Old Point Financial (OPOF) - 2025 Q1 - Quarterly Report

Financial Performance - Consolidated net income for Q1 2025 was $2.2 million, an increase of 25.7% from $1.7 million in Q1 2024, with diluted earnings per share rising to $0.42 from $0.34[128] - Return on average equity (ROE) for Q1 2025 was 7.50%, compared to 6.44% in Q1 2024[132] - Net interest income for Q1 2025 was $12.0 million, an increase of $467 thousand from Q1 2024, with a net interest margin (NIM) of 3.63%, up from 3.45% year-over-year[146] - Total noninterest income for Q1 2025 was $3.8 million, an increase of $625 thousand from Q1 2024, primarily due to gains on redemption of subordinated notes[163] - Noninterest expense decreased to $12.4 million in Q1 2025 from $12.7 million in Q1 2024, mainly due to reductions in salaries and employee benefits[164] - The adjusted operating earnings (non-GAAP) for the three months ended March 31, 2025, were $1.985 million, down from $2.880 million in the previous quarter[225] Assets and Loans - Total assets reached $1.5 billion as of March 31, 2025, reflecting a slight increase of $418 thousand or 0.03% from December 31, 2024[132] - Net loans held for investment were $1.0 billion, up $2.3 million or 0.2% from the previous quarter[132] - Total loans amounted to $1,012.8 million as of March 31, 2025, compared to $1,010.2 million at December 31, 2024[185] - Average loans for the three months ended March 31, 2025, totaled $1,076,894 thousand[193] - Average loans decreased by $64.0 million, or 5.9%, in Q1 2025 compared to Q1 2024, while average yields on loans increased by 18 basis points[148] Deposits - Total deposits increased by $2.6 million or 0.2% from December 31, 2024[132] - Total deposits reached $1.3 billion as of March 31, 2025, reflecting an increase of $2.6 million, or 0.2% from December 31, 2024[168] - Noninterest-bearing deposits rose by $15.7 million, or 4.4%, while time deposits decreased by $43.0 million, or 17.9%[168] - Average interest-bearing deposits in other banks increased by $45.5 million in Q1 2025 compared to Q1 2024, while the average yield on these deposits decreased by 107 basis points[150] Credit Quality - The Company recognized a provision for credit losses of $717 thousand in Q1 2025, significantly higher than $90 thousand in Q4 2024[132] - Non-performing assets increased to $4.2 million, a rise of 53.9% from $2.7 million at December 31, 2024[132] - The allowance for credit losses (ACL) was $12.0 million as of March 31, 2025, an increase from $11.6 million at December 31, 2024[186] - Loans past due 90 days or more and accruing interest increased by $1.2 million to $1.9 million as of March 31, 2025[185] - The ratio of net charge-offs to average loans was 0.03% for the three months ended March 31, 2025[193] Capital and Equity - Total stockholders' equity as of March 31, 2025, was $117.2 million, up 2.8% from $114.0 million on December 31, 2024[207] - The Common Equity Tier 1 Capital to Risk-Weighted Assets ratio was 13.04%, significantly above the regulatory minimum of 4.5%[211] - The Company issued $30.0 million of subordinated notes with a fixed interest rate of 3.5% for the first five years, qualifying as Tier 2 capital[212] Market and Economic Conditions - The Company is closely monitoring changes in the industry and market conditions that may affect liquidity, including potential impacts from rising market interest rates[215] - The impact of economic conditions, such as inflation and unemployment levels, is closely monitored as they affect customer behavior and loan demand[230] - Changes in the political landscape and regulatory policies may impact the Company's operations and financial performance[230] - The Company does not predict future interest rates or their exact effects on net interest income, emphasizing the uncertainty inherent in such projections[236] Proposed Merger - A proposed merger with TowneBank was announced, with shareholders to receive either $41.00 per share in cash or 1.14 shares of TowneBank common stock[130][131] - The Company faces significant risks related to the proposed Merger, including potential delays in regulatory approvals and adverse effects on business relationships[227]