Bank of Botetourt Exceeds Budget Expectations, Records Profitable 2024; Board Votes to Increase Dividend 12.5%

Rhea-AI Summary

Bank of Botetourt (BORT) reported strong financial results for Q4 and full-year 2024. The bank achieved Q4 net income of $1,954,000 ($0.94 per share), up from $1,800,000 ($0.86 per share) in Q4 2023. Full-year 2024 net income was $7,942,000 ($3.82 per share), compared to $8,173,000 ($3.95 per share) in 2023.

Key highlights include total deposit growth of 10.94%, total asset growth of 8.35%, and total loan growth of 13.20%. The bank maintained strong asset quality with a Community Bank Leverage Ratio of 10.22%. The Board approved a 12.5% increase in quarterly dividend to $0.225 per common share, payable February 18, 2025, and a 7.00% preferred dividend of $0.49 per share, payable February 7, 2025.

The bank expanded its presence by opening its fourteenth full-service branch in Rocky Mount, Virginia, on December 23, 2024.

Positive

• Q4 net income increased 8.56% to $1,954,000
• Total deposits grew 10.94% to $767,222,000
• Total loans increased 13.20% to $671,590,000
• 12.5% increase in quarterly dividend
• Strong asset quality with minimal non-performing assets ($51,000)
• Expansion with new branch opening

Negative

• Full-year net income decreased 2.83% from $8,173,000 to $7,942,000
• Noninterest expenses increased by $1,416,000 (7.44%) year-over-year
• Net charge-offs increased in Q4 2024 compared to prior year

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 Consolidated Balance Sheets December 31, 2024(unaudited) and December 31, 2023 (audited)
		(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 Income Statement For the twelve months ended and three months ended December 31, 2024 and 2023 (Unaudited)
	Twelve Months Ended December 31,				Three Months Ended December 31,
	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

 

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SOURCE Bank of Botetourt

FAQ

What is Bank of Botetourt's (BORT) new quarterly dividend amount and payment date?

Bank of Botetourt's new quarterly dividend is $0.225 per share ($0.90 annualized), payable on February 18, 2025, to common shareholders of record February 11, 2025.

How much did Bank of Botetourt's (BORT) total deposits grow in 2024?

Bank of Botetourt's total deposits grew by 10.94% or $75,638,000 to reach $767,222,000 by December 31, 2024.

What was BORT's net income for Q4 2024 compared to Q4 2023?

BORT's net income for Q4 2024 was $1,954,000 ($0.94 per share), compared to $1,800,000 ($0.86 per share) in Q4 2023, representing an 8.56% increase.

What is Bank of Botetourt's (BORT) Community Bank Leverage Ratio as of December 31, 2024?

Bank of Botetourt's Community Bank Leverage Ratio was 10.22% as of December 31, 2024.

Where did Bank of Botetourt (BORT) open its newest branch in December 2024?

Bank of Botetourt opened its fourteenth full-service branch in Rocky Mount, Virginia, at 875 Tanyard Road on December 23, 2024.