Bank of Botetourt Exceeds Budget Expectations, Records Profitable 2025; Board Votes to Increase Dividend by 11.1%

Buchanan-based Bank of Botetourt (OTC-PINK: BORT) and (OTC-PINK: BORTP) announced today its unaudited financial results for the three and twelve months ended December 31, 2025. The Bank produced net income amounting to $2,709,000 or $1.32 per basic share in the fourth quarter. This amount compares to net income of $1,954,000 or $0.94 per share, for the same period last year. For the twelve months ended December 31, 2025, the Bank produced net income amounting to $10,802,000 or $5.25 per basic share. This amount compares to a net income of $7,942,000 or $3.82 per share, for the same period last year.

At December 31, 2025, select financial information and key highlights include:

— Return on average assets of 1.22%

— Return on average equity of 12.29%

— Book value of $44.19

— Total deposit growth of 7.28%

— Total asset growth of 7.70%

— Total loan growth of 11.73%

— Community Bank Leverage Ratio of 10.42%

— Net Interest Margin of 3.64%

The Board of Directors voted to pay the 7.00% preferred dividend, which calculates to $0.49 per share on February 6, 2026, to preferred shareholders of record January 30, 2026. Furthermore, the Board of Directors voted to pay the $0.25 per share quarterly dividend, or $1.00 per share annualized, an increase of 11.1%, which is payable on February 17, 2026, to common shareholders of record February 10, 2026. President & CEO Michelle Austin stated “This was a strong year for Bank of Botetourt, with results that exceeded expectations and reflected the disciplined execution of our strategy. None of this would be possible without the trust of our customers, the support of our communities, and the dedication of our employees. As we look ahead, we remain focused on delivering long-term shareholder value while continuing to invest in the communities we are proud to serve.”

Results of Operations

Net income for the three months ended December 31, 2025, was $2,709,000 compared to $1,954,000 for the same period last year, representing an increase of $755,000 or 38.64%. Basic and diluted earnings per share increased $0.38 from $0.94 at December 31, 2024, to $1.32 at December 31, 2025. The increase in net income is primarily due to $1,588,000 more interest and fees on loan income, $181,000 less expense on deposits and other borrowings, offset by $44,000 more provision for credit losses, and $121,000 less investment income.

For the three months ended December 31, 2025, the Bank recorded a provision for credit loss expense of $408,000 compared to $364,000 for the same period last year, representing an increase of $44,000. The provision recorded during the quarter primarily 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 1.10% at the end of the quarter, down six basis points from the prior quarter and down eight basis points from one year prior.

At December 31, 2025, net loans increased 11.73%. Interest and fees on loans at December 31, 2025, increased $1,588,000 over the same three-month period of 2024. Interest expense decreased by $181,000 from $4,302,000 at December 31, 2024, to $4,121,000 at December 31, 2025. The lower interest expense is a result of lower interest rates paid on the balances of interest-bearing deposits than for the same period of 2024 and a decrease of interest on borrowed funds.

Noninterest income increased by $24,000, or 1.62%, to $1,510,000 for the three months ended December 31, 2025, compared to $1,486,000 for same period of 2024. The increase is attributed to an increase in service charges on deposit accounts, income from title insurance subsidiaries, gain on sale of mortgage loans, partially offset by a decrease in other income from the Bank's subsidiaries.

Noninterest expense increased $664,000 from $5,584,000 at December 31, 2024, to $6,248,000 at December 31, 2025. 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 December 31, 2025, was $707,000 compared to $498,000 one year prior. The increase in tax expense is due to more revenue for the quarter.

Financial Condition

At December 31, 2025, total assets amounted to $923,097,000 compared to $857,073,000 at December 31, 2024, an increase of $66,024,000 or 7.70%. Total net loans increased $78,778,000 or 11.73% from $671,590,000 at December 31, 2024, to $750,368,000 at December 31, 2025. Total deposits at December 31, 2024, amounted to $767,221,000, compared to $823,058,000 at December 31, 2025, an increase of 7.28% or $55,837,000.

Stockholders' equity totaled $93,517,000 at December 31, 2025, compared to $82,510,000 at December 31, 2024. The $11,007,000 increase during the period is attributed to net income for 2025, net proceeds from the issuance of common stock from the Dividend Reinvestment and Stock Purchase Plan, a decrease in accumulated other comprehensive loss, partially offset by dividends paid.

Asset Quality

Bank of Botetourt's asset quality remained strong for the fourth quarter of 2025. Provision for credit losses for the fourth quarter of 2025 was $408,000 compared to $326,000 in the previous quarter and $364,000 in the same quarter of 2024.

The Bank had no foreclosed properties at December 31, 2025, and December 31, 2024, respectively. Therefore, non-performing assets only consisted of nonaccrual loans. Non-performing assets decreased $10,000, from $51,000 at December 31, 2024 to $41,000 at December 31, 2025. The decrease is attributable to the addition of three commercial and industrial loans, collateralized by commercial vehicles and a blanket UCC on equipment and two unsecured commercial and industrial loans, offset by the charge-off of the aforementioned loan additions. All loans that were added to non-accrual during 2025 were charged off prior to December 31, 2025. There were no loans added to nonaccrual loans during the fourth quarter. The decrease in nonaccrual loans is attributable to the new additions and the charge-off and payment activity of the aforementioned loans.

Net charge-offs during the fourth quarter of 2025 were $556,000 or seven basis points on total average loans outstanding. Net charge-offs for the fourth quarter of 2025 were comprised of charge-offs of $583,000, partially offset by recoveries of $27,000. Compared to December 31, 2024, net charge-offs increased $359,000 or five basis points on total average loans outstanding.

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 December 31, 2025, Bank of Botetourt reported its CBLR ratio at 10.42% which meets the required regulatory minimum ratio. This compares to a CBLR ratio of 10.25% at December 31, 2024.

About Bank of Botetourt

Chartered in 1899, Bank of Botetourt is a full-service community bank serving customers through fourteen retail offices across Botetourt, Franklin, Roanoke, and Rockbridge counties, as well as the Cities of Roanoke and Salem and the Towns of Vinton and Rocky Mount in Virginia. The Bank also operates Virginia Mountain Mortgage, its residential lending division, and Botetourt Wealth Management, offering financial planning and investment services. Recognized by Forbes as a multi-year top-ranked bank in Virginia, Bank of Botetourt continues to build on its long-standing tradition of service, strength, and local commitment.

(unaudited) (audited) December 31, December 31, 2025 2024 Assets Cash and Due from banks $13,045,000 $12,439,000 Interest-bearing deposits with banks 42,103,000 53,381,000 Federal funds sold 1,282,000 936,000 Total cash and cash equivalents 56,430,000 66,756,000 Debt securities held to maturity, net of allowance 9,182,000 9,982,000 for credit losses of $18,000 at December 31, 2025 and December 31, 2024, respectively Debt securities available for sale 69,962,000 73,159,000 Restricted equity securities 681,000 634,000 Loans, net of allowance for credit losses of $8,374,000 at 750,368,000 671,590,000 December 31, 2025 and $7,989,000 at December 31, 2024. Loans held for sale 1,737,000 Premises and fixed assets, net 16,515,000 17,356,000 Bank ownded life insurnace 7,787,000 7,544,000 Accrued interest receivable 2,886,000 2,633,000 Other assets 7,549,000 7,419,000 Total assets $923,097,000 $857,073,000 Liabilities and Stockholders' Equity Liabilities Noninterest-bearing deposits $164,542,000 $179,420,000 Interest-bearing deposits 658,516,000 587,801,000 Total deposits 823,058,000 767,221,000 Accrued interest payable 2,484,000 3,544,000 Other liabilities 4,038,000 3,798,000 Total liabilities 829,580,000 774,563,000 Commitments and contingencies Stockholders' Equity Preferred stock, $1.00 par value; 1,000,000 shares authorized; 243,659 issued and outstanding at December 31, 2025 and at December 31, 2024, respectively 244,000 244,000 Common stock, $1.50 par value; 5,000,000 shares authorized; 1,970,230 and 1,960,879 issued and outstanding at December 31, 2025 and at December 31, 2024 respectively 2,955,000 2,941,000 Additional paid-in capital 24,504,000 24,198,000 Retained earnings 67,834,000 59,277,000 Accumulated other comprehensive loss (2,020,000) (4,150,000) Total stockholders' equity 93,517,000 82,510,000 Total liabilities and stockholders' equity $923,097,000 $857,073,000 Bank of Botetourt Consolidated Income Statement For the twelve months ended and three months ended December, 2025 and 2024 (Unaudited) Twelve Months Ended Three Months Ended December 31, December 31, 2025 2024 2025 2024 Interest income Loans and fees on loans $44,455,000 $37,603,000 $11,822,000 $10,234,000 Federal funds sold 34,000 23,000 8,000 7,000 Securities: Taxable 1,411,000 1,572,000 365,000 360,000 Exempt from federal income tax 244,000 207,000 65,000 53,000 Dividend income 48,000 107,000 11,000 28,000 Deposits with banks 1,774,000 2,295,000 412,000 534,000 Total Interest income 47,966,000 41,807,000 12,683,000 11,216,000 Interest expense Deposits 15,764,000 15,029,000 4,120,000 4,220,000 Other borrowings 19,000 825,000 1,000 82,000 Total Interest expense 15,783,000 15,854,000 4,121,000 4,302,000 Net Interest Income 32,183,000 25,953,000 8,562,000 6,914,000 Provision for credit losses 1,221,000 918,000 408,000 364,000 Net Interest Income after credit loss expense 30,962,000 25,035,000 8,154,000 6,550,000 Noninterest income Service charges on deposit accounts 1,368,000 1,284,000 377,000 316,000 ATM and debit card 2,140,000 1,871,000 516,000 479,000 Other service charges and fees 896,000 818,000 218,000 217,000 Mortgage origination fees 334,000 198,000 90,000 57,000 Other income, net of gains 1,196,000 1,220,000 309,000 417,000 Total noninterest income 5,934,000 5,391,000 1,510,000 1,486,000 Noninterest expense Salaries and employee benefits 9,850,000 8,947,000 2,677,000 2,356,000 Occupancy 1,233,000 1,002,000 276,000 233,000 Equipment 1,277,000 1,077,000 318,000 319,000 Foreclosed assets, net – 45,000 163,000 46,000 Outside services 3,171,000 2,771,000 819,000 770,000 FDIC insurance premiums and assessment 504,000 477,000 126,000 125,000 ATM and debit card 1,650,000 1,455,000 412,000 375,000 Franchise tax 682,000 657,000 160,000 167,000 Telephone and communication 351,000 320,000 87,000 76,000 Other professional fees 277,000 240,000 72,000 56,000 Marketing 1,234,000 870,000 357,000 286,000 Other operating expenses 3,032,000 2,594,000 781,000 775,000 Total noninterest expense 23,261,000 20,455,000 6,248,000 5,584,000 Income before income taxes 13,635,000 9,971,000 3,416,000 2,452,000 Income tax expense 2,833,000 2,029,000 707,000 498,000 Net income 10,802,000 7,942,000 2,709,000 1,954,000 Preferred stock dividends 478,000 478,000 119,000 119,000 Net income available to common shareholders $10,324,000 $7,464,000 $2,590,000 $1,835,000 Basic earnings per share $5.25 $3.82 $1.32 $0.94 Diluted earnings per share $5.25 $3.82 $1.32 $0.94 Dividends declared per share $0.90 $0.80 $0.225 $0.20 Basic weighted average shares outstanding 1,965,975 1,956,428 1,969,240 1,959,791 Diluted weighted average shares outstanding 1,965,975 1,956,428 1,969,240 1,959,791

View original content:https://www.prnewswire.com/news-releases/bank-of-botetourt-exceeds-budget-expectations-records-profitable-2025-board-votes-to-increase-dividend-by-11-1-302673202.html

SOURCE Bank of Botetourt

https://rt.newswire.ca/rt.gif?NewsItemId=PH72080&Transmission_Id=202601290830PR_NEWS_USPR_____PH72080&DateId=20260129