Potomac Bancshares, Inc. Releases Fourth Quarter And Full Year 2014 Results

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Jan 29, 2015, 11:02 ET

CHARLES TOWN, W.Va., Jan. 29, 2015 /PRNewswire/ -- For the quarter ended December 31, 2014, Potomac Bancshares Inc. (OTC-QB: PTBS) earned $608 thousand or 18 cents per share compared to $554 thousand or 16 cents a share for the quarter ended December 31, 2013, an improvement of 10%. For the 12 months ended December 31, 2014, the company earned $2.16 million or 64 cents per share compared to earnings of $2.33 million or 69 cents per share for the year ended December 31, 2013, a decrease of 7.3%. There are several reasons for the decline in earnings. First, there was an increase in the loan loss provision of $1.1 million in 2014 compared to 2013. The majority of this provision was set aside for a loan that was put on non-accrual status during the third quarter of 2014. The remainder of the provision was allocated to the reserve based on the growth in loans experienced in 2014 compared to 2013 of $25.1 million or 11%. The second reason for the decline, which was anticipated, was due to the incremental expenses incurred with the expansion into the Hagerstown, Maryland market. As outlined in previous communications, we have exceeded projections at both the Hagerstown and Middleburg, Virginia locations in 2014 and expect the two offices to positively contribute to the bottom line in 2015. To fund the aforementioned loan growth in 2014, we were able to grow deposits $18.2 million or 7% during 2014.

Based on the bank's performance during the fourth quarter of 2014, the Board of Directors of Potomac Bancshares Inc. at its January 2015 meeting declared a dividend of 5.25 cents per share to all shareholders of record on January 26, 2015. This dividend will be payable on February 2, 2015 and represents a 24% increase in the 4.25 cents per share dividend paid on November 3, 2014.

Also in the fourth quarter of 2014, Anthony P. Zelenka was elected to the Board of Directors of both Bank of Charles Town and Potomac Bancshares Inc. Zelenka is President and Chief Operating Officer of University Healthcare's Berkeley Medical Center and is also President of the Berkeley County Development Authority. President and CEO of Potomac Bancshares Inc. and Bank of Charles Town Robert F. Baronner said of Zelenka, "Tony has a proven track record of improving and expanding Berkeley Medical Center. His insight into an evolving healthcare industry will be invaluable to the bank and we feel he will be a very valuable addition to the Board."

Bank of Charles Town, a wholly owned subsidiary of Potomac Bancshares Inc., is a locally owned community bank with seven offices serving the Eastern Panhandle of West Virginia, Washington County, Maryland and Middleburg, Virginia. For more information, visit us online at www.mybct.com or speak to one of our staff by calling (304) 725-8431.

FINANCIAL HIGHLIGHTS
POTOMAC BANCSHARES, INC.



	Three Months Ended		Twelve Months Ended

(Unaudited - dollars in thousands, except per share data)	December 31, 2014	December 31, 2013	December 31, 2014	December 31, 2013
Earnings Performance
Interest Income	$3,083	$2,894	$12,072	$11,487
Interest Expense	370	301	1,275	1,240
Net Interest Income	2,713	2,593	10,797	10,247
Provision For (Recovery of) Loan Losses	61	(300)	814	(300)
Non-Interest Income	1,148	1,190	4,503	4,567
Non-Interest Expense	2,870	3,293	11,268	11,698
Income Before Income Tax Expense	930	790	3,218	3,416
Income Tax Expense	322	236	1,059	1,088
Net Income	$608	$554	$2,159	$2,328

Annualized Return On Average Equity			7.06%	8.30%
Annualized Return On Average Assets			0.70%	0.79%

			December 31, 2014	December 31, 2013

Balance Sheet Highlights
Total Assets			$320,919	$296,694
Investment Securities			33,892	32,554
Loans, Net			253,360	228,264
Deposits And Cash Management Accounts			279,196	260,955
Shareholders' Equity			$30,050	$29,765

	Three Months Ended		Twelve Months Ended

	December 31, 2014	December 31, 2013	December 31, 2014	December 31, 2013

Shareholders' Value *(per share)*
Earnings Per Share, Basic	$0.18	$0.16	$0.64	$0.69
Earnings Per Share, Diluted	0.18	0.16	0.64	0.69
Cash Dividends Declared (per share)			0.17	0.12
Book Value At Period End (per share)			$8.86	$8.78

			December 31, 2014	December 31, 2013

Safety and Soundness
Tier 1 Capital Ratio (Leverage Ratio)*			10.07%	10.11%
Non-Performing Assets As A Percentage Of
Total Assets Including OREO			2.00%	2.02%
Allowance For Loan Losses As A Percentage Of
Period End Loans			1.04%	1.35%
Ratio Of Net Charge-Offs Annualized During The Period To
Average Loans Outstanding During The Period			0.52%	0.10%

* 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.