FVCBankcorp, Inc.
For the period ended Jun 30, 2025. Filed Aug 13, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 13, 2025
FVCB$16.25-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001675644-25-000090
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0001675644-25-000126
Item 2. 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 163 previous paragraphs and 190 current paragraphs.
104 unchanged; 50 reworded; 29 added; 8 removed; 1 previous and 7 current paragraphs rearranged.
Tables are not compared: 17 previous and 20 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 (29)
Current report
•the effect of any change in federal government enforcement of federal laws affecting the cannabis industry;
Current report
We recorded net income of $5.7 million, or $0.31 diluted earnings per share, for the three months ended June 30, 2025, compared to net income of$4.2 million, or $0.23 diluted earnings per share, for the three months ended June 30, 2024, an increase of $1.5 million, or 36%. During the second quarter of 2025, we unwound $15 million of our pay-fixed/receive floating interest rate swaps and the funding associated with that hedge, resulting in a pre-tax gain of $154 thousand (which was recorded in non-interest income).
Current report
Net interest income increased $2.1 million, or 15%, to $15.8 million for the three months ended June 30, 2025, compared to $13.7 million for the same period of 2024. Provision for credit losses totaled $105 thousandfor the three months ended June 30, 2025 compared to$206 thousand for the three months ended June 30, 2024. Noninterest income was $1.0 million and $871 thousand for the three months ended June 30, 2025 and 2024, respectively, an increase of $137 thousand, or 16%. Noninterest expense was $9.4 million for the three months ended June 30, 2025 compared to $9.0 million for the three months ended June 30, 2024, an increase of $432 thousand, or 5%.
Current report
Net interest income for the six months ended June 30, 2025 was $30.8 million, compared to $26.5 million for the same period of 2024, an increase of $4.3 million, or 16%.
Current report
Provision for credit losses was $305 thousand and $206 thousand for the six months ended June 30, 2025 and 2024, respectively. Noninterest income was $1.7 million and $1.3 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $413 thousand, or 33%. Noninterest expense was $18.6 million and $17.6 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $940 thousand, or 5%.
Current report
Commercial bank operating earnings, which exclude the aforementioned derivative gain recorded during 2025, for the three months ended June 30, 2025 and 2024 were $5.5 million and $4.2 million, respectively. For the six months ended June 30, 2025 and 2024, commercial bank operating earnings were $10.7 million and $7.9 million, respectively. See table below for additional information on commercial bank operating earnings.
Current report
(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the periods presented.
Current report
Net interest income totaled $15.8 million for the three months ended June 30, 2025 compared to $13.7 million for the three months ended June 30, 2024, an increase of $2.1 million, or 15%. The increase in net interest income is primarily due to a $1.5 million increase in interest income and a $630 thousand decrease in interest expense for the second quarter of 2025 compared to the same period of 2024.
Current report
Total average interest-bearing liabilities increased $63.5 million to $1.60 billion for the three months ended June 30, 2025 compared to $1.54 billion for the same period of 2024. Conversely, interest expense decreased $630 thousand to $13.7 million for the three months ended June 30, 2025, compared to $14.3 million for the three months ended June 30, 2024. The cost of interest-bearing liabilities decreased 32 basis points to 3.42% for the three months ended June 30, 2025 compared to 3.74% for the three months ended June 30, 2024. The decrease in the average rate reduced interest expense by $1.0 million for the second quarter of 2025 as compared to the same period of 2024, while the increase in average volume increased interest expense $413 thousand when compared to the second quarter of 2024.
Current report
Rate and Volume Analysis
Current report
(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the periods presented.
Current report
Net interest income for the six months ended June 30, 2025 and 2024, was $30.8 million and $26.5 million, respectively, an increase of $4.3 million, or 16%. The increase in net interest income is primarily due to a $3.2 million increase in interest income and a $1.2 million decrease in interest expense for the six months ended June 30, 2025 compared to the same period of 2024.
Current report
Our net interest margin for the six months ended June 30, 2025 and 2024 was 2.87% and 2.53%, respectively, an increase of 34 basis points, or 13%. The increase in our net interest margin was a result of continued repricing of our loan renewals and newly originated loans to current market interest rates over the past year along with the reduction in our cost of our funding sources. The yield on interest-earning assets increased 11 basis points to 5.32% for the six months ended June 30, 2025, compared to 5.21% for the same period of 2024. Our cost of funds decreased 10 basis points to 2.74% for the six months ended June 30, 2025, compared to 2.84% for the same period of 2024.
Current report
Average interest-earning assets increased $64.3 million, to $2.17 billion, for the six months ended June 30, 2025 as compared to$2.10 billion for the same period of 2024, which is primarily related to an increase in interest-bearing deposits at other financial institutions. Total interest income increased $3.2 million, or 6%, to $58.0 million for the six months ended June 30, 2025 compared to $54.8 million for the six months ended June 30, 2024. The increase in average volume was the main driver to the increase in our interest income, contributing $3.6 million of the increase for the six months ended June 30, 2025 compared to the six month period of 2024, offset by a decrease in the average rate which decreased interest income $430 thousand.
Current report
Average loans receivable increased $2.9 million to $1.86 billion for the six months ended June 30, 2025. Loan interest income for the six months ended June 30, 2025 increased $1.8 million compared to the same six month period of 2024, primarily as a result of the change in our loan mix towards commercial and industrial loans, which earn a higher yield than other portions of our loan portfolio. The yield on average loans increased 16 basis points to 5.72% for the six months ended June 30, 2025, compared to 5.56% for the six months ended June 30, 2024.
Current report
Average interest-earning deposits at other financial institutions, consisting primarily of excess cash reserves maintained at the Federal Reserve, increased $77.0 million to $105.5 million for the six months ended June 30, 2025, compared to $28.5 million for the same six month period of 2024. The increase in our cash reserves is primarily a result of the $89.8 million increase in our average total deposits year-over-year. The yield on average interest-earning deposits at other financial institutions decreased 101 basis points to 4.45% for the six months ended June 30, 2025 compared to the same period of 2024, primarily as a result of the decrease in the targeted federal funds rate during 2024. Interest income earned on average deposits at other financial institutions increased $1.6 million to $2.3 million for the six months ended June 30, 2025 compared $773 thousand for the same period of 2024.
Current report
Average interest-bearing liabilities increased $56.1 million to $1.59 billion for the six months ended June 30, 2025 compared to $1.54 billion for the same period of 2024. Conversely, interest expense decreased $1.2 million to $27.2 million for the six months ended June 30, 2025, compared to $28.3 million for the six months ended June 30, 2024. The decrease in the average rate reduced interest expense by $1.5 million for the six month period of 2025 as compared to the same period of 2024, while the increase in average volume increased interest expense $358 thousand when compared to the six months ended June 30, 2024.
Current report
Average interest-bearing deposits increased $110.8 million to $1.52 billion for the six months ended June 30, 2025 compared to $1.41 billion for the six months ended June 30, 2024. Interest expense on average interest-bearing deposits increased $316 thousand to $25.8 million for the six months ended June 30, 2025, compared to $25.4 million for the three months ended June 30, 2024. The cost of interest-bearing deposits decreased 21 basis points to 3.41% for the six months ended June 30, 2025, compared to 3.62% for the same period of 2024, which was primarily attributable to the repricing of our interest-bearing deposits to lower interest rates. Cost of deposits (which includes noninterest-bearing deposits) was 2.76% for the six months ended June 30, 2025 compared to 2.85% for the same six month period of 2024. The increase in average volume increased interest expense $1.6 million when compared to the six month period of 2024 while the decrease in the average rate reduced interest expense by $1.3 million when compared to the six months ended June 30, 2024. Average noninterest-bearing deposits decreased $21.1 million to $358.1 million for the six months ended June 30, 2025 compared to$379.2 million for the same period of 2024.
Current report
Average other borrowed funds decreased $53.8 million to $50.0 million for the six months ended June 30, 2025, compared to $103.8 million for the six months ended June 30, 2024. Interest expense on other borrowed funds decreased $1.5 million to $936 thousand for the six months ended June 30, 2025 compared to $2.4 million for the same period of 2024. The cost of other borrowed funds decreased 85 basis points to 3.77% for the six months ended June 30, 2025 compared to 4.62% for the six months ended June 30, 2024.
Current report
We recorded income from our minority membership interests totaling $351 thousand and $492 thousand for the three and six months ended June 30, 2025, respectively. For the three and six months ended June 30, 2024, we recorded income from our minority membership interests totaling $351 thousand and $148 thousand, respectively. This income is primarily attributable to our membership interest in ACM.
Current report
For the six months ended June 30, 2025 and 2024, salaries and benefits expense was $9.8 million and $9.2 million, respectively, an increase of $597 thousand, or 7%, which was primarily related to an increase in incentive accruals for 2025 along with the filling of open positions that were vacant in previous periods. Internet banking and software expense increased $265 thousand to $1.7 million for the six months ended June 30, 2025, compared to $1.4 million for the same period of 2024, a result of the enhanced customer service solutions we have implemented over the past year.
Current report
We recorded a provision for income tax expense of $1.6 million and $1.2 million for the three months ended June 30, 2025 and 2024, respectively. The effective tax rate for the three months ended June 30, 2025 and 2024 was 21.7% and 22.2%, respectively.
Current report
For the six months ended June 30, 2025 and 2024, the provision for income taxes was $2.8 million and $4.4 million, respectively. The provision for income taxes for the six months ended June 30, 2024 included $2.4 million in taxes and penalties related to the surrender of our BOLI policies. The effective tax rate for the six months ended June 30, 2025 and 2024 was 20.5% and 44.5%, respectively.
Current report
For the six months ended June 30, 2025 and for the year ending December 31, 2024
Current report
On July 17, 2025, we announced we were initiating a quarterly cash dividend program. The initial quarterly cash dividend of $0.06 was declared for each share of its common stock outstanding. The dividend is payable on August 18, 2025 to shareholders of record on July 28, 2025. Based on the current number of shares outstanding, the aggregate payment will be approximately $1.1 million.
Current report
We provide banking services to customers that are licensed to do business in the cannabis industry, primarily in Virginia, Maryland and the District of Columbia. These customers include multi-state operators, fully integrated state-wide operators, independent dispensary/cultivation licensees, as well as provisional cannabis licensees. We maintain stringent written policies and procedures related to the on-boarding of such businesses and to the monitoring and maintenance of such business accounts.
Current report
In accordance with federal regulatory guidance and industry best practices, our cannabis banking business is conducted through a comprehensive, defined, and multi-department process, which includes extensive compliance and onboarding due diligence with subsequent involvement by bank experts in cannabis in our operations, branch, treasury management, lending, and credit departments. We perform a multilayered due diligence review of a cannabis business before the business is on-boarded, including site visits and confirmation that the business is properly licensed by the state in which it is conducting business. Throughout the relationship, we continue to monitor the business, including additional site visits, to ensure that the cannabis business continues to meet strict requirements, including maintenance of required licenses. We perform periodic financial reviews of the business and monitor the business in accordance with the Bank Secrecy Act of 1970 and other state requirements.
Current report
While we are providing banking services to customers that are engaged in growing, processing, and sales of both medical and adult use cannabis in a manner that complies with applicable state law, such customers engaged in those activities currently violate federal law. While we are not aware of any instance of a federally-insured financial institution being subject to such liability, the strict enforcement of federal laws regarding cannabis could result in our inability to continue to provide banking services to these customers and we could have legal action taken against us by the federal government. There is an uncertainty of the potential impact to our consolidated financial statements if the federal government should take action against us. As of June 30, 2025, we have not accrued an amount for the potential impact of any such actions.
Current report
The following is a summary of the level of business activities with our cannabis customers: Deposit and loan balances at June 30, 2025 were approximately $161.0 million, or 8.5% of total deposits, and $110.6 million, or 5.9% of total loans, respectively. Deposit and loan balances at December 31, 2024 were approximately $100.0 million, or 5.3% of total deposits, and $108.3 million, or 5.8% of total loans, respectively.
Removed paragraphs (8)
Previous report
Net interest income for the three months ended March 31, 2025 was $15.1 million, compared to $12.8 million for the same period of 2024, an increase of $2.3 million, or 18%. Provision for credit losses for the three months ended March 31, 2025 was $200 thousand, compared to none for the same period of 2024. Noninterest income was $671 thousand and $395 thousand for the three months ended March 31, 2025 and 2024, respectively, an increase of $276 thousand, or 70%. Noninterest expensewas $9.1 millionand $8.6 million for the three months ended March 31, 2025 and 2024, respectively, an increase of $508 thousand, or 6%.
Previous report
(2)The average balances for investment securities includes restricted stock
Previous report
(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the years presented.
Previous report
(2)Includes the impact of restricted stock
Previous report
Net interest income totaled$15.1 million for the three months ended March 31, 2025 compared to $12.8 million for the three months ended March 31, 2024, an increase of $2.3 million, or 18%. The increase in net interest income is primarily due to an increase in loan interest income as the loan portfolio reprices in this higher interest rate environment.
Previous report
Total average interest-bearing liabilities increased $48.6 million to $1.58 billion at March 31, 2025 compared to $1.53 billion at March 31, 2024. Conversely, interest expense decreased $530 thousand to $13.5 million for the three months ended March 31, 2025 compared to $14.0 million for the three months ended March 31, 2024. The decrease in the average rate contributed $439 thousand to the decrease in interest expense for the first quarter of 2025 compared to the same period of 2024.
Previous report
We recorded income from our minority membership interest in ACM totaling$141 thousandfor the three months ended March 31, 2025, compared to a loss of $203 thousand for same period of 2024.
Previous report
We recorded a provision for income tax expense of $1.2 millionfor the three months ended March 31, 2025, compared to theprovision for income tax expense of $3.2 million for the three months ended March 31, 2024. Income tax expense for the three months ended March 31, 2024 includes $2.4 million in taxes and penalties related to the surrender of our BOLI policies. These were in part offset by discrete tax benefits recorded as a result of nonqualified option exercises that occurred during the quarter ended March 31, 2024.
Reworded paragraphs (50)
Previous wording
The following presents management’s discussion and analysis of our consolidated financial condition at March 31, 2025 and December 31, 2024 and the results of our operations for the three months ended March 31, 2025 and 2024. This discussion should be read in conjunction with our unaudited consolidated financial statements and the notes thereto appearing elsewhere in this report and the audited consolidated financial statements and the notes to consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. Results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results of operations for the balance of 2025, or for any other period. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations.
Current wording
The following presents management’s discussion and analysis of our consolidated financial condition at June 30, 2025 and December 31, 2024 and the results of our operations for the three and six months ended June 30, 2025 and 2024. This discussion should be read in conjunction with our unaudited consolidated financial statements and the notes thereto appearing elsewhere in this report and the audited consolidated financial statements and the notes to consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. Results of operations for the three and six month periods ended June 30, 2025 are not necessarily indicative of the results of operations for the balance of 2025, or for any other period. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations.
Previous wording
Typically, financial institutions use their historical loss experience and trends in losses for each loan segment which are then adjusted for portfolio trends and economic and environmental factors in determining the ACL. Since the Bank’s inception in 2007, we have experienced minimal loss history within our loan portfolio. Due to the fact that limited internal loss history exists to generate statistical significance, we determined it was most prudent to rely on peer data when deriving our best estimate of PD and LGD. As part of our estimation process, we will continue to assess the reasonableness of the data, assumptions, and model methodology utilized to derive our allowance for credit losses.
Current wording
Bank’s inception in 2007, we have experienced minimal loss history within our loan portfolio. Due to the fact that limited internal loss history exists to generate statistical significance, we determined it was most prudent to rely on peer data when deriving our best estimate of PD and LGD. As part of our estimation process, we will continue to assess the reasonableness of the data, assumptions, and model methodology utilized to derive our allowance for credit losses.
Previous wording
Results of Operations— Three Months Ended March 31, 2025 and 2024
Current wording
Results of Operations— Three and Six Months Ended June 30, 2025 and 2024
Previous wording
The annualized return on average assets for the three months ended March 31, 2025 and 2024 was 0.94% and 0.25%, respectively. The annualized return on average equity for the three months ended March 31, 2025 and 2024 was 8.61% and 2.44%, respectively.
Current wording
The annualized return on average assets for the three months ended June 30, 2025 and 2024 was 1.02% and 0.77%, respectively. The annualized return on average equity for the three months ended June 30, 2025 and 2024 was 9.37% and 7.42%, respectively.
Previous wording
For the three months ended March 31, 2025, we recorded net income of $5.2 million, or $0.28 diluted earnings per share, compared to net income of $1.3 million, or $0.07 diluted earnings per share for the three months ended March 31, 2024, an increase of $3.8 million. Net income for the three months ended March 31, 2024 included the surrender of certain BOLI policies with an aggregate cash surrender value of $48.0 million. Upon the surrender, we received a cash payout and were required to accrue additional income tax on the appreciation of those policies which had previously been treated as tax-exempt income. This resulted in additional statutory income tax expense of $1.6 million and tax penalties of $722 thousand. The tax penalties related to the surrender of the BOLI were recorded in income tax expense.
Current wording
For the six months ended June 30, 2025, we recorded net income of $10.8 million, or $0.59 diluted earnings per share, compared to net income of $5.5 million, or $0.30 diluted earnings per share for the six months ended June 30, 2024. Net income for the six months ended June 30, 2024 included the surrender of certain BOLI policies with an aggregate cash surrender value of $48.0 million. Upon the surrender, we received a cash payout and were required to accrue additional income tax on the appreciation of those policies which had previously been treated as tax-exempt income. This resulted in additional statutory income tax expense of $1.6 million and tax penalties of $722 thousand. The tax penalties related to the surrender of the BOLI were recorded in income tax expense.
Previous wording
Commercial bank operating earnings, which exclude the above mentioned nonrecurring taxes on the surrender of our BOLI policies, for the three months ended March 31, 2025 and March 31, 2024 were $5.2 million and $3.7 million, respectively, an increase of $1.4 million, or 38%. Diluted commercial bank operating earnings per share for the three months ended March 31, 2025 and March 31, 2024 were $0.28 and $0.20, respectively.
Current wording
Diluted commercial bank operating earnings per share for the three months ended June 30, 2025 and 2024 were $0.30 and $0.23, respectively. For the six months ended June 30, 2025 and 2024, diluted commercial bank operating earnings per share were $0.58 and $0.43, respectively.
Previous wording
The following table presents average balance information, interest income, interest expense and the corresponding average yields earned and rates paidfor the three months ended March 31, 2025 and 2024.
Current wording
The following table presents average balance information, interest income, interest expense and the corresponding average yields earned and rates paid for the three months ended June 30, 2025 and 2024.
Previous wording
(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the quarters presented. Net loan fees and late charges included in interest income on loans totaled $670 thousandand $404 thousandfor the quarters ended March 31, 2025 and 2024, respectively.
Current wording
(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the quarters presented. Net loan fees and late charges included in interest income on loans totaled $501 thousand and $388 thousandfor the quarters ended June 30, 2025 and 2024, respectively.
Previous wording
Our net interest margin for the three months ended March 31, 2025 and 2024 was 2.83% and 2.47%, respectively, an increase of 36 basis points, or 15%. The increase in our net interest margin was a result of continued repricing of our loan renewals and newly originated loans to current market interest rates over the past year. We have also reduced the cost of our funding sources simultaneously with federal funds rate decisions during 2024. The yield on interest-earning assets increased 16 basis points to 5.31% for the three months ended March 31, 2025, compared to 5.15% for the same period of 2024, a result of the increased rate environment over the past year. Our cost of funds decreased 12 basis points to 2.83%for the three months ended March 31, 2025, compared to 2.95% for the same period of 2024.
Current wording
Our net interest margin for the three months ended June 30, 2025 and 2024 was 2.90% and 2.59%, respectively, an increase of 31 basis points, or 12%. The increase in our net interest margin was a result of continued repricing of our loan renewals and newly originated loans to current market interest rates over the past year. We have also reduced the cost of our funding sources simultaneously with federal funds rate decisions during 2024. The yield on interest-earning assets increased 12 basis points to 5.39% for the three months ended June 30, 2025, compared to 5.27% for the same period of 2024, a direct result of our originating loans at higher interest rates and further diversifying our portfolio mix towards commercial and industrial loans. Our cost of funds decreased 21 basis points to 2.79% for the three months ended June 30, 2025, compared to 3.00% for the same period of 2024.
Previous wording
Average interest-earning assets increased $69.8 million, or 3%, to $2.15 billion at March 31, 2025 compared to $2.08 billion at March 31, 2024. This increase was primarily related to an increase in interest-bearing deposits held at other financial institutions. Total interest income increased $1.7 million, or 6%, to $28.6 million for the three months ended March 31, 2025 compared to $26.8 million for the three months ended March 31, 2024. The increase in our average volume was the main driver to the increase in our interest income, contributing $1.9 million of the increase for the three months ended March 31, 2025 compared to the year ago quarter, offset by a decrease in the average rate which decreased interest income $164 thousand.
Current wording
Average interest-earning assets for the three months ended June 30, 2025 increased $58.7 million, or 3%, to $2.18 billion compared to $2.12 billion for the three months ended June 30, 2024. This increase was primarily related to an increase in interest-bearing deposits held at other financial institutions. Total interest income increased $1.5 million, or 5%, to $29.4 million for the three months ended June 30, 2025 compared to $28.0 million for the three months ended June 30, 2024. The increase in our average volume was the main driver to the increase in our interest income, contributing $1.7 million of the increase for the three months ended June 30, 2025 compared to the year ago quarter, offset by a decrease in the average rate which decreased interest income by $249 thousand.
Previous wording
Average loans receivable increased $25.7 million to $1.87 billion for the three months ended March 31, 2025, compared to $1.84 billion for the three months ended March 31, 2024. The yield on average loans increased 19 basis points to 5.69% for the three months ended March 31, 2025. The increase in our average loan yields was primarily a result of the repricing of the loan portfolio at higher interest rates. Average balances of nonperforming loans, which consist of nonaccrual loans, are included in the net interest margin calculation and did not have a material impact on our net interest margin in 2025 and 2024.
Current wording
Average loans receivable decreased $20.0 million to $1.86 billion for the three months ended June 30, 2025, compared to $1.88 billion for the three months ended June 30, 2024. The yield on average loans increased 18 basis points to 5.80% for the three months ended June 30, 2025, compared to 5.62% for the three months ended June 30, 2024. The increase in our average loan yields was primarily a result of the repricing of the loan portfolio at higher interest rates. Average balances of nonperforming loans, which consist of nonaccrual loans, are included in the net interest margin calculation and did not have a material impact on our net interest margin in 2025 and 2024.
Previous wording
Average interest-earning deposits at other financial institutions, consisting primarily of excess cash reserves maintained at the Federal Reserve, increased $60.3 million to $87.8 million for the quarter ended March 31, 2025, compared to $27.5 million for the quarter ended March 31, 2024. The yield on average interest-earning deposits at other financial institutions decreased 99 basis points to 4.45% for the quarter ended March 31, 2025 compared to the same period of 2024, primarily as a result of the Federal Open Market Committee's decision to decrease its targeted federal funds rate 100 basis points during 2024.
Current wording
Average interest-earning deposits at other financial institutions, consisting primarily of excess cash reserves maintained at the Federal Reserve, increased $93.5 million to $123.0 million for the quarter ended June 30, 2025, compared to $29.5 million for the quarter ended June 30, 2024. The increase in our cash reserves is primarily a result of the $97.5 million increase in our average total deposits year-over-year. The yield on average interest-earning deposits at other financial institutions decreased 103 basis points to 4.45% for the quarter ended June 30, 2025 compared to the same period of 2024, primarily as a result of the Federal Open Market Committee's decision to decrease its targeted federal funds rate 100 basis points during 2024.
Previous wording
Total average interest-bearing deposits increased $107.3 million to $1.51 billion at March 31, 2025 compared to $1.41 billion at March 31, 2024. Interest expense on deposits increased $251 thousand to $12.8 million for the three months ended March 31, 2025 compared to $12.5 million for the three months ended March 31, 2024, primarily a result of the increase in average total interest-bearing deposits for the three months ended March 31, 2025. Average noninterest-bearing deposits decreased $25.5 million, or 7%, to $354.6 million for the three months ended March 31, 2025, compared to $380.1 million for the three months ended March 31, 2024, as customers continue to move excess funds from noninterest-bearing to interest-bearing deposit products. Average interest checking deposits increased $117.2 million to $617.1 million for the three months ended March 31, 2025 compared to $499.9 million for the three months ended March 31, 2024. Average savings and money market deposits increased $90.1 million to $390.5 million for the three months ended March 31, 2025 compared to $300.4 million for the same period of 2024. Average time deposits decreased $44.5 million to $256.4 million for the three months ended March 31, 2025 compared to $300.9 million for the three months ended March 31, 2024. Average wholesale deposits decreased $55.5 million to $249.9 million for the three months ended March 31, 2025 compared to $305.4 million for the three months ended March 31, 2024.
Current wording
Total average interest-bearing deposits increased $114.2 million to $1.53 billion for the three months ended June 30, 2025 compared to $1.42 billion for the three months ended June 30, 2024. Interest expense on deposits increased $64 thousand to $13.0 million for the three months ended June 30, 2025 compared to $12.9 million for the three months ended June 30, 2024, primarily as a result of the increase in volume of average interest-bearing deposits for the three months ended June 30, 2025. The cost of interest-bearing deposits decreased 26 basis points to 3.39% for the three months ended June 30, 2025 compared to 3.65% for the same period of 2024. Average noninterest-bearing deposits decreased $16.7 million, or 4%, to $361.6 million for the three months ended June 30, 2025, compared to $378.3 million for the three months ended June 30, 2024, as customers continue to move excess funds from noninterest-bearing to interest-bearing deposit products. Average wholesale deposits decreased $2.2 million to $247.6 million for the three months ended June 30, 2025 compared to $249.8 million for the three months ended June 30, 2024. Cost of deposits (which includes noninterest- bearing deposits) was 2.74% for the three months ended June 30, 2025 compared to 2.88% for the same three month period of 2024.
Previous wording
Average other borrowed funds decreased $57.8 million to $50.0 million for the quarter ended March 31, 2025, compared to $107.8 million for the quarter ended March 31, 2024. Interest expense on other borrowed funds decreased
Current wording
Average other borrowed funds decreased $49.7 million to $50.0 million for the quarter ended June 30, 2025, compared to $99.8 million for the quarter ended June 30, 2024. Interest expense on other borrowed funds decreased $681 thousand for the quarter ended June 30, 2025 to $468 thousand compared to $1.1 million for the same period of 2024. The cost of other borrowed funds decreased 88 basis points to 3.75% for the three months ended June 30, 2025 compared to 4.63% for the three months ended June 30, 2024.
Previous wording
We recorded a provision for credit losses of $200 thousand for the three months ended March 31, 2025 and $0 for the three months ended March 31, 2024. The allowance for credit losses was$18.4 million and $18.1 million at March 31, 2025 and December 31, 2024, respectively. Our allowance for credit losses as a percent of total loans, net of deferred fees and costs, was 0.98% and 0.97% at March 31, 2025 and December 31, 2024, respectively.
Current wording
We recorded a provision for credit losses of $105 thousand and $305 thousand for the three and six months ended June 30, 2025, respectively, compared to $206 thousand for each of the three and six months ended June 30, 2024. The allowance for credit losses was $18.1 million at each of June 30, 2025 and December 31, 2024. Our allowance for credit losses as a percent of total loans, net of deferred fees and costs, was 0.97% at each of June 30, 2025 and December 31, 2024.
Previous wording
We lend to well-established and relationship-driven borrowers which has contributed to our track record of low historical credit losses. We continue to maintain our disciplined credit guidelines during the current rate environment. We proactively monitor the impact of interest rates on our adjustable loans as the industry navigates through this economic cycle of increased inflation and higher interest rates. Nonperforming loans, net of fees, at March 31, 2025 totaled $10.7 million, or 0.48% of total assets, compared to $12.8 million, or 0.58%, of total assets at December 31, 2024. We had no other real estate owned at March 31, 2025 and December 31, 2024, respectively. We recorded net recoveries of $139 thousand and $30 thousand for the quarters ended March 31, 2025 and 2024, respectively.
Current wording
We lend to well-established and relationship-driven borrowers, which has contributed to our track record of low historical credit losses. We continue to maintain our disciplined credit guidelines during the current rate environment. We proactively monitor the impact of changes in economic conditions, such as inflation and recessionary conditions, changes in market interest rates, and changes in government policy. Nonperforming loans, net of fees, at June 30, 2025 totaled $10.5 million, or 0.47% of total assets, compared to $12.8 million, or 0.58%, of total assets at December 31, 2024. We had noother real estate owned at June 30, 2025 and at December 31, 2024. We recorded net charge-offs of $518 thousand during the second quarter of 2025 compared to net recoveries of $5 thousand for same period of 2024. For the six months ended June 30, 2025 and 2024, we recorded net charge-offs of $379 thousand and net recoveries of $35 thousand, respectively.
Previous wording
The following table provides detail for noninterest incomefor the three months ended March 31, 2025 and 2024.
Current wording
The following table provides detail for noninterest incomefor the three and six months ended June 30, 2025 and 2024.
Previous wording
Noninterest income includes service charges on deposits and loans, loan swap fee income, income from our membership interest in ACM and other investments, income from our BOLI policies, and other fee income, and continues to supplement our operating results. For the three months ended March 31, 2025 and 2024, we recorded noninterest income of$671 thousand and$395 thousand, respectively, an increase of $276 thousand, or 70%.
Current wording
Noninterest income includes service charges on deposits and loans, loan swap fee income, income from our membership interest in ACM and other investments, income from our BOLI policies, and other fee income, and continues to supplement our operating results. For the three months ended June 30, 2025 and 2024, we recorded noninterest income of $1.0 million and$871 thousand, respectively, an increase of $137 thousand, or 16%. For the six months ended June 30, 2025 and 2024, we recorded noninterest income of $1.7 million and$1.3 million, respectively, an increase of $413 thousand, or 33%.
Previous wording
Fee income from loanswas $77 thousand for the quarter ended March 31, 2025, compared to $49 thousand for the same period of 2024. Service charges on deposits were$270 thousand for the quarter ended March 31, 2025, compared to $261 thousand for the same period of 2024, an increase of $9 thousand, or 3%. Income from BOLI decreased to
Current wording
Fee income from loans was $33 thousand for the quarter ended June 30, 2025, compared to $38 thousand for the same period of 2024. Service charges on deposits were $282 thousand for the quarter ended June 30, 2025, compared to $278 thousand for the same period of 2024. Income from BOLI increased to $71 thousand for the three months ended June 30, 2025 compared to $66 thousand for same period of 2024.
Previous wording
$70 thousand for the three months ended March 31, 2025 compared to $190 thousand for same period of 2024, the decrease a result of our surrendered BOLI policies which occurred during the first quarter of 2024.
Current wording
Fee income from loans was $110 thousand for six months ended June 30, 2025, compared to $87 thousand for the same period of 2024. Service charges on deposits were $552 thousand for the six months ended June 30, 2025, compared to $539 thousand for the same period of 2024, an increase of $13 thousand, or 2%. Income from BOLI decreased to $141 thousand for the six months ended June 30, 2025 compared to $256 thousand for same period of 2024, a result of our surrendered BOLI policies which occurred during the first quarter of 2024.
Previous wording
The following table reflects the components of noninterest expense for the three months ended March 31, 2025 and 2024.
Current wording
The following table reflects the components of noninterest expense for the three and six months ended June 30, 2025 and 2024.
Previous wording
Noninterest expense includes, among other things, salaries and benefits, occupancy and equipment costs, professional fees, data processing, insurance and miscellaneous expenses. Noninterest expense was $9.1 millionand $8.6 million for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Noninterest expense includes, among other things, salaries and benefits, occupancy and equipment costs, professional fees, data processing, insurance and miscellaneous expenses. Noninterest expense was $9.4 million and $9.0 million for the three months ended June 30, 2025 and 2024, respectively, an increase of $432 thousand, or 5%. Noninterest expense was $18.6 million and $17.6 million for the six months ended June 30, 2025 and 2024, respectively, an increase of $940 thousand, or 5%.
Previous wording
Salaries and benefits expense increased $252 thousand to $4.8 million for the three months ended March 31, 2025 compared to $4.5 million for the same period of 2024, which was primarily related to an increase in payroll taxes and other incentive accruals during the first quarter of 2025. Internet banking and software expense increased $131 thousand to $825 thousand for the three months ended March 31, 2025, compared to $694 thousand for the same period of 2024.
Current wording
Salaries and benefits expense increased $346 thousand to $5.0 million for the three months ended June 30, 2025 compared to $4.7 million for the same period in 2024. Internet banking and software expense increased $134 thousand for the three months ended June 30, 2025 to $864 thousand, compared to $730 thousand for the same period in 2024, primarily as a result of the implementation of enhanced customer software solutions. Data processing and network expense decreased $117 thousand to $550 thousand for the three months ended June 30, 2025 compared to $667 thousand for the same period of 2024, primarily as a result of contract renewals with certain service providers for the Bank.
Previous wording
At March 31, 2025, total assets were $2.24 billion, an increase of $41.8 million, from $2.20 billion at December 31, 2024. Investments in debt securities were $159.0 million at March 31, 2025, an increase of$2.2 million, from $156.7 million at December 31, 2024. Total deposits increased $36.0 million, or 2%, to $1.91 billion at March 31, 2025, from $1.87 billion at December 31, 2024. We had Federal Home Loan Bank of Atlanta ("FHLB") advances outstanding totaling $50.0 millionat each of March 31, 2025 and December 31, 2024. Subordinated debt, net of unamortized issuance costs, totaled$18.7 million at each of March 31, 2025 and December 31, 2024.
Current wording
At June 30, 2025, total assets were $2.24 billion, an increase of $38.3 million, from $2.20 billion at December 31, 2024. Investments securities were $157.1 million at June 30, 2025, an increase of $389 thousand, from $156.7 million at December 31, 2024. Total loans, net of fees, were $1.87 billion at each of June 30, 2025 and December 31, 2024. Total deposits increased $32.9 million to $1.90 billionat June 30, 2025, from $1.87 billion at December 31, 2024. We had Federal Home Loan Bank of Atlanta ("FHLB") advances outstanding totaling$50 millionat each of June 30, 2025 and December 31, 2024. Subordinated debt, net of unamortized issuance costs, totaled$18.7 millionat each of June 30, 2025 and December 31, 2024.
Previous wording
Loans receivable, net of deferred fees, were $1.88 billion at March 31, 2025 and $1.87 billion at December 31, 2024, an increase of $11.9 million, or 1%.
Current wording
Loans receivable, net of deferred fees, were $1.87 billion at each of June 30, 2025 and December 31, 2024.
Previous wording
Commercial real estate loans totaled $1.01 billion and $1.04 billion at March 31, 2025 and December 31, 2024, respectively, and were approximately 54%and 56% of the total loans receivable at such dates, respectively. Owner-occupied commercial real estate loans were $182.5 million at March 31, 2025 compared to $187.8 million at December 31, 2024. Nonowner-occupied commercial real estate loans were $828.2 millionat March 31, 2025 compared to $850.1 million at December 31, 2024. Commercial construction loans totaled $165.7 millionat March 31, 2025, compared to $162.4 million at December 31, 2024 and comprisedof 9%of total loans receivable at such dates, respectively. Our regulatory commercial real estate concentration (which includes nonowner-occupied real estate and construction loans) was 357% of our total risk-based capital at March 31, 2025. Our commercial real estate portfolio, including construction loans, is diversified by asset type and geographic concentration. We manage the portfolio in a disciplined manner and have comprehensive policies to monitor, measure, and mitigate our loan concentrations within this portfolio segment, including rigorous credit approval, monitoring and administrative practices. Additional information on the stratification of these portfolio segments can be found below under "Asset Quality".
Current wording
Commercial real estate loans totaled $981.5 million and $1.04 billion at June 30, 2025 and December 31, 2024, respectively, and were approximately 53% and 56% of total loans receivable at such dates, respectively. Owner-occupied commercial real estate loans were $178.7 million at June 30, 2025 compared to $188.2 million at December 31, 2024. Nonowner-occupied commercial real estate loans were $802.8 million at June 30, 2025 compared to $850.1 million at December 31, 2024. Commercial construction loans totaled $177.1 million at June 30, 2025, compared to $162.4 million at December 31, 2024 and comprised 9% of total loans receivable at each of June 30, 2025 and December 31, 2024. Our regulatory commercial real estate concentration (which includes nonowner-occupied real estate and construction loans) was 346% of our total risk-based capital at June 30, 2025 and 371% of our total risk-based capital at December 31, 2024. Our commercial real estate portfolio, including construction loans, is diversified by asset type and geographic concentration. We manage the portfolio in a disciplined manner and have comprehensive policies to monitor, measure, and mitigate our loan concentrations within this portfolio segment, including rigorous credit approval, monitoring and administrative practices. Additional information on the stratification of these portfolio segments can be found below under "Asset Quality".
Previous wording
Commercial and industrial loans increased $46.7 million to $383.3 million at March 31, 2025, an increase of 14%, from $336.7 million at December 31, 2024. Consumer real estate loans decreased $10.3 million to $315.0 million at March 31, 2025, from $325.3 million at December 31, 2024, primarily a result of principal repayments during the first quarter of 2025.
Current wording
Commercial and industrial loans increased $60.8 million to $397.5 million at June 30, 2025, an increase of 18%, from $336.7 million at December 31, 2024. The increase in commercial and industrial loans was a result of an increase in loans originations for the first six months of the 2025 in addition to an increase in the Company's warehouse lending facility totaling $30.1 million. Consumer real estate loans decreased $17.9 million to $307.4 million at June 30, 2025, from $325.3 million at December 31, 2024, primarily a result of principal payments during the first half of 2025.
Previous wording
Nonperforming loans, defined as nonaccrual loans and loans contractually past due 90 days or more as to principal or interest and still accruing, were$10.7 million and $12.8 million at March 31, 2025 and December 31, 2024, respectively, a decrease of $2.1 million. The decrease in nonperforming loans at March 31, 2025 is primarily due to a decrease in loans past due over 90 days at March 31, 2025. Loans that we have classified as nonperforming are a result of customer specific deterioration, mostly financial in nature, that are not a result of economic, industry, or environmental causes that we might see as a pattern for possible future losses within our loan portfolio. For each of our criticized assets, we individually evaluate each loan, generally through the performance of a collateral analysis to determine the amount of allowance required. As a result of the analysis completed, we had a reserve for individually assessed loans totaling $462 thousand and $468 thousand at March 31, 2025 and December 31, 2024, respectively. Our ratio of nonperforming loans to total assets was 0.48% and 0.58% at March 31, 2025 and December 31, 2024, respectively. We had no other real estate owned and there were no loan modifications for borrowers who were experiencing financial difficulty during the quarters ended March 31, 2025 and December 31, 2024.
Current wording
Nonperforming loans, defined as nonaccrual loans and loans contractually past due 90 days or more as to principal or interest and still accruing, were $10.5 million and $12.8 million at June 30, 2025 and December 31, 2024, respectively, a decrease of $2.3 million. The decrease in nonperforming loans at June 30, 2025 is primarily due to a decrease in loans past due over 90 days at June 30, 2025. Loans that we have classified as nonperforming are a result of customer specific deterioration, mostly financial in nature, that are not a result of economic, industry, or environmental causes that we might see as a pattern for possible future losses within our loan portfolio. For each of our criticized assets, we individually evaluate each loan, generally through the performance of a collateral analysis to determine the amount of allowance required. As a result of the analysis completed, we had a reserve for individually assessed loans totaling $365 thousand and $468 thousand at June 30, 2025 and December 31, 2024, respectively. Our ratio of nonperforming loans to total assets was 0.47% and 0.58% at June 30, 2025 and December 31, 2024, respectively. We had no other real estate owned and there were no loan modifications for borrowers who were experiencing financial difficulty during the six and twelve month periods ended June 30, 2025 and December 31, 2024.
Previous wording
We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. We analyze loans individually by classifying the loans as to credit risk. This analysis includes larger, non-homogeneous loans such as commercial real estate and commercial and industrial loans. This analysis is performed on an ongoing basis as new information is obtained. At March 31, 2025, we had $4.6 million in loans identified as special mention, an increase of $1.3 million from December 31, 2024. Special mention rated loans have a potential weakness that deserves our close attention; however, the borrower continues to pay in accordance with their contractual terms, unless modified and disclosed. The increase from December 31, 2024 was primarily a result of downgrading two loan relationships to special mention during the first quarter of 2025. Loans rated as special mention are generally considered to be well-secured, and are not individually evaluated.
Current wording
We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. We analyze loans individually by classifying the loans as to credit risk. This analysis includes larger, non-homogeneous loans such as commercial real estate and commercial and industrial loans. This analysis is performed on an ongoing basis as new information is obtained. At June 30, 2025, we had $2.4 million in loans identified as special mention, a decrease of $915 thousand from December 31, 2024. Special mention rated loans have a potential weakness that deserves our close attention; however, the borrower continues to pay in accordance with their contractual terms, unless modified and disclosed. The decrease from December 31, 2024 was primarily a result of upgrading two loan relationships from special mention during 2025. Loans rated as special mention are generally considered to be well-secured, and are not individually evaluated.
Previous wording
At March 31, 2025, we had$10.7 million in loans identified as substandard, adecrease of $459 thousand from $11.2 million as of December 31, 2024, which was primarily a result of one loan being upgraded during the first quarter of 2025. Substandard rated loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. For each of these substandard loans, a liquidation analysis is completed. At March 31, 2025, reserves for individually assessed loans totaling $462 thousand were allocated within the allowance for credit losses to supplement any shortfall of collateral.
Current wording
At June 30, 2025, we had $10.2 million in loans identified as substandard, a decrease of $1.0 millionfrom $11.2 million as of December 31, 2024, which was primarily a result of two loans being paid off in full and one loan upgraded during 2025. Substandard rated loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. For each of these substandard loans, a liquidation analysis is completed. At June 30, 2025, reserves for individually assessed loans totaling $365 thousand were allocated within the allowance for credit losses to supplement any shortfall of collateral.
Previous wording
We recorded annualized net recoveriesof (0.03)% and(0.01)% for the three months ended March 31, 2025 and 2024, respectively. The following table provides additional information on our asset quality for the dates presented.
Current wording
For the three months ended June 30, 2025 and 2024, we recorded net charge-offs of $517 thousand and net recoveries of $5 thousand, respectively. We recorded net charge-offsof $378 thousand and net recoveries $35 thousandfor the six months ended June 30, 2025 and 2024, respectively. The following table provides additional information on our asset quality for the dates presented.
Previous wording
We closely and proactively monitor the effects of recent market activity. As mentioned above, our commercial real estate loan portfolio totaled $1.01 billion, or 54% of total loans, at March 31, 2025 and $1.04 billion, or 56% of total loans, at December 31, 2024. The commercial real estate portfolio, including construction loans, is diversified by asset type and geographic concentration. We manage this portfolio in a disciplined manner, and have comprehensive policies to monitor, measure, and mitigate our loan concentrations within this portfolio segment, including rigorous credit approval, monitoring, and administrative practices. Included in commercial real estate are loans secured by office properties totaling $121.9 million, or 6% oftotal loans, which are primarily located in the Virginia and Maryland suburbs of our market area, with only $2.3 million, or 0.12% of total loans, located in Washington, D.C. Loans secured by retail properties total $244.9 million, or 13% of total loans, at March 31, 2025. Loans secured by multi-family commercial properties totaled $158.9 million, or 8%of total loans, at March 31, 2025.
Current wording
We closely and proactively monitor the effects of recent market activity. As mentioned above, our commercial real estate loan portfolio totaled$981.5 million, or 53% of total loans, at June 30, 2025 and $1.04 billion, or 56% of total loans, at December 31, 2024. The commercial real estate portfolio, including construction loans, is diversified by asset type and geographic concentration. We manage this portfolio in a disciplined manner, and have comprehensive policies to monitor, measure, and mitigate our loan concentrations within this portfolio segment, including rigorous credit approval, monitoring, and administrative practices. Included in commercial real estate are loans secured by office properties totaling $119.8 million at June 30, 2025, or 6% of total loans, which are primarily located in the Virginia and Maryland suburbs of our market area, with only $1.6 million, or less than 1% of total loans, located in Washington, D.C. Loans secured by retail properties totaled $236.9 million, or 13% of total loans, at June 30, 2025, with $12.3 million, or less than 1% of total loans, located in Washington, D.C. Loans secured by multi-family commercial properties totaled $155.7 million, or 8% of total loans, at June 30, 2025, with $73.3 million, or 4% of total loans, located in Washington, D.C.
Previous wording
The loans shown in the above table exhibit strong credit quality, with one classified delinquency at March 31, 2025 totaling $10.2 million, which has a specific reserve of $462 thousand. During our assessment of the allowance for credit losses on loans, we addressed the credit risks associated with these portfolio segments and believe that as a result of our conservative underwriting discipline at loan origination and our ongoing loan monitoring procedures, we have appropriately reserved for possible credit concerns in the event of a downturn in economic activity.
Current wording
The loans shown in the above table exhibit strong credit quality, with one nonaccrual loan at June 30, 2025 totaling$10.1 million, which has a specific reserve of$365 thousand. During our assessment of the allowance for credit losses on loans, we addressed the credit risks associated with these portfolio segments and believe that as a result of our conservative underwriting discipline at loan origination and our ongoing loan monitoring procedures, we have appropriately reserved for possible credit concerns in the event of a downturn in economic activity.
Previous wording
Our investment securities portfolio is used as a source of income and liquidity. The investment portfolio consists of investment securities available-for-sale and investment securities held-to-maturity. Investment securities available-for-sale are those securities that we intend to hold for an indefinite period of time, but not necessarily until maturity. These securities are carried at fair value and may be sold as part of an asset/liability strategy, liquidity management, or regulatory capital management. Investment securities held-to-maturity at each of March 31, 2025 and 2024 totaled $265 thousand, and are those securities that we have the intent and ability to hold to maturity and are carried at amortized cost. The fair value of our investment securities available-for-sale was $158.7 million at March 31, 2025, anincrease of $2.2 million, or 1%, from $156.5 million at December 31, 2024, primarily due to an increase in the market value of the investment securities portfolio totaling $4.6 million offset by principal repayments and maturities of $3.3 million.
Current wording
Our investment securities portfolio is used as a source of income and liquidity. The investment portfolio consists of investment securities available-for-sale and investment securities held-to-maturity. Investment securities available-for-sale are those securities that we intend to hold for an indefinite period of time, but not necessarily until maturity. These securities are carried at fair value and may be sold as part of an asset/liability strategy, liquidity management, or regulatory capital management. Investment securities held-to-maturity at each of June 30, 2025 and December 31, 2024 totaled$265 thousand, and are those securities that we have the intent and ability to hold to maturity and are carried at amortized cost. The fair value of our investment securities available-for-sale was $156.9 millionat June 30, 2025, an increase of $389 thousand, from $156.5 million at December 31, 2024, primarily due to an increase in the market value of the investment securities portfolio totaling $6.0 million and new purchases of $2.0 million, offset by principal repayments, calls, and maturities of $7.5 million.
Previous wording
As of March 31, 2025 and December 31, 2024, the majority of the investment securities portfolio consisted of securities rated AAA by a leading rating agency. Investment securities which carry a AAA rating are judged to be of the best quality and carry the smallest degree of investment risk. All of our mortgage-backed securities are guaranteed by either the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association. The effective duration of the investment securities portfolio continues to be slightly over five years, which is within the industry average. Investment securities that were pledged to secure public deposits totaled$20.2 million and $55.3 million at March 31, 2025 and December 31, 2024, respectively.
Current wording
As of June 30, 2025 and December 31, 2024, the majority of the investment securities portfolio consisted of securities rated AAA by a leading rating agency. Investment securities which carry a AAA rating are judged to be of the best quality and carry the smallest degree of investment risk. All of our mortgage-backed securities are guaranteed by either the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association. The effective duration of the investment securities portfolio continues to be slightly over five years, which is within the industry average. Investment securities that were pledged to secure public deposits totaled $19.8 million and $55.1 million at June 30, 2025 and December 31, 2024, respectively.
Previous wording
In accordance with ASC 326, we complete periodic assessments on at least a quarterly basis to determine if credit deterioration exists within our investment securities portfolio and if an allowance for credit losses would be required as of a valuation date. As a result of the assessment performed as of March 31, 2025, the investment securities with unrealized losses are a result of pricing changes due to recent rising interest rate conditions in the current market environment and not as a result of credit deterioration. Contractual cash flows for agency-backed portfolios are guaranteed and funded by the U.S. government. Municipal securities have third party protective elements and there are no negative indications that the contractual cash flows will not be received when due. We do not intend to sell nor do we believe we will be required to sell any of our investment securities portfolio prior to the recovery of the amortized cost as of the valuation date. As such, no impairment was recognized for our investment securities portfolio as of March 31, 2025.
Current wording
In accordance with ASC 326, we complete periodic assessments on at least a quarterly basis to determine if credit deterioration exists within our investment securities portfolio and if an allowance for credit losses would be required as of a valuation date. As a result of the assessment performed as of June 30, 2025, the investment securities with unrealized losses are a result of pricing changes due to recent rising interest rate conditions in the current market environment and not as a result of credit deterioration. Contractual cash flows for agency-backed portfolios are guaranteed and funded by the U.S. government. Municipal securities have third party protective elements and there are no negative indications that the contractual cash flows will not be received when due. We do not intend to sell nor do we believe we will be required to sell any of our investment securities portfolio prior to the recovery of the amortized cost as of the valuation date. As such, no impairment was recognized for our investment securities portfolio as of June 30, 2025 and December 31, 2024.
Previous wording
We hold restricted investments in equities of the Federal Reserve Bank of Richmond ("FRB") and FHLB. At March 31, 2025, we owned $3.6 million in FRB stock and $4.0 millionin FHLB stock. At December 31, 2024, we owned $4.1 million in FRB stock and $4.0 million in FHLB stock.
Current wording
We hold restricted investments in equities of the Federal Reserve Bank of Richmond ("FRB") and FHLB. At June 30, 2025, we owned $3.6 million in FRB stock and $4.0 million in FHLB stock. At December 31, 2024, we owned $4.1 million in FRB stock and $4.0 million in FHLB stock.
Previous wording
The following table sets forth the average balances of deposits and the percentage of each category to total average deposits for the three months ended March 31, 2025 and 2024:
Current wording
The following table sets forth the balances of deposits and the percentage of each category to total deposits for the six months ended June 30, 2025 and for the year ending December 31, 2024:
Previous wording
Total deposits increased $36.0 million, or 2%, to $1.91 billion at March 31, 2025 from $1.87 billion at December 31, 2024. Noninterest-bearing deposits were $367.1 million at March 31, 2025, or 19.3% of total deposits. Interest checking deposits decreased $6.0 million to $617.8 million at March 31, 2025 compared to $623.8 million at December 31, 2024. Savings and money market deposits increased $13.7 million, or 4%, to $396.8 million at March 31, 2025 compared to $383.1 million at December 31, 2024. Time deposits increased $26.8 million, or 11%, to $274.9 million at March 31, 2025 from $248.2 million at December 31, 2024.
Current wording
Total deposits increased $32.9 million to $1.90 billion at June 30, 2025 from $1.87 billion at December 31, 2024. Core deposits, which exclude wholesale deposits, increased $47.8 million, or 6%, on an annualized basis, for the six months ended June 30, 2025. Noninterest-bearing deposits were $356.2 million at June 30, 2025, or 19% of total deposits. Interest checking deposits increased $45.2 million, or 7%, to $669.1 million at June 30, 2025 compared to $623.8 million at December 31, 2024. Savings and money market deposits decreased $18.6 million, or 5%, to $364.5 million at June 30, 2025 compared to $383.1 million at December 31, 2024. Time deposits increased $30.6 million, or 12%, to $278.8 million at June 30, 2025 from $248.2 million at December 31, 2024.
Previous wording
Wholesale deposits were $249.9 million at each of March 31, 2025 and December 31, 2024. Wholesale deposits are partially fixed at a weighted average rate of 3.44% as we have executed $250.0 million in pay-fixed/receive-floating interest rate swaps to reduce funding costs. In addition, we are a member of the IntraFi Network (“IntraFi”), which gives us the ability to offer Certificates of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweep (“ICS”) products to our customers who seek to maximize Federal Deposit Insurance Corporation ("FDIC") insurance protection. When a customer places a large deposit with us for IntraFi, funds are placed into certificates of deposit or other deposit products with other banks in the CDARS and ICS networks in increments of less than $250 thousandso that principal and interest are eligible for FDIC insurance protection. These deposits are part of our core deposit base. At March 31, 2025 and December 31, 2024, we had$328.8 millionand$269.7 million, respectively, in CDARS reciprocal and ICS reciprocal products.
Current wording
Wholesale deposits were$234.9 million and $249.9 million at June 30, 2025 and December 31, 2024, respectively. During the second quarter of 2025, wholesale deposits decreased $15.0 million, as we unwound $15 million of our pay-fixed/receive floating interest rate swaps and the funding associated with that hedge, resulting in a gain of $154 thousand. Wholesale deposits are partially fixed at a weighted average rate of 3.46%, which includes $235.0 million in pay-fixed/receive-floating interest rate swaps with a weighted average rate of 3.26%, to reduce funding costs. In addition, we are a member of the IntraFi Network (“IntraFi”), which gives us the ability to offer Certificates of Deposit Account Registry Service (“CDARS”) and Insured Cash Sweep (“ICS”) products to our customers who seek to maximize Federal Deposit Insurance Corporation ("FDIC") insurance protection. When a customer places a large deposit with us for IntraFi, funds are placed into certificates of deposit or other deposit products with other banks in the CDARS and ICS networks in increments of less than $250 thousandso that principal and interest are eligible for FDIC insurance protection. These deposits are part of our core deposit base. At June 30, 2025 and December 31, 2024, we had $320.7 million and$269.7 million, respectively, in CDARS reciprocal and ICS reciprocal products.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Typically, financial institutions use their historical loss experience and trends in losses for each loan segment which are then adjusted for portfolio trends and economic and environmental factors in determining the ACL. Since the
Current report — wording carried from elsewhere
For the Three Months Ended June 30, 2025 and 2024
Current report — wording carried from elsewhere
The following table presents average balance information, interest income, interest expense and the corresponding average yields earned and rates paid for the six months ended June 30, 2025 and 2024.
Current report — wording carried from elsewhere
Average Balance Sheets and Interest Rates on Interest-Earning Assets and Interest-Bearing Liabilities
Current report — wording carried from elsewhere
(1)Nonaccrual loans are included in average balances and do not have a material effect on the average yield. Interest income on non-accruing loans was not material for the periods presented. Net loan fees and late charges included in interest income on loans totaled $180 thousand and $792 thousand for the six months ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
The following table shows the effect of variations in the volume and mix of our assets and liabilities, as well as the changes in interest rates had on the interest earned from our interest-earning assets and interest incurred on our interest-bearing liabilities for the six months ended June 30, 2025 as compared to the same period of 2024.
Current report — wording carried from elsewhere
Average balances of nonperforming loans, which include nonaccrual loans, are included in the net interest margin calculation and did not have a material impact on our net interest margin for the three and six months ended June 30, 2025 and 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
$769 thousand for the quarter ended March 31, 2025 to $468 thousand compared to $1.2 million for the same period of 2024.