Potomac Bancshares, Inc. Releases 2013 First Quarter Results, Declares Dividend and Announces New Loan Production Office in Middleburg, Virginia

News provided by

Apr 19, 2013, 05:12 ET

CHARLES TOWN, W.Va., April 19, 2013 /PRNewswire/ -- Robert F. Baronner Jr., President and CEO of Potomac Bancshares, Inc. (OTC-QB: PTBS), the One Bank Holding Company for Bank of Charles Town, announced its quarterly results for the period ending March 31, 2013. The Charles Town, West Virginia based company earned $566 thousand or 17 cents per share compared to net income of $320 thousand or 9 cents a share for the quarter ended March 31, 2012. The improvement in earnings is largely the result of declining credit costs to include a reduction in the loan loss provision compared to a year ago. Loans, net of reserve for the quarter ended March 31, 2013 were $217.4 million compared to $211.4 million at year end December 31, 2012, an improvement of 11% on an annualized basis. This is the first significant loan growth in a number of years.

Baronner reports, "The economy continues to slowly improve in our area with real estate prices stabilizing over the last six months and unemployment trending downward. Although there is still work to do, clearly the volume and severity of problem assets continues to decline and as a result, earnings are becoming more predictable from quarter to quarter."

Based on the improvement in the bank's performance and the overall economic outlook in the bank's trade area, the Board of Directors of Potomac Bancshares at its April 2013 meeting declared a 4 cent per share dividend for all shareholders of record on April 15, 2013. This cash dividend will be payable on May 1, 2013.

The bank also announced the opening of a new loan production office in Middleburg, Virginia under the trade name of BCT Mortgage and Commercial Loan Company. Baronner said, "We decided to open this office in an effort to give us additional growth opportunities and some market diversification for our loan portfolio. We have existing personnel, specifically Arch Moore III and Grant Wetmore, who have ties to the market and our newest Director, Barbara Scott, is a long time resident of Middleburg." The new office is located at 2 West Washington Street in Middleburg also known as the 'Noble House' across the street from the Red Fox Inn & Tavern. The phone number is (540) 687-5304.

In addition to the Middleburg loan production office, Bank of Charles Town has locations in Charles Town, Harpers Ferry, Kearneysville, Martinsburg and Hedgesville West Virginia. For more information visit us online at www.mybct.com or speak to our staff at 304-725-8431.

FINANCIAL HIGHLIGHTS
POTOMAC BANCSHARES, INC.

	Three Months Ended

(Unaudited - dollars in thousands, except per share data)	March 31, 2013	March 31, 2012
Earnings Performance
Interest Income	$2,818	$2,942
Interest Expense	326	459
Net Interest Income	2,492	2,483
Provision For Loan Losses	0	309
Non-Interest Income	1,024	1,038
Non-Interest Expense	2,663	2,763
Income Before Income Tax Expense	853	449
Income Tax Expense	287	129
Net Income	$566	$320

Annualized Return On Average Equity	8.38%	4.95%
Annualized Return On Average Assets	0.78%	0.44%

	March 31, 2013	December 31, 2012

Balance Sheet Highlights
Total Assets	$296,983	$296,811
Investment Securities	32,198	32,236
Loans, Net	217,371	211,364
Deposits And Cash Management Accounts	266,960	266,402
Shareholders' Equity*	27,505	26,923

	March 31, 2013	March 31, 2012

Shareholders' Value *(per share)*
Earnings Per Share, Basic	$0.17	$0.09
Earnings Per Share, Diluted	0.17	0.09
Cash Dividends Declared (per share)	- -	- -
Book Value At Period End (per share)	8.11	7.63

	March 31, 2013	December 31, 2012

Safety and Soundness
Tier 1 Capital Ratio (Leverage Ratio)	9.47%	9.15%
Non-Performing Assets As A Percentage Of
Total Assets Including OREO	2.97%	2.97%
Allowance For Loan Losses As A Percentage Of
Period End Loans	1.58%	1.69%
Ratio Of Net Charge-Offs Annualized During The Period To
Average Loans Outstanding During The Period	0.28%	0.82%


*When computing capital ratios, the net of unrealized holding gains (losses) on securities available for sale and the unfunded liability for pension and other post-retirement benefits, all computed net of tax, are added back to these shareholders' equity figures. Capital ratios are preliminary.