POTOMAC BANCSHARES, INC. REPORTS 2024 THIRD QUARTER RESULTS

In This Article:

CHARLES TOWN, W.Va., Nov. 4, 2024 /PRNewswire/ -- Potomac Bancshares, Inc. (the "Company") (OTC: PTBS), the one bank holding company for Bank of Charles Town (BCT), also known as The Community's Bank, for the quarter ended September 30, 2024, earned $1.761 million or $0.42 per share compared to $1.729 million or $0.42 per share for the quarter ended September 30, 2023, and $1.421 million in the second quarter of 2024 or $0.34 per share.

Visit PTBS Investor Relations site at https://ir.mybct.bank/ (PRNewsfoto/Potomac Bancshares, Inc.)
Visit PTBS Investor Relations site at https://ir.mybct.bank/ (PRNewsfoto/Potomac Bancshares, Inc.)

Net income was $4.857 million for the nine months ended September 30, 2024, or $1.17 per share compared to $5.554 million or $1.34 per share for the nine months ended September 30, 2023. Excluding the investment security after-tax loss of $300 thousand taken in the second quarter of 2024, net income for the nine months ended September 30, 2024, would have been $5.157 million, $1.24 per share.

Alice P. Frazier, CEO and President commented, "This quarter's results reflect a number of successes by the BCT team for which we are proud.  We celebrated substantial wins with BCT Wealth accounts that grew assets under management over 20% during the quarter.   Momentum continues with new commercial relationships driving loan and related noninterest-bearing deposit growth.  Our net interest margin remained stable due to the strategic investment portfolio losses along with our disciplined  deposit pricing.  Cumulatively, these actions provided solid returns for the quarter."

Selected Highlights

  • Total assets as of Q3 2024 were $871.4 million compared to Q3 2023 total assets of $809.6 million, an increase of $61.8 million or 7.6%.

  • Return on Assets (ROA) for the nine months ended September 30, 2024, was 0.78% compared to 0.96% for the same period in 2023.

  • Return on Equity (ROE) for the nine months ended September 30, 2024, was 9.69% compared to 12.02% for the same period in 2023.

  • Net interest income was $19.9 million for the first nine months of 2024 up from $19.2 million for the same period in 2023.

  • Net interest margin for the first nine months of 2024 was 3.20% compared to 3.36% for the same period in 2023.

Linked Quarter Q3 2024 Compared to Q2 2024 Highlights

  • Total assets as of Q3 were $871.4 compared to Q2 total assets of $832.5 million, an increase of $38.9 million or 4.7%.

  • Loan growth was $22.4 million or 3.4% for Q3 as pipelines continue to build with strategically planned growth in government contracting and SBA lending.

  • Net unrealized losses in the AFS portfolio in Q3 decreased $2.6 million, moving to $5.8 million from $8.4 million in Q2.

  • Deposits increased $9.7 million during Q3 or 1.3% from Q2.

    • Noninterest-bearing deposits increased $3.7 million or 2.2%, and interest-bearing deposits increased $6.0 million or 1.0%.

    • Deposits were inflated during Q3 by $40 million, related to a single client who disbursed the funds on September 30, 2024.

  • The Tier 1 leverage capital ratio for BCT was 9.67% as of Q3 and 9.99% as of Q2. For the Company, the tangible equity / tangible assets ratio was 8.32% as of Q3 compared to 8.33% as of Q2.

  • The net interest margin remained stable at 3.21% for Q3 and Q2 . See Table 4 for additional details.

    • The yield on loans increased 15 basis points (bps) to 5.29%.

    • The cost of interest-bearing deposits increased 12 bps to 2.41%. The cost of interest-bearing deposits was impacted this quarter by a single large deposit that was disbursed on September 30, 2024.

  • The allowance for credit losses was 1.03% and 1.04% of total loans outstanding as of Q3 and Q2, respectively.

  • Non-performing assets as a percentage of total assets was 0.30% for Q3 and 0.36% in Q2. The decrease is due to one nonaccrual relationship settled with no loss of income or principal.

  • Non-interest income improved in Q3 by $23 thousand or 1.3% from Q2. Wealth and Investments advisory fees grew 18.9% during the quarter primarily due to the growth in new accounts. See Table 3 for additional details.

    • The increase in other operating income is due to increases in equity securities market values and fee income from negotiated contracts.

  • Non-interest expense was $6.3 million for Q3, an increase of $289 thousand (excluding the loss on sale of securities in Q2 of $386 thousand) or 4.8% from Q2. The increase is primarily in salary and employee benefits and other operating expenses which included multiple one-time expenses as noted below. See Table 3 for additional details.

    • Salary and employee benefits were up due to increased incentive-related expenses partially offset by lower payroll tax expenses.

    • Computer services and communications decreased as a result of contract negotiations that were completed in June 2024.

    • Professional fees included one-time recruiting expenses of approximately $70 thousand.

    • Other operating expenses increased primarily due to losses related to fraudulent checks of $174 thousand.