Bank of Botetourt Exceeds Budget Expectations, Records Profitable 2024; Board Votes to Increase Dividend 12.5%
BUCHANAN, Va., Jan. 30, 2025 /PRNewswire/ -- Buchanan-based Bank of Botetourt (OTCPK: BORT and BORTP) announced today its unaudited financial results for the three and twelve months ended December 31, 2024. The Bank produced net income amounting to $1,954,000 or $0.94 per basic share in the fourth quarter. This amount compares to net income of $1,800,000 or $0.86 per share, for the same period last year. For the twelve months ended December 31, 2024, the Bank produced net income amounting to $7,942,000 or $3.82 per basic share. This amount compares to a net income of $8,173,000 or $3.95 per share, for the same period last year.
At December 31, 2024, select financial information and key highlights include:
- Return on average assets of 0.97%
- Return on average equity of 10.10%
- Book value of $38.78
- Total deposit growth of 10.94%
- Total asset growth of 8.35%
- Total loan growth of 13.20%
- Community Bank Leverage Ratio of 10.22%
The Board of Directors voted to pay the 7.00% preferred dividend, which calculates to $0.49 per share on February 7, 2025, to preferred shareholders of record January 31, 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 February 18, 2025, to common shareholders of record February 11, 2025. CEO & Vice-Chairman, G. Lyn Hayth, III stated, "We have not only surpassed our budget expectations for 2024, but we have also remained deeply committed to supporting our community and customers. This achievement reflects our dedication to sustainable growth, innovation, and providing long-term value to our shareholders."
Results of Operations
Net income for the three months ended December 31, 2024, was $1,954,000 compared to $1,800,000 for the same period last year, representing an increase of $154,000 or 8.56%. Basic and diluted earnings per share increased $0.08 from $0.86 at December 31, 2023, to $0.94 at December 31, 2024. The increase in net income is primarily due to $1,989,000 more interest and fees on loan income, offset by $997,000 more expense on deposits and other borrowings, $60,000 more provision for credit losses, and $329,000 less investment income.
For the three months ended December 31, 2024, the Bank recorded a provision for credit loss expense of $364,000 compared to $304,000 for the same period last year, representing an increase of $60,000. The provision recorded during the quarter primarily reflected allocations necessitated by net loan growth and adjustments to historical loss factors to better represent expectations for future credit losses. The ratio of the allowance for credit losses to total loans and leases outstanding was 1.18% at the end of the quarter, no change from the prior quarter and down eight basis points from one year prior.
At December 31, 2024, net loans increased 13.20%. Interest and fees on loans at December 31, 2024, increased $1,989,000 over the same three-month period of 2023. Interest expense increased by $997,000 from $3,305,000 at December 31, 2023, to $4,302,000 at December 31, 2024. 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 2023, offset by a decrease of interest on borrowed funds.
Noninterest income increased by $274,000, or 22.61%, to $1,486,000 for the three months ended December 31, 2024, compared to $1,212,000 for same period of 2023. The increase is attributed to an increase in service charges on deposit accounts, income from title insurance subsidiaries, partially offset by a decrease in gain on sale of mortgage loans.
Noninterest expense increased $673,000 from $4,911,000 at December 31, 2023, to $5,584,000 at December 31, 2024. 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 December 31, 2024, was $498,000 compared to $448,000 one year prior. The increase in tax expense is due to more revenue for the quarter.
Financial Condition
At December 31, 2024, total assets amounted to $857,073,000 compared to $791,015,000 at December 31, 2023, an increase of $66,058,000 or 8.35%. Total net loans increased $78,334,000 or 13.20% from $593,256,000 at December 31, 2023, to $671,590,000 at December 31, 2024. Total deposits at December 31, 2023, amounted to $691,584,000, compared to $767,222,000 at December 31, 2024, an increase of 10.94% or $75,638,000.
Stockholders' equity totaled $82,510,000 at December 31, 2024, compared to $74,778,000 at December 31, 2023. The $7,732,000 increase during the period is attributed to net income for 2024, 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 fourth quarter 2024. Provision for credit losses for the fourth quarter of 2024 was $364,000 compared to $411,000 in the previous quarter and $304,000 in the same quarter of 2023.
The Bank had no foreclosed properties at December 31, 2023, and December 31, 2024, respectively. Therefore, non-performing assets only consisted of nonaccrual loans. Non-performing assets decreased from $121,000 at December 31, 2023, to $51,000 at December 31, 2024. The decrease is attributed to the removal of one residential lot, five commercial and industrial loans, and one auto loan, offset by the addition of four commercial and industrial loans. The commercial and industrial additions are collateralized by commercial vehicles along with a UCC blanket lien on inventory, equipment and accounts. The sale of collateral for one residential lot loan and one commercial and industrial loan resulted in the subsequent paydown of the loan with the auto loan balance being charged off. During the fourth quarter, two commercial and industrial loans totaling $194,000 were charged off. There were no new additions to nonaccrual loans during the fourth quarter. The decrease in nonaccrual loans is attributed to the new additions and the charge-off and payment activity of the aforementioned loans.
Net charge-offs during the fourth quarter of 2024 were $197,000 or three basis points on total average loans outstanding. Net charge-offs for the fourth quarter of 2024 were comprised of charge-offs of $263,000 partially offset by recoveries of $66,000. Compared to the prior quarter, net charge-offs increased $80,000 or one basis point on total average loans outstanding. Compared to December 31, 2023, net charge-offs increased $36,000 or .05 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 December 31, 2024, Bank of Botetourt reported its CBLR ratio at 10.25% which meets the required regulatory minimum ratio. This compares to a CBLR ratio of 10.36% at December 31, 2023.
Strategic Initiatives
On December 23, 2024, Bank of Botetourt opened its fourteenth full-service branch in the Town of Rocky Mount, Virginia. The new office is located at 875 Tanyard Road in Rocky Mount. Services include a 24/7 accessible ATM with deposit capabilities, a drive-thru, and night deposit. The Bank's mortgage company, Virginia Mountain Mortgage, also provides services from this location.
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 Town 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) |
||||
December 31, |
December 31, |
||||
2024 |
2023 |
||||
Assets |
|||||
Cash and due from banks |
$ 12,439,000 |
$ 10,410,000 |
|||
Interest-bearing deposits with banks |
53,381,000 |
58,800,000 |
|||
Federal funds sold |
936,000 |
524,000 |
|||
Total cash and cash equivalents |
66,756,000 |
69,734,000 |
|||
Debt securities held to maturity, net of allowance |
|||||
for credit losses of $18,000 at December 31, 2024 and |
|||||
at December 31, 2023, respectively |
9,982,000 |
9,932,000 |
|||
Debt securities available for sale |
73,159,000 |
85,663,000 |
|||
Loans, net of allowance for credit losses of $7,989,000 at |
|||||
December 31, 2024 and $7,542,000 at December 31, 2023 |
671,590,000 |
593,256,000 |
|||
Loans held for sale |
634,000 |
- |
|||
Premises and fixed assets, net |
17,356,000 |
14,652,000 |
|||
Investment in unconsolidated subsidiaries |
3,257,000 |
3,000,000 |
|||
Bank owned life insurance |
7,544,000 |
- |
|||
Accrued interest receivable |
2,633,000 |
- |
|||
Other assets |
4,162,000 |
14,778,000 |
|||
Total assets |
$ 857,073,000 |
$ 791,015,000 |
|||
Liabilities and Stockholders' Equity |
|||||
Liabilities |
|||||
Noninterest-bearing deposits |
$ 179,420,000 |
$ 161,464,000 |
|||
Interest-bearing deposits |
587,802,000 |
530,120,000 |
|||
Total deposits |
767,222,000 |
691,584,000 |
|||
Other borrowings |
- |
19,000,000 |
|||
Accrued interest payable |
3,544,000 |
- |
|||
Other liabilities |
3,797,000 |
5,653,000 |
|||
Total liabilities |
774,563,000 |
716,237,000 |
|||
Commitments and contingencies |
- |
- |
|||
Stockholders' Equity |
|||||
Preferred stock, $1.00 par value; 1,000,000 shares |
|||||
authorized; 243,659 issued and outstanding |
|||||
at December 31, 2024 and at December 31, 2023, respectively |
244,000 |
244,000 |
|||
Common stock, $1.50 par value; 5,000,000 shares |
|||||
authorized; 1,960,879 and 1,951,372 issued and |
|||||
outstanding at December 31, 2024 and at December 31, 2023, |
|||||
respectively |
2,941,000 |
2,927,000 |
|||
Additional paid-in capital |
24,198,000 |
23,937,000 |
|||
Retained earnings |
59,277,000 |
53,377,000 |
|||
Accumulated other comprehensive loss |
(4,150,000) |
(5,707,000) |
|||
Total stockholders' equity |
82,510,000 |
74,778,000 |
|||
Total liabilities and stockholders' equity |
$ 857,073,000 |
$ 791,015,000 |
|||
Bank of Botetourt |
|||||||
Twelve Months Ended |
Three Months Ended |
||||||
2024 |
2023 |
2024 |
2023 |
||||
Interest income |
|||||||
Loans and fees on loans |
$ 37,603,000 |
$ 29,225,000 |
$ 10,234,000 |
$ 8,245,000 |
|||
Federal funds sold |
23,000 |
19,000 |
7,000 |
5,000 |
|||
Securities: |
|||||||
Taxable |
1,572,000 |
1,737,000 |
360,000 |
422,000 |
|||
Exempt from federal income tax |
207,000 |
234,000 |
53,000 |
51,000 |
|||
Dividend income |
107,000 |
41,000 |
28,000 |
20,000 |
|||
Deposits with banks |
2,295,000 |
3,119,000 |
534,000 |
813,000 |
|||
Total Interest income |
41,807,000 |
34,375,000 |
11,216,000 |
9,556,000 |
|||
Interest expense |
|||||||
Deposits |
15,029,000 |
8,917,000 |
4,220,000 |
3,072,000 |
|||
Other borrowings |
825,000 |
235,000 |
82,000 |
233,000 |
|||
Total Interest expense |
15,854,000 |
9,385,000 |
4,302,000 |
3,305,000 |
|||
Net Interest Income |
25,953,000 |
24,990,000 |
6,914,000 |
6,251,000 |
|||
Provision for credit losses |
918,000 |
891,000 |
364,000 |
304,000 |
|||
Net Interest Income after credit loss expense |
25,035,000 |
24,099,000 |
6,550,000 |
5,947,000 |
|||
Noninterest income |
|||||||
Service charges on deposit accounts |
1,284,000 |
1,306,000 |
316,000 |
300,000 |
|||
ATM and debit card |
1,871,000 |
1,956,000 |
479,000 |
465,000 |
|||
Other service charges and fees |
818,000 |
742,000 |
217,000 |
182,000 |
|||
Mortgage origination fees |
198,000 |
226,000 |
57,000 |
74,000 |
|||
Other income, net of gains |
1,220,000 |
969,000 |
417,000 |
191,000 |
|||
Total noninterest income |
5,391,000 |
5,199,000 |
1,486,000 |
1,212,000 |
|||
Noninterest expense |
|||||||
Salaries and employee benefits |
8,947,000 |
8,407,000 |
2,356,000 |
2,108,000 |
|||
Occupancy |
1,002,000 |
973,000 |
233,000 |
174,000 |
|||
Equipment |
1,077,000 |
907,000 |
319,000 |
224,000 |
|||
Foreclosed assets, net |
45,000 |
3,000 |
46,000 |
3,000 |
|||
Outside services |
2,771,000 |
2,269,000 |
770,000 |
620,000 |
|||
FDIC insurance premiums and assessment |
477,000 |
348,000 |
125,000 |
105,000 |
|||
ATM and debit card |
1,455,000 |
1,427,000 |
375,000 |
359,000 |
|||
Franchise tax |
657,000 |
598,000 |
167,000 |
155,000 |
|||
Telephone and communication |
320,000 |
262,000 |
76,000 |
62,000 |
|||
Other professional fees |
240,000 |
298,000 |
56,000 |
74,000 |
|||
Marketing |
870,000 |
944,000 |
286,000 |
338,000 |
|||
Other operating expenses |
2,594,000 |
2,603,000 |
775,000 |
689,000 |
|||
Total noninterest expense |
20,455,000 |
19,039,000 |
5,584,000 |
4,911,000 |
|||
Income before income taxes |
9,971,000 |
10,259,000 |
2,452,000 |
2,248,000 |
|||
Income tax expense |
2,029,000 |
2,086,000 |
498,000 |
448,000 |
|||
Net income |
7,942,000 |
8,173,000 |
1,954,000 |
1,800,000 |
|||
Preferred stock dividends |
478,000 |
478,000 |
119,000 |
119,000 |
|||
Net income available to common shareholders |
$ 7,464,000 |
$ 7,695,000 |
$ 1,835,000 |
$ 1,681,000 |
|||
Basic earnings per share |
$ 3.82 |
$ 3.95 |
$ 0.94 |
$ 0.86 |
|||
Diluted earnings per share |
$ 3.82 |
$ 3.95 |
$ 0.94 |
$ 0.86 |
|||
Dividends declared per share |
$ 0.80 |
$ 0.77 |
$ 0.20 |
$ 0.1925 |
|||
Basic weighted average shares outstanding |
1,956,428 |
1,946,576 |
1,959,791 |
1,950,188 |
|||
Diluted weighted average shares outstanding |
1,956,428 |
1,946,576 |
1,959,791 |
1,950,188 |
|||
SOURCE Bank of Botetourt
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