BANK OF THE JAMES FINANCIAL GROUP INC
For the period ended Dec 31, 2024. Filed Mar 26, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 26, 2025
BOTJ$24.44+2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-27.
0001562762-24-000069
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-26.
0001562762-25-000054
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 191 previous paragraphs and 209 current paragraphs.
119 unchanged; 52 reworded; 37 added; 15 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 20 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (37)
Current report
The following table sets forth select financial ratios:
Current report
The allowance for credit losses (“ACL”) represents management’s best estimate of lifetime expected losses in the loan portfolio as of the reporting date. The ACL is initially recognized upon origination or acquisition of loans and reflects management’s ongoing evaluation of the loan portfolio based on current conditions, past events, and reasonable and supportable forecasts of future economic conditions, including anticipated prepayments. Additional analysis and detailed information on the ACL and loan portfolio quality can be found in “Management’s Discussion and Analysis – Analysis of Financial Condition – Asset Quality.”
Current report
Goodwill, resulting from business combinations, represents the excess of consideration transferred over the fair value of net identifiable assets acquired. Goodwill is tested annually for impairment as of September 1, or more frequently if impairment indicators arise. Impairment testing begins with a qualitative assessment to determine if further quantitative testing is necessary. If quantitative testing is conducted, impairment is measured by comparing the reporting unit’s carrying value to its fair value, calculated using discounted cash flow analysis, market comparables, or other relevant methodologies. An impairment charge is recognized if the carrying value exceeds fair value. Determining fair value involves significant management judgment, including estimates related to future cash flow projections, discount rates, growth assumptions, and market conditions. Intangible assets with finite useful lives, such as core deposit intangibles or customer relationships, are amortized on a straight-line basis over their estimated useful lives. Goodwill is the only intangible asset with an indefinite life reflected on our consolidated balance sheet.
Current report
The Mortgage Division originated 633 mortgage loans, totaling approximately $190,669,000 during the year ended December 31, 2024, as compared with 609 mortgage loans, totaling $164,511,000 in 2023. The increase in originations was due to a slight decrese interest rates coupled with a slight increase in housing inventory in our markets.
Current report
Noninterest Income of Financial
Current report
The following table details the Company’s noninterest expense:
Current report
The increase in noninterest expense from $32,507,000 in 2023 to $35,105,000 in 2024 was primarily driven by increases in salaries and employee benefits, professional and other outside expenses, data processing, and other expenses, partially offset by decreased marketing expenses. Salaries and employee benefits increased primarily due to higher staffing levels, salary adjustments, and additional personnel and operational costs associated with the opening of two new branch locations in 2024. In addition, the increase reflected an increase in the variable compensation component related to mortgage origination, which increased due to higher mortgage volume. Professional and other outside expenses rose significantly due to higher audit fees paid to our external audit provider, as well as increased consulting services supporting various strategic initiatives, including consultants used to negotiate contracts for the Bank. We expect the revised contracts to provide an ongoing benefit to the Bank. Data processing expenses increased as a result of higher charges from our core service provider, reflecting increased transaction volumes during the year. Other expenses grew primarily due to increased VISA card processing fees and interchange costs. Marketing expenses declined due to strategic reductions in certain advertising activities.
Current report
Loans, net of unearned income and the allowance, increased to $636,552,000 on December 31, 2024, from $601,921,000 on December 31, 2023. Total loans increased primarily due to higher demand and originations in all segments of our commercial real estate and consumer lending portfolios other than consumer open-end and residential construction, the latter of which declined by approximately $5,520,000. Competition for qualified borrowers continues to remain strong.
Current report
Total deposits increased by 0.45%, from $878,459,000 at December 31, 2023, to $882,404,000 at December 31, 2024. Noninterest-bearing deposits decreased by $3,945,000, or 0.45%, from $134,275,000 at December 31, 2023, to $129,692,000 at December 31, 2024. This decrease was primarily due to customers moving funds to higher-rate accounts both within and outside the Bank. Interest-bearing deposits increased by $8,528,000, or 1.15%, from $744,184,000 at December 31, 2023, to $752,712,000 at December 31, 2024.
Current report
We continue to pursue deposit growth in our Charlottesville, Harrisonburg, Roanoke, Appomattox, and Rustburg markets and remain focused on acquiring primary checking accounts from commercial loan customers to strengthen our core deposit base.
Current report
Cash and cash equivalents decreased from $74,838,000 on December 31, 2023, to $73,309,000 on December 31, 2024. Federal funds sold increased slightly to $50,022,000 on December 31, 2024, from $49,225,000 on December 31, 2023. The increase in federal funds sold is primarily due to modest growth in total deposits. Fluctuations in federal funds sold balances reflect our ongoing liquidity management practices.
Current report
Securities held-to-maturity at amortized cost decreased slightly from $3,622,000 at December 31, 2023, to $3,606,000 at December 31, 2024, due to normal amortization of premiums. The decision to invest surplus funds into securities held-to-maturity reflects our assessment that such funds will not be required for liquidity during the securities' term, though they may be pledged for short-term borrowings or collateral for public deposits.
Current report
The portfolio of securities available-for-sale decreased from $216,510,000 at December 31, 2023, to $187,916,000 at December 31, 2024. This decrease primarily resulted from principal repayments, maturities, and calls totaling $15,854,000, combined with a decline in the fair value of the portfolio of $1,300,000 (net of tax), driven by increasing interest rates and shorter portfolio duration. During 2024, the Bank sold $31,353,000 available-for-sale securities and purchased $20,752,000 of available-for-sale securities, using liquidity from maturing securities and repayments.
Current report
Our ongoing liquidity management framework includes internal stress testing scenarios and robust contingency plans to address potential deposit volatility or market disruptions.
Current report
In December 2024, the Bank paid a dividend to Financial of $5,000,000. That dividend had the effect of lowering the capital ratios set forth above.
Current report
We have expertise and a long history in originating and managing commercial real estate loans. We have a strong credit underwriting process, which includes management and board oversight. We perform rigorous monitoring, stress testing, and reporting of these portfolios at the management and board levels, and we continue to monitor the level of the concentration in commercial real estate loans within our loan portfolio monthly.
Current report
The Bank closely monitors concentrations within its commercial real estate loan portfolio. As of December 31, 2024, non-owner occupied commercial real estate loans totaled $195,089,000, or 30.31% of total loans. The Bank has minimal exposure to loans secured by large office buildings or shopping centers, which comprise less than 5% of the non-owner occupied commercial real estate portfolio. The majority of the Bank’s non-owner occupied commercial loans are secured by smaller, multi-tenant properties diversified across various industries and geographies within our market areas.
Current report
The Bank does not have any non-owner-occupied commercial loans secured by properties in major city centers. We have not seen an increase in delinquencies in loans secured by non-owner occupied commercial real estate.
Current report
In addition, to help manage risk we actively manage and monitor our commercial real estate risk through, when appropriate, the following:
Current report
Origination and Analysis
Current report
We have a thorough loan origination process. For all CRE loans secured by real estate collateral, we require an appraisal or valuation at the time that we originate the loan. We generally do not approve loans that have a loan-to-value ratio in excess of 80%. We perform an individual property cashflow analysis and, if appropriate, a global cash flow analysis at origination and generally require a debt service coverage ratio of at least 1.2x.
Current report
Ongoing Risk Management
Current report
Following origination, we continue to manage risk. Our ongoing risk management includes:
Current report
Utilizing enhanced risk rating systems specific to CRE exposures;
Current report
Obtaining regular third-party loan reviews of the CRE portfolio;
Current report
Obtaining subsequent appraisals when either required by regulations or dictated by our internal policies;
Current report
Stress testing of property cash flows using various vacancy and rate scenarios during underwriting;
Current report
Regular monitoring of local market conditions and property sector trends;
Current report
Meeting at least annually with clients to which the Bank has significant exposure along with market-level monitoring of vacancy rates and rental trends;
Current report
Performing annual reviews, including the review of current financial information, rate shocking, and collecting and analyzing rent rolls and operating statements at least annually; and
Current report
Utilizing a risk rating system that incorporates both property and borrower performance metrics.
Current report
Credit Enhancements
Current report
Where appropriate, we mitigate risk by obtaining credit enhancements. Typical enhancements to CRE loans include personal guarantees, secondary collateral, and liquid collateral.
Current report
The following table sets forth information for non-owner occupied CRE Loans for each loan category (classified by purpose code and collateral description) that comprises more than one percent (1%) of our total loans:
Current report
(1)Loan-to-value is based on collateral valuation at origination date against current bank-owned principal.
Current report
The following table sets forth information for owner occupied CRE Loans for the four largest categories of loans (classified by purpose code and collateral description) that comprises more than one percent (1%) of our total loans:
Current report
(1)Loan-to-value is based on collateral valuation at origination date against current bank-owned principal.
Removed paragraphs (15)
Previous report
The following table sets forth selected financial ratios:
Previous report
The allowance for credit losses (ACL) is management’s estimate of the probable losses expected in our loan portfolio. For information on the Company’s policies on the ACL beginning with adoption of CECL on January 1, 2023, please refer to Note 2 - “Accounting Standards Adopted in 2023.” See “Management Discussion and Analysis – Analysis of Financial Condition –Asset Quality” below for further discussion of the allowance for credit losses.
Previous report
The decrease in noninterest income for 2023 as compared to 2022 was due to a decrease in gain on sales of loans held for sale and was offset by an increase in service charges, fees and commission and wealth management fees. The decrease in the gain on sales of loans held for sale was caused by an increase in mortgage loan rates.
Previous report
Noninterest expenses decreased slightly from $32,737,000 for the year ended December 31, 2022 to $32,507,000 for the year ended December 31, 2023. The following table summarizes our noninterest expense for the periods indicated.
Previous report
The decrease in noninterest expense was due in large part to a decrease in credit expense, OREO expense, and other expense. The decrease in other expense decreased primarily dueto an insurance recovery of $287,000 associated with a check forgery. The decrease was offset in part by increases in compensation expense and data processing expense. Data processing increased primarily due to increased charges by our core service provider relating to the additional volume of transactions in 2023. Our compensation and benefits expense has a variable component related to mortgage origination, which offset some of the increase noted above due to lower mortgage volume in 2023
Previous report
Loans, net of unearned income and the allowance, decreased to $601,921,000 on December 31, 2023 from $605,366,000 on December 31, 2022. Total loans, including loans held for sale decreased to $610,591,000 on December 31, 2023 from $614,048,000 on December 31, 2022. The decrease in total loans was in large part due to both reduced demand for commercial and residential mortgage loans as well as paydowns of existing loans. Competition for qualified borrowers remains strong.
Previous report
We experienced an increase in deposits from $848,138,000 at December 31, 2022 to $878,459,000 at December 31, 2023, for an increase of 3.58%. Noninterest-bearing deposits decreased $20,609,000 or 13.31% from $154,884,000 at December 31, 2022 to $134,275,000 at December 31, 2023. The decrease in noninterest-bearing deposits was due to customers moving funds to higher rate accounts both within and outside the Bank. The decrease was offset by our growth in the Charlottesville, Harrisonburg, Roanoke, Appomattox, and Rustburg markets, as well as increased and continued efforts to procure the primary checking accounts of our commercial loan customers. Interest-bearing deposits including certificates of deposit increased $50,930,000, or 7.35%, from $693,254,000 at December 31, 2022 to $744,184,000 at December 31, 2023.
Previous report
Cash and cash equivalents increased from $61,762,000 on December 31, 2022 to $74,838,000 on December 31, 2023. Federal funds sold amounted to $49,225,000 on December 31, 2023 compared to $31,737,000 on December 31, 2022. The increase in the balance of federal funds sold is due in part to the increase in deposits and reduced loan volume. In addition, fluctuations in federal funds sold generally are related to fluctuations in transactional accounts and professional settlement accounts. The large increase in cash and cash equivalents in 2023 can be directly attributed to the increase in federal funds sold.
Previous report
Securities held-to-maturity at amortized cost decreased slightly from $3,639,000 as of December 31, 2022 to $3,622,000 as of December 31, 2023. This decrease resulted from the amortization of premiums within the held-to-maturity portfolio. The decision to invest in securities held-to-maturity is based on the same factors as the decision to invest in securities available-for-sale except that management invests surplus funds in securities held-to-maturity only after concluding that such funds will not be necessary for liquidity purposes during the term of such security. However, the held-to-maturity securities may be pledged for such purposes as short term borrowings and as collateral for public deposits.
Previous report
The portfolio of securities available-for-sale increased to $216,510,000 as of December 31, 2023 from $185,787,000 as of December 31, 2022. The increase was due to the deployment of cash and cash equivalents into fixed income securities in an attempt secure higher yields on our earning assets. In addition, the increase was due in part to an increase in the fair valueof available-for-sale securities of $6,539,000 (net of tax) from December 31, 2022 to December 31, 2023 caused by declining interest rates and the decreasing duration of the portfolio. The Bank realized $12,127,000 from paydowns related to the normal amortization of principal related to the Bank’s mortgage backed securities, calls, and maturities. During 2023, the Bank sold no available-for-sale securities and purchased $34,853,000 of available-for-sale securities.
Previous report
In response to the failures of Silicon Valley Bank and Signature Bank, the Federal Reserve authorized all 12 regional reserve banks to make additional funding available to eligible depository institutions, including the Bank, through the Bank Term Funding Program (the “Program”) in order to help assure the depository institutions that they have an additional source of liquidity to meet the needs of their depositors. Under the Program, eligible depository institutions could pledge eligible collateral (which included direct obligations of the U.S. Department of Treasury and most federal agencies and mortgage-backed securities issued and/or fully guaranteed by Ginnie Mae, Freddie Mac, and Fannie Mae) in exchange for advances equal to 100% of the par value of the collateral pledged. The advances had a term of one year and bore interest at a fixed rate equal to the one-year overnight swap index rate plus 10 basis points. As of March 11, 2024, no new advances were available under the program. Although the Bank pledged approximately $30,000,000 of collateral under the program, the Bank did not take any advances. To maintain this liquidity, the Bank intends to transfer the collateral pledged as part of the Program to the Fed’s discount window.
Previous report
On September 24, 2020, the Bank used $5,000,000 of the proceeds for the payment of principal of unregistered debt securities issued by Financial in 2017. The Company has used the balance of the proceeds from the 2020 Offering for general corporate purposes. Such uses have included payment of interest on the 2020 Notes and the contribution of additional capital to the Bank.
Previous report
The following table sets forth the number of outstanding TDR contracts and the total amount of the Bank’s TDRs as of December 31, 2022:
Previous report
The Company adopted ASU 2022-02 on January 1, 2023, which eliminated the accounting guidance for TDRs.
Previous report
Timberlake Road Area, Campbell County (Lynchburg), Virginia. As previously disclosed, the Bank has purchased certain undeveloped real property located at the intersection of Turnpike and Timberlake Roads, Campbell County, Virginia. The Bank has not determined when it will open a branch at this location. The Bank has determined that the existing structure is not suitable for use as a bank branch. The Bank estimates that the cost of improvements, furniture, fixtures, and equipment necessary to upfit the property at the undeveloped Timberlake location will be between $900,000 and $1,500,000.
Reworded paragraphs (52)
Previous wording
the effects of a resurgence of COVID-19 or other pandemic on the business, customers, employees and third-party service providers of Financial or any of its acquisition targets;
Current wording
the effects of a pandemic on the business, customers, employees and third-party service providers of Financial or any of its acquisition targets;
Previous wording
Although we intend to increase other sources of revenue, our operating results depend primarily upon the Bank’s net interest income, which is determined by the difference between (i) interest and dividend income on earning assets, which consist primarily of loans, investment securities and other investments, and (ii) interest expense on interest-bearing liabilities, which consist principally of deposits and other borrowings. The Bank’s net income also is affected by its provision for credit losses, as well as the level of its noninterest income, including deposit fees and service charges, gains on sales of mortgage loans, and its noninterest expenses, including salaries and employee benefits, occupancy expense, data processing expenses, miscellaneous other expenses, franchise taxes, and income taxes. We anticipate that going forward, PWW will enhance our operating results by providing additional noninterest income (generally investment advisory fees less operating expenses).
Current wording
Although we intend to increase other sources of revenue, our operating results depend primarily upon the Bank’s net interest income, which is determined by the difference between (i) interest and dividend income on earning assets, which consist primarily of loans, investment securities and other investments, and (ii) interest expense on interest-bearing liabilities, which consist principally of deposits and other borrowings. The Bank’s net income also is affected by its provision for credit losses, as well as the level of its noninterest income, including deposit fees and service charges, gains on sales of mortgage loans, and its noninterest expenses, including salaries and employee benefits, occupancy expense, data processing expenses, miscellaneous other expenses, franchise taxes, and income taxes. We anticipate that going forward, PWW will continue to enhance our operating results by providing additional noninterest income (generally investment advisory fees less operating expenses).
Previous wording
For the year ended December 31, 2023, Financial had net income of $8,704,000, a decrease of $255,000 from net income of $8,959,000, for the year ended December 31, 2022;
Current wording
For the year ended December 31, 2024, Financial had net income of $7,944,000, a decrease of $760,000 from net income of $8,704,000 for the year ended December 31, 2023.
Previous wording
For the year ended December 31, 2023, earnings per basic and diluted common share were $1.91, as compared to earnings of $1.91 per basic and diluted common share for the year ended December 31, 2022;
Current wording
For the year ended December 31, 2024, earnings per basic and diluted common share were $1.75, as compared to earnings of $1.91 per basic and diluted common share for the year ended December 31, 2023.
Previous wording
Net interest income increased to $29,740,000 for the current year from $29,703,000 for the year ended December 31, 2022;
Current wording
Net interest income decreased to $29,236,000 for the current year from $29,740,000 for the year ended December 31, 2023.
Previous wording
Noninterest income (exclusive of net gains on sales and calls of securities) decreased to $12,867,000 for the year ended December 31, 2023 from $13,247,000 for the year ended December 31, 2022;
Current wording
Noninterest income (exclusive of net gains on sales and calls of securities) increased to $15,075,000 for the year ended December 31, 2024, from $12,867,000 for the year ended December 31, 2023.
Previous wording
Total assets as of December 31, 2023 were $969,371,000 compared to $928,571,000 at the end of 2022, an increase of $40,800,000 or 4.39%;
Current wording
Total assets as of December 31, 2024, were $979,244,000 compared to $969,371,000 at the end of 2023, an increase of $9,873,000 or 1.02%.
Previous wording
Net loans (excluding loans held for sale), net of unearned income and the allowance for credit losses, decreased to $601,921, 000 as of December 31, 2023 from $605,366,000 as of the end of December 31, 2022, a decrease of 0.57%; and
Current wording
Net loans (excluding loans held for sale), net of unearned income and the allowance for credit losses, increased to $636,552,000 as of December 31, 2024 from $601,921,000 as of December 31, 2023.
Previous wording
The net interest margin increased 6 basis points to 3.29% for 2023, compared to 3.23% for 2022.
Current wording
The net interest margin decreased by 18 basis point to 3.11% for 2024, compared to 3.29% for 2023.
Previous wording
In response to higher inflation and supply chain issues exacerbated by the war in Ukraine, on March 17, 2022, the FOMC increased the target rate to a range of 0.25% to 0.50%. The FOMC continued to increase the target rate, including raises of 50 basis points on May 5, 2022, 75 basis points on each of June 16, July 27, September 30, and November 2, 2022, 50 basis points on December 14, 2022 and 25 basis points on February 1, 2023, at which point the target rate was 4.50% to 4.75%. In a continued effort to bring the rate of inflation in line with Federal Reserve’s target of 2.0%, on March 22, 2023, May 3, 2023 and July 26, 2023, the FOMC raised the target rate by 25 basis points, bringing the target rate to 5.25% to 5.50%. The FOMC has indicated that may consider cutting the federal funds target rate one or more times in 2024.
Current wording
In response to higher inflation and supply chain issues exacerbated by the war in Ukraine, the FOMC began increasing the target rate in March 2022, starting with a range of 0.25% to 0.50%. Through a series of increases throughout 2022 and into 2023, including raises of 50 basis points in May 2022, 75 basis points each in June, July, September, and November 2022, 50 basis points in December 2022, and 25 basis points in February 2023, the target rate reached 4.50% to 4.75%. Continuing its efforts to bring inflation in line with the Federal Reserve’s 2.0% target, the FOMC implemented three additional 25 basis point increases in March, May, and July 2023, bringing the target rate to 5.25% to 5.50%. In 2024, the Federal Reserve implemented several rate cuts, beginning in September 2024, gradually lowering the target rate to its current range of 4.75% to 5.00% as of February 2025. The FOMC has indicated that further rate adjustments will depend on incoming economic data, particularly inflation metrics and labor market conditions.
Previous wording
The allowance for loan credit losses represents an amount which, in management’s judgment, is adequate to absorb the lifetime expected losses that may be sustained on outstanding loans at the balance sheet date based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions, and prepayment experience. The allowance for loan credit losses is measured and recorded upon the initial recognition of a financial asset. The allowance for loan credit losses is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (or recovery of) credit losses, which is recorded in the Consolidated Statements of Income.
Current wording
The allowance for credit losses on loans represents an amount which, in management’s judgment, is adequate to absorb the lifetime expected losses that may be sustained on outstanding loans at the balance sheet date based on the evaluation of the size and current risk characteristics of the loan portfolio, past events, current conditions, reasonable and supportable forecasts of future economic conditions, and prepayment experience. The allowance for loan credit losses is measured and recorded upon the initial recognition of a financial asset. The allowance for loan credit losses is reduced by charge-offs, net of recoveries of previous losses, and is increased or decreased by a provision for (or recovery of) credit losses, which is recorded in the Consolidated Statements of Income.
Previous wording
The net income for Financial for the year ended December 31, 2023 was $8,704,000 or $1.91 per basic and diluted share compared with net income of $8,959,000 or $1.91 per basic and diluted share for the year ended December
Current wording
The net income for Financial for the year ended December 31, 2024, was$7,944,000 or$1.75 per basic and diluted share compared with net income of $8,704,000 or $1.91 per basic and diluted share for the year ended December 31, 2023. Note 13 of the consolidated financial statements provides additional information with respect to the calculation of Financial’s earnings per share.
Previous wording
The decrease of $255,000 in 2023 net income compared to 2022 was due in large part to a decrease in the recovery of credit losses of $721,000, from $900,000 for the year ended December 31, 2022 to $179,000 for the year ended December 31, 2023 as well as a decrease in gain on sales of loans held for sale and an increase in salaries and employee benefits. This decrease was offset in part by a decrease in income tax expense, an increase in wealth management fees to $4,197,000 in 2023 from $3,932,000 in 2022 as well as a decrease in other expenses.
Current wording
The decrease of$760,000 in 2024 net income compared to 2023 was due in large part to a decrease in our net interest income as detailed below. In addition a greater increase in non-interest expense compared to non-interest income, which was driven by increases in salaries and employee benefits expense and an increase in professional fees, contributed to the increas. The decrease was offset in part by an increase in the recovery of credit losses of$476,000, from $179,000 for the year ended December 31, 2023, to$655,000 for the year ended December 31, 2024. This decrease in net income was also was offset in part by an increase in wealth management fees to$4,843,000 in 2024 from $4,197,000 in 2023, as well as a decrease in other expenses.
Previous wording
These operating results represent a return on average stockholders’ equity of 17.07% for the year ended December 31, 2023 compared to 15.59% for the year ended December 31, 2022. Our return on average stockholder’s equity increased because of a decrease in equity resulting from the repurchase of 85,319 shares of common stock in 2023. The return on average assets for the year ended December 31, 2023 was 0.92% compared to 0.91% in 2022 primarily due to a decrease in average assets, which was offset by a decrease in net income.
Current wording
These operating results represent a return on average stockholders’ equity of 12.70% for the year ended December 31, 2024, compared to 17.07% for the year ended December 31, 2023. Our return on average stockholders’ equity decreased due to our decrease in net income and the increase in equity. The return on average assets for the year ended December 31, 2024, was 0.80% compared to 0.92% in 2023, primarily due to a decrease in net income and an increase in average assets.
Previous wording
Interest income increased to $39,362,000 for the year ended December 31, 2023 from $31,853,000 for the year ended December 31, 2022. This increase was due primarily to an increase in the yields on average earning assets which primarily consist of loans and investment securities, as discussed below.
Current wording
Interest income increased to$44,643,000 for the year ended December 31, 2024, from $39,362,000 for the year ended December 31, 2023. This increase was due primarily to an increase in the yields on average earning assets, which primarily consist of loans and investment securities, as discussed below.
Previous wording
Net interest income for 2023 increased slightly, to $29,740,000 from $29,703,000 in 2022. The rates charged on loans and received on investments grew faster than rates paid on deposits, which was the primary driver in the increase of our net interest income. Our interest expense increased over 348% from $2,150,000 in 2022 to $9,622,000 in 2023. The average balance of interest bearing liabilities decreased 1.09% from $746,479,000 for the year ended December 31, 2022 to $738,335,000 for the year ended December 31, 2023. The average interest rate paid on interest bearing liabilities increased by 101 basis points to 1.30% in 2023 from 0.29% in 2022.
Current wording
Net interest income for 2024 decreased slightly, to$29,236,000 from $29,740,000 in 2023. The rates charged on loans and received on investments grew more slowly than rates paid on deposits, which was the primary driver in the decrease of our net interest income. Our interest expense increased over 60.12%, from $9,622,000 in 2023 to$15,407,000 in 2024. The average balance of interest-bearing liabilities increased 6.05%, from $738,335,000 for the year ended December 31, 2023, to $783,003,000 for the year ended December 31, 2024. The average interest rate paid on interest-bearing liabilities increased by 67 basis points to 1.97% in 2024 from 1.30% in 2023.
Previous wording
The net interest margin increased to 3.29% in 2023 from 3.23% in 2022. The average rate on earning assets increased 90 basis points from 3.46% in 2022 to 4.36% in 2023 and the average rate on interest-bearing deposits increased from 0.18% in 2022 to 1.23% in 2023. The increase was primarily caused by an increase in average time deposits, which pay a higher rate than demand interest bearing and savings deposits, from $134,821,000 for the year ended December 31, 2022 to $183,256,000 for the year ended December 31, 2023. Because of Financial’s asset interest rate sensitivity, we anticipate that a gradual decrease in interest rates generally would have a negative impact on our results of operations.
Current wording
The net interest margin decreased to 3.11% in 2024 from 3.29% in 2023. The average rate on earning assets increased 39 basis points from 4.36% in 2023 to 4.75% in 2024, and the average rate on interest-bearing deposits increased from 1.23% in 2023 to 1.92% in 2024. The increase was primarily caused by an increase in average time deposits, which generally pay a higher rate than demand interest-bearing and savings deposits, from $183,256,000 for the year ended December 31, 2023, to $225,894,000 for the year ended December 31, 2024. Because of Financial’s asset interest rate sensitivity, we anticipate that a decrease in interest rates likely would have a negative impact on our results of operations while an increase likely would have a positive impact on our results of operations.
Previous wording
Noninterest income has been and will continue to be an important factor for increasing our profitability. Our management continues to review and consider areas where noninterest income can be increased. Noninterest income (excluding securities gains and losses) consists of income from mortgage originations and sales, service fees, income from life insurance, income from credit and debit card transactions, fees generated by the investment services of Investment, and since January 1, 2022, income from PWW. Service fees consist primarily of monthly service and minimum account balance fees and charges on transactional deposit accounts, treasury management fees, overdraft charges, and ATM service fees.
Current wording
Noninterest income has been and will continue to be an important factor for increasing our profitability. Our management continues to review and consider areas where noninterest income can be increased. Noninterest income (excluding securities gains and losses) consists of income from mortgage originations and sales, service fees, income from life insurance, income from credit and debit card transactions, fees generated by the investment services of Investment, and wealth management fees earned by PWW. Service fees consist primarily of monthly service and minimum account balance fees and charges on transactional deposit accounts, treasury management fees, overdraft charges, and ATM service fees.
Previous wording
The Bank, through the Mortgage Division originates both conforming and non-conforming consumer residential mortgages and reverse mortgage loans primarily in the Region 2000 area as well as in Charlottesville, Harrisonburg, Roanoke, Lexington, and Blacksburg. As part of the Bank’s overall risk management strategy, all of the loans originated and closed by the Mortgage Division are presold to mortgage banking or other financial institutions. The Mortgage Division assumes no credit or interest rate risk on these mortgages. In addition, overall home inventory for sale decreased in our market areas. Beginning in 2013 we began operating the Mortgage Division with hybrid correspondent relationships that allow the Bank to close loans in its name before an investor purchases the loan. By using the Bank’s funds to close the loan (as compared to a broker relationship in which loans are funded by the purchaser of the mortgage), the Bank is able to obtain better pricing due to the slight increase in risk.
Current wording
The Bank, through the Mortgage Division originates both conforming and non-conforming consumer residential mortgages and reverse mortgage loans primarily in the Region 2000 area as well as in Charlottesville, Harrisonburg, Roanoke, Lexington, and Blacksburg. As part of the Bank’s overall risk management strategy, all of the loans originated and closed by the Mortgage Division are presold to mortgage banking or other financial institutions. The Mortgage Division assumes no credit or interest rate risk on these mortgages. In addition, overall home inventory in our market areas has remains below historical levels. We operate the Mortgage Division with hybrid correspondent relationships that allow the Bank to close loans in its name before an investor purchases the loan. By using the Bank’s funds to close the loan (as compared to a broker relationship in which loans are funded by the purchaser of the mortgage), the Bank is able to obtain better pricing due to the slight increase in risk.
Previous wording
The Mortgage Division originated 609 mortgage loans, totaling approximately $164,511,000 during the year ended December 31, 2023 as compared with 798 mortgage loans, totaling $213,406,000 in 2022. The decrease in originations was due in large part to a rapid increase in mortgage rates during 2022, particularly the second half of the year. Rates remained elevated throughout 2023 as compared to recent history. Loans for new home purchases comprised 80% of the total volume in 2023 as compared to 75% in 2022. The Mortgage Division’s revenue is derived from gains on sales of loans held-for-sale to the secondary market. For the year ended December 31, 2023, the Mortgage Division accounted for 7.54% of Financial’s total revenue as compared with 11.65% of Financial’s total revenue for the year ended December 31, 2022. Mortgage contributed $452,000 and $790,000 to Financial’s pre-tax net income in 2023 and 2022, respectively. Because of the uncertainty surrounding current and near-term economic conditions, management cannot predict future mortgage rates. Management also anticipates that in the near to medium term if rates continue to stay above 5% to 6% and prices remain relatively steady or increase, refinancing opportunities will be scarce and the majority of the loan mix will continue to lean towards new home purchases and away from refinancing.
Current wording
Rates remained elevated throughout 2024 as compared to recent history. Loans for new home purchases comprised 81% of the total volume in 2024, as compared to 80% in 2023. The Mortgage Division’s revenue is derived from gains on sales of loans held-for-sale to the secondary market. For the year ended December 31, 2024, the Mortgage Division accounted for 7.52% of Financial’s total revenue, as compared with 7.54% of Financial’s total revenue for the year ended December 31, 2023. Mortgage contributed$827,000 and $452,000 to Financial’s pre-tax net income in 2024 and 2023, respectively. Because of the uncertainty surrounding current and near-term economic conditions, management cannot predict future mortgage rates. Management also anticipates that in the near to medium term, if rates continue to stay above 5% to 6% and prices remain relatively steady or increase, refinancing opportunities will be scarce, and the majority of the loan mix will continue to lean towards new home purchases and away from refinancing.
Previous wording
Service charges and fees and commissions increased to $3,901,000 for the year ended December 31, 2023 from $3,591,000 for the year ended December 31, 2022 primarily due to increases related to commissions on the sales of securities, debit card fees, and treasury management fees.
Current wording
Service charges, fees, and commissions increased to$4,003,000 for the year ended December 31, 2024, from $3,901,000 for the year ended December 31, 2023, primarily due to increases related to commissions on the sales of securities, debit card fees, and treasury management fees.
Previous wording
Investment provides brokerage services through an agreement with a third-party broker-dealer. Pursuant to this arrangement, the third party broker-dealer operates a service center adjacent to one of the branches of the Bank. The center is staffed by dual employees of the Bank and the broker-dealer. Investment receives commissions on transactions generated and in some cases ongoing management fees such as mutual fund 12b-1 fees. Investment’s financial impact on our consolidated revenue has been minimal. Although management cannot predict the financial impact of Investment with certainty, management anticipates it will continue to be a relatively small component of revenue in 2024.
Current wording
Investment provides brokerage services to its clients through an agreement with a third-party broker-dealer. Pursuant to this arrangement, the third-party broker-dealer operates a service center adjacent to one of the branches of the Bank. The center is staffed by dual employees of the Bank and the broker-dealer. Investment receives commissions on transactions generated and, in some cases, ongoing management fees such as mutual fund 12b-1 fees. Investment’s financial impact on our consolidated revenue has been minimal. Although management cannot predict the financial impact of Investment with certainty, management anticipates it will continue to be a relatively small component of revenue in 2025.
Previous wording
We conduct our investment advisory business through PWW, which Financial acquired on December 31, 2021. PWW is a Lynchburg, Virginia-based investment advisory firm that had approximately $650 million in assets under management and advisement at the time of the acquisition. PWW operates as a subsidiary of Financial. PWW generates revenue primarily through investment advisory fees. The investment advisory fees will vary based on the value of assets under management. Assets under management may fluctuate due to both client action and fluctuations in the equity and debt markets. Despite the potential for fluctuation, we anticipate that PWW will continue to contribute meaningfully to the Company’s consolidated net income. For the year ended December 31, 2022, its first year of operations as a subsidiary of Financial, PWW had fee income of $3,932,000. PWW’s fee income increased to $4,197,000 for the year ended December 31, 2023. For the year ended December 31, 2023 and 2022, PWW accounted for 8.04% and 8.72% of Financial’s total revenue, respectively.
Current wording
We conduct our investment advisory business through PWW, which Financial acquired on December 31, 2021. PWW is a Lynchburg, Virginia-based investment advisory firm that had approximately $650 million in assets under management and advisement at the time of the acquisition. PWW operates as a subsidiary of Financial. As of December 31, 2024, PWW’s asset under management was approximately $853,970,000. PWW generates revenue primarily through investment advisory fees. The investment advisory fees will vary based on the value of assets under management. Assets under management may fluctuate due to both client action and fluctuations in the equity and debt markets. Despite the potential for fluctuation, we anticipate that PWW will continue to contribute meaningfully to the Company’s consolidated net income. For the year ended December 31, 2023, its second year of operations as a subsidiary of Financial, PWW had fee income of $4,197,000. PWW’s fee income increased to $4,843,000 for the year ended December 31, 2024. For the year ended December 31, 2024 and 2023, PWW accounted for 8.10% and 8.04% of Financial’s total revenue, respectively.
Previous wording
Noninterest income decreased to $12,867,000 in 2023 from $13,247,000 in 2022. The following table summarizes our noninterest income for the periods indicated.
Current wording
Noninterest income increased to $15,137,000 in 2024 from $12,867,000 in 2023. The following table summarizes our noninterest income for the periods indicated:
Previous wording
The efficiency ratio, that is the cost of producing each dollar of revenue, is determined by dividing noninterest expense by the sum of net interest income plus noninterest income. Financial’s efficiency ratio increased from 76.23% in 2022 to 76.29% in 2023. Our efficiency ratio increased because of the slight decrease in noninterest income. This is a non-GAAP financial measure that the Company believes provides investors with important information regarding operational efficiency. No non-recurring adjustments were made to the calculation of the efficiency ratio.
Current wording
The efficiency ratio, calculated as noninterest expense divided by the sum of net interest income plus noninterest income, increased from 76.29% in 2023 to 79.11% in 2024. This increase was driven by higher interest expenses, which reduced net interest income, in combination with the rise in noninterest expenses outlined above. The efficiency ratio is a non-GAAP financial measure used by the Company to assess operational efficiency. No non-recurring adjustments were applied in calculating this ratio.
Previous wording
For the year ended December 31, 2023, Financial had federal income tax expense of $1,575,000 as compared to a federal income tax expense of $2,151,000, in 2022, which equates to effective tax rates of 15.32% and 19.36%, respectively. Our effective tax rate was lower than the statutory corporate tax rate in 2022 because of federal income tax benefits resulting from the tax treatment of earnings on bank owned life insurance, and certain tax-free municipal securities. Our effective tax rate was lower than the statutory corporate tax rate in 2023 because, in addition to the same factors from 2022, in the fourth quarter we utilized a tax benefit for Virginia state income tax purposes that has accumulated as a result of parent company only (i.e., not consolidated) losses over time. This resulted in a one-time credit to income tax expense and led to a sharp decrease in the effective tax rate in 2023 as compared to 2022. Note 12 of the consolidated financial statements provides additional information with respect to our 2022 and 2023 federal income tax expense and deferred tax accounts.
Current wording
For the year ended December 31, 2024, Financial had federal income tax expense of $1,979,000 as compared to a federal income tax expense of $1,575,000 in 2023, which equates to effective tax rates of 19.94% and 15.32%, respectively. Our effective tax rate was lower than the statutory corporate tax rate in 2024 because of federal income tax benefits resulting from the tax treatment of earnings on bank-owned life insurance and certain tax-free municipal securities and loans. Our effective tax rate was lower than the statutory corporate tax rate in 2023 because, in addition to the same factors in 2024, in the fourth quarter we utilized a tax benefit for Virginia state income tax purposes that has accumulated as a result of parent company-only (i.e., not consolidated) losses over time. This resulted in a one-time credit to income tax expense and led to a sharp decrease in the effective tax rate in 2023 as compared to 2024. Note 12 of the consolidated financial statements provides additional information with respect to our 2023 and 2024 federal income tax expense and deferred tax accounts.
Previous wording
Our total assets were $969,371,000 at December 31, 2023, an increase of $40,800,000 or 4.39% from $928,571,000 at December 31, 2022, primarily due to increases in federal funds sold and securities available for sale and partially offset by decreases in cash and due from banks and loans, net of allowance for credit losses. As explained in more detail below, deposits increased from $848,138,000 on December 31, 2022 to $878,459,000 on December 31, 2023. These deposits were in large part used to purchase fed funds sold and securities available for sale.
Current wording
Our total assets were$979,244,000 at December 31, 2024, an increase of$9,873,000 or 1.02% from $969,371,000 at December 31, 2023, primarily due to increases in loans, net of allowance for credit losses and loans held for sale and partially offset by decreases in securities available-for-sale. As explained in more detail below, deposits increased from $878,459,000 on December 31, 2023, to$882,404,000 on December 31, 2024. These deposits were in large part used to purchase fed funds sold and securities available for sale.
Previous wording
Our loan portfolio is the largest and most profitable component of our earning assets. The Bank has comprehensive policies and procedures which cover both commercial and consumer loan origination and management of credit risk. Loans are underwritten in a manner that focuses on the borrower’s ability to repay. Management’s goal is not to avoid risk, but to manage it and to include credit risk as part of the pricing decision for each product.
Current wording
Our loan portfolio is the largest and most profitable component of our earning assets. The Bank has comprehensive policies and procedures which cover both commercial and consumer loan origination and management of credit risk. Loans are underwritten in a manner that focuses on the borrower’s ability to repay through cash flow. Management’s goal is not to avoid risk, but to manage it and to include credit risk as part of the pricing decision for each product.
Previous wording
As of December 31, 2023, the Bank had $391,000, or 0.06% of its total loans, in non-accrual status compared with $633,000, or 0.10% of its total loans, at December 31, 2022. Management is continuing its efforts to reduce non-performing assets through enhanced collection efforts and the liquidation of underlying collateral when applicable. The Bank attempts to work with borrowers on a case-by-case basis to attempt to protect the Bank’s interests. However, despite our commitment, a reduction of non-accrual loans can be dependent on a number of factors, including an increase in unemployment, adverse housing market conditions, and overall economic conditions at the local, regional and national levels. See “Asset Quality” below.
Current wording
As of December 31, 2024, the Bank had$1,640,000, or 0.25% of its total loans, in non-accrual status compared with $391,000, or 0.06% of its total loans, at December 31, 2023. Management is continuing its efforts to reduce non-performing assets through enhanced collection efforts and the liquidation of underlying collateral when applicable. The Bank attempts to work with borrowers on a case-by-case basis to protect the Bank’s interests. However, despite our commitment, a reduction of non-accrual loans can be dependent on a number of factors, including an increase in unemployment, adverse housing market conditions, and overall economic conditions at the local, regional, and national levels. See “Asset Quality” below.
Previous wording
The total amount of all deposit categories in excess of the FDIC $250,000 insurance limit was $221,312,000 and $185,848,000 as of December 31, 2023 and 2022, respectively.
Current wording
The total amount of all deposit categories in excess of the FDIC $250,000 insurance limit was $276,476,000 and $221,312,000 as of December 31, 2024 and 2023, respectively.
Previous wording
The Company has funded bank-owned life insurance (BOLI) for certain of its officers. The Company is the owner and sole beneficiary of the BOLI policies. As of December 31, 2023, the BOLI had a cash surrender value of $21,586,000 an increase of $2,349,000 from the cash surrender value of $19,237,000, as of December 31, 2022. The Company did not purchase any additional BOLI in 2022 and purchased an additional $1,800,000 of BOLI during the first quarter of 2023. With the exception of purchases, the value of BOLI increases from the cash surrender values of the pool of insurance. The increase in cash surrender value is recorded as a component of noninterest income; however, the Company does not pay tax on the increase in cash value. This profitability is used to offset a portion of current and future employee benefit costs. BOLI can be liquidated if necessary with associated tax costs. However, the Company intends to hold this pool of insurance, because it provides income that enhances the Company’s capital position. Therefore, the Company has not provided for deferred income taxes on the earnings from the increase in cash surrender value.
Current wording
The Company has funded bank-owned life insurance (BOLI) for certain of its officers. The Company is the owner and sole beneficiary of the BOLI policies. As of December 31, 2024, the BOLI had a cash surrender value of $22,907,000, an increase of $1,321,000 from the cash surrender value of $21,586,000, as of December 31, 2023. The Company purchased additional BOLI in 2024 and 2023 in the amounts of $600,000 and $1,800,000, respectively. With the exception of purchases, the value of BOLI increases from the cash surrender values of the pool of insurance. The increase in cash surrender value is recorded as a component of noninterest income; however, the Company does not pay tax on the increase in cash value. This profitability is used to offset a portion of current and future employee benefit costs. BOLI can be liquidated if necessary with associated tax costs. However, the Company intends to hold this pool of insurance, because it provides income that enhances the Company’s capital position. Therefore, the Company has not provided for deferred income taxes on the earnings from the increase in cash surrender value.
Previous wording
Lynchburg, Virginia-based investment advisory firm with approximately $650 million in assets under management and advisement at the time of the acquisition. PWW operates as a subsidiary of Financial. The acquisition date fair value of consideration transferred totaled $10.5 million, which was paid in cash.
Current wording
On December 31, 2021, Financial completed its acquisition of Pettyjohn, Wood & White, Inc. (“PWW”), a Lynchburg, Virginia-based investment advisory firm with approximately $650 million in assets under management and advisement at the time of the acquisition. PWW operates as a subsidiary of Financial. The acquisition date fair value of consideration transferred totaled $10.5 million, which was paid in cash.
Previous wording
In connection with the transaction, the Company recorded intangibles relating to customer relationships and the resultant goodwill, representing the excess of the fair value of the consideration transferred over the fair value of the assets acquired and liabilities assumed in accordance with the acquisition method of accounting. Other assets acquired and liabilities assumed in the combination were not significant. Refer to Note 26. Acquisitions, included in Item 8 of this Annual Report on Form 10-K for additional information.
Current wording
In connection with the transaction, the Company recorded intangibles relating to customer relationships and the resultant goodwill, representing the excess of the fair value of the consideration transferred over the fair value of the assets acquired and liabilities assumed in accordance with the acquisition method of accounting. Other assets acquired and liabilities assumed in the combination were not significant.
Previous wording
Additional borrowings may be obtained through the FHLBA. The Bank’s remaining available credit through the FHLBA was $239,927,000 as of December 31, 2023, the most recent calculation. Currently the Bank has in place pledged collateral in the amount of approximately $34,535,000, allowing the Bank to borrow up to $21,052,000, against which $0 was drawn and outstanding on December 31, 2023. Additional collateral would be required to be pledged in order for the full amount to be available.
Current wording
Additional borrowings may be obtained through the Federal Home Loan Bank of Atlanta (FHLBA). As of December 31, 2024, the Bank’s remaining available credit through the FHLBA was $242,535,000, based on the most recent calculation. The Bank currently has pledged collateral amounting to approximately $33,210,000, enabling it to borrow up to $19,911,000, of which$0 was drawn and outstanding as of December 31, 2024. Additional collateral would need to be pledged for the full credit amount to become available.
Previous wording
At December 31, 2023, liquid assets, which include cash, interest-bearing and noninterest-bearing deposits with banks, federal funds sold, and securities available-for-sale totaled $291,348,000 as compared to $247,549,000 at December 31, 2022. Investment securities traditionally provide a secondary source of liquidity because they can be converted into cash in a timely manner. However, approximately $30,166,000(current market value) of these securities are pledged to secure public deposits and $5,210,000 (current market value) are pledged to secure unfunded lines of credit. In the event any secured line of credit is drawn upon, the related debt would need to be repaid before the securities could be sold and converted to cash.
Current wording
At December 31, 2024, liquid assets, which include cash, interest-bearing and noninterest-bearing deposits with banks, federal funds sold, and securities available-for-sale, totaled$261,225,000, as compared to $291,348,000 at December 31, 2023. Investment securities traditionally provide a secondary source of liquidity because they can be converted into cash in a timely manner. However, approximately $50,187,000 (current market value) of these securities are pledged to secure public deposits and unfunded lines of credit. In the event any secured line of credit is drawn upon, the related debt would need to be repaid before the securities could be sold and converted to cash.
Previous wording
(1)Currently the Bank has in place collateral in the form of 1-4 family residential mortgages and securities in the amount of approximately $34,535,000, against which $0 was drawn and outstanding on December 31, 2023. Additional collateral would be required to be pledged in order for the full $297,524,000 to be available.
Current wording
(1)Currently the Bank has in place collateral in the form of 1-4 family residential mortgages and securities in the amount of approximately $33,210,000, against which $0 was drawn and outstanding on December 31, 2024. Additional collateral would be required to be pledged in order for the full $300,485,000 to be available.
Previous wording
At the end of 2023, approximately 28.07%, or $171,016,000 of the loan portfolio could mature or could reprice within a one-year period. At December 31, 2023, non-deposit sources of available funds totaled $297,524,000, which included $239,927,000 available from the FHLBA.
Current wording
At the end of 2024, approximately 31.17%, or $200,583,000 of the loan portfolio could mature or could reprice within a one-year period. At December 31, 2024, non-deposit sources of available funds totaled $300,485,000, which included $242,535,000 available from the FHLBA.
Previous wording
Stockholders’ equity increased by $9,813,000 from $50,226,000 on December 31, 202 2 to $60,039,000 on December 31, 2023. The increase was due to 2023 income andan increase in the market value (mark to market, net of taxes) of available-for-sale securities of $5,166,000. The increase was partially offset by cash dividends paid. As of December 31, 2023, we had an unrealized loss in our securities available-for-sale portfolio of $21,615,000 as compared to $26,781,000 on December 31, 2022. The unrealized loss is due to changes in market rates of interest rather than the credit worthiness of the issuers. Financial does not expect to realize the losses as it has the intent and ability to hold the securities until their recovery, which may be at maturity.
Current wording
Stockholders' equity increased from December 31, 2023, to December 31, 2024, primarily due to net income earned during the year, partially offset by dividends paid to stockholders and a decrease of $1,300,000 in the market value (mark-to-market adjustment, net of taxes) of available-for-sale securities during 2024. As of December 31, 2024, we had an unrealized loss in our securities available-for-sale portfolio of $22,915,000 as compared to $21,615,000 on December 31, 2023. The unrealized loss is due to changes in market rates of interest rather than the creditworthiness of the issuers. Financial does not expect to realize the losses, as it has the intent and ability to hold the securities until their recovery, which may be at maturity.
Previous wording
Non-accrual loans decreased to $391,000 on December 31, 2023 from $633,000 on December 31, 2022. Total charge-offs during 2023 were $236,000 compared to $162,000 in 2022. In 2023, the Bank recovered $209,000 in loans previously charged-off as compared with recoveries of $406,000 in 2022.
Current wording
Non-accrual loans increased to$1,640,000 on December 31, 2024, from $391,000 on December 31, 2023. This increase primarily resulted from specific commercial credits being downgraded during 2024. Total charge-offs during 2024 were$84,000 compared to $236,000 in 2023. In 2024, the Bank recovered$249,000 in loans previously charged off, as compared with recoveries of $209,000 in 2023.
Previous wording
Non-accrual loans plus OREO decreased to $391,000 on December 31, 2023 from $1,199,000 on December 31, 2022, a decrease of 67.39%.
Current wording
Non-accrual loans plus OREO increased to $1,640,000 on December 31, 2024 from $391,000 on December 31, 2023, an increase of 319.44%.
Showing the first 40 of 52 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Bank has the ability to borrow funds from a number of sources. The Bank had no amounts outstanding on these facilities as of December 31, 2024 and 2023.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Goodwill arises from business combinations and is generally determined as the excess of fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquired entity, over the fair value of the nets assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently in events and circumstances exists that indicate that a goodwill impairment test should be performed. The Company has selected September 1 of each year as the date to perform the annual impairment test. Impairment testing requires a qualitative assessment or that the fair value of each of the Company’s reporting units be compared to the carrying amount of their net assets, including goodwill. If the fair value of a reporting unit is less than its carrying value, an expense may be required to write down the related goodwill to record an impairment loss. Determining fair value is subjective, requiring the use of estimates, assumptions and management judgment. Intangible assets with finite useful lives are amortized over their estimated useful lives to their estimated residual values, if any. Goodwill is the only intangible asset with an indefinite life on our consolidated balance sheet.
Previous report — wording carried elsewhere
31, 2022. Note 13 of the consolidated financial statements provides additional information with respect to the calculation of Financial’s earnings per share.
Previous report — wording carried elsewhere
On December 31, 2021, Financial completed its acquisition of Pettyjohn, Wood & White, Inc. (“PWW”), a
Previous report — wording carried elsewhere
In performing its credit loss analysis, the Bank assigns a risk rating to each loan in the Bank’s portfolio.
Previous report — wording carried elsewhere
Real property located at 19792 Main Street, Buchanan, Virginia. On August 7, 2023, the Bank purchased real property located at 19792 Main Street, Buchanan, Virginia. The building on the property previously served as a bank branch for another financial institution. The Bank anticipates that the cost to upfit the building will be modest. The Bank anticipates that it will open a branch at this location in the second quarter of 2024.