Potomac Bancshares Reports Solid Growth in Q2 Earnings for 2025

Potomac Bancshares Reports Strong Growth in Q2 Earnings for 2025

Potomac Bancshares, Inc., the parent company of the Bank of Charles Town, has recently released impressive earnings results for the second quarter of 2025. The company reported a net income of $2.1 million, reflecting a notable increase of $654 thousand from the previous year's $1.4 million during the same time period. Additionally, the basic and diluted earnings per share rose to $0.50, marking an increase of $0.16 compared to $0.34 from Q2 2024.

For the first half of 2025, Potomac Bancshares reported a net income of $4.3 million, a significant $1.2 million increase from $3.1 million in the first half of 2024. Basic and diluted earnings per share for this period totaled $1.03, illustrating a rise of $0.28 from the previous year.

Key Financial Metrics

The financial metrics for the quarter ending June 30, 2025, reveal a strong operational performance. The adjusted return on average assets was 0.94%, while the adjusted return on average equity reached 11.18%. Loan balances showed a remarkable 11% annualized increase, and deposit balances surged by 12%, demonstrating the bank's growth strategy is on track. Total revenue experienced a commendable annual growth of 9%. Furthermore, the asset quality metrics remained solid, with non-performing assets at a mere 0.24% of total assets.

President and CEO Alice P. Frazier commented, "We are proud of our strong second quarter performance, with annualized revenue growth and significant advancements in our strategic objectives." She highlighted the company's robust loan and deposit growth, particularly in key markets such as Berkeley and Loudoun Counties, while focusing on expanding their Small Business Administration (SBA) and government contracting lending.

Earnings Breakdown

The net interest income for the second quarter increased by $280 thousand, or 4%, totaling $7.6 million compared to the first quarter of 2025. The rise in total interest and dividend income by $490 thousand was counterbalanced by an increase in interest expense by $210 thousand. Despite the increase in net interest income, the net interest margin decreased slightly to 3.48%. This was primarily attributed to the change in the composition of average earning assets as well as an upswing in costs associated with interest-bearing liabilities.

Interestingly, noninterest income for Q2 stood at $1.8 million, reflecting a slight decline of 3% compared to the previous quarter. This dip was mostly due to a decrease in other operating income, despite a boost in secondary market mortgage income.

Expenses and Credit Quality

Noninterest expenses registered at $6.5 million for the quarter, marking a 5% uptick from the prior quarter. Salary and employee benefit expenses increased notably as the company adjusted wages, inclusive of cost-of-living increases and merit-based adjustments.

In terms of asset quality, the bank maintained impressive metrics. Nonperforming assets as a percentage of total assets decreased from 0.25% in the previous quarter to 0.24% in Q2 2025. The allowance for credit losses on loans also saw an increase, reflecting prudent risk management practices as the loan portfolio continues to grow amidst economic uncertainties.

Looking Ahead

Frazier concluded, "We remain positive about the upcoming year despite the current economic climate. Our focus is clearly on optimizing shareholder value as illustrated in our robust balance sheet growth and overall increased dividend payout." The company paid an increased quarterly cash dividend of $0.13 per share, an 8% rise from the last period.

As Potomac Bancshares continues to innovate and adapt to the evolving market landscape, stakeholders remain optimistic about future earnings and overall performance. The bank’s unwavering commitment to serve the community and its clients effectively indicates a promising trajectory for both short-term and long-term growth.

For more information on Potomac Bancshares, Inc. and its financial services, visit their website at mybct.bank.