TYSONS CORNER, Va., May 6, 2024 – ODNB Financial Corporation (“ODNB” or the “Company”), the holding company for Old Dominion National Bank (the “Bank”) and its Centre 1st Bank division (“Centre 1st Bank”), reported financial results for the first quarter ended March 31, 2024.

“ODNB’s first quarter results were marked by healthy profitability, organic loan growth, pristine asset quality, and stable deposits, positioning the Company very well for the balance of 2024,” Chairman and Chief Executive Officer Mark Merrill said. “During the first quarter we invested in talented commercial bankers focused on growing core deposits and commercial and industrial lending, and we opened our newest Northern Virginia branch in Leesburg, enhancing our ability to provide concierge-level service to clients throughout the Washington, D.C. metro area. Looking ahead and across our markets, we anticipate strong overall loan and deposit growth in 2024. We also intend to continue protecting net interest margin, even in a prolonged high-interest rate environment.”

First Quarter 2024 Highlights

  • Net income of $890 thousand compared to $1.4 million for fourth quarter of 2023 and $1.1 million for the first quarter of 2023. Net income in the first quarter of 2024 reflected revenue stability compared to the linked quarter, and top-line growth from a year ago, offset by investments in revenue-producing talent and the Leesburg branch.
  • Net interest margin of 2.46% remained stable, up 1 basis point from the fourth quarter of 2023, while net interest income was $7.2 million for the first quarter of 2024, down just 0.06% from the linked quarter.
  • Gross loans totaled $1.05 billion at period end, up 0.7% from December 31, 2023 and 12.6% from March 31, 2023.
  • Deposits totaled $983.7 million at period end, in line with December 31, 2023 and up 13.3% from March 31, 2023.
  • Asset quality remained pristine, with just one non-accrual loan of $165 thousand or 0.01% of total assets, while March 31, 2024 stockholders’ equity, tangible book value per share, and regulatory capital ratios increased from December 31, 2023.

Operating Results

Net interest income was $7.2 million for the three months ended March 31, 2024, compared to $7.3 million for the three months ended December 31, 2023, and $6.9 million for the same period in 2023. Net interest income declined modestly from the prior quarter with interest income and interest expense growing evenly.

Net interest margin was 2.46% for the first quarter of 2024, compared to 2.45% in the linked quarter, and 2.72% a year earlier. The net interest margin stabilized quarter-over-quarter after experiencing significant margin compression in 2023 due to higher deposit and borrowing costs across the industry.

Non-interest income was $362 thousand for the three months ended March 31, 2024, compared to $349 thousand for the three months ended December 31, 2023, and $357 thousand for the same period in 2023. The primary driver of the increase over the linked quarter was the bank owned life insurance income.

Non-interest expense was $6.5 million for the three months ended March 31, 2024, compared to $5.7 million in the linked quarter and $5.8 million in the first quarter 2023. The increase was driven by higher salaries and employee benefits, bank franchise taxes, occupancy and equipment costs, and other operating expense, which were partially offset by lower professional services and data processing expenses that reflect an ongoing focus on managing discretionary expenses. The increase in salaries and employee benefits from the prior quarter was primarily from the addition of revenue-generating talent, including a Title & Escrow Services team and staffing of the Bank's Leesburg, Va. branch, as well as higher incentive accruals and payroll taxes. Higher occupancy and equipment expense is also a result of the new Northern Virgina branch, while elevated other operating expense is primarily the result of the increase in FDIC assessments that reflects the growth of the Bank’s deposit franchise and branch network. Annualized non-interest expense was 2.16% of average assets in the first quarter of 2024, elevated from 1.91% in the linked quarter and down from 2.23% a year earlier.

Financial Condition

Total assets were $1.24 billion at March 31, 2024 and December 31, 2023, compared to $1.08 billion at March 31, 2023. The Bank largely achieved its loan growth goals for the first quarter 2024, however it was offset by higher than expected payoffs during the quarter. Gross loans were $1.05 billion, compared to $1.04 billion in the linked quarter, and $932.8 million during the first quarter of 2023. Total deposits remained relatively flat at March 31, 2024, when compared to the linked quarter, and grew $115.6 million, or 13.3%, over the prior year. As a percentage of total deposits at March 31, 2024, non-interest-bearing customer deposits represented 20.9%, interest-bearing checking, savings and money market customer deposits totaled 50.7%, and customer certificates of deposit (“CDs”) and brokered CDs represented 28.4%.

The Company’s balance sheet continues to remain highly liquid during this current rate environment. The liquidity ratio, defined as the sum of cash and unencumbered marketable securities, totaled $149.6 million, or 13.5% of total liabilities as of March 31, 2024. Additionally, the Bank maintains access to additional sources of liquidity in the form of secured borrowings from the Federal Reserve and the Federal Home Loan Bank totaling $152 million as of March 31, 2024.

Asset Quality and Capital Strength

Asset quality remained pristine with only one non-accrual loan of $165 thousand, representing just 0.01% of total assets at March 31, 2024. As of March 31, 2024, the allowance for credit losses totaled $10.2 million, or 0.97% of gross loans. There were no charge-offs during the quarter.

The Bank’s regulatory capital ratios for the first quarter of 2024 remain above the regulatory well capitalized levels with tier one leverage of 12.32%, tier one risk based capital of 13.37%, and total risk based capital of 14.41%. The Company’s tangible common equity to total assets ratio was 10.42% at March 31, 2024.

Tangible book value (“TBV”) per share increased to $11.31 at March 31, 2024, from $11.25 at December 31, 2023. Excluding the AFS securities losses reported in accumulated other comprehensive income (“AOCI”), tangible book value per share increased to $11.85 per share at March 31, 2024, from $11.76 at December 31, 2023.

About ODNB Financial Corporation

ODNB Financial Corporation is the holding company for Old Dominion National Bank, a locally owned community bank serving markets including the Washington, D.C. metro area, with its executive headquarters in the heart of Northern Virginia at Tysons Corner. The Company has over $1.2 billion in assets as of March 31, 2024. ODNB’s Tysons Corner and Leesburg branches serve a growing number of customers across the Washington metropolitan area, and its branch locations in Albemarle County serve Central Virginia. Centre 1st Bank, a division of ODNB, serves the Pennsylvania and New Jersey markets, with offices in State College and the Harrisburg, Pennsylvania areas. ODNB offers a full range of commercial and consumer financial services in the communities it serves.

Forward-Looking Statements

This news release may contain certain forward-looking statements, such as statements of the Company’s plans, objectives, expectations, estimates and intentions. Forward-looking statements may be identified using words such as “expects,” “subject,” “will,” “intends,” “will be” or “would,” These statements are subject to change based on various important factors (some of which are beyond the Company’s control) and actual results may differ materially. Accordingly, readers should not place undue reliance on any forward-looking statements (which reflect management’s analysis of factors only as of the date of which they are given). These factors include general economic conditions, trends in interest rates, the ability of the Company to effectively manage its growth and results of regulatory examinations, among other factors. The foregoing list of important factors is not exclusive.

 

Investor Contact

Mark Merrill

Chairman & Chief Executive Officer

571.299.6942

shareholders@ODNB.Bank