1. OPOF reports Q1 2025 net income of $2.2M, down from Q4 2024. 2. Merger with TowneBank announced; expected to enhance growth and shareholder value. 3. Total assets increased slightly to $1.5 billion as of March 31, 2025. 4. Non-performing assets rose to $4.2 million, indicating potential credit risk. 5. Dividends remain steady at $0.14 per share, with a payout ratio of 33%.
The merger could create operational synergies enhancing OPOF's growth potential similar to other successful bank mergers.
The merger could lead to substantial shareholder benefits and operational efficiencies, reflecting the likely positive reception in the market.
Though immediate earnings dipped, the long-term benefits of the merger can significantly improve market positioning over time.
Old Point Financial Corporation (the "Company" or "Old Point") (NASDAQ "OPOF") reported net income of $2.2 million with diluted earnings per common share of $0.42 for the first quarter of 2025 compared to net income of $2.9 million with diluted earnings per common share of $0.57 for the fourth quarter of 2024, and net income of $1.7 million with diluted earnings per common share of $0.34 for the first quarter of 2024. Adjusted operating earnings (non-GAAP) for the first quarter of 2025 were $2.0 million, or $0.39 per diluted share, compared to $1.7 million, or $0.34 per share, for the first quarter of 2024.
As previously disclosed, on April 2, 2025, the Company, The Old Point National Bank of Phoebus (the "Bank") and TowneBank entered into an Agreement and Plan of Merger (the "Agreement"). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, the Company will merge with and into TowneBank and immediately thereafter and contemporaneously therewith, the Bank will merge with and into TowneBank, with TowneBank continuing as the surviving corporation (the "Merger").
The Agreement and the transactions contemplated thereby are subject to the approval of the shareholders of the Company, the Federal Deposit Insurance Corporation ("FDIC"), Office of the Comptroller of the Currency and Bureau of Financial Institutions of the Virginia State Corporation Commission, as well as other customary closing conditions.
Chairman, President and Chief Executive Officer of the Company and Bank, Robert F. Shuford, Jr., commented, "Building off our record earnings in 2024, we had a strong first quarter from an operating perspective, with revenues, deposits, total assets, and net interest margin all increasing compared to the first quarter of 2024.
"The first quarter was historic for the Old Point family -- culminating in our April 3, 2025 announcement of our agreement to merge with TowneBank, subject to shareholder and regulatory approvals. We are excited about our future partnership and are actively working with the TowneBank team to efficiently complete the Merger. We believe this partnership will provide the combined company with a stronger platform for growth and create enhanced value for our shareholders, customers and employees."
For more information about financial measures that are not calculated in accordance with GAAP, please see "Non-GAAP Financial Measures" and "Reconciliation of Certain Non-GAAP Financial Measures" below.
Total assets of $1.5 billion as of March 31, 2025 increased $418 thousand or 0.03% from December 31, 2024. Net loans held for investment increased $2.3 million, or 0.2% from December 31, 2024 to $1.0 billion at March 31, 2025, primarily driven by increases in consumer automobile loans of $5.4 million, commercial – owner occupied loans of $4.3 million, equity lines of credit of $2.0 million, and construction and land development loans of $1.8 million, partially offset by decreases in commercial and industrial loans of $3.3 million and commercial – non-owner occupied loans of $4.8 million. Securities available-for-sale, at fair value, increased $2.8 million from December 31, 2024 to $220.9 million at March 31, 2025.
Total deposits of $1.3 billion as of March 31, 2025 increased $2.6 million, or 0.2%, from December 31, 2024. Noninterest-bearing deposits increased $15.7 million, or 4.4%, savings deposits increased $29.9 million, or 4.5%, and time deposits decreased $43.0 million, or 17.9%. The increase in total deposits was primarily driven by increases from large commercial and municipal customers. Overnight repurchase agreements, other borrowings, Federal Home Loan Bank advances, and subordinated notes decreased $4.4 million to $69.4 million at March 31, 2025 from $73.8 million at December 31, 2024. This was primarily driven by a decrease in subordinated notes of $3.7 million or 12.5% as of March 31, 2025 from December 31, 2024, due to the repurchase and retirement in the first quarter, of a subordinated note issued by the Company, resulting in a realized gain of $656 thousand.
The Company's total stockholders' equity at March 31, 2025 increased $3.2 million, or 2.8%, from December 31, 2024 to $117.2 million. The increase was primarily driven by net income and a $1.3 million improvement of unrealized losses on securities available-for-sale driven by fluctuations in market interest rates, net of tax, partially offset by cash dividend payments. The Bank remains well capitalized with a Tier 1 Capital ratio of 13.04% at March 31, 2025 as compared to 12.97% at December 31, 2024. The Bank's leverage ratio was 10.45% at March 31, 2025 as compared to 10.06% at December 31, 2024.
NPAs totaled $4.2 million as of March 31, 2025, compared to $2.7 million as of December 31, 2024, and $2.2 million as of March 31, 2024. NPAs as a percentage of total assets were 0.29% at March 31, 2025, compared to 0.19% at December 31, 2024, and 0.15% at March 31, 2024. Non-accrual loans were $80 thousand at March 31, 2025, a decrease from $82 thousand at December 31, 2024, and a decrease from $194 thousand at March 31, 2024. Loans past due 90 days or more and still accruing interest increased $1.2 million to $1.9 million at March 31, 2025 from $641 thousand at December 31, 2024 and increased $1.0 million from $878 thousand at March 31, 2024, primarily due to one relationship moving to this category in the first quarter of 2025.
Net interest income for the first quarter of 2025 was $12.0 million, a decrease of $244 thousand, or 2.0%, from the prior quarter and an increase of $468 thousand, or 4.1%, from the first quarter of 2024. The decrease from the linked quarter was primarily due to lower average balances of loans, partially offset by higher average balance of securities available for sale at higher average yields. The increase from the prior-year comparative quarter was due primarily to higher average balances of, and lower average rates on, interest-bearing liabilities.
Total noninterest income was $3.8 million for the first quarter of 2025 compared to $3.2 million for both the fourth quarter of 2024 and the comparative quarter of 2024. The increase was primarily driven by the gain on the repurchase and retirement of subordinated notes and an increase in fiduciary and asset management fees.
Noninterest expense totaled $12.4 million for the first quarter of 2025 compared to $12.1 million for the fourth quarter of 2024 and $12.7 million for the first quarter of 2024. The increase in expenses from the linked quarter was primarily related to increases in merger-related costs, professional services, occupancy and equipment, and data processing.
For the first quarter of 2025, the Company declared a dividend of $0.14 per share, consistent with the fourth quarter of 2024. The dividend represents a payout ratio of 33.0% of earnings per share for the first quarter of 2025.
Statements in this press release may constitute "forward-looking statements" which are subject to significant risks and uncertainties. Actual results may differ materially from historical results or those expressed or implied by such statements.
For more information, contact Laura Wright, Vice President/Marketing Director, at [email protected] or (757) 728-1743.
| Assets | March 31, 2025 | December 31, 2024 |
|---|---|---|
| Cash and due from banks | $15,609 | $17,098 |
| Interest-bearing due from banks | 119,835 | 122,238 |
| Total assets | $1,450,988 | $1,450,570 |
| For the quarters ended | Mar. 31, 2025 | Dec. 31, 2024 | Mar. 31, 2024 |
|---|---|---|---|
| Net income | $2,158 | $2,880 | $1,717 |
| Net income per share of common stock | $0.42 | $0.57 | $0.34 |