Bank of Botetourt posts strong second quarter financial results

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Bank of Botetourt (OTCPK: BORT) reported strong Q2 2025 financial results, with net income of $3.17 million ($1.55 per basic share), up 44.46% from $2.19 million ($1.06 per share) in Q2 2024.

Key highlights include a Return on Assets of 1.20%, Return on Equity of 12.26%, and total asset growth of 3.14%. The bank demonstrated solid growth with deposits increasing 2.60% and loans growing 4.43%. The Community Bank Leverage Ratio stood at 10.42%, with a Net Interest Margin of 3.70%.

The Board approved a $0.225 quarterly dividend for common shareholders and a 7.00% preferred dividend of $0.49 per share. Asset quality remained strong with minimal charge-offs, though non-performing assets increased to $629,000 from $51,000 in December 2024.

Positive

• Net income increased 44.46% year-over-year to $3.17 million in Q2 2025
• Total loan growth of 4.43% to $701.3 million
• Total deposit growth of 2.60% to $789.4 million
• Strong capital position with Community Bank Leverage Ratio of 10.42%
• Noninterest income increased 22.51% to $1.63 million

Negative

• Non-performing assets increased significantly from $51,000 to $629,000
• Noninterest expense increased by $640,000 or 13%
• Three commercial and industrial loans totaling $584,000 added to nonaccrual status

BUCHANAN, Va., July 31, 2025 /PRNewswire/ -- Buchanan-based Bank of Botetourt (OTCPK: BORT and BORTP) announced today its unaudited financial results for the three and six months-ended June 30, 2025. The Bank produced net income amounting to $3,168,000 or $1.55 per basic share in the second quarter. This amount compares to net income of $2,193,000 or $1.06 per share, for the same period last year.  For the six months-ended the Bank produced net income amounting to $5,212,000 or $2.53 per basic share. This amount compares to a net income of $4,021,000 or $1.94 per share, for the same period last year. 

At June 30, 2025, select financial information and key highlights include:

• Return on average assets of 1.20%
• Return on average equity of 12.26%
• Book value of $41.32
• Total deposit growth of 2.60%
• Total asset growth of 3.14%
• Total loan growth of 4.43%
• Community Bank Leverage Ratio of 10.42%
• Net Interest Margin of 3.70%

The Board of Directors voted to pay the 7.00% preferred dividend, which calculates to $0.49 per share on August 8, 2025, to preferred shareholders of record August 1, 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 August 18, 2025, to common shareholders of record August 11, 2025. President & CEO Michelle Austin stated, "It's an incredible honor to step into this role and lead an organization with such a strong legacy.  I'm proud to report another quarter of solid earnings, a testament to the dedication of our team and the trust of our customers.  As we continue delivering value to our shareholders, we remain deeply committed to serving our community because our success means little without the people and places that made it possible."     

Results of Operations

Net income for the three months ended June 30, 2025, was $3,168,000 compared to $2,193,000 for the same period last year, representing an increase of $975,000 or 44.46%.  Basic and diluted earnings per share increased $0.49 from $1.06 at June 30, 2024, to $1.55 at June 30, 2025.  The increase in net income is primarily due to $1,759,000 more interest income, $300,000 more noninterest income, $25,000 less interest expense on deposits, offset by $640,000 more noninterest expense, and $259,000 more income tax expense. 

For the three months ended June 30, 2025, the Bank recorded a provision for credit loss expense of $8,000 and a reserve for unfunded commitments of $(99,000), which is included in other expenses. This compares to $36,000 for the same period last year, representing a decrease of $28,000.  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 1.18% at the end of the quarter, down two basis points from the prior quarter and unchanged from one year prior.    

At June 30, 2025, net loans increased 4.43%. Interest and fees on loans at June 30, 2025, increased $1,759,000 over the same three-month period of 2024. Interest expense decreased by $25,000 from $3,855,000 at June 30, 2024, to $3,830,000 at June 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 $300,000, or 22.51%, to $1,633,000 for the three months ended June 30, 2025, compared to $1,333,000 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 $640,000 from $4,934,000 at June 30, 2024, to $5,574,000 at June 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 June 30, 2025, was $827,000 compared to $568,000 one year prior. The increase in tax expense is due to more revenue for the quarter.

Financial Condition

At June 30, 2025, total assets amounted to $886,260,000, an increase of 3.14% above total assets at December 31, 2024 of $859,237,000, an increase of $27,023,000. Total net loans increased $29,747,000 or 4.43% from $671,590,000 at December 31, 2024, to $701,337,000 at June 30, 2025. Total deposits at December 31, 2024, amounted to $769,386,000, compared to $789,387,000 at June 30, 2025, an increase of 2.60% or $20,001,000.

Stockholders' equity totaled $87,788,000 at June 30, 2025, compared to $82,510,000 at December 31, 2024. The $5,278,000 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 second quarter of 2025. Provision for credit losses for the second quarter of 2025 was $8,000 compared with $354,000 in the previous quarter and $36,000 in the same quarter of 2024. 

The Bank had no foreclosed properties at December 31, 2024, and June 30, 2025, respectively.  Therefore, non-performing assets only consisted of nonaccrual loans.  Non-performing assets increased at June 30, 2025, from $51,000 at December 31, 2024 to $629,000 at June 30, 2025.  The increase is attributable to the addition of three commercial and industrial loans.  The commercial and industrial additions are collateralized by commercial vehicles and a blanket UCC on equipment.  Three commercial and industrial loans totaling $584,000 were added to nonaccrual loans during the second 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 second quarter of 2025 were $78,000 or four basis point annualized on total average loans outstanding.  Net charge-offs for the second quarter of 2025 were comprised of charge-offs of $161,000, partially offset by recoveries of $84,000.  Compared to December 31, 2024, net charge-offs decreased $119,000 or seven 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 June 30, 2025, Bank of Botetourt reported its CBLR ratio at 10.42% which meets the required regulatory minimum ratio. This compares to a CBLR ratio of 10.25% at December 31, 2024.

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, Roanoke City, 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 Balance Sheets, unconsolidated June 30, 2025(unaudited) and December 31, 2024
		(unaudited)		(audited)
		June 30,		December 31,
		2025		2024
Assets
Cash and Due from banks		$          14,862,000		$          12,390,000
Interest-bearing deposits with banks		52,457,000		53,430,000
Federal funds sold		784,000		936,000
Total cash and cash equivalents		68,103,000		66,756,000
Debt securities held to maturity, net of allowance		9,982,000		9,982,000
for credit losses of $18,000 at June 30, 2025 and
December 31, 2024, respectively
Debt securities available for sale		67,103,000		73,159,000
Loans, net of allowance for credit losses of $8,350,000 at		701,337,000		671,590,000
June 30, 2025 and $7,989,000 at December 31, 2024.
Loans held for sale		1,360,000		-
Premises and fixed assets, net		17,808,000		17,356,000
Investment in unconsolidated subsidiaries		3,499,000		3,257,000
Other assets		17,068,000		17,137,000
Total assets		$        886,260,000		$        859,237,000
Liabilities and Stockholders' Equity
Liabilities
Noninterest-bearing deposits		$        182,535,000		$        181,585,000
Interest-bearing deposits		606,852,000		587,801,000
Total deposits		789,387,000		769,386,000
Other liabilities		9,085,000		7,341,000
Total liabilities		798,472,000		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 June 30, 2025 and at December 31, 2024, respectively		244,000		244,000
Common stock, $1.50 par value; 5,000,000 shares
authorized; 1,966,209 and 1,960,879 issued and
outstanding at June 30, 2025 and at December 31, 2024
respectively		2,949,000		2,941,000
Additional paid-in capital		24,361,000		24,198,000
Retained earnings		63,368,000		59,277,000
Accumulated other comprehensive loss		(3,134,000)		(4,150,000)
Total stockholders' equity		87,788,000		82,510,000
Total liabilities and stockholders' equity		$        886,260,000		$        859,237,000

 

Bank of Botetourt Income Statement For the six months ended and three months ended June 30, 2025 and 2024 (Unaudited)
	Six Months Ended June 30,				Three Months Ended June 30,
	2025		2024		2025		2024
Interest income
Loans and fees on loans	$      21,304,000		$      17,756,000		$      10,861,000		$        9,102,000
Securities:
U.S. Treasury and Government Agencies	301,000		394,000		147,000		191,000
Mortgage-backed securities	109,000		133,000		53,000		65,000
All other securities	417,000		434,000		208,000		217,000
Due from depository institutions	1,005,000		1,321,000		496,000		674,000
Federal funds sold	17,000		9,000		9,000		4,000
Total Interest income	23,153,000		20,047,000		11,774,000		10,253,000
Interest expense
Deposits	7,824,000		7,040,000		3,830,000		3,607,000
Other borrowings	-		491,000		-		248,000
Total Interest expense	7,824,000		7,531,000		3,830,000		3,855,000
Net Interest Income	15,329,000		12,516,000		7,944,000		6,398,000
Provision for credit losses	362,000		102,000		8,000		36,000
Net Interest Income after credit loss expense	14,967,000		12,414,000		7,936,000		6,362,000
Noninterest income
Service charges on deposit accounts	634,000		612,000		319,000		335,000
Securities brokerage and annuities	124,000		186,000		49,000		119,000
Other income, net of gains	2,119,000		1,718,000		1,265,000		879,000
Total noninterest income	2,877,000		2,516,000		1,633,000		1,333,000
Noninterest expense
Salaries and employee benefits	4,709,000		4,377,000		2,378,000		2,151,000
Premises and fixed assets expense	1,187,000		970,000		567,000		479,000
Other expense	5,380,000		4,523,000		2,629,000		2,304,000
Total noninterest expense	11,276,000		9,870,000		5,574,000		4,934,000
Income before income taxes	6,568,000		5,060,000		3,995,000		2,761,000
Income tax expense	1,356,000		1,039,000		827,000		568,000
Net income	5,212,000		4,021,000		3,168,000		2,193,000
Preferred stock dividends	239,000		239,000		120,000		120,000
Net income available to common shareholders	$        4,973,000		$        3,782,000		$        3,048,000		$        2,073,000
Basic earnings per share	$                  2.53		$                  1.94		$                  1.55		$                  1.06
Diluted earnings per share	$                  2.53		$                  1.94		$                  1.55		$                  1.06
Dividends declared per share	$                  0.45		$                  0.40		$               0.225		$                  0.20
Basic weighted average shares outstanding	1,963,718		1,954,082		1,965,101		1,955,395
Diluted weighted average shares outstanding	1,963,718		1,954,082		1,965,101		1,955,395

 

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SOURCE Bank of Botetourt

FAQ

What was Bank of Botetourt's (BORT) earnings per share in Q2 2025?

Bank of Botetourt reported earnings of $1.55 per basic share in Q2 2025, compared to $1.06 per share in Q2 2024.

How much did Bank of Botetourt's (BORT) deposits grow in Q2 2025?

The bank's total deposits grew by 2.60% to $789.4 million from $769.4 million at December 31, 2024.

What is Bank of Botetourt's (BORT) dividend payment for Q2 2025?

The bank declared a quarterly dividend of $0.225 per share for common shareholders, payable on August 18, 2025.

What was Bank of Botetourt's (BORT) loan growth in Q2 2025?

Total net loans increased by 4.43% to $701.3 million from $671.6 million at December 31, 2024.

How did Bank of Botetourt's (BORT) asset quality perform in Q2 2025?

While overall asset quality remained strong, non-performing assets increased to $629,000 from $51,000, primarily due to three commercial and industrial loans added to nonaccrual status.