Potomac Bancshares Reports 60% Increase in Second Quarter Earnings
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 | M. Shane Bell |
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 | 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 | 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 | - | - | - | - | - | |||||
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 | - | - | - | - | - | |||||
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 | - | - | - | - | - | |||||
Add: Tax benefit realized on non-taxable interest income | $ 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. | |||||||
SOURCE Potomac Bancshares, Inc.
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