Bank of Botetourt posts strong first quarter financial results
MWN-AI** Summary
Bank of Botetourt, a community-focused financial institution based in Buchanan, Virginia, reported robust financial results for the first quarter of 2025. The bank recorded a net income of $2,044,000, or $0.98 per share, marking an 11.82% increase from the same period in 2024, when it achieved a net income of $1,828,000, or $0.88 per share. Key performance metrics highlighted an impressive return on average assets of 0.95% and return on average equity of 9.77%.
The bank experienced a modest growth in total deposits, which rose by 0.50% to $773,216,000, while total assets increased by 0.72%, reaching $865,386,000. Total loan growth was particularly strong, at 2.27%, with net loans amounting to $686,857,000. The net interest margin stood at 3.59%, contributing to an increase in interest income, which grew by approximately $1.59 million compared to the previous year.
Despite a rise in noninterest expenses of $766,000, driven largely by increased salaries and employee benefits, the bank managed a disciplined cost control strategy. Additionally, a provision for credit loss expense of $354,000 was recorded, reflecting prudent measures for loan growth and credit risk evaluation.
The bank continued its commitment to rewarding shareholders, declaring a preferred dividend of $0.49 per share and a common quarterly dividend of $0.225 per share. Looking forward, CEO G. Lyn Hayth, III expressed confidence in the bank’s performance and its focus on sustainable growth amid competitive pressures in the deposit market. As a testament to its strength, the bank reported a Community Bank Leverage Ratio of 10.22%, meeting regulatory requirements and highlighting its solid capitalization.
MWN-AI** Analysis
The Bank of Botetourt's recent first-quarter financial results have not only highlighted its solid performance but also present an enticing opportunity for investors. The bank reported a robust net income of $2.04 million for the quarter, marking an impressive year-on-year increase of approximately 11.8%. This growth, attributed to enhanced interest income from loan growth, coupled with prudent expense management, reveals the bank's effective operational strategy amidst a competitive financial landscape.
Key metrics such as a return on average equity of 9.77% and a community bank leverage ratio of 10.22% indicate a stable and well-capitalized institution. The net interest margin of 3.59% further portrays the bank's ability to maximize profits on its interest-earning assets, despite a noticeable rise in interest expenses. Additionally, the steady growth in total loans (2.27%) suggests strong demand in their lending portfolio, which could translate to further income generation in subsequent quarters.
Investors should also note the bank's commitment to shareholder returns evidenced by its declared dividend of $0.225 per share, an increase from the previous year. This signals management’s confidence in the bank's ongoing profitability and growth prospects.
However, potential investors should remain cautious about the credit loss provisions that have increased, indicating heightened vigilance in current economic conditions. While the bank's asset quality appears strong, maintaining a close watch on credit performance will be essential.
In summary, the Bank of Botetourt shows promising growth and stability, making it a viable consideration for those seeking investments in the regional banking sector. Monitoring its ongoing performance while capitalizing on the growth trajectory could yield favorable returns, while simultaneously accounting for market risks.
**MWN-AI Summary and Analysis is based on asking OpenAI to summarize and analyze this news release.
PR Newswire
BUCHANAN, Va. , May 1, 2025 /PRNewswire/ -- Buchanan -based Bank of Botetourt (OTCPK: BORT and BORTP) announced today its unaudited financial results for the three months-ended March 31, 2025 . The Bank produced net income amounting to $2,044,000 or $0.98 per basic share in the first quarter. This amount compares to net income of $1,828,000 or $0.88 per share, for the same period last year.
At March 31, 2025 , select financial information and key highlights include:
- Return on average assets of 0.95%
- Return on average equity of 9.77%
- Book value of $39.83
- Total deposit growth of 0.50%
- Total asset growth of 0.72%
- Total loan growth of 2.27%
- Community Bank Leverage Ratio of 10.22%
- Net Interest Margin of 3.59%
The Board of Directors voted to pay the 7.00% preferred dividend, which calculates to $0.49 per share on May 9, 2025 , to preferred shareholders of record May 2 , 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 May 16, 2025 , to common shareholders of record May 9, 2025 . CEO & Vice-Chairman, G. Lyn Hayth, III stated, "We are pleased to report a strong first quarter, driven by prudent balance sheet management, solid loan growth, and disciplined cost control. In a highly competitive environment for deposits, we remained focused on delivering differentiated value to our customers while enhancing returns for our shareholders. Our performance reflects the strength of our institution and our continued commitment to long-term, sustainable growth."
Results of Operations
Net income for the three months ended March 31, 2025 , was $2,044,000 compared to $1,828,000 for the same period last year, representing an increase of $216,000 or 11.82%. Basic and diluted earnings per share increased $0.10 from $0.88 at March 31, 2024 , to $0.98 at March 31, 2025 . The increase in net income is primarily due to $1,585,000 more interest income, $61,000 more noninterest income, overset by $318,000 more interest expense on deposits, $766,000 more noninterest expense, and $288,000 more provision for credit losses.
For the three months ended March 31, 2025 , the Bank recorded a provision for credit loss expense of $354,000 and a reserve for unfunded commitments of $(3,000) , which is included in other expenses. This compares to $66,000 for the same period last year, representing an increase of $288,000 . 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 1.20% at the end of the quarter, up two basis points from the prior quarter and down six basis points from one year prior.
At March 31, 2025 , net loans increased 2.27%. Interest and fees on loans at March 31, 2025 , increased $1,789,000 over the same three-month period of 2024. Interest expense increased by $318,000 from $3,676,000 at March 31, 2024 , to $3,994,000 at March 31 , 2025. The higher interest expense is a result of higher interest rates paid on the balances of interest-bearing deposits than for the same period of 2024 offset by a decrease of interest on borrowed funds.
Noninterest income increased by $61,000 , or 5.16%, to $1,244,000 for the three months ended March 31, 2025 , compared to $1,183,000 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 $766,000 from $4,936,000 at March 31, 2024 , to $5,702,000 at March 31 , 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 March 31, 2025 , was $529,000 compared to $471,000 one year prior. The increase in tax expense is due to more revenue for the quarter.
Financial Condition
At March 31, 2025 , total assets amounted to $865,386,000 , an increase of 0.72% above total assets at December 31, 2024 , of $859,237,000 , an increase of $6,149,000 . Total net loans increased $15,267,000 or 2.27% from $671,590,000 at December 31, 2024 , to $686,857,000 at March 31, 2025 . Total deposits at December 31, 2024 , amounted to $769,386,000 , compared to $773,216,000 at March 31, 2025 , an increase of 0.50% or $3,830,000 .
Stockholders' equity totaled $84,803,000 at March 31, 2025 , compared to $82,510,000 at December 31, 2024 . The $2,293,000 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, a decrease in accumulated other comprehensive loss, partially offset by dividends paid.
Asset Quality
Bank of Botetourt's asset quality remained strong for the first quarter of 2025. Provision for credit losses for the first quarter of 2025 was $354,000 compared with $364,000 in the previous quarter and $66,000 in the same quarter of 2024.
The Bank had no foreclosed properties at December 31, 2024 , and March 31, 2025 , respectively. Therefore, non-performing assets only consisted of nonaccrual loans. Non-performing assets remained unchanged at March 31, 2025 , from $51,000 at December 31 , 2024. There were no new additions to nonaccrual loans during the first quarter.
Net charge-offs during the first quarter of 2025 were $25,000 or one basis point annualized on total average loans outstanding. Net charge-offs for the first quarter of 2025 were comprised of charge-offs of $47,000 partially offset by recoveries of $22,000 . Compared to December 31, 2024 , net charge-offs decreased $172,000 or two basis points annualized on total average loans outstanding.
Capital Ratios
Bank of Botetourt qualified for and adopted the optional, simplified measure of capital adequacy, 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 March 31, 2025 , Bank of Botetourt reported its CBLR ratio at 10.22% which meets the required regulatory minimum ratio. This compares to a CBLR ratio of 10.25% at December 31, 2024 .
Retirement
G. Lyn Hayth, III will retire as Chief Executive Officer on June 30, 2025, after dedicating nearly four decades to the Bank. Hayth will remain Vice-Chair of the Board of Directors and transition into a part-time role as Chief Strategic Officer, where he will focus on strategic initiatives and leadership transition. The Board of Directors has appointed Michelle R. Austin , current President and Chief Operating Officer, as President and Chief Executive Officer, effective July 1,2025.
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 , 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) | ||
March 31, | December 31, | ||
2025 | 2024 | ||
Assets | |||
Cash and Due from banks | 11,816,000 | 12,390,000 | |
Interest-bearing deposits with banks | 48,433,000 | 53,430,000 | |
Federal funds sold | 909,000 | 936,000 | |
Total cash and cash equivalents | 61,158,000 | 66,756,000 | |
Debt securities held to maturity, net of allowance | 9,982,000 | 9,982,000 | |
for credit losses of $18,000 at March 31, 2025 and | |||
December 31, 2024, respectively | |||
Debt securities available for sale | 69,653,000 | 73,159,000 | |
Loans, net of allowance for credit losses of $8,321,000 at | 686,857,000 | 671,590,000 | |
March 31, 2025 and $7,989,000 at December 31, 2024. | |||
Premises and fixed assets, net | 17,816,000 | 17,356,000 | |
Investment in unconsolidated subsidiaries | 3,295,000 | 3,257,000 | |
Other assets | 16,625,000 | 17,137,000 | |
Total assets | 865,386,000 | 859,237,000 | |
Liabilities and Stockholders' Equity | |||
Liabilities | |||
Noninterest-bearing deposits | 175,443,000 | 181,585,000 | |
Interest-bearing deposits | 597,773,000 | 587,801,000 | |
Total deposits | 773,216,000 | 769,386,000 | |
Other liabilities | 7,367,000 | 7,341,000 | |
Total liabilities | 780,583,000 | 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 March 31, 2025 and at December 31, 2024, respectively | 244,000 | 244,000 | |
Common stock, $1.50 par value; 5,000,000 shares | |||
authorized; 1,963,968 and 1,960,879 issued and | |||
outstanding at March 31, 2025 and at December 31, 2024 | |||
respectively | 2,946,000 | 2,941,000 | |
Additional paid-in capital | 24,291,000 | 24,198,000 | |
Retained earnings | 60,760,000 | 59,277,000 | |
Accumulated other comprehensive loss | (3,438,000) | (4,150,000) | |
Total stockholders' equity | 84,803,000 | 82,510,000 | |
Total liabilities and stockholders' equity | 865,386,000 | 859,237,000 |
Bank of Botetourt | |||
March 31 | |||
2025 | 2024 | ||
Interest income | |||
Loans and fees on loans | 10,443,000 | 8,654,000 | |
Securities: | |||
U.S. Treasury and Government Agencies | 154,000 | 203,000 | |
Mortgage-backed securities | 56,000 | 68,000 | |
All other securities | 209,000 | 217,000 | |
Due from depository institutions | 509,000 | 647,000 | |
Federal Funds Sold | 8,000 | 5,000 | |
Total interest income | 11,379,000 | 9,794,000 | |
Interest expense | |||
Deposits | 3,994,000 | 3,433,000 | |
Other borrowings | - | 243,000 | |
Total interest expense | 3,994,000 | 3,676,000 | |
Net interest Income | 7,385,000 | 6,118,000 | |
Provision for credit losses | 354,000 | 66,000 | |
Net interest income after credit loss expense | 7,031,000 | 6,052,000 | |
Noninterest income | |||
Service charges on deposit accounts | 315,000 | 277,000 | |
Securities brokerage and annuities | 75,000 | 67,000 | |
Other income, net of gains (losses) | 854,000 | 839,000 | |
Total noninterest income | 1,244,000 | 1,183,000 | |
Noninterest expense | |||
Salaries and employee benefits | 2,331,000 | 2,226,000 | |
Premises and fixed assets expense | 620,000 | 491,000 | |
Other expense | 2,751,000 | 2,219,000 | |
Total noninterest expense | 5,702,000 | 4,936,000 | |
Income before income taxes | 2,573,000 | 2,299,000 | |
Income tax expense | 529,000 | 471,000 | |
Net income | 2,044,000 | 1,828,000 | |
Preferred stock dividends | 119,000 | 119,000 | |
Net income available to common shareholders | 1,925,000 | 1,709,000 | |
Basic earnings per share | 0.98 | 0.88 | |
Diluted earnings per share | 0.98 | 0.88 | |
Dividends declared per share | 0.225 | 0.2000 | |
Basic weighted average shares outstanding | 1,962,321 | 1,952,768 | |
Diluted weighted average shares outstanding | 1,962,321 | 1,952,768 |
SOURCE Bank of Botetourt
FAQ**
What factors contributed to the increase in net income for Bank of Botetourt BORTP from $1,828,000 to $2,044,000 in Q1 2025 compared to the same period last year?
How does Bank of Botetourt BORTP plan to manage rising interest expenses, which rose to $3,994,000 in Q1 20due to higher rates on deposits?
Given the reported net loan growth of 2.27%, what strategies is Bank of Botetourt BORTP implementing to sustain this momentum in a competitive lending environment?
What impact will the leadership transition with G. Lyn Hayth, III retiring and Michelle R. Austin becoming CEO have on the strategic direction of Bank of Botetourt BORTP?
**MWN-AI FAQ is based on asking OpenAI questions about Bank of Botetourt (OTC: BORTP).
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