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Potomac Bancshares Inc

POTOMAC BANCSHARES REPORTS 30% INCREASE IN 2025 FIRST QUARTER EARNINGS OVER PRIOR YEAR

CHARLES TOWN, W.Va. , April 28, 2025 /PRNewswire/ -- Potomac Bancshares, Inc. (the "Company") (OTCPK: PTBS), the bank holding company of Bank of Charles Town (the "Bank" or "BCT"), also known as The Community's Bank, reported net income of $2.2 million and basic and diluted earnings per common share of $0.53 for the first quarter of 2025.  Net income increased $512 thousand, or 30%, and basic and diluted earnings per share increased by $0.13 compared to net income of $1.7 million and basic and diluted earnings per common share of $0.40 for the first quarter of 2024.

Three Months Ended


March 31,
2025

December 31,
2024

March 31,
2024

Net income

$2,188

$1,972

$1,676

Basic and diluted earnings per share

$0.53

$0.48

$0.40

Return on average assets

1.01 %

0.89 %

0.81 %

Return on average equity

11.88 %

10.81 %

10.00 %





Non-GAAP Measures:




Adjusted net income

$2,188

$2,286

$1,676

Adjusted basic and diluted earnings per share

$0.53

$0.55

$0.40

Adjusted return on average assets

1.01 %

1.04 %

0.81 %

Adjusted return on average equity

11.88 %

12.53 %

10.00 %

Adjusted pre-provision, pre-tax earnings

$2,982

$2,951

$2,344

Adjusted pre-provision, pre-tax return on average
assets

1.37 %

1.34 %

1.13 %

Net interest margin

3.51 %

3.37 %

3.20 %

Efficiency ratio

67.47 %

67.98 %

70.67 %

Note: see "Non-GAAP Financial Measures" and "Non-GAAP Reconciliations" for additional information and detailed calculations of adjustments.

"We are pleased to report an outstanding start to the year with continued growth and improved profitability, resulting in a 30% increase in net income for the first quarter of 2025 compared to 2024," stated Alice P. Frazier, President and CEO. "Our strategic initiatives continue to deliver improved profitability and growth of both the loan and deposit portfolios. During the first quarter, the team's disciplined approach to loan and deposit pricing and expense management resulted in an expanded net interest margin and flat noninterest expense. I am thankful for the efforts of our dedicated team who are responsible for the profitable growth and overall success of the Company through their commitment to our clients and communities we serve."

FOURTH QUARTER HIGHLIGHTS

Key highlights of the three-month period ending March 31, 2025, are as follows. Comparisons are to the three-month period ending December 31, 2024, unless otherwise stated:

  • Return on assets and return on equity of 1.01% and 11.88%, respectively
  • Net interest margin(1) improved 14 basis points to 3.51%
  • Loan balances increased by 7%, annualized
  • Deposit balances increased by 10%, annualized
  • Tangible book value per share(1) increased 14%, annualized, to $18.35
  • Loan production office relocated in northern Virginia with capacity for growth

LOAN PRODUCTION OFFICE RELOCATED WITH CAPACITY FOR GROWTH

In support of the Company's strategic plan, which includes market expansion and continued growth, the Bank celebrated the grand opening of a new lending office in Ashburn, Virginia, located within Loudoun County, in March 2025. The new office houses professional bankers who offer both commercial loans and residential real estate loans. These employees formerly reported to an office in Leesburg, Virginia, which is also in Loudoun County. The new Ashburn office provides capacity for growth.

NET INTEREST INCOME

Net interest income increased $190 thousand, or 3%, to $7.4 million for the first quarter of 2025 compared to the fourth quarter of 2024. Total interest and dividend income increased by $27 thousand and total interest expense decreased by $163 thousand. The net interest margin(1) increased to 3.51%, which was up 14-basis points from 3.37% for the fourth quarter of 2024.

Total interest and dividend income increased $27 thousand and was attributable to a $214 thousand increase in interest income and fees on loans and a $68 thousand increase in interest income on securities, which was partially offset by a $255 thousand decrease in interest income on deposits in other financial institutions. The increase in interest and fees on loans was attributable to a 6-basis point increase in the yield and a $21.6 million increase in average balances and the increase in interest on securities was primarily attributable to a 52-basis point increase in yield. The decrease in interest income on deposits in other financial institutions was attributable to a $15.4 million decrease in average balances and a 40-basis point decrease in yield. The yield on total earning assets increased to 5.21% from 5.12% in the fourth quarter of 2024.

Total interest expense decreased $163 thousand and was primarily attributable to a $133 thousand, or 4%, decrease in interest expense on deposits and a $27 thousand decrease in interest expense on long term borrowings. The decrease in interest expense on deposits resulted from a 2-basis point decrease in the cost of deposits, which was partially offset by a $3.6 million increase in average balances. The decrease in interest expense on long term borrowings was primarily attributable to a lower average balance of other borrowings in the first quarter compared to the fourth quarter of 2024. The total cost of funds was 1.79% for the first quarter, which was a 5-basis point decrease compared to the fourth quarter of 2024.

NONINTEREST INCOME

Noninterest income totaled $1.8 million for the first quarter, which was a $159 thousand, or 10%, increase over the fourth quarter of 2024. Excluding net losses on sales of securities from the fourth quarter of 2024, total noninterest income would have decreased in the first quarter by $238 thousand, or 12%, primarily from a $79 thousand decrease in wealth and investment income and a $108 thousand decrease in secondary market mortgage income. Secondary market mortgage income decreased from lower demand for mortgage loans, while wealth and investment income decreased from lower estate fee income.

Net losses on the sale of securities available for sale totaled $397 thousand during the fourth quarter of 2024, which resulted from repositioning the investment portfolio by selling lower yielding securities and reinvesting the proceeds in higher yielding securities. The sales and reinvestment of securities decreased the risk of lower earnings in falling interest rate environments and increased interest income on securities in the first quarter of 2025.

NONINTEREST EXPENSE

Noninterest expenses totaled $6.2 million for the first quarter, which was a $79 thousand, or 1%, decrease from the fourth quarter of 2024. The decrease was primarily attributable to a $59 thousand decrease in salaries and employee benefits, a $53 thousand decrease in other professional fees, and a $48 thousand decrease in other operating expenses. The decreases were partially offset by a $36 thousand increase in occupancy expense, a $24 thousand increase in equipment expense, and a $24 thousand increase in printing, stationery, and supplies expense.

ASSET QUALITY

Overview

Asset quality remained stable during the fourth quarter. Loans that were past due greater than 30 days and still accruing interest as a percentage of total loans were 0.07% on March 31, 2025, 0.07% on December 31, 2024, and 0.01% on March 31, 2024. Nonperforming assets as a percentage of total assets were 0.25% on March 31, 2025, 0.31% on December 31, 2024, and 0.32% on March 31, 2024. Annualized net charge-offs as a percentage of total loans were 0.00% for the first quarter of 2025, 0.04% for the fourth quarter of 2024, and 0.01% for the first quarter of 2024. The allowance for credit losses on loans totaled $7.2 million, or 1.00% of total loans on March 31, 2025, $7.0 million, or 0.99% of total loans on December 31, 2024, and $6.8 million, or 1.04% of total loans on March 31, 2024.

Provision for Credit Losses

Provision for credit losses totaled $250 thousand for the first quarter of 2025 compared to no provision for credit losses in the fourth quarter of 2024 and $180 thousand for the first 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 first quarter of 2025 from the impact of loan growth and changes to certain qualitative factors of the general reserve. Qualitative factors related to economic conditions and the operating environment were downgraded, while qualitative factors related to management experience and asset quality were upgraded.

Allowance for Credit Losses on Loans

The allowance for credit losses on loans totaled $7.2 million on March 31, 2025, $7.0 million on December 31, 2024, and $6.8 million on March 31, 2024. There was an increase in the general reserve component of the allowance during the first quarter of 2025. Net charge-offs totaled $1 thousand in the first quarter and were comprised primarily of commercial and industrial loans.

The following table provides the changes in the allowance for credit losses on loans for the three-month periods ended (dollars in thousands):

Three Months Ended


March 31,
2025

December 31,
2024

March 31,
2024

Allowance for credit losses on loans, beginning of
period

$6,977

$7,097

$6,673

Net (charge-offs) recoveries

(1)

(79)

(21)

Provision for (recovery of) credit losses on loans

204

(41)

180

Allowance for credit losses on loans, end of period

$7,180

$6,977

$6,832

The allowance for credit losses on loans as a percentage of total loans totaled 1.00% on March 31, 2025, 0.99% on December 31, 2024, and 1.04% on March 31, 2024.

Allowance for Credit Losses on Unfunded Commitments

The allowance for credit losses on unfunded commitments totaled $448 thousand on March 31, 2025, $402 thousand on December 31, 2024, and $304 thousand on March 31, 2024. There was a $46 thousand provision for credit losses on unfunded commitments in the first quarter of 2025, $41 thousand provision for credit losses on unfunded commitments in the fourth quarter of 2024, and no provision for credit losses on unfunded commitments in the first quarter 2024.

BALANCE SHEET

Assets totaled $895.6 million on March 31, 2025, which was an increase of $18.2 million, or 8% (annualized), from December 31, 2024, and a $40.6 million, or 5%, increase from March 31, 2024. The increase in total assets from the fourth quarter of 2024 was primarily due to a $12.0 million increase in loans, net of allowance for credit losses and a $7.2 million increase in interest-bearing deposits in other banks. Total assets increased from March 31, 2024, primarily from a $60.4 million, or 9%, increase in loans, net of the allowance for credit losses, which was partially offset by a $16.0 million decrease in the interest-bearing deposits in other financial institutions and an $8.0 million decrease in securities available for sale.

Loans totaled $716.3 million on March 31, 2025, an increase of $12.2 million, or 7% (annualized), from $704.1 million on December 31, 2024. Quarterly average loans totaled $711.8 million, an increase of $21.5 million, or 12% (annualized), from the fourth quarter of 2024. On March 31, 2025, loans increased $60.7 million, or 9%, from one year ago, and quarterly average loans increased $59.2 million, or 9%, when comparing the first quarter of 2025 to the first quarter of 2024.

Securities available for sale totaled $76.8 million on March 31, 2025, a decrease of $622 thousand from December 31, 2024, and a decrease of $8.0 million from March 31, 2024. On March 31, 2025, net unrealized losses on the securities portfolio totaled $6.4 million, which was a $1.3 million decrease from December 31, 2024, and a $2.8 million decrease from March 31, 2024.

Deposits totaled $772.4 million on March 31, 2025, an increase of $18.0 million, or 10% (annualized), from December 31, 2024. Quarterly average deposits increased from the fourth quarter of 2024 by $3.6 million. Total deposits increased $9.5 million, or 1%, from March 31, 2024, and quarterly average deposits for the first quarter of 2025 increased $18.9 million from the first quarter of 2024.

Other borrowings totaled $32.1 million on March 31, 2025, compared to $34.2 million on December 31, 2024. On March 31, 2025, other borrowings included $29.0 million of funds borrowed from the Federal Home Loan Bank of Pittsburgh and had a weighted average fixed interest rate of 4.21% with maturity dates on advances ranging from 2026 to 2028.

Shareholders' equity totaled $76.0 million on March 31, 2025, which was a $2.6 million increase from December 31, 2024, and an $8.3 million increase from March 31, 2024. The increases in shareholders' equity were attributable to increases in retained earnings and decreases in accumulated other comprehensive loss. Retained earnings increased $1.7 million from December 31, 2024, and $5.4 million from March 31, 2024. Accumulated other comprehensive loss decreased $942 thousand from December 31, 2024, and $2.9 million from March 31, 2024.

The following table provides capital ratios at the end of the period:

Three Months Ended


March 31,
2025

December 31,
2024

March 31,
2024

Total capital ratio(2)

13.61 %

13.57 %

13.97 %

Tier 1 capital ratio(2)

12.55 %

12.52 %

12.88 %

Common equity Tier 1 capital ratio(2)                          

12.55 %

12.52 %

12.88 %

Leverage ratio(2)                       

10.06 %

9.92 %

9.98 %

Tangible common equity to tangible assets(1)(3)

8.49 %

8.37 %

7.92 %

During the first quarter of 2025, the Company declared and paid cash dividends of $0.12 per common share, which was consistent with the dividend paid in the fourth quarter of 2024, and a 20% increase from $0.10 per share paid in the first quarter of 2024.

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, INC.

Potomac Bancshares, Inc. (OTCPK: 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 2024 Loudoun's Favorite readers' poll in four categories: Bank, Mortgage Company, Banker, 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 OTC Pink Sheet 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 5 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.

POTOMAC BANCSHARES, INC.

Performance Summary

(in thousands, except share and per share data)

(unaudited)












For the Quarter Ended


March 31,


Dec 31,


Sep 30,


June 30,


March 31,


2025


2024


2024


2024


2024

Income Statement










Interest and fees on loans 

$     9,501


$    9,287


$    8,985


$    8,361


$     8,225

Taxable interest on securities

715


647


678


695


635

Tax-exempt interest on securities

29


29


29


29


28

Other interest and dividends 

674


929


1,273


1,003


859

Total interest and dividend income 

$   10,919


$  10,892


$  10,965


$  10,088


$     9,747











Interest on deposits 

$     3,105


$    3,238


$    3,648


$    3,308


$     3,142

Interest on short term borrowings

6


9


7


7


6

Interest on long term borrowings

313


340


217


67


67

Interest on subordinated debt

141


141


140


140


140

Total interest expense 

$     3,565


$    3,728


$    4,012


$    3,522


$     3,355

Net interest income 

$     7,354


$    7,164


$    6,953


$    6,566


$     6,392

Provision for credit losses

250


-


202


129


180

Net interest income after provision for
credit losses                     

$     7,104


$    7,164


$    6,751


$    6,437


$     6,212











Wealth and investments

$        505


$       584


$       515


$       431


$        419

Service charges on deposit accounts 

260


273


273


265


246

Secondary market mortgage income

247


355


169


274


196

Interchange fees

475


530


522


521


493

Income from bank owned life insurance

97


99


98


97


116

Net losses on sale of securities

-


(397)


-


(386)


-

Other operating income 

245


226


178


157


144

Total noninterest income 

$     1,829


$    1,670


$    1,755


$    1,359


$     1,614











Salaries and employee benefits 

$     3,368


$    3,427


$    3,333


$    3,228


$     3,015

Occupancy 

344


308


278


266


276

Equipment 

376


352


353


367


368

Accounting, audit, and compliance

69


70


83


44


65

Advertising and public relations

118


104


103


116


68

Computer services and online banking

406


385


393


436


426

FDIC assessment 

99


100


99


94


94

Other professional fees

132


185


206


146


110

Trust professional fees

171


203


119


123


108

Director fees

97


100


75


88


93

Legal fees

33


34


31


117


65

Printing, stationery, and supplies

79


55


57


62


76

Communications 

112


114


99


99


102

ATM and check card expense

240


238


247


263


249

Other operating expenses 

557


605


772


523


547

Total noninterest expenses 

$     6,201


$    6,280


$    6,248


$    5,972


$     5,662

Income before income tax expense  

$     2,732


$    2,554


$    2,258


$    1,824


$     2,164

Income tax expense  

544


582


497


404


488

Net income

$     2,188


$    1,972


$    1,761


$    1,420


$     1,676

 

POTOMAC BANCSHARES, INC.

Performance Summary

(in thousands, except share and per share data)

(unaudited)












For the Quarter Ended


March 31,


Dec 31,


Sep 30,


June 30,


March 31,


2025


2024


2024


2024


2024

Common Share and Per Common Share Data










Earnings per common share, basic

$          0.53


$          0.48


$          0.42


$          0.34


$          0.40

Adjusted earnings per common share, basic (1)

$          0.53


$          0.55


$          0.42


$          0.42


$          0.40

Weighted average shares, basic

4,144,561


4,144,561


4,144,561


4,144,561


4,144,561

Earnings per common share, diluted

$          0.53


$          0.48


$          0.42


$          0.34


$          0.40

Adjusted earnings per common share, diluted (1)

$          0.53


$          0.55


$          0.42


$          0.42


$          0.40

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)

$        18.35


$        17.71


$        17.49


$        16.72


$        16.35

Cash dividends

$          0.12


$          0.12


$          0.12


$          0.12


$          0.10











Key Performance Ratios










Return on average assets

1.01 %


0.89 %


0.79 %


0.68 %


0.81 %

Adjusted return on average assets (1)

1.01 %


1.04 %


0.79 %


0.82 %


0.81 %

Return on average equity

11.88 %


10.81 %


9.92 %


8.41 %


10.00 %

Adjusted return on average equity (1)

11.88 %


12.53 %


9.92 %


10.21 %


10.00 %

Net interest margin (1)

3.51 %


3.37 %


3.24 %


3.25 %


3.20 %

Efficiency ratio (1)

67.47 %


67.98 %


71.69 %


71.80 %


70.67 %











Average Balances










Average assets

$    881,490


$    877,813


$    884,167


$    841,627


$    831,861

Average earning assets

850,176


847,248


853,527


812,168


803,289

Average shareholders' equity

74,694


72,588


70,637


67,987


67,381











Asset Quality










Loan charge-offs

$             21


$           101


$             22


$             81


$             56

Loan recoveries

20


22


59


34


35

Net charge-offs (recoveries)

1


79


(37)


47


21

Non-accrual loans

2,245


2,738


2,638


2,963


2,695

Other real estate owned, net

-


-


-


-


-

Nonperforming assets (5)

2,245


2,738


2,638


2,963


2,695

Loans 30 to 89 days past due, accruing

523


474


299


60


75

Loans over 90 days past due, accruing

-


-


1


-


-

Special mention loans

8,192


10,627


2,267


14,055


8,132

Substandard loans, accruing

4,594


4,238


4,391


3,708


3,729











Capital Ratios (2)










Total capital

$      97,302


$      95,449


$      93,943


$      92,606


$      91,554

Tier 1 capital

89,674


88,070


86,485


85,388


84,418

Common equity tier 1 capital

89,674


88,070


86,485


85,388


84,418

Total capital to risk-weighted assets

13.61 %


13.57 %


13.79 %


13.96 %


13.97 %

Tier 1 capital to risk weighted assets

12.55 %


12.52 %


12.69 %


12.87 %


12.88 %

Common equity Tier 1 capital to risk wtd. assets

12.55 %


12.52 %


12.69 %


12.87 %


12.88 %

Leverage ratio

10.06 %


9.92 %


9.67 %


9.99 %


9.98 %

 

POTOMAC BANCSHARES, INC.

Performance Summary

(in thousands, except share and per share data)

(unaudited)


For the Quarter Ended


March 31,


Dec 31,


Sep 30,


June 30,


March 31,


2025


2024


2024


2024


2024

Balance Sheet










Cash and due from banks 

$      4,673


$      5,143


$      5,014


$      4,061


$      3,662

Interest-bearing deposits in other financial
institutions 

66,844


59,621


67,337


51,167


82,816

Cash and cash equivalents

$    71,517


$    64,764


$    72,351


$    55,228


$    86,478

Securities available for sale, at fair value 

76,763


77,385


82,146


83,276


84,768

Equity securities, at fair value 

243


241


223


200


205

Loans held for sale

2,234


1,506


1,219


1,395


2,210

Loans, net of allowance for credit losses

709,160


697,132


679,558


657,188


648,804

Premises and equipment, net 

8,240


8,099


7,832


7,806


5,882

Accrued interest receivable 

2,478


2,283


2,382


2,413


2,309

Bank owned life insurance

14,074


13,977


13,878


13,780


13,683

FHLB of Pittsburgh stock 

2,023


2,103


2,328


1,419


1,481

Other assets 

8,851


9,859


9,414


9,875


9,151

Total assets

$  895,583


$  877,349


$  871,331


$  832,580


$  854,971











Noninterest-bearing  demand deposits

$  186,182


$  171,681


$  172,941


$  169,262


$  170,933

Savings and interest-bearing demand deposits

586,200


582,677


576,809


570,834


591,994

Total deposits

$  772,382


$  754,358


$  749,750


$  740,096


$  762,927

Short term borrowings

3,052


3,170


3,503


3,031


3,657

Long term borrowings

29,000


31,000


31,000


6,000


6,000

Subordinated debt

9,973


9,958


9,942


9,927


9,912

Accrued interest payable 

987


1,266


1,041


875


658

Other liabilities 

4,140


4,181


3,586


3,347


4,057

Total liabilities 

$  819,534


$  803,933


$  798,822


$  763,276


$  787,211











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

65,497


63,806


62,331


61,068


60,145

Accumulated other comprehensive (loss), net 

(4,994)


(5,936)


(5,368)


(7,310)


(7,931)


$    79,543


$    76,910


$    76,003


$    72,798


$    71,254

Less cost of shares acquired for the treasury

(3,494)


(3,494)


(3,494)


(3,494)


(3,494)

Total shareholders' equity 

$    76,049


$    73,416


$    72,509


$    69,304


$    67,760

Total liabilities and shareholders' equity 

$  895,583


$  877,349


$  871,331


$  832,580


$  854,971











Loan Data










Construction and land development

$    42,954


$    39,404


$    35,260


$    28,936


$    27,437

Secured by farmland

6,707


6,769


6,820


6,814


6,915

Secured by 1-4 family resident

250,436


247,299


244,125


240,053


235,861

Other real estate loans

344,953


345,904


340,027


335,888


340,289

Loans to farmers (except secured by real estate)

237


190


195


198


195

Commercial and industrial loans (except those
secured by real estate)

61,348


54,205


49,972


41,431


33,791

Consumer installment loans

2,910


2,910


2,994


3,287


3,359

Deposit overdraft

85


518


74


71


132

All other loans

6,710


6,910


7,188


7,391


7,657

Total loans

$  716,340


$  704,109


$  686,655


$  664,069


$  655,636

Allowance for credit losses

(7,180)


(6,977)


(7,097)


(6,881)


(6,832)

Loans, net

$  709,160


$  697,132


$  679,558


$  657,188


$  648,804

 

POTOMAC BANCSHARES, INC.

Non-GAAP Reconciliations

(in thousands, except share and per share data)

(unaudited)












For the Quarter Ended


March 31,


Dec 31,


Sep 30,


June 30,


March 31,


2025


2024


2024


2024


2024

Adjusted Net Income










Net income (GAAP)

$        2,188


$        1,972


$        1,761


$        1,421


$        1,675

Add: Loss on sale of securities

-


397


-


386


-

Subtract: Tax effect of adjustment (4)

-


(83)


-


(81)


-

Adjusted net income (non-GAAP)

$        2,188


$        2,286


$        1,761


$        1,726


$        1,675





















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)

$          0.53


$          0.48


$          0.42


$          0.34


$          0.40

Adjusted earnings per share, basic (Non-
GAAP)

$          0.53


$          0.55


$          0.42


$          0.42


$          0.40





















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)

$          0.53


$          0.48


$          0.42


$          0.34


$          0.40

Adjusted earnings per share, diluted (Non-
GAAP)

$          0.53


$          0.55


$          0.42


$          0.42


$          0.40





















Adjusted Pre-Provision, Pre-tax earnings










Net interest income

$        7,354


$        7,164


$        6,953


$        6,566


$        6,392

Total noninterest income

1,829


1,670


1,755


1,359


1,614

Net revenue

$        9,183


$        8,834


$        8,708


$        7,925


$        8,006

Total noninterest expense

6,201


6,280


6,248


5,972


5,662

Pre-provision, pre-tax earnings

$        2,982


$        2,554


$        2,460


$        1,953


$        2,344

Add: Loss on sale of securities

-


397


-


386


-

Adjusted pre-provision, pre-tax earnings

$        2,982


$        2,951


$        2,460


$        2,339


$        2,344





















Adjusted Performance Ratios










Average assets

$    881,490


$    877,813


$    884,167


$    841,627


$    831,861

Return on average assets (GAAP)

1.01 %


0.89 %


0.79 %


0.68 %


0.81 %

Adjusted return on average assets (Non-
GAAP)

1.01 %


1.04 %


0.79 %


0.82 %


0.81 %





















Average shareholders' equity

$      74,694


$      72,588


$      70,637


$      67,987


$      67,381

Return on average equity (GAAP)

11.88 %


10.81 %


9.92 %


8.41 %


10.00 %

Adjusted return on average equity (Non-GAAP)

11.88 %


12.53 %


9.92 %


10.21 %


10.00 %





















Pre-provision, pre-tax return on average assets

1.37 %


1.16 %


1.11 %


0.93 %


1.13 %

Adjusted pre-provision, pre-tax return on
average assets

1.37 %


1.34 %


1.11 %


1.12 %


1.13 %

 

POTOMAC BANCSHARES, INC.

Non-GAAP Reconciliations

(in thousands, except share and per share data)

(unaudited)












For the Quarter Ended


March 31,


Dec 31,


Sep 30,


June 30,


March 31,


2025


2024


2024


2024


2024

Net Interest Margin










Tax-equivalent net interest income

$        7,360


$        7,170


$        6,959


$            6,572


$        6,398

Average earning assets

850,176


847,248


853,527


812,168


803,289

Net interest margin

3.51 %


3.37 %


3.24 %


3.25 %


3.20 %











Efficiency Ratio










Total noninterest expense

$        6,201


$        6,280


$        6,248


$            5,972


$        5,662

Tax-equivalent net interest income

$        7,360


$        7,170


$        6,959


$            6,572


$        6,398

Total noninterest income

$        1,829


$        1,670


$        1,755


$            1,359


$        1,614

Add: Loss on disposal of property and
equipment

2


1


1


-


-

Add: Loss on sale of securities

-


397


-


386


-

Total noninterest income subtotal

1,831


2,068


1,756


1,745


1,614

Subtotal

$        9,191


$        9,238


$        8,715


$            8,317


$        8,012











Efficiency ratio

67.47 %


67.98 %


71.69 %


71.80 %


70.67 %











Tax-Equivalent Net Interest Income










GAAP measures:










Interest income - loans

$        9,501


$        9,287


$        8,985


$            8,361


$        8,225

Interest income - investments taxable

715


647


678


695


635

Interest income - investments tax exempt

29


29


29


29


28

Interest income - other

674


929


1,273


1,003


859

Interest expense - deposits

(3,105)


(3,238)


(3,648)


(3,308)


(3,142)

Interest expense - short term borrowings

(6)


(9)


(7)


(7)


(6)

Interest expense - long term borrowings

(313)


(340)


(217)


(67)


(67)

Interest expense - subordinated debt

(141)


(141)


(140)


(140)


(140)

Net interest income

$        7,354


$        7,164


$        6,953


$            6,566


$        6,392

Non-GAAP measures:










Add: Tax benefit realized on non-taxable
interest income - municipal securities (4)

$               6


$               6


$               6


$                   6


$               6

Tax benefit realized on non-taxable interest
income

$               6


$               6


$               6


$                   6


$               6

Tax equivalent net interest income

$        7,360


$        7,170


$        6,959


$            6,572


$        6,398











Tangible Book Value Per Share










Tangible common equity

$      76,049


$      73,417


$      72,509


$          69,305


$      67,760

Common shares outstanding, ending

4,144,561


4,144,561


4,144,561


4,144,561


4,144,561

Tangible book value per share

$        18.35


$        17.71


$        17.49


$            16.72


$        16.35


(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.

 

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SOURCE Potomac Bancshares, Inc.