Potomac Bancshares, Inc. · OTC:PTBS
Potomac Bancshares — Investor Presentation (April 2023)
27 slides from Potomac Bancshares's investor presentation, Apr 25, 2023
Slide 1: Potomac Bancshares
POTOMAC 13)\77 BANCSHARES BuitDING ComMUNITIES TOGETHER S a BCI Ss a BCI @ BANK OF CHARLES TOWN ® THE COMMUNITY'S BANK
Slide 2: PTBS Board of Directors
PTBS Board of Directors Name Business Dr. Keith Berkeley Chairman Veterinary Kristina Bouweiri Board Transportation 45% 90% J. Scott Boyd Board Pharmacy diverse independent Norman M. Casagrande Board Retired, Building Margaret M. Cogswell Board Hospice Alice P. Frazier Board, CEO Banking 1/3 Dr. Mit
Slide 3: Executive Leadership Team
Executive Leadership Team Alice Frazier Dean Cognetti Raymond Goodrich Tim Lewis President & CEO EVP & CFO EVP, Retail and EVP & Chief Lending Officer Board of Director Joined 2011 Technology Operations Joined 2018 Joined 2017 Joined 2004 3
Slide 4: President / CEO’s Report
President / CEO’s Report Alice P. Frazier 4
Slide 5: Forward Looking Statements
Forward Looking Statements A Warning about Forward-Looking Information This presentation contains statements that are based on other than historical data and that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide curren
Slide 6: Vision Purpose
Vision BCT is a solid, high-performing presence in the tri-state region of West Virginia, Virginia and Maryland, becoming the clear bank of choice for businesses and members of the community. Purpose Simplify our Clients’ Financial Lives 6
Slide 7: Core Values
Core Values Work in authentic, We are accountable to Provide opportunities Being in the moment, We live our founding trustworthy ways to do the each other to be a for our colleagues to fully engaged and principle, “neighbors right thing every time, in collective WE, feel well-prepared, listening to
Slide 8: Strategic Priorities
Strategic Priorities Provide a differentiated culture in which employees thrive Provide a Differentiated Ensure a consistent Amazing Client Experience (ACE) at every Client Experience interaction with the ACE Playbook Must be equally present in the physical and digital environment Grow and Enh
Slide 9: Living the Community Focus
Living the Community Focus Outstanding CRA Rating 2022 Community Commitment December 31, 2022 Stats Second Annual Pack the ‘Pack raised $56,000 BCT directly funded 16 loans for $483,519 3.7% of net profits supported Local Community and Non-Profits Organizations Collectively 3 banks, $907,134 funded
Slide 10: Employee Growth Commitment
Employee Growth Commitment All Employees Are Shareholders Together on Purpose Days 41 Promotions during 2022 Certification Programs Drive Career Growth Employee Engagement Teams I.e. Diversity & Inclusion Committee 10
Slide 11: Strengthened BCT Residential Lending
Strengthened BCT Residential Lending ▪ Partnered with proven mortgage infrastructure built for community banks ▪ Access to more correspondent lenders providing more options for borrowers ▪ Outsourcing underwriting, processing and closing functions to a pay per loan cost efficiency ▪ Access to advanc
Slide 12: Digital – Investments for the Future
Digital – Investments for the Future ▪ Adds value to the client - Simplifies the financial life - Ease of use - Saves client money ▪ Streamlines process for cost savings ▪ Enterprise-wide dashboard ▪ Outsourced AI 12
Slide 13: Future of Fintech Investing
Future of Fintech Investing ▪ Five year involvement in the ICBA ThinkTech program - Selection Committee exposure - In-depth demos/coaching ▪ Anchor investment in BankTech Venture Fund - Access to Fintech ecosystem - Cash calls to date = $160,000 - Current valuation = $205,000 ▪ Direct investment in
Slide 14: Awards and Recognition
Awards and Recognition BEST BANK FINALIST - BANK BEST LOAN SERVICING FINALIST – MORTGAGE COMPANY BEST FINANCIAL PLANNING FINALIST Large Business DEIA Member Award 5 Star Rating: BauerFinancial (Inaugural recipient) FINALIST 23 Consecutive Quarters Executive Leader (Paul Bice) 14
Slide 15: Financial Review
POTOMAC 77 BANCSHARES Financial Review OTC: PTBS 15
Slide 16: Balance Sheet Growth
Balance Sheet Growth (in thousands) $900,000 $792,336 $800,000 $704,717 $700,000 $627,010 $620,912 $600,000 $548,542 $500,000 $447,386 $400,000 $300,000 $200,000 $88,605 $100,000 $63,207 $0 Investment Portfolio Loans (excl PPP) Deposits Assets 2020 2021 2022 3/31/2023 16
Slide 17: Well Diversified Loan Portfolio
Well Diversified Loan Portfolio Loan Portfolio Comparison YoY Non-Owner Occupied CRE – 12/31/22 (in millions) $250 Ministorage, 6% Other, 7% $200 Hotels, 15% $150 Industrial, 15% Professional Office, 16% $100 Mixed Use, 6% $50 Medical Retail, 29% Office, 6% $0 Cons & Other Construction Multi-family
Slide 18: Prudent Credit Culture Drives Asset Quality
Prudent Credit Culture Drives Asset Quality Non-Current Assets to Total Assets ▪ Strong credit culture and underwriting guidelines 0.60% BCT ▪ Well below regulatory guidelines: 0.56% 0.52% Local Peer 0.50% 0.54% – Construction & Land = 39.6% National Peer – Commercial RE = 284.6% 0.47% 0.40% ▪ Stron
Slide 19: Conservative Investment Portfolio & Limited AOCI
Conservative Investment Portfolio & Limited AOCI March 31, 2023 Agencies, Other, 1% 4% ▪ Conservative, high-quality portfolio = 11.2% of total assets ▪ All securities classified as AFS US Treasuries, ▪ Average duration = 4.46 years 25% ▪ Taxable equivalent yield = MBS, 57% 2.28% Municipal, ▪ Unreali
Slide 20: Trends in Deposit Growth
Trends in Deposit Growth (in thousands) $400,000 $800,000 $347,777 $350,000 $695,477 $700,000 $300,000 $282,445 $600,000 $554,014 $250,000 $500,000 $200,000 $400,000 $348,717 $165,988 $308,791 $150,000 $300,000 $128,412 $108,221 $108,417 $200,000 $166,403 $180,356 $100,000 $53,300 $130,424 $114,798
Slide 21: Additional Deposit Information
Additional Deposit Information 6.00% 5.00% 4.50% 5.00% Uninsured deposits are 4.00% less than 15% (March 31, 2023) 3.00% 2.00% Average balance per deposit account is $24,252 1.00% 0.25% 0.33% 0.77% 0.00% 2021 0.31% 2022 3/31/2023 Effective relationship pricing BCT Cost of Total Deposits Fed Funds to
Slide 22: Abundant Liquidity
Abundant Liquidity ▪ On balance sheet liquidity at March 31, 2023 = 19.25% ▪ Off balance sheet liquidity = 42% of March 31, 2023 total deposits Type Amount Available ▪ FHLB borrowings at March 31, Fed Funds Lines $ 10,000,000 2023 = $6 million FHLB $ 265,442,000 ▪ BTFP in process to provide Fed Disc
Slide 23: Earnings Trends
Earnings Trends (in thousands) Strategic expansion initiatives began July 2018 $8,000 $7,570 $7,311 $7,000 $526 $1,627 $6,000 $5,000 $3,785 $4,000 $3,392 $3,213 $855 $6,785 $3,000 $5,943 $2,042 $2,000 $1,669 $2,930 $1,000 $0 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 3/31/2022 3/31/2023 PPP Income 23
Slide 24: Well Diversified Non-Interest Income
Well Diversified Non-Interest Income ▪ Non-Interest Income to Average Assets 2022Y – PTBS/BCT = 0.82% Other, 15% Deposit Services, – Local Peer Group = 0.78% 17% – National Peer Group = Secondary Market, 10% 0.57% ▪ Wealth AUM growth of new Wealth Interchange, 33% accounts = 10% of assets Advisory,
Slide 25: Rewarding Shareholders with Dividends and Total Return
Rewarding Shareholders with Dividends and Total Return Annual Per Share $2.00 Total Return $1.83 $1.77 $1.80 since $1.60 July 1, 2017 $1.40 75.68% $1.20 $1.00 $0.94 $0.92 Quarterly assessment of capital $0.80 $0.78 with stress test $0.60 $0.40 $0.28 $0.28 $0.28 $0.31 $0.35 Target payout of 20-25% $0
Slide 26: Strong Capital Position
Strong Capital Position 16.00% Bank of Charles Town Only 13.85% 14.00% 12.79% 12.79% 13.62% 12.62% 12.62% PTBS 12.00% 10.25% 10.50% 10.08% 10.00% 10.00% 8.50% 8.00% 8.00% 7.88% 8.00% 7.00% 6.50% 6.00% 5.00% 4.00% 4.00% 2.00% 0.00% Tier 1 to Average Assets Tier 1 to Risk Weighted Assets CET 1 to Risk
Slide 27: Thank You.
POTOMAC 77 BANCSHARES. POTOMAC a)(@7 BANCSHARES Buitoinc Communities ToGETHER Thank You. OTC: PTBS 27
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