Potomac Bancshares Reports 60% Increase in Second Quarter Earnings

Rhea-AI Summary

Potomac Bancshares (OTCID: PTBS) reported Q2 2026 net income of $3.3 million, or $0.80 per share, up 9% from Q1 2026 and 60% from Q2 2025. Q2 return on average assets was 1.32% and return on average equity was 15.52%. For the first half of 2026, net income was $6.4 million, or $1.54 per share, a 49% increase over the prior year period.

Net interest income rose 9% linked-quarter, with net interest margin expanding to 3.76% and the efficiency ratio improving to 61.15%. Loans grew 7% annualized (5% year-over-year) and deposits 1% annualized (7% year-over-year). Noninterest income declined 9% from Q1 2026 but increased 47% versus Q2 2025. Asset quality remained favorable, with nonperforming assets at 0.05% of total assets and allowance for credit losses on loans at 1.03% of total loans.

Total assets reached $981.4 million, shareholders' equity $86.9 million, and the bank remained well-capitalized, including a total capital ratio of 14.04% and CET1 ratio of 12.97%. The quarterly cash dividend was raised 15% to $0.15 per share, which was also declared for Q3 2026, and a previously authorized stock repurchase plan for up to 100,000 shares or $2.0 million remained unused.

Positive

• Q2 2026 net income $3.32 million, +9% QoQ and +60% YoY
• First-half 2026 net income $6.4 million, +49% year-over-year
• Net interest margin expanded to 3.76% from 3.66% in Q1 2026
• Adj. pre-provision, pre-tax earnings up to $4.55 million from $3.86 million QoQ
• Loans +7% annualized QoQ and +5% year-over-year; deposits +7% year-over-year
• Dividend increased 15% QoQ to $0.15 per share
• Capital ratios strong: total capital 14.04%, CET1 12.97%, TCE/TA 8.86%

Negative

• Noninterest income declined 9% QoQ, driven by lower mortgage and SBA loan sale gains
• Loans past due >30 days rose to 0.56% of loans from 0.23% in Q1 2026
• Provision for credit losses increased to $250 thousand from $200 thousand in Q1 2026
• Net unrealized losses on securities $5.8 million, up $574 thousand since March 31, 2026
• Leverage ratio edged down to 9.85% from 10.02% in Q1 2026
• Stock repurchase plan unused; no shares repurchased in 2025 or first half 2026

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CHARLES TOWN, W.Va., July 29, 2026 /PRNewswire/ -- Potomac Bancshares, Inc. (the "Company") (OTCID: PTBS), the bank holding company of Potomac Bank (the "Bank"), reported net income of $3.3 million, or $0.80 per basic and diluted earnings per common share, for the second quarter of 2026. This represents a 9% increase from the first quarter of 2026 and a 60% increase from the second quarter of 2025. Return on average assets was 1.32% and return on average equity was 15.52% for the quarter.

For the six months ending June 30, 2026, the Company reported net income of $6.4 million, or $1.54 per share. This represents an increase of $2.1 million, or 49% increase, compared to the same period in 2025 when net income was $4.3 million, or $1.03 per share.

Quarterly Financial Highlights
(in thousands, except per share data)

	Q2 2026	Q1 2026	Q2 2025
Net Income	$3,320	$3,044	$2,074
EPS (basic and diluted)	$0.80	$0.73	$0.50
ROA	1.32 %	1.28 %	0.91 %
ROE	15.52 %	14.68 %	10.83 %
Non-GAAP Measures1:
Adj. Net Income	$ 3,320	$2,865	$2,159
Adj. EPS (basic and diluted)	$0.80	$0.69	$0.52
Adj. ROA	1.32 %	1.21 %	0.95 %
Adj. ROE	15.52 %	13.82 %	11.27 %
Adj. Pre-Provision, Pre-Tax Earnings	$4,552	$3,860	$3,008
Adj. Pre-Provision, Pre-Tax ROA	1.82 %	1.63 %	1.32 %
Net Interest Margin	3.76 %	3.66 %	3.48 %
Efficiency Ratio	61.15 %	64.84 %	67.96 %

¹Non-GAAP financial measures provide additional insight into the Company's core operating performance by excluding certain non-recurring items. See "Non-GAAP Financial Measures" and "Non-GAAP Reconciliations" for additional information and detailed calculations of adjustments.

"We are extremely pleased with our second quarter performance, which produced record quarterly earnings, strong revenue growth, and continued improvement in profitability metrics," said Alice Frazier, President and CEO of Potomac Bancshares. "We experienced strong organic growth across our core markets. Despite early payoffs, loans increased 2% during the quarter and asset quality remained exceptional. Our growth opportunities remain strong for delivering long-term value to our shareholders."

Expansion in New and Existing Markets

The Bank previously announced its plans to expand into the Winchester-Frederick County, Virginia market and hired experienced bankers to lead the expansion. Early returns are positive ahead of the first branch expected to open in downtown Winchester late in the third quarter. The Bank's market president will join other employees in the new branch to enable more comprehensive service to business and personal clients.

Commercial deposit growth remains a strategic priority, leading to the recruitment of an experienced commercial banker dedicated to expanding treasury management services and growing the Bank's commercial deposit portfolio across its markets.

Second Quarter Highlights

Key highlights of the three-month period ending June 30, 2026, are as follows, with comparisons to the three-month period ending March 31, 2026, unless otherwise noted:

• Net income increased 9% linked-quarter and 60% year-over-year
• Return on assets improved to 1.32%
• Return on equity increased to 15.52%
• Net interest margin expanded to 3.76%
• Loans increased 7% (annualized) and 5% year-over-year
• Deposits increased 1% (annualized) and 7% year-over-year
• Book value per share increased to $20.97, or 12% year-over-year
• Cash dividend increased to $0.15 per share, or 15% over the prior quarter

Net Interest Income

Net interest income was $9.1 million for the second quarter of 2026, representing a 9% increase from the first quarter of 2026. Total interest and dividend income increased by $883 thousand, which was partially offset by a $141 thousand increase in total interest expense.

The increase in interest and dividend income was primarily attributable to a $577 thousand, or 6%, increase in interest income and fees on loans and a $207 thousand, or 25%, increase in other interest income and dividend income. The increases were primarily a result of higher balances of loans and interest-bearing deposits in banks, and $139 thousand of accelerated deferred loan fee income on a loan that was paid off prior to its maturity date during the second quarter.

The increase in total interest expense was attributable to an increase in interest expense on deposits from higher average interest-bearing deposits. The cost of deposits decreased by 2 basis points to 1.55% for the quarter.

The net interest margin increased to 3.76% compared to 3.66% for the first quarter of 2026. Approximately 5 basis points of the increase resulted from the recognition of $139 thousand in accelerated deferred loan fee income from a loan that paid off prior to its maturity date. Excluding the favorable impact of the accelerated fee income, net interest margin would have increased to 3.71% for the second quarter, reflecting a favorable trend in earning asset yields and disciplined deposit pricing.

Noninterest Income

Noninterest income totaled $2.6 million for the second quarter, which was a 9% decrease from the first quarter of 2026, reflecting a $145 thousand decrease in gains on sales of mortgage loans and a $308 thousand decrease in gains on sales of SBA loans. There was less demand for mortgage loans in the second quarter compared to recent periods. The decrease in gains on sales of SBA loans was attributable to the total dollar amount of loans sold in the first quarter of 2026 being unusually high. The decreases were partially offset by increases in wealth management income, debit card interchange income, and other operating income. Other operating income increased from a $201 thousand loan prepayment penalty on a loan that paid off prior to its maturity date.

Compared to the second quarter of 2025, noninterest income increased $827 thousand, or 47%, driven by growth in wealth management income, debit card interchange income, other operating income, and gains on sales of SBA loans. Wealth management income increased $292 thousand, or 59%, from the implementation of a new client fee schedule and estate fee income. Other operating income increased $376 thousand from a $201 thousand from income from a prepayment penalty on a loan and the receipt of an annual incentive based on debit card transactions totaling $120 thousand.

Noninterest Expense

Noninterest expense totaled $7.2 million, which was a slight increase from the first quarter of 2026. Expenses were comparable to the first quarter of 2026 except for marketing and other operating expenses. Increases in marketing expenses were partially offset by decreases in other operating expenses. Marketing expenses increased $84 thousand from business development costs in the Bank's new market area, initiatives to increase market share in existing markets, and the cost of sponsorships of community events and local non-profit organizations. Other operating expenses decreased $80 thousand from a decrease in fraud losses in the second quarter.

Asset Quality

Overview

Asset quality metrics remained favorable as of June 30, 2026. Loans past due greater than 30 days and still accruing interest as a percentage of total loans were 0.56% on June 30, 2026, compared to 0.23% on March 31, 2026, and 0.42% on June 30, 2025. Nonperforming assets as a percentage of total assets were 0.05% on June 30, 2026, compared to 0.03% on March 31, 2026, and 0.24% on June 30, 2025. Annualized net charge-offs as a percentage of total loans were 0.13% for the second quarter of 2026 and the allowance for credit losses on loans totaled $7.9 million, or 1.03% of total loans.

Provision for Credit Losses

Provision for credit losses totaled $250 thousand for the second quarter of 2026 compared to $200 thousand for the first quarter of 2026 and $225 thousand for the second quarter of 2025. The provision for credit losses was comprised of a $60 thousand provision for loans and a $40 thousand provision for unfunded commitments.

Allowance for Credit Losses on Loans

The allowance for credit losses on loans totaled $7.9 million, or 1.03% of total loans on June 30, 2026, compared to 1.05% of total loans on March 31, 2026, and 0.99% of total loans on June 30, 2025.

The following table provides the changes in the allowance for credit losses on loans for the three-month periods ended:

(dollars in thousands)
	Q2 2026	Q1 2026	Q2 2025
Allowance for credit losses on loans, beginning	$7,972	$7,796	$7,180
Net charge-offs	(244)	(17)	(46)
Provision for credit losses on loans	210	193	225
Allowance for credit losses on loans, ending	$7,938	$7,972	$7,359

Allowance for Credit Losses on Unfunded Commitments

The allowance for credit losses on unfunded commitments totaled $477 thousand on June 30, 2026, and $437 thousand on March 31, 2026. The provision for credit losses on unfunded commitments was $40 thousand, compared to the provision for credit losses on unfunded commitments of $7 thousand for the first quarter of 2026.

Balance Sheet

Assets totaled $981.4 million on June 30, 2026, which was a 2% increase (annualized) from March 31, 2026, and a 7% increase year-over-year. There was no significant change in the Bank's asset composition when comparing balances on June 30, 2026, to balances on March 31, 2026, and June 30, 2025.

Securities available for sale increased $3.9 million, or 17% annualized, during the second quarter, and increased $19.9 million, or 26% from one year ago. Net unrealized losses on the securities portfolio totaled $5.8 million on June 30, 2026, which was an increase of $574 thousand from March 31, 2026, and a decrease of $728 thousand from June 30, 2025.

Total (gross) loans increased $13.2 million, or 7% annualized, during the second quarter, which was primarily attributable to an $8.1 million increase in other real estate loans (secured by commercial real estate) and a $3.8 million increase in construction and land development loans. The loan growth occurred despite approximately $12.0 million of loans that paid off prior to their maturity dates during the second quarter. On a year-over-year basis, total loans increased $35.3 million, or 5%.

Total deposits increased $2.4 million, or 1% annualized, during the second quarter, and increased $52.9 million, or 7%, year-over-year. Noninterest-bearing deposits totaled 23% of total deposits at the end of the period, which was up from 22% on March 31, 2026.

Other borrowings totaled $30.0 million on June 30, 2026, compared to $29.2 million on March 31, 2026, and $31.8 million one year ago. This included $27.0 million borrowed from the Federal Home Loan Bank of Pittsburgh, with a weighted average fixed interest rate of 4.21% and maturity dates ranging from 2026 to 2028.

Shareholders' equity totaled $86.9 million on June 30, 2026, an increase of $2.3 million, or 11% annualized from March 31, 2026, and $9.4 million, or 12%, from one year ago. The increases were primarily attributable to increases in retained earnings. Retained earnings increased $2.7 million, or 15% annualized, quarter-over-quarter, and $8.8 million, or 13%, year-over-year. Accumulated other comprehensive loss increased $431 thousand from the first quarter of 2026 and decreased $594 thousand year-over-year from changes in market rates.

The Bank remained well-capitalized based on capital ratios at the end of the following quarterly periods:

	Q2 2026	Q1 2026	Q2 2025
Total capital ratio (2)	14.04 %	13.98 %	13.46 %
Tier 1 capital ratio (2)	12.97 %	12.87 %	12.40 %
Common equity Tier 1 capital ratio (2)	12.97 %	12.87 %	12.40 %
Leverage ratio (2)	9.85 %	10.02 %	9.91 %
Tangible common equity to tangible assets (1)(3)	8.86 %	8.67 %	8.42 %

Dividends

During the second quarter of 2026, the Company paid a quarterly cash dividend of $0.15 per common share, which was a 15% increase compared to $0.13 per share paid during the first quarter of 2026.

The Company recently announced that a quarterly cash dividend of $0.15 per common share was declared for the third quarter of 2026 by its Board of Directors. The dividend was declared for all shareholders of record as of August 6, 2026, and payable on August 13, 2026.

Stock Repurchase Plan

On October 19, 2025, the Company's board of directors authorized a stock repurchase plan pursuant to which Potomac Bancshares, Inc. may repurchase up to the aggregate of 100,000 shares or $2.0 million of the Company's outstanding common stock. The plan ends on October 19, 2027, unless the entire amount authorized to be repurchased has been acquired before that date. There were no repurchases of common stock during the first six months of 2026 or during 2025.

Non-GAAP Financial Measures

In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), the Company uses certain non-GAAP financial measures that management believes provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. Non-GAAP financial measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure is included at the end of this release.

About Potomac Bancshares

Potomac Bancshares, Inc. (OTCID: PTBS) is the bank holding company of Potomac Bank, which was founded in 1871 as Bank of Charles Town and renamed Potomac Bank on November 3, 2025. The Bank conducts operations through its nine-branch network and one loan production office serving the Eastern Panhandle of West Virginia, Washington County, Maryland, and Northern Virginia. The Bank offers comprehensive financial solutions through its consumer and commercial banking divisions, Trust and Wealth, and BCT Investments divisions, and its Residential Lending mortgage division. The Bank is also proud to serve its communities as a Small Business Administration (SBA) Preferred Lender. Over the past several years, the Bank has received many awards and recognitions, including American Banker's "Top Performing Banks" and "Best Banks to Work For", the Journal-News "Best of the Best" award, and the LoudounNow "Loudoun's Favorite" award.

The Company's shares are quoted on the OTCID marketplace under the symbol "PTBS." For more information about Potomac Bancshares, Inc., and the Bank, please visit our website at www.potomac.bank.

Forward-Looking Statements

Certain statements made in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about events or results or otherwise are not statements of historical facts, such as statements about the Company's growth strategy and deployment of capital. Although the Company believes that its expectations with respect to such forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results, performance, or achievements of the Company will not differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ from those discussed in such forward-looking statements include, but are not limited to, the following: (1) general economic conditions, especially in the communities and markets in which the Company conducts its business; (2) credit risk, including risk that negative credit quality trends may lead to a deterioration of asset quality, risk that our allowance for credit losses may not be sufficient to absorb actual losses in the Company's loan portfolio, and risk from concentrations in the Company's loan portfolio; (3) changes in the real estate market, including the value of collateral securing portions of the Company's loan portfolio; (4) changes in the interest rate environment; (5) operational risk, including cybersecurity risk and risk of fraud, data processing system failures, and network breaches; (6) changes in technology and increased competition, including competition from non-bank financial institutions; (7) changes in consumer preferences, spending and borrowing habits, demand for our products and services, and customers' performance and creditworthiness; (8) difficulty growing loan and deposit balances; (9) the Company's ability to effectively execute its business plan; (10) changes in regulations, laws, taxes, government policies, monetary policies and accounting policies affecting bank holding companies and their subsidiaries, including changes in deposit insurance premiums; (11) deterioration in the financial condition of the U.S. banking system may impact the valuations of investments the Company has made in the securities of other financial institutions; (12) regulatory enforcement actions and adverse legal actions; (13) difficulty attracting and retaining key employees; and (14) other economic, competitive, technological, operational, governmental, regulatory, and market factors affecting the Company's operations. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise, except as required by applicable law.

Contacts
Alice P. Frazier President and CEO (304) 728-2431 afrazier@potomac.bank	M. Shane Bell Executive Vice President and CFO (304) 728-2434 sbell@potomac.bank

 

POTOMAC BANCSHARES, INC.
Performance Summary
(in thousands, except share and per share data)
(unaudited)
	For the Three Months Ended							For the Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,
		2026		2026		2025		2026		2025
Income Statement
Interest and dividend income:
Interest and fees on loans		$             11,062		$             10,485		$               9,682		$             21,547		$             19,183
Taxable interest on securities		894		796		710		1,690		1,425
Tax-exempt interest on securities		30		29		28		59		57
Other interest and dividends		1,040		833		989		1,873		1,663
Total interest and dividend income		$             13,026		$             12,143		$             11,409		$             25,169		$             22,328
Interest expense:
Interest on deposits		$               3,379		$               3,243		$               3,324		$               6,622		$               6,429
Interest on short term borrowings		6		3		2		9		8
Interest on long term borrowings		287		290		309		577		622
Interest on subordinated debt		219		214		140		433		281
Total interest expense		$               3,891		$               3,750		$               3,775		$               7,641		$               7,340
Net interest income		$               9,135		$               8,393		$               7,634		$             17,528		$             14,988
Provision for credit losses		250		200		225		450		475
Net interest income after provision for credit losses		$               8,885		$               8,193		$               7,409		$             17,078		$             14,513
Noninterest Income:
Wealth and investments		$                   790		$                   745		$                   498		$               1,535		$               1,003
Service charges on deposit accounts		240		234		225		474		485
Gains / fees on sale of mortgage loans		349		494		351		843		598
ATM and check card fees		563		499		518		1,062		993
Income from bank owned life insurance		102		101		100		203		197
Net loss on disposal of premises & equipment		(1)		(9)		-		(10)		(2)
Net gain on sale of SBA loans		100		408		-		508		-
Other operating income		450		368		74		818		321
Total noninterest income		$               2,593		$               2,840		$               1,766		$               5,433		$               3,595
Noninterest expenses:
Salaries and employee benefits		$               4,083		$               4,049		$               3,742		$               8,132		$               7,092
Occupancy		321		334		310		655		654
Equipment		301		269		344		570		720
Accounting, audit, and compliance		58		73		70		131		139
Marketing		231		147		112		378		230
Data processing		471		485		453		956		905
FDIC assessment		114		108		104		222		203
Other professional fees		139		135		140		274		272
Trust professional fees		209		206		144		415		315
Director and committee fees		117		126		68		243		165
Legal fees		16		17		23		33		56
Supplies		71		89		66		160		145
Communications		129		121		112		250		224
ATM and check card expense		282		273		264		555		504
Other operating expenses		634		714		547		1,348		1,076
Total noninterest expenses		$               7,176		$               7,146		$               6,499		$             14,322		$             12,700
Income before income tax expense		$               4,334		$               3,887		$               2,676		$               8,189		$               5,408
Income tax expense		1,014		843		602		1,889		1,146
Net income		$               3,320		$               3,044		$               2,074		$               6,301		$               4,262

 

POTOMAC BANCSHARES, INC.
Performance Summary
(in thousands, except share and per share data)
(unaudited)
		As of or For the Three Months Ended						As of or for the Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,
		2026		2026		2025		2026		2025
Common Share and Per Common Share Data
Earnings per common share, basic		$                 0.80		$                 0.73		$                    0.50		$                      1.54		$                      1.03
Adjusted earnings per common share, basic (1)		$                 0.80		$                 0.69		$                    0.52		$                      1.49		$                      1.05
Weighted average shares, basic		4,144,561		4,144,561		4,144,561		4,144,561		4,144,561
Earnings per common share, diluted		$                 0.80		$                 0.73		$                    0.50		$                      1.54		$                      1.03
Adjusted earnings per common share, diluted (1)		$                 0.80		$                 0.69		$                    0.52		$                      1.49		$                      1.05
Weighted average shares, diluted		4,144,561		4,144,561		4,144,561		4,144,561		4,144,561
Shares outstanding at period end		4,144,561		4,144,561		4,144,561		4,144,561		4,144,561
Tangible book value per share at period end (1)		$               20.97		$               20.42		$                 18.70		$                    20.97		$                    18.70
Cash dividends		$                 0.15		$                 0.13		$                    0.13		$                      0.28		$                      0.25
Key Performance Ratios
Return on average assets		1.32 %		1.28 %		0.91 %		1.30 %		0.96 %
Adjusted return on average assets (1)		1.32 %		1.21 %		0.95 %		1.27 %		0.98 %
Return on average equity		15.52 %		14.68 %		10.83 %		15.11 %		11.41 %
Adjusted return on average equity (1)		15.52 %		13.82 %		11.27 %		14.68 %		11.63 %
Net interest margin (1)		3.76 %		3.66 %		3.48 %		3.71 %		3.51 %
Efficiency ratio (1)		61.15 %		64.84 %		67.96 %		62.94 %		67.72 %
Average Balances
Average assets		$       1,005,077		$          961,992		$             912,253		$               983,653		$               891,935
Average earning assets		973,898		930,543		881,485		952,339		861,090
Average shareholders' equity		85,786		84,077		76,808		84,936		75,341
Asset Quality
Loan charge-offs		$                   251		$                     23		$                       65		$                       274		$                          86
Loan recoveries		7		6		20		13		40
Net charge-offs		244		17		45		261		46
Non-accrual loans		500		257		2,245		-		2,245
Other real estate owned, net		-		-		-		-		-
Nonperforming assets (5)		500		257		2,245		-		2,245
Loans 30 to 89 days past due, accruing		3,663		1,491		726		3,663		726
Loans over 90 days past due, accruing		128		-		151		128		151
Special mention loans		21,078		20,344		15,711		21,078		15,711
Substandard loans, accruing		418		432		1,150		418		1,150
Non performing assets/total assets		0.05 %		0.03 %		0.24 %		0.00 %		0.24 %
Past due loans/total loans		0.56 %		0.23 %		0.42 %		0.49 %		0.42 %
Capital Ratios (2)
Total capital		$          108,010		$          105,495		$               99,097		$               108,129		$                 99,097
Tier 1 capital		99,746		97,087		91,290		99,864		91,290
Common equity tier 1 capital		99,746		97,087		91,290		99,864		91,290
Total capital to risk-weighted assets		14.04 %		13.98 %		13.46 %		14.06 %		13.46 %
Tier 1 capital to risk weighted assets		12.97 %		12.87 %		12.40 %		12.98 %		12.40 %
Common equity Tier 1 capital to risk weighed assets		12.97 %		12.87 %		12.40 %		12.98 %		12.40 %
Leverage ratio		9.85 %		10.02 %		9.91 %		9.86 %		9.91 %

 

POTOMAC BANCSHARES, INC.
Performance Summary
(in thousands, except share and per share data)
(unaudited)
		For the Period Ended
		June 30,		March 31,		December 31,		September 30,		June 30,
		2026		2026		2025		2025		2025
Balance Sheet
Cash and due from banks		$               4,884		$               6,133		$               3,603		$               4,648		$               4,638
Interest-bearing deposits in other financial institutions		74,980		87,754		76,046		115,174		67,636
Cash and cash equivalents		$             79,864		$             93,887		$             79,649		$          119,822		$             72,274
Securities available for sale, at fair value		96,642		92,713		80,905		77,935		76,787
Equity securities, at fair value		309		280		258		278		246
Restricted securities		2,122		1,852		1,932		1,932		2,037
Loans held for sale		3,321		1,771		2,804		2,946		5,682
Loans, net of allowance for credit losses		763,774		750,548		743,808		724,611		729,065
Premises and equipment, net		8,776		8,734		8,759		8,164		8,107
Accrued interest receivable		2,800		2,719		2,309		2,592		2,439
Bank owned life insurance		14,103		14,002		14,378		14,275		14,174
Other assets		9,687		9,340		9,482		9,456		9,528
Total assets		$          981,398		$          975,846		$          944,284		$          962,011		$          920,339
Noninterest-bearing  demand deposits		$          196,835		$          187,715		$          183,461		$          204,355		$          176,708
Savings and interest-bearing demand deposits		650,911	U	657,665		629,568		629,062		618,155
Total deposits		$          847,746		$          845,380		$          813,029		$          833,417		$          794,863
Short term borrowings		2,967		2,241		2,451		3,013		2,793
Long term borrowings		27,000		27,000		29,000		29,000		29,000
Subordinated debt		10,000		10,000		10,000		10,000		9,989
Accrued interest payable		993		936		1,052		1,037		1,148
Other liabilities		5,789		5,652		6,309		5,185		5,056
Total liabilities		$          894,495		$          891,209		$          861,841		$          881,652		$          842,849
Common stock		$               4,493		$               4,493		$               4,493		$               4,493		$               4,493
Surplus		14,547		14,547		14,547		14,547		14,547
Retained Earnings		75,852		73,154		70,649		68,815		67,032
Accumulated other comprehensive (loss), net		(4,494)		(4,063)		(3,752)		(4,002)		(5,088)
		$             90,398		$             88,131		$             85,937		$             83,853		$             80,984
Less cost of shares acquired for the treasury		(3,494)		(3,494)		(3,494)		(3,494)		(3,494)
Total shareholders' equity		$             86,904		$             84,637		$             82,443		$             80,359		$             77,490
Total liabilities and shareholders' equity		$          981,398		$          975,846		$          944,284		$          962,011		$          920,339
Loan Data
Construction and land development		$             41,585		$             37,751		$             45,537		$             45,979		$             46,882
Secured by farmland		7,351		7,435		7,509		7,594		6,732
Secured by 1-4 family residential properties		270,734		270,027		258,467		256,974		253,798
Secured by multifamily residential properties		38,906		38,205		39,280		39,928		39,246
Secured by owner-occupied nonfarm nonresidential properties		122,061		114,770		114,078		117,053		118,883
Secured by other nonfarm nonresidential properties		218,096		217,282		205,548		188,227		197,561
Loans to farmers (except secured by real estate)		101		109		120		128		118
Commercial and industrial loans (except those secured by real estate)		62,967		63,517		72,158		66,965		63,763
Consumer installment loans		2,830		2,859		2,757		2,845		2,860
Deposit overdraft		-		-		-		-		-
All other loans		7,081		6,565		6,150		6,424		6,581
Total loans		$          771,712		$          758,520		$          751,604		$          732,117		$          736,424
Allowance for credit losses		(7,938)		(7,972)		(7,796)		(7,506)		(7,359)
Loans, net		$          763,774		$          750,548		$          743,808		$          724,611		$          729,065

 

POTOMAC BANCSHARES, INC.
Non-GAAP Reconciliations
(in thousands, except share and per share data)
(unaudited)
		As of or for the Three Months Ended						As of or for the Six Months Ended
		June 30,		March 31,		June 30,		June 30,		June 30,
		2026		2026		2025		2026		2025
Adjusted Net Income
Net income (GAAP)		$               3,320		$               3,044		$                 2,074		$                    6,364		$                    4,262
Add: Loss on sale of securities		-		-		-		-		-
Add: Core system conversion expense		-		-		85		-		85
Add:  Renaming expense		-		-		22		-		22
Subtract:  Interest income recognized on nonaccrual loans from prior periods		-		-		-		-		-
Subtract: BOLI death benefit		-		(227)		-		(227)		-
Total adjustments		$                      -		$                 (227)		$                     107		$                      (227)		$                       107
Subtract: Tax effect of adjustment (4)		-		48		(22)		48		(22)
Adjusted net income (non-GAAP)		$               3,320		$               2,865		$                 2,159		$                    6,184		$                    4,347
Adjusted Earnings Per Share, Basic
Weighted average shares, basic		4,144,561		4,144,561		4,144,561		4,144,561		4,144,561
Basic earnings per share (GAAP)		$                 0.80		$                 0.73		$                    0.50		$                      1.54		$                      1.03
Adjusted earnings per share, basic (Non-GAAP)		$                 0.80		$                 0.69		$                    0.52		$                      1.49		$                      1.05
Adjusted Earnings Per Share, Diluted
Weighted average shares, diluted		4,144,561		4,144,561		4,144,561		4,144,561		4,144,561
Diluted earnings per share (GAAP)		$                 0.80		$                 0.73		$                    0.50		$                      1.54		$                      1.03
Adjusted earnings per share, diluted (Non-GAAP)		$                 0.80		$                 0.69		$                    0.52		$                      1.49		$                      1.05
Adjusted Pre-Provision, Pre-tax earnings
Net interest income		$               9,135		$               8,393		$                 7,634		$                 17,528		$                 14,988
Total noninterest income		2,593		2,840		1,766		5,433		3,595
Net revenue		$             11,728		$             11,233		$                 9,400		$                 22,961		$                 18,583
Total noninterest expense		7,176		7,146		6,499		14,322		12,700
Pre-provision, pre-tax earnings		$               4,552		$               4,087		$                 2,901		$                    8,639		$                    5,883
Add: Loss on sale of securities		-		-		-		-		-
Add: Core system conversion expense		-		-		85		-		85
Add:  Bank renaming expense		-		-		22		-		22
Subtract:  Interest income recognized on nonaccrual loans from prior periods		-		-		-		-		-
Subtract:  BOLI death benefit		-		(227)		-		(227)		-
Adjusted pre-provision, pre-tax earnings		$               4,552		$               3,860		$                 3,008		$                    8,412		$                    5,990
Adjusted Performance Ratios
Average assets		$       1,005,077		$          961,992		$             912,253		$               983,653		$               891,935
Return on average assets (GAAP)		1.32 %		1.28 %		0.91 %		1.30 %		0.96 %
Adjusted return on average assets (Non-GAAP)		1.32 %		1.21 %		0.95 %		1.27 %		0.98 %
Average shareholders' equity		$             85,786		$             84,077		$               76,808		$                 84,936		$                 75,341
Return on average equity (GAAP)		15.52 %		14.68 %		10.83 %		15.11 %		11.41 %
Adjusted return on average equity (Non-GAAP)		15.52 %		13.82 %		11.27 %		14.68 %		11.63 %
Pre-provision, pre-tax return on average assets		1.82 %		1.72 %		1.28 %		1.77 %		1.33 %
Adjusted pre-provision, pre-tax return on average assets		1.82 %		1.63 %		1.32 %		1.72 %		1.35 %
Net Interest Margin
Tax-equivalent net interest income		$               9,141		$               8,399		$                 7,640		$                 17,540		$                 15,000
Average earning assets		973,898		930,543		881,485		952,339		861,090
Net interest margin		3.76 %		3.66 %		3.48 %		3.71 %		3.51 %
Efficiency Ratio
Total noninterest expense		$               7,176		$               7,146		$                 6,499		$                 14,322		$                 12,700
Subtract: Core system conversion expense		-		-		(85)		-		(85)
Subtract: Renaming expense		-		-		(22)		-		(22)
Total noninterest expense subtotal		$               7,176		$               7,146		$                 6,392		$                 14,322		$                 12,593
Tax-equivalent net interest income		$               9,141		$               8,399		$                 7,640		$                 17,540		$                 15,000
Total noninterest income		$               2,593		$               2,840		$                 1,766		$                    5,433		$                    3,595
Add: Net losses on sale of investment securities, AFS		-		-		-		-		-
Add: Net losses on disposal of premises & equipment		1		9		-		10		2
Subtract:  Bank owned life insurance death benefit		-		(227)		-		(227)		-
Total noninterest income subtotal		$               2,594		$               2,622		$                 1,766		$                    5,216		$                    3,597
Subtotal		$             11,735		$             11,021		$                 9,406		$                 22,756		$                 18,597
Efficiency ratio		61.15 %		64.84 %		67.96 %		62.94 %		67.72 %
Tax-Equivalent Net Interest Income
GAAP measures:
Interest income - loans		$             11,062		$             10,485		$                 9,682		$                 21,547		$                 19,183
Interest income - investments taxable		894	U	796		710		1,690		1,425
Interest income - investments tax exempt		30		29		28		59		57
Interest income - other		1,040		833		989		1,873		1,663
Interest expense - deposits		(3,379)		(3,243)		(3,324)		(6,622)		(6,429)
Interest expense - short term borrowings		(6)		(3)		(2)		(9)		(8)
Interest expense - long term borrowings		(287)		(290)		(309)		(577)		(622)
Interest expense - subordinated debt		(219)		(214)	U	(140)		(433)		(281)
Net interest income		$               9,135		$               8,393		$                 7,634		$                 17,528		$                 14,988
Non-GAAP measures:
Subtract:  Interest income recognized on non-accrual loans from prior periods		-		-		-		-		-
Add: Tax benefit realized on non-taxable interest income - municipal securities (4)		$                       6		$                       6		$                          6		$                          12		$                          12
Tax equivalent net interest income		$               9,141		$               8,399		$                 7,640		$                 17,540		$                 15,000
Tangible Book Value Per Share
Tangible common equity		$             86,904		$             84,637		$               77,490		$                 86,904		$                 77,490
Common shares outstanding, ending		4,144,561		4,144,561		4,144,561		4,144,561		4,144,561
Tangible book value per share		$               20.97		$               20.42		$                 18.70		$                    20.97		$                    18.70

(1) Non-GAAP financial measures. See "Non-GAAP Financial Measures" and "Non-GAAP Reconciliations" for additional information and detailed calculations of adjustments.
(2) Capital ratios are for Potomac Bank.
(3) Capital ratios are for Potomac Bancshares, Inc.
(4) The tax rate utilized in calculating the tax benefit is 21%
(5) Nonperforming assets are comprised of nonaccrual loans. There was no other real estate owned for the periods presented.

 

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SOURCE Potomac Bancshares, Inc.

FAQ

How did Potomac Bancshares (OTCID: PTBS) perform in Q2 2026?

Potomac Bancshares reported Q2 2026 net income of $3.3 million, or $0.80 per share, a 60% year-over-year increase. According to the company, return on average assets was 1.32% and return on average equity was 15.52% for the quarter.

What drove the 60% year-over-year earnings increase for PTBS in Q2 2026?

The 60% year-over-year earnings increase reflected higher net interest income and improved efficiency. According to Potomac Bancshares, net interest income rose 9% linked-quarter, net interest margin expanded to 3.76%, loans and deposits grew, and the efficiency ratio improved to 61.15% from 67.96% a year earlier.

How did Potomac Bancshares loans and deposits change in Q2 2026?

In Q2 2026, total loans increased $13.2 million, or 7% annualized, and 5% year-over-year. According to the company, total deposits rose $2.4 million, or 1% annualized, and 7% year-over-year, with noninterest-bearing deposits reaching 23% of total deposits.

What are Potomac Bancshares’ asset quality metrics as of June 30, 2026?

As of June 30, 2026, loans past due over 30 days were 0.56% of loans and nonperforming assets were 0.05% of assets. According to the company, annualized net charge-offs were 0.13% and the allowance for credit losses on loans was 1.03% of total loans.

What dividend is Potomac Bancshares (PTBS) paying for Q3 2026?

For Q3 2026, Potomac Bancshares declared a quarterly cash dividend of $0.15 per common share. According to the company, the dividend is payable on August 13, 2026, to shareholders of record as of August 6, 2026.

Does Potomac Bancshares have a stock repurchase plan in place?

Yes. On October 19, 2025, Potomac Bancshares authorized repurchases of up to 100,000 shares or $2.0 million of common stock through October 19, 2027. According to the company, no shares were repurchased during 2025 or the first six months of 2026.

Is Potomac Bancshares well-capitalized based on Q2 2026 ratios?

Potomac Bancshares reported a total capital ratio of 14.04%, Tier 1 and CET1 ratios of 12.97%, and a leverage ratio of 9.85%. According to the company, these levels mean the bank remained well-capitalized as of June 30, 2026.