CHARLES TOWN, W.Va., Oct. 29, 2025 /PRNewswire/ -- Potomac Bancshares, Inc. (the "Company") (OTCID: PTBS), the bank holding company of Bank of Charles Town (the "Bank"), reported net income of $2.3 million, or $0.56 per basic and diluted common share, for the third quarter of 2025.
This reflects a 32% increase in net income and a $0.14 per share increase compared to the third quarter of 2024 when the Company reported net income of $1.8 million, or $0.42 per share.
For the nine months ending September 30, 2025, the Company reported net income of $6.6 million, or $1.59 per share. This marks an increase of $1.7 million, or 36%, compared to the same period in 2024 when net income was $4.9 million, or $1.17 per share.
Quarterly Financial Highlights
( in thousands, except per share data)
| | Q3 2025 | Q2 2025 | Q3 2024 |
| Net Income | $2,322 | $2,074 | $1,761 |
| EPS (basic and diluted) | $0.56 | $0.50 | $0.42 |
| ROA | 0.98 % | 0.91 % | 0.79 % |
| ROE | 11.62 % | 10.83 % | 9.92 % |
| | | | |
| Non-GAAP Measures: | | | |
| Adj. Net Income | $2,322 | $2,141 | $1,761 |
| Adj. EPS (basic and diluted) | $0.56 | $0.52 | $0.42 |
| Adj. ROA | 0.98 % | 0.94 % | 0.79 % |
| Adj. ROE | 11.62 % | 11.18 % | 9.92 % |
| Adj. Pre-Provision, Pre-Tax Earnings | $3,193 | $2,986 | $2,460 |
| Adj. Pre-Provision, Pre-Tax ROA | 1.35 % | 1.31 % | 1.12 % |
| Net Interest Margin | 3.54 % | 3.48 % | 3.24 % |
| Efficiency Ratio | 67.95 % | 68.19 % | 71.69 % |
Non-GAAP financial measures provide additional insight into the Company's core operating performance by excluding certain non-recurring items. See "Non-GAAP Financial Measures" and "Non-GAAP Reconciliations" for additional information and detailed calculations of adjustments.
"We are pleased with our strong third-quarter performance," said Alice Frazier, President and CEO of Potomac Bancshares. "Revenue growth, margin expansion, and disciplined expense management contributed to improved profitability. We continue to see strength in our commercial banking division and an opportunity to gain new clients as an SBA preferred lender."
Frazier continued, "Our tangible book value per share increased 11% year-over-year, while maintaining strong asset quality and capital levels. Looking ahead, we remain focused on expanding through our business lines and leveraging technology to enhance client experiences and operational efficiencies."
Third Quarter Highlights
Key highlights of the three-month period ending September 30, 2025, are as follows. Comparisons are to the three-month period ending June 30, 2025, unless otherwise stated:
- Net income increased 12%, and 32% year-over-year
- Return on assets was 0.98%
- Return on equity was 11.62%
- Deposit balances increased 5%, and 11% year-over-year
- Asset quality metrics remained strong with NPAs at 0.22% of total assets
- Tangible book value per share increased 11% year-over-year to $19.39
- Quarterly cash dividend on common stock remained $0.13 per share
Net Interest Income
Net interest income increased $430 thousand, or 6%, to $8.1 million for the third quarter of 2025, driven by growth in earning assets and a higher net interest margin. Total interest and dividend income rose $837 thousand, primarily due to a $765 thousand increase in interest income and fees on loans, reflecting a 20-basis point increase in loan yield to 5.63% and a $20.2 million increase in average balances. Interest expense increased $407 thousand, driven by an 8% rise in deposit costs from a 15-basis point increase in the cost of interest-bearing deposits. The total cost of funds was 1.94%, up 13 basis points from the prior quarter.
Noninterest Income
Noninterest income totaled $1.9 million for the third quarter of 2025, a $148 thousand, or 8%, increase from Q2 2025. The increase was primarily attributable to higher wealth and investment income, gains and fees on mortgage loan sales, and increased ATM and check card fee income.
Noninterest Expense
Noninterest expenses totaled $6.8 million for the third quarter, a $286 thousand, or 4%, increase from the second quarter of 2025. The increase was primarily driven by higher professional fees, trust-related expenses, and other operating costs.
Asset Quality
Overview
Asset quality remained strong during the third quarter. Loans past due greater than 30 days and still accruing interest were 0.09% of total loans as of September 30, 2025. Nonperforming assets as a percentage of total assets were 0.22%. Annualized net charge-offs as a percentage of total loans were 0.01%. The allowance for credit losses on loans totaled $7.5 million, or 1.03% of total loans.
Provision for Credit Losses
Provision for credit losses totaled $200 thousand for the third quarter of 2025 compared to $225 thousand in the second quarter of 2025 and $202 thousand for the third quarter of 2024. While there were no changes in the specific reserve component of the allowance for credit losses, the general reserve component increased during the third quarter of 2025.
Allowance for Credit Losses on Loans
The allowance for credit losses on loans totaled $7.5 million on September 30, 2025, $7.4 million on June 30, 2025, and $7.1 million on September 30, 2024. Net charge-offs totaled $13 thousand in the third quarter of 2025, $45 thousand in the second quarter of 2025, compared to net recoveries of $37 thousand in the third quarter of 2024. Charge-offs were comprised of deposit overdrafts.
The following table provides the changes in the allowance for credit losses on loans for the three-month periods ended:
(dollars in thousands)
| | Q3 2025 | Q2 2025 | Q3 2024 |
| Allowance for credit losses on loans, beginning | $7,359 | $7,180 | $6,881 |
| Net (charge-offs) recoveries | (13) | (46) | 37 |
| Provision for credit losses on loans | 159 | 225 | 179 |
| Allowance for credit losses on loans, ending | $7,505 | $7,359 | $7,097 |
Allowance for Credit Losses on Unfunded Commitments
The allowance for credit losses on unfunded commitments totaled $489 thousand on September 30, 2025, $448 thousand on June 30, 2025, and $361 thousand on September 30, 2024. The provision for credit losses on unfunded commitments totaled $40 thousand for the third quarter of 2025, compared to no provision for credit losses on unfunded commitments in the second quarter of 2025, and $23 thousand in the third quarter of 2024.
Balance Sheet
As of September 30, 2025, total assets were $962.0 million, an increase of $41.7 million, or 18% annualized, from June 30, 2025. As noted below, deposits reflect a short-term large deposit of $25 million which is included in cash.
Loans totaled $732.1 million, a decrease of $4.3 million, or 2% annualized, from the prior quarter. However, quarterly average loans rose to $735.9 million, up $20.2 million, or 11% annualized, from Q2 2025. The decrease in loans during the third quarter was attributable to loan payoffs that were slightly greater than prior periods. On a year-over-year basis, loans increased $45.5 million, or 7%.
Deposits grew to $833.4 million, an increase of $38.6 million, or 19% annualized, from June 30, 2025. The increase was primarily attributable to a large deposit in a client account that was short term in nature during the third quarter. Quarterly average deposits were $808.8 million, up $20.5 million, or 10% annualized, from the prior quarter. Compared to September 30, 2024, total deposits increased $83.7 million, or 11%.
Securities available for sale totaled $77.9 million, up $1.1 million from June 30, 2025, but down $4.2 million from a year ago. Net unrealized losses on the securities portfolio were $5.0 million, a decrease of $1.4 million from the prior quarter and $736 thousand decrease year-over-year.
Other borrowings totaled $32.0 million, compared to $31.8 million on June 30, 2025, and $34.5 million on September 30, 2024. This included $29.0 million borrowed from the Federal Home Loan Bank of Pittsburgh, with a weighted average fixed interest rate of 4.21% and maturities ranging from 2026 to 2028.
Shareholders' equity totaled $80.4 million, an increase of $2.9 million from June 30, 2025, and $7.9 million from September 30, 2024. These increases were primarily driven by growth in retained earnings, which rose $1.8 million quarter-over-quarter and $6.5 million year-over-year. Accumulated other comprehensive loss decreased $1.1 million from the prior quarter and $1.4 million from the prior year.
The following table provides capital ratios at the end of the period:
| | Q3 2025 | Q2 2025 | Q3 2024 |
| Total capital ratio (2) | 13.74 % | 13.50 % | 13.79 % |
| Tier 1 capital ratio (2) | 12.66 % | 12.43 % | 12.69 % |
| Common equity Tier 1 capital ratio (2) | 12.66 % | 12.43 % | 12.69 % |
| Leverage ratio (2) | 9.84 % | 9.91 % | 9.67 % |
| Tangible common equity to tangible assets (1)(3) | 8.35 % | 8.42 % | 8.32 % |
Shareholder Dividend
During the third quarter of 2025, the Company paid a quarterly cash dividend of $0.13 per common share, unchanged from the second quarter and up $0.01 per share, or 8%, from the first quarter of 2025.
Stock Repurchase Plan
On October 19, 2025, the Company's board of directors authorized a stock repurchase plan pursuant to which Potomac Bancshares, Inc. may repurchase up to the aggregate of 100,000 shares or $2.0 million of the Company's outstanding common stock.
Potomac Bancshares, Inc. intends to purchase shares periodically through privately negotiated transactions or in the open market. The Company's board of directors authorized the purchase plan to run through October 19, 2027, unless the entire amount authorized to be repurchased has been acquired before that date. Potomac Bancshares, Inc. intends to fund the repurchase plan with a combination of cash on hand and cash generated from ongoing operations.
There is no guarantee as to the exact number of, or value of, shares that will be repurchased by the Company, and Potomac Bancshares, Inc. may discontinue repurchases at any time that management determines additional repurchases are unwarranted. The timing and amount of share repurchases under the stock repurchase plan will depend on a number of factors, including Potomac Bancshares, Inc. stock price performance, ongoing capital planning considerations, and general market conditions.
Bank of Charles Town Announces New Name
On November 3, 2025, Bank of Charles Town will be renamed Potomac Bank. The transition not only reflects the Bank's significant growth and expanding regional presence across the Eastern Panhandle of West Virginia, Washington County, Maryland, and Northern Virginia, it also affirms the foresight of its Board of Directors who established and named its holding company Potomac Bancshares over 30 years ago.
The name Potomac Bank was chosen to symbolize the powerful connection shared among the diverse communities the bank serves, all united by the namesake Potomac River, which has shaped the region's geography, history, and prosperity. This transition is a natural progression that honors the bank's heritage and values while celebrating the shared connection that unites the bank's identity.
Non-GAAP Financial Measures
In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company uses certain non-GAAP financial measures that the Company's management believes provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. The non-GAAP financial measures presented in this document include adjusted net income, adjusted basic and diluted earnings per share, adjusted return on average assets, adjusted return on average equity, pre-provision pre-tax earnings, adjusted pre-provision pre-tax earnings, fully taxable equivalent interest income, the net interest margin, the efficiency ratio, tangible book value per share, and tangible common equity to tangible assets.
The Company believes certain non-GAAP financial measures enhance the understanding of its business, performance, and financial position. Non-GAAP financial measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure is included at the end of this release.
About Potomac Bancshares
Potomac Bancshares, Inc. (OTCID: PTBS) is the bank holding company of Bank of Charles Town, which was founded in 1871. The Bank also does business under the names BCT and The Community's Bank. The Bank conducts operations through its nine branch offices and two loan production offices. The Bank's offices are in Jefferson and Berkeley Counties (WV), Washington County (MD), and Loudoun and Stafford Counties (VA). The Bank offers commercial lines and term loans, residential and commercial construction loans, commercial real estate loans, agricultural loans, and government contractor loans. The Bank is also a Small Business Administration (SBA) Preferred Lender. The Residential Lending division offers secondary market and portfolio mortgage loans, one-time close construction to permanent loans, as well as home equity loans and lines of credit. For over 70 years, BCT Wealth Advisors has provided caring and personalized trust services, growing into a premier financial management, investments, and estate services provider. The Bank also provides convenient online and mobile banking for individuals, businesses, and local governments plus free access to over 55,000 ATMs through the Allpoint® network plus another approximately 675 free access ATMs through another partnership. BCT was voted WINNER in the LoudounNow 2025 Loudoun's Favorite readers' poll in four categories: Bank, Mortgage Company, Mortgage Broker, and Financial Planner. BCT was voted a "Best of the Best" winner in the 2024 Martinsburg Journal-News Readers' Choice Awards in three categories: Bank, Loan Services, and Financial Planning. In 2023, American Banker selected BCT as a "Top 200 Community Bank," an annual listing of the best performing banks in the United States with assets under $2 billion. The Bank was named a "Best Bank to Work For" by American Banker five of the last six years.
The Company's shares are quoted on the OTCID marketplace under the symbol "PTBS." For more information about Potomac Bancshares, Inc., and the Bank, please visit our website at www.mybct.bank.
Forward-Looking Statements
Certain statements made in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise are not statements of historical facts, such as statements about the Company's growth strategy and deployment of capital. Although the Company believes that its expectations with respect to such forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to, the following: (1) general economic conditions, especially in the communities and markets in which the Company conducts its business; (2) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in the Company's loan portfolio, and risk from concentrations in the Company's loan portfolio; (3) changes in the real estate market, including the value of collateral securing portions of the Company's loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers' performance and creditworthiness; (8) difficulty growing loan and deposit balances; (9) the Company's ability to effectively execute its business plan; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries, including changes in deposit insurance premiums; (11) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; and (14) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting the Company's operations. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise, except as required by applicable law.
Contacts
| Alice P. Frazier | M. Shane Bell |
| President and CEO | Executive Vice President and CFO |
| 304-728-2431 | 304-728-2434 |
| [email protected] | [email protected] |
| POTOMAC BANCSHARES, INC. | | | | | | | | | | |
| Performance Summary | | | | | | | | | | |
| (in thousands, except share and per share data) | | | | | | |||||
| (unaudited) | | | | | | | | | | |
| | | | | | | | | | | |
| | For the Three Months Ended | | For the Nine Months Ended | |||||||
| | | September 30, | | June 30, | | September 30, | | September 30, | | September 30, |
| | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 |
| Income Statement | | | | | | | | | | |
| Interest and dividend income: | | | | | | | | | | |
| Interest and fees on loans | | $ 10,447 | | $ 9,682 | | $ 8,984 | | $ 29,630 | | $ 25,571 |
| Taxable interest on securities | | 709 | | 710 | | 678 | | 2,134 | | 2,008 |
| Tax-exempt interest on securities | | 30 | | 28 | | 29 | | 87 | | 86 |
| Other interest and dividends | | 1,060 | | 989 | | 1,274 | | 2,723 | | 3,135 |
| Total interest and dividend income | | $ 12,246 | | $ 11,409 | | $ 10,965 | | $ 34,574 | | $ 30,800 |
| Interest expense: | | | | | | | | | | |
| Interest on deposits | | $ 3,717 | | $ 3,324 | | $ 3,648 | | $ 10,146 | | $ 10,098 |
| Interest on short term borrowings | | 1 | | 2 | | 7 | | 9 | | 20 |
| Interest on long term borrowings | | 312 | | 309 | | 217 | | 934 | | 351 |
| Interest on subordinated debt | | 152 | | 140 | | 140 | | 433 | | 420 |
| Total interest expense | | $ 4,182 | | $ 3,775 | | $ 4,012 | | $ 11,522 | | $ 10,889 |
| Net interest income | | $ 8,064 | | $ 7,634 | | $ 6,953 | | $ 23,052 | | $ 19,911 |
| Provision for credit losses | | 200 | | 225 | | 202 | | 675 | | 511 |
| Net interest income after provision for credit losses | | $ 7,864 | | $ 7,409 | | $ 6,751 | | $ 22,377 | | $ 19,400 |
| Noninterest Income: | | | | | | | | | | |
| Wealth and investments | | $ 525 | | $ 498 | | $ 514 | | $ 1,528 | | $ 1,364 |
| Service charges on deposit accounts | | 217 | | 225 | | 273 | | 702 | | 784 |
| Gains / fees on sale of mortgage loans | | 408 | | 351 | | 169 | | 1,006 | | 640 |
| ATM and check card fees | | 543 | | 518 | | 522 | | 1,536 | | 1,535 |
| Income from bank owned life insurance | | 102 | | 100 | | 98 | | 299 | | 311 |
| Net losses on sale of securities | | - | | - | | - | | - | | (386) |
| Net loss on disposal of premises & equipment | | (1) | | - | | (1) | | (3) | | (1) |
| Net gain(loss) on sale of SBA loans | | - | | - | | - | | - | | - |
| Other operating income | | 120 | | 74 | | 180 | | 441 | | 481 |
| Total noninterest income | | $ 1,914 | | $ 1,766 | | $ 1,755 | | $ 5,509 | | $ 4,728 |
| Noninterest expenses: | | | | | | | | | | |
| Salaries and employee benefits | | $ 3,732 | | $ 3,760 | | $ 3,322 | | $ 10,860 | | $ 9,565 |
| Occupancy | | 310 | | 310 | | 278 | | 964 | | 820 |
| Equipment | | 351 | | 344 | | 353 | | 1,071 | | 1,087 |
| Accounting, audit, and compliance | | 72 | | 70 | | 83 | | 211 | | 191 |
| Advertising and public relations | | 115 | | 112 | | 103 | | 345 | | 287 |
| Data processing | | 413 | | 453 | | 485 | | 1,318 | | 1,409 |
| FDIC assessment | | 111 | | 104 | | 99 | | 314 | | 287 |
| Other professional fees | | 208 | | 140 | | 206 | | 480 | | 462 |
| Trust professional fees | | 190 | | 144 | | 119 | | 505 | | 351 |
| Director and committee fees | | 93 | | 68 | | 75 | | 258 | | 256 |
| Legal fees | | 47 | | 23 | | 31 | | 103 | | 212 |
| Supplies | | 55 | | 66 | | 57 | | 200 | | 195 |
| Communications | | 119 | | 112 | | 99 | | 343 | | 300 |
| ATM and check card expense | | 269 | | 264 | | 247 | | 773 | | 760 |
| Other operating expenses | | 700 | | 529 | | 691 | | 1,740 | | 1,700 |
| Total noninterest expenses | | $ 6,785 | | $ 6,499 | | $ 6,248 | | $ 19,485 | | $ 17,882 |
| Income before income tax expense | | $ 2,993 | | $ 2,676 | | $ 2,258 | | $ 8,401 | | $ 6,246 |
| Income tax expense | | 671 | | 602 | | 497 | | 1,817 | | 1,389 |
| Net income | | $ 2,322 | | $ 2,074 | | $ 1,761 | | $ 6,584 | | $ 4,857 |
| POTOMAC BANCSHARES, INC. | | | | | | | | | | |
| Performance Summary | | | | | | | | | | |
| (in thousands, except share and per share data) | | | | | | | | | | |
| (unaudited) | | | | | | | | | | |
| | | | | | | | | | | |
| | | As of or For the Three Months Ended | | As of or For the Nine Months Ended | ||||||
| | | September 30, | | June 30, | | September 30, | | September 30, | | September 30, |
| | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 |
| Common Share and Per Common Share Data | | | | | | | | | | |
| Earnings per common share, basic | | $ 0.56 | | $ 0.50 | | $ 0.42 | | $ 1.59 | | $ 1.17 |
| Adjusted earnings per common share, basic (1) | | $ 0.56 | | $ 0.52 | | $ 0.42 | | $ 1.61 | | $ 1.25 |
| Weighted average shares, basic | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 |
| Earnings per common share, diluted | | $ 0.56 | | $ 0.50 | | $ 0.42 | | $ 1.59 | | $ 1.17 |
| Adjusted earnings per common share, diluted (1) | | $ 0.56 | | $ 0.52 | | $ 0.42 | | $ 1.61 | | $ 1.25 |
| Weighted average shares, diluted | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 |
| Shares outstanding at period end | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 |
| Tangible book value per share at period end (1) | | $ 19.39 | | $ 18.70 | | $ 17.49 | | $ 19.39 | | $ 17.49 |
| Cash dividends | | $ 0.13 | | $ 0.13 | | $ 0.12 | | $ 0.38 | | $ 0.34 |
| | | | | | | | | | | |
| Key Performance Ratios | | | | | | | | | | |
| Return on average assets | | 0.98 % | | 0.91 % | | 0.79 % | | 0.97 % | | 0.76 % |
| Adjusted return on average assets (1) | | 0.98 % | | 0.94 % | | 0.79 % | | 0.98 % | | 0.81 % |
| Return on average equity | | 11.62 % | | 10.83 % | | 9.92 % | | 11.44 % | | 9.45 % |
| Adjusted return on average equity (1) | | 11.62 % | | 11.18 % | | 9.92 % | | 11.56 % | | 10.04 % |
| Net interest margin (1) | | 3.54 % | | 3.48 % | | 3.24 % | | 3.51 % | | 3.23 % |
| Efficiency ratio (1) | | 67.95 % | | 68.19 % | | 71.69 % | | 67.87 % | | 71.40 % |
| | | | | | | | | | | |
| Average Balances | | | | | | | | | | |
| Average assets | | $ 936,572 | | $ 912,253 | | $ 884,167 | | $ 910,244 | | $ 852,667 |
| Average earning assets | | 905,307 | | 881,485 | | 853,386 | | 879,144 | | 822,962 |
| Average shareholders' equity | | 79,290 | | 76,808 | | 70,637 | | 76,947 | | 68,676 |
| | | | | | | | | | | |
| Asset Quality | | | | | | | | | | |
| Loan charge-offs | | $ 23 | | $ 58 | | $ 22 | | $ 103 | | $ 158 |
| Loan recoveries | | 10 | | 13 | | 59 | | 43 | | 128 |
| Net charge-offs | | 13 | | 45 | | (37) | | 60 | | 30 |
| Non-accrual loans | | 2,138 | | 2,245 | | 2,638 | | 2,138 | | 2,638 |
| Other real estate owned, net | | - | | - | | - | | - | | - |
| Nonperforming assets (5) | | 2,138 | | 2,245 | | 2,638 | | 2,138 | | 2,638 |
| Loans 30 to 89 days past due, accruing | | 694 | | 726 | | 60 | | 694 | | 60 |
| Loans over 90 days past due, accruing | | - | | 151 | | - | | - | | - |
| Special mention loans | | 15,635 | | 15,711 | | 14,055 | | 15,635 | | 14,055 |
| Substandard loans, accruing | | 1,125 | | 1,150 | | 1,463 | | 1,125 | | 1,463 |
| NPA/Total Assets | | 0.22 % | | 0.24 % | | 0.30 % | | 0.22 % | | 0.30 % |
| PD/Total Loans | | 0.09 % | | 0.10 % | | 0.01 % | | 0.09 % | | 0.01 % |
| | | | | | | | | | | |
| Capital Ratios (2) | | | | | | | | | | |
| Total capital | | $ 100,875 | | $ 99,097 | | $ 93,943 | | $ 100,875 | | $ 93,943 |
| Tier 1 capital | | 92,921 | | 91,290 | | 86,485 | | 92,921 | | 86,485 |
| Common equity tier 1 capital | | 92,921 | | 91,290 | | 86,485 | | 92,921 | | 86,485 |
| Total capital to risk-weighted assets | | 13.74 % | | 13.50 % | | 13.79 % | | 13.82 % | | 13.79 % |
| Tier 1 capital to risk weighted assets | | 12.66 % | | 12.43 % | | 12.69 % | | 12.73 % | | 12.69 % |
| Common equity Tier 1 capital to risk weighed assets | | 12.66 % | | 12.43 % | | 12.69 % | | 12.73 % | | 12.69 % |
| Leverage ratio | | 9.84 % | | 9.91 % | | 9.67 % | | 9.84 % | | 9.67 % |
| POTOMAC BANCSHARES, INC. | | | | | | | | | | |
| Performance Summary | | | | | | | | | | |
| (in thousands, except share and per share data) | | | | | | | | | | |
| (unaudited) | | | | | | | | | | |
| | | For the Period Ended | ||||||||
| | | September 30, | | June 30, | | March 31, | | December 31, | | September 30, |
| | | 2025 | | 2025 | | 2025 | | 2024 | | 2024 |
| Balance Sheet | | | | | | | | | | |
| Cash and due from banks | | $ 4,648 | | $ 4,638 | | $ 4,673 | | $ 5,143 | | $ 5,014 |
| Interest-bearing deposits in other financial institutions | | 115,174 | | 67,636 | | 66,844 | | 59,621 | | 67,337 |
| Cash and cash equivalents | | $ 119,822 | | $ 72,274 | | $ 71,517 | | $ 64,764 | | $ 72,351 |
| Securities available for sale, at fair value | | 77,935 | | 76,787 | | 76,763 | | 77,385 | | 82,146 |
| Equity securities, at fair value | | 278 | | 246 | | 243 | | 241 | | 223 |
| Restricted securities | | 1,932 | | 2,037 | | 2,023 | | 2,103 | | 2,328 |
| Loans held for sale | | 2,946 | | 5,682 | | 2,234 | | 1,506 | | 1,219 |
| Loans, net of allowance for credit losses | | 724,611 | | 729,065 | | 709,160 | | 697,132 | | 679,558 |
| Premises and equipment, net | | 8,164 | | 8,107 | | 8,240 | | 8,099 | | 7,832 |
| Accrued interest receivable | | 2,592 | | 2,439 | | 2,478 | | 2,283 | | 2,382 |
| Bank owned life insurance | | 14,275 | | 14,174 | | 14,074 | | 13,977 | | 13,878 |
| Other assets | | 9,456 | | 9,528 | | 8,851 | | 9,859 | | 9,414 |
| Total assets | | $ 962,011 | | $ 920,339 | | $ 895,583 | | $ 877,349 | | $ 871,331 |
| | | | | | | | | | | |
| Noninterest-bearing demand deposits | | $ 204,355 | | $ 176,708 | | $ 186,182 | | $ 171,681 | | $ 172,941 |
| Savings and interest-bearing demand deposits | | 629,062 | | 618,155 | | 586,200 | | 582,677 | | 576,809 |
| Total deposits | | $ 833,417 | | $ 794,863 | | $ 772,382 | | $ 754,358 | | $ 749,750 |
| Short term borrowings | | 3,013 | | 2,793 | | 3,052 | | 3,170 | | 3,503 |
| Long term borrowings | | 29,000 | | 29,000 | | 29,000 | | 31,000 | | 31,000 |
| Subordinated debt | | 10,000 | | 9,989 | | 9,973 | | 9,958 | | 9,942 |
| Accrued interest payable | | 1,037 | | 1,148 | | 987 | | 1,266 | | 1,041 |
| Other liabilities | | 5,185 | | 5,056 | | 4,140 | | 4,181 | | 3,586 |
| Total liabilities | | $ 881,652 | | $ 842,849 | | $ 819,534 | | $ 803,933 | | $ 798,822 |
| | | | | | | | | | | |
| Common stock | | $ 4,493 | | $ 4,493 | | $ 4,493 | | $ 4,493 | | $ 4,493 |
| Surplus | | 14,547 | | 14,547 | | 14,547 | | 14,547 | | 14,547 |
| Retained Earnings | | 68,815 | | 67,032 | | 65,497 | | 63,806 | | 62,331 |
| Accumulated other comprehensive (loss), net | | (4,002) | | (5,088) | | (4,994) | | (5,936) | | (5,368) |
| | | $ 83,853 | | $ 80,984 | | $ 79,543 | | $ 76,910 | | $ 76,003 |
| Less cost of shares acquired for the treasury | | (3,494) | | (3,494) | | (3,494) | | (3,494) | | (3,494) |
| Total shareholders' equity | | $ 80,359 | | $ 77,490 | | $ 76,049 | | $ 73,416 | | $ 72,509 |
| Total liabilities and shareholders' equity | | $ 962,011 | | $ 920,339 | | $ 895,583 | | $ 877,349 | | $ 871,331 |
| | | | | | | | | | | |
| Loan Data | | | | | | | | | | |
| Construction and land development | | $ 45,979 | | $ 46,882 | | $ 42,954 | | $ 39,404 | | $ 35,260 |
| Secured by farmland | | 7,594 | | 6,732 | | 6,707 | | 6,769 | | 6,820 |
| Secured by 1-4 family residential loans | | 256,973 | | 253,798 | | 250,436 | | 247,299 | | 244,125 |
| Other real estate loans | | 345,208 | | 355,690 | | 344,953 | | 345,904 | | 340,027 |
| Loans to farmers (except secured by real estate) | | 128 | | 118 | | 237 | | 190 | | 195 |
| Commercial and industrial loans (except those secured by real estate) | | 66,965 | | 63,763 | | 61,348 | | 54,205 | | 49,972 |
| Consumer installment loans | | 2,845 | | 2,860 | | 2,910 | | 2,910 | | 2,994 |
| Deposit overdraft | | 122 | | 103 | | 85 | | 518 | | 74 |
| All other loans | | 6,302 | | 6,478 | | 6,710 | | 6,910 | | 7,188 |
| Total loans | | $ 732,116 | | $ 736,424 | | $ 716,340 | | $ 704,109 | | $ 686,655 |
| Allowance for credit losses | | (7,505) | | (7,359) | | (7,180) | | (6,977) | | (7,097) |
| Loans, net | | $ 724,611 | | $ 729,065 | | $ 709,160 | | $ 697,132 | | $ 679,558 |
| POTOMAC BANCSHARES, INC. | | | | | | | | | | |
| Non-GAAP Reconciliations | | | | | | | | | | |
| (in thousands, except share and per share data) | | | | | | | | | | |
| (unaudited) | | | | | | | | | | |
| | | | | | | | | | | |
| | | As of or for the Three Months Ended | | As of or for the Nine Months Ended | ||||||
| | | September 30, | | June 30, | | September 30, | | September 30, | | September 30, |
| | | 2025 | | 2025 | | 2024 | | 2025 | | 2024 |
| Adjusted Net Income | | | | | | | | | | |
| Net income (GAAP) | | $ 2,322 | | $ 2,074 | | $ 1,761 | | $ 6,584 | | $ 4,857 |
| Add: Loss on sale of securities | | - | | - | | - | | - | | 386 |
| Add: Core system conversion expense | | - | | 85 | | - | | 85 | | - |
| Total adjustments | | $ - | | $ 85 | | $ - | | $ 85 | | $ 386 |
| Subtract: Tax effect of adjustment (4) | | - | | (18) | | - | | (18) | | (81) |
| Adjusted net income (non-GAAP) | | $ 2,322 | | $ 2,141 | | $ 1,761 | | $ 6,651 | | $ 5,162 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Adjusted Earnings Per Share, Basic | | | | | | | | | | |
| Weighted average shares, basic | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 |
| Basic earnings per share (GAAP) | | $ 0.56 | | $ 0.50 | | $ 0.42 | | $ 1.59 | | $ 1.17 |
| Adjusted earnings per share, basic (Non-GAAP) | | $ 0.56 | | $ 0.52 | | $ 0.42 | | $ 1.61 | | $ 1.25 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Adjusted Earnings Per Share, Diluted | | | | | | | | | | |
| Weighted average shares, diluted | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 |
| Diluted earnings per share (GAAP) | | $ 0.56 | | $ 0.50 | | $ 0.42 | | $ 1.59 | | $ 1.17 |
| Adjusted earnings per share, diluted (Non-GAAP) | | $ 0.56 | | $ 0.52 | | $ 0.42 | | $ 1.61 | | $ 1.25 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Adjusted Pre-Provision, Pre-tax earnings | | | | | | | | | | |
| Net interest income | | $ 8,064 | | $ 7,634 | | $ 6,953 | | $ 23,052 | | $ 19,911 |
| Total noninterest income | | 1,914 | | 1,766 | | 1,755 | | 5,509 | | 4,728 |
| Net revenue | | $ 9,978 | | $ 9,400 | | $ 8,708 | | $ 28,561 | | $ 24,639 |
| Total noninterest expense | | 6,785 | | 6,499 | | 6,248 | | 19,485 | | 17,882 |
| Pre-provision, pre-tax earnings | | $ 3,193 | | $ 2,901 | | $ 2,460 | | $ 9,076 | | $ 6,757 |
| Add: Loss on sale of securities | | - | | - | | - | | - | | 386 |
| Add: Core system conversion expense | | - | | 85 | | - | | 85 | | - |
| Adjusted pre-provision, pre-tax earnings | | $ 3,193 | | $ 2,986 | | $ 2,460 | | $ 9,161 | | $ 7,143 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Adjusted Performance Ratios | | | | | | | | | | |
| Average assets | | $ 936,572 | | $ 912,253 | | $ 884,167 | | $ 910,244 | | $ 852,667 |
| Return on average assets (GAAP) | | 0.98 % | | 0.91 % | | 0.79 % | | 0.97 % | | 0.76 % |
| Adjusted return on average assets (Non-GAAP) | | 0.98 % | | 0.94 % | | 0.79 % | | 0.98 % | | 0.81 % |
| | | | | | | | | | | |
| Average shareholders' equity | | $ 79,290 | | $ 76,808 | | $ 70,637 | | $ 76,947 | | $ 68,676 |
| Return on average equity (GAAP) | | 11.62 % | | 10.83 % | | 9.92 % | | 11.44 % | | 9.45 % |
| Adjusted return on average equity (Non-GAAP) | | 11.62 % | | 11.18 % | | 9.92 % | | 11.56 % | | 10.04 % |
| | | | | | | | | | | |
| Pre-provision, pre-tax return on average assets | | 1.35 % | | 1.28 % | | 1.12 % | | 1.33 % | | 1.06 % |
| Adjusted pre-provision, pre-tax return on average assets | | 1.35 % | | 1.31 % | | 1.12 % | | 1.35 % | | 1.12 % |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Net Interest Margin | | | | | | | | | | |
| Tax-equivalent net interest income | | $ 8,070 | | $ 7,640 | | $ 6,959 | | $ 23,070 | | $ 19,929 |
| Average earning assets | | 905,307 | | 881,485 | | 853,386 | | 879,144 | | 822,962 |
| Net interest margin | | 3.54 % | | 3.48 % | | 3.24 % | | 3.51 % | | 3.23 % |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Efficiency Ratio | | | | | | | | | | |
| Total noninterest expense | | $ 6,785 | | $ 6,499 | | $ 6,248 | | $ 19,485 | | $ 17,882 |
| Subtract: Core sytstem conversion expense | | - | | (85) | | - | | (85) | | - |
| Total noninterest expense subtotal | | $ 6,785 | | $ 6,414 | | $ 6,248 | | $ 19,400 | | $ 17,882 |
| Tax-equivalent net interest income | | $ 8,070 | | $ 7,640 | | $ 6,959 | | $ 23,070 | | $ 19,929 |
| Total noninterest income | | $ 1,914 | | $ 1,766 | | $ 1,755 | | $ 5,509 | | $ 4,728 |
| Add: Net losses on disposal of premises & equipment | | 1 | | - | | 1 | | 3 | | 1 |
| Add: Net losses on sale of investment securities, AFS | | - | | - | | - | | - | | 386 |
| Total noninterest income subtotal | | 1,915 | | 1,766 | | 1,756 | | 5,512 | | 5,115 |
| Subtotal | | $ 9,985 | | $ 9,406 | | $ 8,715 | | $ 28,582 | | $ 25,044 |
| | | | | | | | | | | |
| Efficiency ratio | | 67.95 % | | 68.19 % | | 71.69 % | | 67.87 % | | 71.40 % |
| | | | | | | | | | | |
| Tax-Equivalent Net Interest Income | | | | | | | | | | |
| GAAP measures: | | | | | | | | | | |
| Interest income - loans | | $ 10,447 | | $ 9,682 | | $ 8,984 | | $ 29,630 | | $ 25,571 |
| Interest income - investments taxable | | 709 | | 710 | | 678 | | 2,134 | | 2,008 |
| Interest income - investments tax exempt | | 30 | | 29 | | 29 | | 87 | | 86 |
| Interest income - other | | 1,060 | | 989 | | 1,274 | | 2,723 | | 3,135 |
| Interest expense - deposits | | (3,717) | | (3,324) | | (3,648) | | (10,146) | | (10,098) |
| Interest expense - short term borrowings | | (1) | | (2) | | (7) | | (9) | | (20) |
| Interest expense - long term borrowings | | (312) | | (309) | | (217) | | (934) | | (351) |
| Interest expense - subordinated debt | | (152) | | (141) | | (140) | | (433) | | (420) |
| Net interest income | | $ 8,064 | | $ 7,634 | | $ 6,953 | | $ 23,052 | | $ 19,911 |
| Non-GAAP measures: | | | | | | | | | | |
| Add: Tax benefit realized on non-taxable interest income - municipal securities (4) | | $ 6 | | $ 6 | | $ 6 | | $ 18 | | $ 18 |
| Tax benefit realized on non-taxable interest income | | $ 6 | | $ 6 | | $ 6 | | $ 18 | | $ 18 |
| Tax equivalent net interest income | | $ 8,070 | | $ 7,640 | | $ 6,959 | | $ 23,070 | | $ 19,929 |
| | | | | | | | | | | |
| Tangible Book Value Per Share | | | | | | | | | | |
| Tangible common equity | | $ 80,359 | | $ 77,490 | | $ 72,509 | | $ 80,359 | | $ 72,509 |
| Common shares outstanding, ending | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 | | 4,144,561 |
| Tangible book value per share | | $ 19.39 | | $ 18.70 | | $ 17.49 | | $ 19.39 | | $ 17.49 |
| |
| (1) Non-GAAP financial measures. See "Non-GAAP Financial Measures" and "Non-GAAP Reconciliations" for additional information and detailed calculations of adjustments. |
| (2) Capital ratios are for Bank of Charles Town. |
| (3) Capital ratios are for Potomac Bancshares, Inc. |
| (4) The tax rate utilized in calculating the tax benefit is 21% |
| (5) Nonperforming assets are comprised of nonaccrual loans and other real estate owned. |
SOURCE Potomac Bancshares, Inc.
