BUCHANAN, Va., April 25, 2024 /PRNewswire/ -- Buchanan-based Bank of Botetourt (OTCPK: BORT and BORTP) announced today its unaudited financial results for the three months-end March 31, 2024. The Bank produced net income amounting to $1,828,000 or $0.88 per basic share in the first quarter. This amount compares to a net income of $2,294,000 or $1.12 per share, for the same period last year. At March 31, 2024, select financial information and key highlights include: Return on average assets of 0.92% Return on average equity of 9.69% Book value of $35.60 Total deposit growth of 1.42% Total asset growth of 1.42% Total loan growth of 2.21% Community Bank Leverage Ratio of 10.35% As a result of the solid financial performance, the Board of Directors voted to pay the 7.00% preferred dividend, which calculates to $0.49 per share on May 9, 2024 to preferred shareholders of record May 2, 2024.  Furthermore, the Board of Directors voted to pay the $0.20 per share quarterly dividend, or $0.80 per share annualized which is payable on May 17, 2024 to common shareholders of record May 10, 2024. CEO & Vice-Chairman, G. Lyn Hayth, III stated, "Strong financial results for the first quarter are the foundation for sustainable growth, and it's the commitment of a strong community presence and delivering shareholder value that truly propels the Bank towards lasting success." Results of Operations Net income for the three months ended March 31, 2024 was $1,828,000 compared to $2,294,000 for the same period last year, representing a decrease of $466,000 or 20.31%.  Basic and diluted earnings per share decreased $0.24 from $1.12 at March 31, 2023 to $0.88 at March 31, 2024.  The decrease in net income is primarily due to $2,240,000 more interest expense, $177,000 more employee salary and benefits, offset by $2,140,000 more interest and fees on loans and $206,000 less provision for credit losses. For the three months ended March 31, 2024, the Bank recorded a provision for credit loss expense of $66,000 and a reserve for unfunded commitments of $(42,000), which is included in other expenses. This compares to $272,000 for the same period last year, representing a decrease of $206,000.  The provision recorded during the quarter mainly reflected allocations necessitated by net loan growth and adjustments to historical loss factors to better represent expectations for future credit losses.  The ratio of the allowance for credit losses to total loans and leases outstanding was 1.24% at the end of the quarter, down 1 basis points from the prior quarter and down 17 basis points from the end of the same quarter of 2023.  Net charge-offs were $11,000 at March 31, 2024 as compared to $36,000 at March 31, 2023. At March 31, 2024 net loans increased 2.21%. Interest and fees on loans at March 31, 2024 increased $2,140,000 over the same three month time period of 2023. Interest expense increased by $2,240,000 from $1,436,000 at March 31, 2023 to $3,676,000 at March 31, 2024.  The higher interest expense is a result of higher interest rates paid on the balances of interest-bearing deposits than for the same time period of 2023 and the addition of interest on borrowed funds. Noninterest income decreased by $153,000, or 11.45%, to $1,183,000 for the three months ended March 31, 2024 compared to $1,336,000 for same time period of 2023.  The decrease is attributable primarily to less income from title insurance subsidiaries, partially offset by an increase in service charges on deposit accounts and an increase in gain on sale of mortgage loans.  Noninterest expense increased $338,000 from $4,598,000 at March 31, 2023 to $4,936,000 at March 31, 2024.  The increase is primarily related to increases in salary and employee benefits, debit card expense, and core processing expenses. Income tax expense for the three months ended March 31, 2024 was $471,000 compared to $584,000 one year prior. The decrease in tax expense is due to lower revenue for the quarter. Financial Condition At March 31, 2024 total assets amounted to $802,227,000, an increase of 1.42% above total assets at December 31, 2023 of $791,015,000, an increase of $11,212,000. Total net loans increased $13,138,000 or 2.21% from $593,256,000 at December 31, 2023 to $606,394,000 at March 31, 2024. Total deposits at December 31, 2023 amounted to $691,584,000, compared to $701,400,000 at March 31, 2024, an increase of 1.42% or $9,816,000. Stockholders' equity totaled $76,169,000 at March 31, 2024 compared to $74,778,000 at December 31, 2023. The $1,391,000 increase during the period is net income for 2024, net proceeds from the issuance of common stock from the Dividend Reinvestment and Stock Purchase Plan, and partially offset by dividends paid and increase in accumulated other comprehensive loss. Non-Performing Assets Bank of Botetourt has no foreclosed properties.  Therefore, non-performing assets only consisted of nonaccrual loans at December 31, 2023 and March 31, 2024, respectively.  Non-performing assets decreased from $121,000 at December 31, 2023 to $104,000 at March 31, 2024.  The decrease is attributable to the sale of collateral on one consumer loan secured by multiple vehicles.  The sale of collateral resulted in the subsequent paydown of the consumer loan followed by the subsequent charge-off of the remaining total loan balance.  One auto loan totaling $25,000 was added to nonaccrual loans during the first quarter.  The decrease in nonaccrual loans is attributable to the charge-off and payment activity of the aforementioned loans. A loan is considered impaired if it is probable that the Bank will be unable to collect all amounts due under the contractual terms of the loan agreement. Impaired loans amounted to $1,511,000 at March 31, 2024 compared to $1,532,000 at December 31, 2023.  The decrease in impaired loans is attributable to one other consumer loan being partially paid off from the sale of collateral followed by charge-off of the remaining balance, offset by the addition of one auto loan.  Loss exposure on impaired loans increased from $93,000 at December 31, 2023 to $94,000 at March 31, 2024.  The increase is attributable to the addition of one auto loan with a specific reserve of $2,000, offset by the decrease in exposure on a consumer loan and residential loan as a result of payments made during 2024.  Capital Ratios Bank of Botetourt qualified for and adopted the optional, simplified measure of capital adequacy, the community bank leverage ratio framework, consistent with Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. A qualifying community banking organization is defined as having less than $10 billion in total consolidated assets, a leverage ratio greater than 9%, off-balance sheet exposures of 25% or less of total consolidated assets, and trading assets and liabilities of 5% or less of total consolidated assets. It also cannot be an advanced approaches institution. Bank of Botetourt qualified to opt-in to the Community Bank Leverage Ratio ("CBLR").  As of March 31, 2024 Bank of Botetourt reported its CBLR ratio at 10.35% which meets the required regulatory minimum ratio. This compares to a CBLR ratio of 10.36% at December 31, 2023. About Bank of Botetourt Bank of Botetourt was chartered in 1899 and operates thirteen retail offices in Botetourt, Rockbridge, Roanoke, and Franklin counties, the City of Salem, and the Town of Vinton, all in Virginia.  Bank of Botetourt also operates a mortgage division, Virginia Mountain Mortgage and a financial services division, Botetourt Wealth Management.  In April 2024, Bank of Botetourt celebrated the ...