Skyline Bankshares, Inc. Announces First Quarter 2025 Results

Rhea-AI Summary

Skyline Bankshares reported strong Q1 2025 financial results, with net income reaching $3.6 million ($0.64 per share), up from $2.1 million ($0.37 per share) in Q1 2024. The company's performance showed significant improvements with:

• Return on average assets (ROAA) of 1.17%
• Return on average equity (ROAE) of 15.85%
• Net interest margin (NIM) of 4.15%

Following the Johnson County Bank acquisition in September 2024, total assets grew to $1.25 billion, marking a 19.18% increase year-over-year. Key highlights include:

• Net loans increased to $992.2 million
• Total deposits rose to $1.11 billion
• Strong asset quality with nonperforming loans at 0.22%
• Book value per share improved to $16.44

Positive

• Net income increased 71.4% to $3.6M ($0.64/share) in Q1 2025 vs $2.1M ($0.37/share) in Q1 2024
• Net interest margin improved to 4.15% in Q1 2025 from 3.64% in Q1 2024
• Total assets grew 19.18% YoY to $1.25B
• Net loans increased 21.01% YoY to $992.2M
• Strong asset quality with low nonperforming loans ratio of 0.22%
• Total deposits increased 19.77% YoY to $1.11B
• Successful integration of Johnson County Bank acquisition adding $154.1M in assets

Negative

• Interest expense on deposits increased due to competitive pressure and higher rates
• Noninterest expense increased 11.12% YoY to $8.9M
• FDIC assessments increased due to higher deposit levels

FLOYD, Va. and INDEPENDENCE, Va., April 28, 2025 (GLOBE NEWSWIRE) -- Skyline Bankshares, Inc. (the “Company”) (OTC QX: SLBK) – the holding company for Skyline National Bank (the “Bank”) – announced its results of operations for the first quarter of 2025.  

As previously announced, the Company acquired Johnson County Bank (“JCB”) on September 1, 2024, with the Company as the surviving corporation. For accounting purposes, the Company is considered the acquiror and JCB is considered the acquiree in the transaction. As such, all information contained herein as of and for periods prior to September 1, 2024 reflects the operations of the Company prior to the merger.

The Company recorded net income of $3.6 million, or $0.64 per share, for the quarter ended March 31, 2025, compared to net income of $2.1 million, or $0.37 per share, for the same period in 2024.   First quarter 2025 earnings represented an annualized return on average assets (“ROAA”) of 1.17% and an annualized return on average equity (“ROAE”) of 15.85%, compared to 0.79% and 9.94%, respectively, for the same period last year. Net interest margin (“NIM”) was 4.15% for the first quarter of 2025, compared to 3.64% for the first quarter of 2024.

President and CEO Blake Edwards stated, “We are very pleased with our results for the first quarter of 2025. Our entire Skyline team has worked tirelessly in recent years to deliver on our long-term strategy of growing the Skyline franchise and creating shareholder value through branching activity, organic growth in our legacy markets, and through acquisitions such as last year’s partnership with Johnson County Bank. Our strong first quarter earnings, as noted above, reflect the success of these ongoing efforts. I’m extremely proud of this team and know they will continue to deliver on our brand promise of being “Always our Best” for years to come.”

Highlights

• In connection with the acquisition of JCB, effective September 1, 2024, the Company acquired $154.1 million in assets at fair value, including $87.2 million in loans. The Company also assumed $133.8 million of liabilities at fair value, including $125.3 million of total deposits with a core deposit intangible asset recorded of $3.4 million, and goodwill of $4.6 million.
• Net income was $3.6 million, or $0.64 per share, for the first quarter of 2025, compared to $2.1 million, or $0.37 per share, for the first quarter of 2024.
• Net interest margin (“NIM”) was 4.15% for the first quarter of 2025, compared to 4.10% in the fourth quarter of 2024, and 3.64% in the first quarter of 2024.
• Total assets increased in the first quarter of 2025 by $33.9 million, or 2.78%, and increased by $201.4 million, or 19.18%, when compared to $1.05 billion at March 31, 2024.
• Net loans were $992.2 million at March 31, 2025, an increase of $15.8 million, or 1.61%, when compared to $976.4 million at December 31, 2024, and increased $172.3 million when compared to $819.9 million at March 31, 2024.
• Total deposits were $1.11 billion at March 31, 2025, an increase of $22.2 million, or 2.03%, from $1.09 billion at December 31, 2024, and an increase of $183.9 million from $930.4 million at March 31, 2024.

First Quarter 2025 Income Statement Review

Net interest income after provision for credit losses in the first quarter of 2025 was $11.5 million, compared to $8.8 million in the first quarter of 2024, reflecting an increase in the provision for credit losses of $85 thousand in the quarterly comparison. Total interest income was $15.5 million in the first quarter of 2025, representing an increase of $3.5 million in comparison to the $12.0 million in the first quarter of 2024. Interest income on loans increased in the quarterly comparison by $3.6 million, primarily due to organic loan growth, and the addition of loan balances from the JCB acquisition. Management anticipates that this loan growth will continue to have a positive impact on both earning assets and loan yields.   Interest expense on deposits increased by $653 thousand in the quarterly comparison, as a result of rate increases on deposit offerings, and the additional interest-bearing deposits from the JCB acquisition. Management anticipates that interest expense on deposits could increase in the near term as competitive pressures for deposits may result in continued increases in rates on deposit offerings, especially on time deposits. Interest on borrowings decreased by $11 thousand.  
  
First quarter 2025 noninterest income was $1.8 million compared with $1.7 million in the first quarter of 2024. Included in noninterest income for the first quarter of 2025 was $60 thousand from life insurance contracts.   Included in noninterest income for the first quarter of 2024 was $218 thousand from life insurance contracts and a net realized security loss of $141 thousand. The net security loss resulted from the recognition of unamortized premiums on a called bond.   Excluding these items, noninterest income increased by $104 thousand in the quarter over quarter comparison, primarily as a result of an increase in service charges of $100 thousand.

Noninterest expense in the first quarter of 2025 was $8.9 million compared with $8.0 million in the first quarter of 2024, an increase of $887 thousand, or 11.12%. Salary and benefits increased by $179 thousand in the quarterly comparison due to personnel additions and routine salary adjustments, as well as increased benefit costs. Occupancy and equipment expenses increased by $68 thousand, and data processing increased by $199 thousand in the quarterly comparisons primarily due the JCB acquisition. FDIC assessments increased by $102 thousand due to increased deposit levels from the JCB acquisition and organic deposit growth. Core deposit intangible amortization increased by $132 thousand in the quarterly comparison as a result of the JCB acquisition.

Income tax expense increased by $449 thousand in the quarter-to-quarter comparison, primarily due to an increase in net income before taxes of $2.0 million in the quarterly comparison.

Balance Sheet Review

Total assets increased in the first quarter of 2025 by $33.9 million, or 2.78%, to $1.25 billion at March 31, 2025, from $1.22 billion at December 31, 2024, and increased by $201.4 million, or 19.18%, from $1.05 billion at March 31, 2024. The increase in total assets during the quarter can be primarily attributed to the loan growth of $15.9 million and deposit growth of $22.2 million during the quarter.

Total loans increased during the first quarter by $15.9 million, or 1.61%, to $1.0 billion at March 31, 2025 from $984.5 million at December 31, 2024, and increased by $173.6 million, or 21.01%, compared to $826.7 million at March 31, 2024. Core loan growth during the first quarter was at an annualized rate of 6.60%.

Asset quality has remained strong, with a ratio of nonperforming loans to total loans of 0.22% at March 31, 2025 compared to 0.26% at December 31, 2024. The allowance for credit losses remained comparable at approximately 0.82% of total loans as of March 31, 2025 and December 31, 2024, respectively.  

Investment securities increased by $196 thousand during the first quarter to $118.5 million at March 31, 2025 from $118.3 million at December 31, 2024, and decreased by $3.9 million from $122.4 million at March 31, 2024.   The increase in the first quarter of 2025 was the result of a $2.6 million decrease in unrealized losses on investment securities and paydowns $2.4 million.

Total deposits increased in the first quarter of 2025 by $22.2 million, or 2.03%, to $1.11 billion at March 31, 2025 from $1.09 billion at December 31, 2024, and increased $183.9 million, or 19.77%, compared to $930.4 million at March 31, 2024. Noninterest-bearing deposits increased by $12.5 million and interest-bearing deposits increased by $9.7 million during the quarter. Lower cost interest-bearing deposits increased by $8.3 million during the quarter, and time deposits increased by $1.4 million.

Stockholders’ equity increased by $4.2 million, or 4.80%, to $92.9 million at March 31, 2025, from $88.7 million at December 31, 2024, and increased $10.0 million, or 12.12%, from $82.9 million at March 31, 2024.   The change during the quarter was due to earnings of $3.6 million, less dividends paid of $1.4 million, and $2.0 million in other comprehensive income.   Book value increased from $15.69 per share at December 31, 2024 to $16.44 per share at March 31, 2025.     

Forward-looking statements

This release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934 as amended. These include statements as to expectations regarding future financial performance and any other statements regarding future results or expectations. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by the use of words such as "believe," "expect," "intend," "anticipate," "estimate," or "project" or similar expressions. Our ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors which could have a material adverse effect on the operations and future prospects of the Company and its subsidiaries include, but are not limited to: changes in interest rates; general economic and financial market conditions; the effect of changes in banking, tax and other laws and regulations and interpretations or guidance thereunder; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the economic impact of duties, tariffs or other barriers or restrictions on trade, and any retaliatory counter measures, and the volatility and uncertainty arising therefrom; the quality and composition of the loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in the Company’s market area; the implementation of new technologies; the ability to develop and maintain secure and reliable electronic systems; accounting principles, policies, and guidelines; disruptions to customer and employee relationships and business operations caused by the Johnson County Bank acquisition; the ability to achieve the cost savings and synergies contemplated by the acquisition within the expected timeframe, or at all; and other factors identified in Item 1A, “Risk Factors,” in the Company’s Annual Report on 10-K for the year ended December 31, 2024. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or clarify these forward‐looking statements, whether as a result of new information, future events or otherwise.

(See Attached Financial Statements for quarter ending March 31, 2025)

Skyline Bankshares, Inc. Condensed Consolidated Balance Sheets March 31, 2025; December 31, 2024; March 31, 2024
			March 31,				December 31,				March 31,
(dollars in thousands except share amounts)				2025				2024				2024
			(Unaudited)				(Audited)				(Unaudited)
Assets
Cash and due from banks			$	21,298			$	17,889			$	13,115
Interest-bearing deposits with banks				16,130				1,562				8,233
Federal funds sold				456				-				384
Investment securities available for sale				118,483				118,287				122,368
Restricted equity securities				4,993				4,034				3,609
Loans				1,000,332				984,459				826,684
Allowance for credit losses				(8,160	)			(8,027	)			(6,765	)
Net loans				992,172				976,432				819,919
Cash value of life insurance				26,649				26,743				23,055
Other real estate owned				140				140				-
Properties and equipment, net				35,342				34,663				31,394
Accrued interest receivable				4,009				4,013				3,450
Core deposit intangible				3,603				3,815				837
Goodwill				7,900				7,900				3,257
Deferred tax assets, net				5,060				5,593				5,252
Other assets				15,263				16,528				15,207
Total assets			$	1,251,498			$	1,217,599			$	1,050,080
Liabilities
Deposits
Noninterest-bearing			$	350,451			$	337,918			$	293,912
Interest-bearing				763,936				754,285				636,529
Total deposits				1,114,387				1,092,203				930,441
Borrowings				37,026				29,254				30,000
Accrued interest payable				699				950				683
Other liabilities				6,465				6,524				6,081
Total liabilities				1,158,577				1,128,931				967,205
Stockholders’ Equity
Common stock and surplus				33,556				33,507				33,145
Retained earnings				75,874				73,714				69,638
Accumulated other comprehensive loss				(16,509	)			(18,553	)			(19,908	)
Total stockholders’ equity				92,921				88,668				82,875
Total liabilities and stockholders’ equity			$	1,251,498			$	1,217,599			$	1,050,080
Book value per share			$	16.44			$	15.69			$	14.72
Tangible book value per share			$	14.41			$	13.62			$	14.00
Asset Quality Indicators
Nonperforming assets to total assets				0.19	%			0.22	%			0.17	%
Nonperforming loans to total loans				0.22	%			0.26	%			0.22	%
Allowance for credit losses to total loans				0.82	%			0.82	%			0.82	%
Allowance for credit losses to nonperforming loans				367.90	%			313.19	%			378.14	%

Skyline Bankshares, Inc.
Condensed Consolidated Statement of Operations

					Three Months Ended
					March 31,
(dollars in thousands except share amounts)					2025			2024
					(Unaudited)			(Unaudited)
Interest income
Loans and fees on loans					$	14,721		$	11,147
Interest-bearing deposits in banks						47			64
Federal funds sold						2			4
Interest on securities						682			734
Dividends						32			37
						15,484			11,986
Interest expense
Deposits						3,335			2,682
Interest on borrowings						426			437
						3,761			3,119
Net interest income						11,723			8,867
Provision for credit losses						178			93
Net interest income after
provision for credit losses						11,545			8,774
Noninterest income
Service charges on deposit accounts						584			551
Other service charges and fees						916			849
Net realized losses on securities						-			(141	)
Mortgage origination fees						35			55
Increase in cash value of life insurance						174			146
Life insurance income						60			218
Other income						17			21
						1,786			1,699
Noninterest expenses
Salaries and employee benefits						4,500			4,321
Occupancy and equipment						1,479			1,411
Data processing expense						848			649
FDIC Assessments						246			144
Advertising						244			217
Bank franchise tax						132			99
Director fees						93			58
Professional fees						302			221
Telephone expense						124			107
Core deposit intangible amortization						212			80
Other expense						683			669
						8,863			7,976
Net income before income taxes						4,468			2,497
Income tax expense						895			446
Net income					$	3,573		$	2,051
Net income per share					$	0.64		$	0.37
Weighted average shares outstanding						5,584,704			5,564,568
Dividends declared per share					$	0.25		$	0.23

Skyline Bankshares, Inc.
Reconciliation of 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 provide useful information for financial and operational decision making, evaluating trends, and understanding the Company’s financial condition, capital position and financial results. 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. The non-GAAP financial measure presented in this document includes tangible book value per share. The following tables present calculations underlying non-GAAP financial measures.
			March 31,				December 31,				March 31,
(dollars in thousands except share amounts)				2025				2024				2024
			(Unaudited)				(Unaudited)				(Unaudited)
Tangible Common Equity
Total stockholders’ equity (GAAP)			$	92,921			$	88,668			$	82,875
Less: Goodwill				(7,900	)			(7,900	)			(3,257	)
Less: Core deposit intangible				(3,603	)			(3,815	)			(837	)
Tangible common equity (non-GAAP)			$	81,418			$	76,953			$	78,781
Common stock shares outstanding				5,651,704				5,651,704				5,629,204
Tangible book value per share			$	14.41			$	13.62			$	14.00

For more information contact:
Blake Edwards, President & CEO – 276-773-2811
Lori Vaught, EVP & CFO – 276-773-2811

FAQ

How much did Skyline Bankshares (SLBK) earn per share in Q1 2025?

Skyline Bankshares (SLBK) earned $0.64 per share in Q1 2025, up from $0.37 per share in Q1 2024, representing a 73% increase in earnings per share.

What was Skyline Bankshares (SLBK) net interest margin in Q1 2025?

Skyline Bankshares achieved a net interest margin (NIM) of 4.15% in Q1 2025, compared to 3.64% in Q1 2024, showing improved profitability from interest-earning assets.

How did the Johnson County Bank merger affect SLBK's total assets in 2025?

The Johnson County Bank merger added $154.1 million in assets to SLBK, contributing to total assets reaching $1.25 billion by March 31, 2025, a 19.18% increase from the previous year.

What is Skyline Bankshares (SLBK) book value per share as of March 2025?

Skyline Bankshares' book value per share increased to $16.44 as of March 31, 2025, up from $15.69 at December 31, 2024.

How much did SLBK's deposits grow in Q1 2025?

SLBK's total deposits grew by $22.2 million (2.03%) to $1.11 billion in Q1 2025, with noninterest-bearing deposits increasing by $12.5 million and interest-bearing deposits rising by $9.7 million.