgage-backed securities | 109,000 | 133,000 | 53,000 | 65,000 | |||
All other securities | 417,000 | 434,000 | 208,000 | 217,000 | |||
Due from depository institutions | 1,005,000 | 1,321,000 | 496,000 | 674,000 | |||
Federal funds sold | 17,000 | 9,000 | 9,000 | 4,000 | |||
Total Interest income | 23,153,000 | 20,047,000 | 11,774,000 | 10,253,000 | |||
Interest expense | |||||||
Deposits | 7,824,000 | 7,040,000 | 3,830,000 | 3,607,000 | |||
Other borrowings | - | 491,000 | - | 248,000 | |||
Total Interest expense | 7,824,000 | 7,531,000 | 3,830,000 | 3,855,000 | |||
Net Interest Income | 15,329,000 | 12,516,000 | 7,944,000 | 6,398,000 | |||
Provision for credit losses | 362,000 | 102,000 | 8,000 | 36,000 | |||
Net Interest Income after credit loss expense | 14,967,000 | 12,414,000 | 7,936,000 | 6,362,000 | |||
Noninterest income | |||||||
Service charges on deposit accounts | 634,000 | 612,000 | 319,000 | 335,000 | |||
Securities brokerage and annuities | 124,000 | 186,000 | 49,000 | 119,000 | |||
Other income, net of gains | 2,119,000 | 1,718,000 | 1,265,000 | 879,000 | |||
Total noninterest income | 2,877,000 | 2,516,000 | 1,633,000 | 1,333,000 | |||
Noninterest expense | |||||||
Salaries and employee benefits | 4,709,000 | 4,377,000 | 2,378,000 | 2,151,000 | |||
Premises and fixed assets expense | 1,187,000 | 970,000 | 567,000 | 479,000 | |||
Other expense | 5,380,000 | 4,523,000 | 2,629,000 | 2,304,000 | |||
Total noninterest expense | 11,276,000 | 9,870,000 | 5,574,000 | 4,934,000 | |||
Income before income taxes | 6,568,000 | 5,060,000 | 3,995,000 | 2,761,000 | |||
Income tax expense | 1,356,000 | 1,039,000 | 827,000 | 568,000 | |||
Net income | 5,212,000 | 4,021,000 | 3,168,000 | 2,193,000 | |||
Preferred stock dividends | 239,000 | 239,000 | 120,000 | 120,000 | |||
Net income available to common shareholders | $ 4,973,000 | $ 3,782,000 | $ 3,048,000 | $ 2,073,000 | |||
Basic earnings per share | $ 2.53 | $ 1.94 | $ 1.55 | $ 1.06 | |||
Diluted earnings per share | $ 2.53 | $ 1.94 | $ 1.55 | $ 1.06 | |||
Dividends declared per share | $ 0.45 | $ 0.40 | $ 0.225 | $ 0.20 | |||
Basic weighted average shares outstanding | 1,963,718 | 1,954,082 | 1,965,101 | 1,955,395 | |||
Diluted weighted average shares outstanding | 1,963,718 | 1,954,082 | 1,965,101 | 1,955,395 | |||
SOURCE Bank of Botetourt
