Bank of Botetourt reports financial results for the third quarter
MWN-AI** Summary
Bank of Botetourt (OTCPK: BORT and BORTP), headquartered in Buchanan, Virginia, announced solid financial results for the third quarter ending September 30, 2025. The bank reported a net income of $2,882,000, or $1.40 per basic share, representing a significant increase from the $1,967,000, or $0.94 per share, reported in the same quarter of 2024. Over the nine months ending September 30, 2025, the net income was $8,094,000, up from $5,988,000 in the prior year.
Key performance indicators included a return on average assets of 1.23% and a return on average equity of 12.48%. Total assets grew by 4.61%, reaching $898,809,000, while total loans increased by 8.38% to $727,887,000. Deposits also saw a modest growth of 1.23%, totaling $778,871,000.
The bank's operational efficiency was reflected in its net interest income, which increased to $8,290,000 for the quarter, bolstered by $1,585,000 additional interest income driven by loan growth. Noninterest income rose by 9.25% to $1,476,000, driven primarily by gains in subsidiary income and mortgage loan sales. However, noninterest expense rose significantly by $818,000 due to higher employee benefits and operational expenses.
Bank of Botetourt maintained a strong asset quality with no foreclosures and a slight increase in non-performing assets, attributed to a small number of commercial loans. The bank’s Community Bank Leverage Ratio stood at 10.57%, exceeding the regulatory minimum.
President & CEO Michelle Austin highlighted the bank's commitment to long-term shareholder value and community service, indicating robust strategic execution moving forward. The bank also announced a 7.00% preferred dividend and a quarterly common dividend of $0.225.
MWN-AI** Analysis
In the third quarter of 2025, Bank of Botetourt (OTCPK: BORT and BORTP) reported notable gains in net income, which rose by 46.52%, reaching $2,882,000 or $1.40 per share, compared to $1,967,000 or $0.94 per share in the same period last year. With total assets increasing to $898.8 million, up 4.61% since the end of 2024, the institution exhibits solid financial stability.
The concerted efforts in loan growth are particularly noteworthy, rising by 8.38% over the previous year. This trend is supported by the bank’s robust net interest margin of 3.76%, a key driver of its profit. The significant uptick in interest income indicates successful lending activities, outpacing the rise in interest expenses. Investors should monitor the bank’s ability to maintain this growth without compromising on asset quality, especially as the provision for credit losses stands at 1.16% of total loans.
The healthy return on equity of 12.48% and return on assets at 1.23% underscore the bank's operational efficiency and profitability. Furthermore, the Community Bank Leverage Ratio of 10.57% highlights its capital adequacy, adhering to regulatory standards.
The Board's decision to distribute dividends ($0.225 per common share) reflects confidence in sustained profitability, making the stock attractive for dividend-seeking investors.
However, potential risks remain, particularly the slight increase in non-performing loans and the provision for credit losses. As the economy evolves, impacting credit quality, stakeholders should remain vigilant regarding these dynamics.
For investors, Bank of Botetourt appears to be a sound investment, balancing income growth with strategic risk management. Current shareholders may find value in holding their positions, while new investors could consider entering on dips to capitalize on potentially favorable long-term trends.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
PR Newswire
BUCHANAN, Va., Oct. 30, 2025 /PRNewswire/ -- Buchanan-based Bank of Botetourt (OTCPK: BORT and BORTP) announced today its unaudited financial results for the three and nine months-ended September 30, 2025. The Bank produced net income amounting to $2,882,000 or $1.40 per basic share in the third quarter. This amount compares to net income of $1,967,000 or $0.94 per share, for the same period last year. For the nine months-ended the Bank produced net income amounting to $8,094,000 or $3.94 per basic share. This amount compares to a net income of $5,988,000 or $2.88 per share, for the same period last year.
At September 30, 2025, select financial information and key highlights include:
- Return on average assets of 1.23%
- Return on average equity of 12.48%
- Book value of $42.86
- Total deposit growth of 1.23%
- Total asset growth of 4.61%
- Total loan growth of 8.38%
- Community Bank Leverage Ratio of 10.57%
- Net Interest Margin of 3.76%
The Board of Directors voted to pay the 7.00% preferred dividend, which calculates to $0.49 per share on November 7, 2025, to preferred shareholders of record October 31, 2025. Furthermore, the Board of Directors voted to pay the $0.225 per common share quarterly dividend, or $0.90 per share annualized, which is payable on November 17, 2025, to common shareholders of record November 10, 2025. President & CEO Michelle Austin stated "Our third quarter results reflect the continued strength of our Bank and the disciplined execution of our strategic priorities. We remain focused on delivering long-term value to our shareholders while staying deeply committed to the communities we serve. I'm proud of our team's efforts and the positive impact we're making across our markets."
Results of Operations
Net income for the three months ended September 30, 2025, was $2,882,000 compared to $1,967,000 for the same period last year, representing an increase of $915,000 or 46.52%. Basic and diluted earnings per share increased $0.46 from $0.94 at September 30, 2024, to $1.40 at September 30, 2025. The increase in net income is primarily due to $1,585,000 more interest income, $234,000 less interest on other borrowings, $125,000 more noninterest income, offset by $52,000 more interest expense on deposits, $818,000 more noninterest expense, and $244,000 more income tax expense.
For the three months ended September 30, 2025, the Bank recorded a provision for credit loss expense of $326,000 and a reserve for unfunded commitments of $(22,000), which is included in other expenses. This compares to $411,000 for the same period last year, representing a decrease of $85,000. 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 1.16% at the end of the quarter, down two basis points from the prior quarter and from one year prior.
At September 30, 2025, net loans increased 8.38%. Interest and fees on loans at September 30, 2025, increased $1,716,000 over the same three-month period of 2024. Interest expense decreased by $182,000 from $4,021,000 at September 30, 2024, to $3,839,000 at September 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 $125,000, or 9.25%, to $1,476,000 for the three months ended September 30, 2025, compared to $1,351,000 for same period of 2024. The increase is attributed to an increase in income from title insurance subsidiaries, an increase in gain on sale of mortgage loans, offset by a slight decrease in service charges on deposit accounts.
Noninterest expense increased $818,000 from $5,043,000 at September 30, 2024, to $5,861,000 at September 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 September 30, 2025, was $697,000 compared to $453,000 one year prior. The $244,000 increase in tax expense is due to more revenue for the quarter.
Financial Condition
At September 30, 2025, total assets amounted to $898,809,000, an increase of 4.61% above total assets at December 31, 2024 of $859,237,000, an increase of $39,572,000. Total net loans increased $56,297,000 or 8.38% from $671,590,000 at December 31, 2024, to $727,887,000 at September 30, 2025. Total deposits at December 31, 2024, amounted to $769,386,000, compared to $778,871,000 at September 30, 2025, an increase of 1.23% or $9,485,000.
Stockholders' equity totaled $90,866,000 at September 30, 2025, compared to $82,510,000 at December 31, 2024. The $8,356,000 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 third quarter of 2025. Provision for credit losses for the third quarter of 2025 was $326,000 compared with $8,000 in the previous quarter and $411,000 in the same quarter of 2024.
The Bank had no foreclosed properties at December 31, 2024, and September 30, 2025, respectively. Therefore, non-performing assets only consisted of nonaccrual loans. Non-performing assets increased at September 30, 2025, from $51,000 at December 31, 2024 to $609,000 at September 30, 2025. The increase is attributable to the addition of three commercial and industrial loans, collateralized by commercial vehicles and a blanket UCC on equipment, two unsecured commercial and industrial loans, offset by a charge-off of one commercial and industrial loan that was added in the second quarter. Two commercial and industrial loans totaling $83,000 were added to nonaccrual loans during the third 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 third quarter of 2025 were $176,000 or three basis points annualized on total average loans outstanding. Net charge-offs for the third quarter of 2025 were comprised of charge-offs of $227,000, partially offset by recoveries of $51,000. Compared to December 31, 2024, net charge-offs decreased $21,000 or one 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 September 30, 2025, Bank of Botetourt reported its CBLR ratio at 10.57% which meets the required regulatory minimum ratio. This compares to a CBLR ratio of 10.25% at December 31, 2024.
About Bank of Botetourt
Chartered in 1899, Bank of Botetourt is a full-service community bank serving customers through fourteen retail offices across Botetourt, Franklin, Roanoke, and Rockbridge counties, as well as the Cities of Roanoke and Salem and the Towns of Vinton and Rocky Mount in Virginia. The Bank also operates Virginia Mountain Mortgage, its residential lending division, and Botetourt Wealth Management, offering financial planning and investment services. Recognized by Forbes as a multi-year top-ranked bank in Virginia, Bank of Botetourt continues to build on its long-standing tradition of service, strength, and local commitment.
(unaudited) | (audited) | |||
September 30, | December 31, | |||
2025 | 2024 | |||
Assets | ||||
Cash and Due from banks | 13,807,000 | 12,390,000 | ||
Interest-bearing deposits with banks | 39,220,000 | 53,430,000 | ||
Federal funds sold | 839,000 | 936,000 | ||
Total cash and cash equivalents | 53,866,000 | 66,756,000 | ||
Debt securities held to maturity, net of allowance | 9,982,000 | 9,982,000 | ||
for credit losses of $18,000 at September 30, 2025 and | ||||
December 31, 2024, respectively | ||||
Debt securities available for sale | 67,271,000 | 73,159,000 | ||
Loans, net of allowance for credit losses of $8,523,000 at | 727,887,000 | 671,590,000 | ||
September 30, 2025 and $7,989,000 at December 31, 2024. | ||||
Loans held for sale | 425,000 | - | ||
Premises and fixed assets, net | 17,755,000 | 17,356,000 | ||
Investment in unconsolidated subsidiaries | 3,538,000 | 3,257,000 | ||
Other assets | 18,085,000 | 17,137,000 | ||
Total assets | 898,809,000 | 859,237,000 | ||
Liabilities and Stockholders' Equity | ||||
Liabilities | ||||
Noninterest-bearing deposits | 173,147,000 | 181,585,000 | ||
Interest-bearing deposits | 605,724,000 | 587,801,000 | ||
Total deposits | 778,871,000 | 769,386,000 | ||
Other borrowings | 22,000,000 | - | ||
Other liabilities | 7,072,000 | 7,341,000 | ||
Total liabilities | 807,943,000 | 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 September 30, 2025 and at December 31, 2024, respectively | 244,000 | 244,000 | ||
Common stock, $1.50 par value; 5,000,000 shares | ||||
authorized; 1,968,293 and 1,960,879 issued and | ||||
outstanding at September 30, 2025 and at December 31, 2024 | ||||
respectively | 2,952,000 | 2,941,000 | ||
Additional paid-in capital | 24,431,000 | 24,198,000 | ||
Retained earnings | 65,687,000 | 59,277,000 | ||
Accumulated other comprehensive loss | (2,448,000) | (4,150,000) | ||
Total stockholders' equity | 90,866,000 | 82,510,000 | ||
Total liabilities and stockholders' equity | 898,809,000 | 859,237,000 |
Nine Months Ended | Three Months Ended | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Interest income | |||||||
Loans and fees on loans | 32,633,000 | 27,369,000 | 11,329,000 | 9,613,000 | |||
Securities: | |||||||
U.S. Treasury and Government Agencies | 441,000 | 582,000 | 140,000 | 188,000 | |||
Mortgage-backed securities | 191,000 | 195,000 | 82,000 | 62,000 | |||
All other securities | 622,000 | 650,000 | 205,000 | 216,000 | |||
Due from depository institutions | 1,370,000 | 1,779,000 | 365,000 | 458,000 | |||
Federal funds sold | 25,000 | 16,000 | 8,000 | 7,000 | |||
Total Interest income | 35,282,000 | 30,591,000 | 12,129,000 | 10,544,000 | |||
Interest expense | |||||||
Deposits | 11,645,000 | 10,809,000 | 3,821,000 | 3,769,000 | |||
Other borrowings | 18,000 | 743,000 | 18,000 | 252,000 | |||
Total Interest expense | 11,663,000 | 11,552,000 | 3,839,000 | 4,021,000 | |||
Net Interest Income | 23,619,000 | 19,039,000 | 8,290,000 | 6,523,000 | |||
Provision for credit losses | 688,000 | 513,000 | 326,000 | 411,000 | |||
Net Interest Income after credit loss expense | 22,931,000 | 18,526,000 | 7,964,000 | 6,112,000 | |||
Noninterest income | |||||||
Service charges on deposit accounts | 976,000 | 963,000 | 342,000 | 351,000 | |||
Securities brokerage and annuities | 204,000 | 297,000 | 80,000 | 111,000 | |||
Other income, net of gains | 3,173,000 | 2,607,000 | 1,054,000 | 889,000 | |||
Total noninterest income | 4,353,000 | 3,867,000 | 1,476,000 | 1,351,000 | |||
Noninterest expense | |||||||
Salaries and employee benefits | 7,173,000 | 6,590,000 | 2,464,000 | 2,213,000 | |||
Premises and fixed assets expense | 1,806,000 | 1,469,000 | 619,000 | 499,000 | |||
Other expense | 8,158,000 | 6,854,000 | 2,778,000 | 2,331,000 | |||
Total noninterest expense | 17,137,000 | 14,913,000 | 5,861,000 | 5,043,000 | |||
Income before income taxes | 10,147,000 | 7,480,000 | 3,579,000 | 2,420,000 | |||
Income tax expense | 2,053,000 | 1,492,000 | 697,000 | 453,000 | |||
Net income | 8,094,000 | 5,988,000 | 2,882,000 | 1,967,000 | |||
Preferred stock dividends | 358,000 | 358,000 | 119,000 | 119,000 | |||
Net income available to common shareholders | 7,736,000 | 5,630,000 | 2,763,000 | 1,848,000 | |||
Basic earnings per share | 3.94 | 2.88 | 1.40 | 0.94 | |||
Diluted earnings per share | 3.94 | 2.88 | 1.40 | 0.94 | |||
Dividends declared per share | 0.675 | 0.60 | 0.225 | 0.20 | |||
Basic weighted average shares outstanding | 1,964,889 | 1,955,299 | 1,967,206 | 1,957,708 | |||
Diluted weighted average shares outstanding | 1,964,889 | 1,955,299 | 1,967,206 | 1,957,708 |
SOURCE Bank of Botetourt
FAQ**
How does the increase in net income to $2,882,000 for Bank of Botetourt BORTP in Q3 2025 compare to previous quarters, and what factors contributed most significantly to this growth?
Bank of Botetourt BORTP reported a total asset growth of 4.61%; how did this impact key metrics such as return on average assets and return on average equity during the same period?
With a rise in noninterest expense to $5,861,000, how does Bank of Botetourt BORTP plan to manage these costs while maintaining its profitability?
Given the increase in non-performing assets at Bank of Botetourt BORTP to $609,000, what strategies are being implemented to improve asset quality and reduce credit risks moving forward?
**MWN-AI FAQ is based on asking OpenAI questions about Bank of Botetourt Buchanan VA (OTC: BORT).
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