Potomac Bancshares, Inc. · OTC:PTBS
Potomac Bancshares — Virtual Bank Conference March 2025
34 slides from Potomac Bancshares's conference presentation, Mar 13, 2025
Slide 1: Virtual Bank Conference Investor Presentation
Virtual Bank Conference Investor Presentation March 13, 2025 1
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements made in this document may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, predictions, expectations, or beliefs about
Slide 3: I. Overview of Potomac Bancshares
I. Overview of Potomac Bancshares 3
Slide 4: Overview of Potomac Bancshares
Overview of Potomac Bancshares ($ in thousands) 2023Y 2024Y Balance Sheet Total Assets $830,714 $877,349 Total Loans $651,360 $704,109 Total Deposits $739,680 $754,359 Shareholders' Equity $66,874 $73,416 TCE/TA 8.05% 8.37% Profitability Metrics ROAA 0.91% 0.80% ROAE 11.59% 9.80% Net Interest Margin
Slide 5: Well Positioned in Our Markets
Well Positioned in Our Markets Jefferson and Berkeley County • Ideally located on Interstate 81 provides access to 75% of East Coast within 7 hours' drive. • Recent business investments from three companies total $559 million in investments with 1,020 jobs. Existing manufacturing companies continue
Slide 6: Market Opportunity – By Population Growth
Market Opportunity – By Population Growth 2024 Total Population Population Change 6
Slide 7: Market Opportunity – By Household Income
Market Opportunity – By Household Income 2024 Median Household Income Median Household Income Growth 7
Slide 8: Potomac Bancshares Deposit Market Share
Potomac Bancshares Deposit Market Share FDIC Report June 2024 Market June 2023 June # # June 2024 Market Total Market Rank 2024 Branches Banks Deposits ($000) Share Rank Jefferson County, WV 1 1 3 6 $383,997 30.69% $1,251,203 Loudoun County, VA 11 11 3 21 $208,658 2.36% $8,838,311 Berkeley County, W
Slide 9: Diversified Markets
Diversified Markets Diversified Markets As of December 31, 2024 Loan Portfolio by Region Deposit Portfolio by Region (in millions) (in millions) $63.3 $8.9 $29.9 $218.4 $301.5 $330.4 $506.1 West Virginia Virginia Maryland Other West Virginia Virginia Maryland Strategic Virginia strategic expansion e
Slide 10: Adjusted Net Income (Non-GAAP)
Adjusted Net Income (Non-GAAP) (in thousands) Strategic expansion initiatives began July 2018 (Unaudited) 10
Slide 11: Thoughtful Diversification of Commercial Specialties
Thoughtful Diversification of Commercial Specialties Traditional C&I lending in our Core Markets led by seasoned, well-known Community Market Presidents Commercial Real Estate led by seasoned, well-known banker with contacts throughout Washington DC MSA (2019) Team lift-out in May 2021 of 3 seasoned
Slide 12: Scalable Fee Income Based Business Lines
Scalable Fee Income Based Business Lines • Partnered with • Partnered with Lender • Partnered with Sterling Clearstead Advisors for Solutions for all back- Financial Management, Investment Management office functions a registered LPL • Outsourced backoffice to • Better execution for Advisory Firm Fi
Slide 13: Positioning PTBS for Future Success
Positioning PTBS for Future Success Focused Growth Strategies Launch Commercial Leverage the Government Expand Wealth Deposits / Launch Government Contracting SBA Team Contracting and Mortgage Banking Treasury While Expanding Market Management Presence to Fairfax County Become a Known Leader Launch
Slide 14: II. Financial Overview
ll. Financial Overview SZ POTOMAC 207 BANCSHARES OTC: PTBS
Slide 15: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth For the Years Ended December 31 Loans ($mm) Deposits ($mm) Assets ($mm) 11.3% 10.9% 11.2% CAGR CAGR CAGR 15
Slide 16: Diversified Loan Portfolio
Diversified Loan Portfolio As of December 31, 2024 CRE Owner Occupied 17% Multifamily 4% CRE Non-Owner Occupied Construction 28% • Consistent monitoring of 6% portfolio maintenance balance • Commercial portfolio accounts for 60% of the loan portfolio RRE 1-4 Family 32% C&I HELOC 8% Other 3% 2% Mortg
Slide 17: Proactive Credit Risk Management Practices
Proactive Credit Risk Management Practices Proactive Underwriting Culture CRE and ADC Concentration Ratios • Loan stress testing is conducted: • At a transaction level, we stress test increased vacancy, rising interest rates, and high capitalization rates (i.e., lower values) • At a more macro level
Slide 18: Low-Cost Deposit Portfolio
Low-Cost Deposit Portfolio As of 12/31/2024, unless otherwise noted Portfolio Composition Noninterest-Bearing Checking ($mm) $172 $162 $162 Savings $141 10% Noninterest Checking $106 23% Money Market 14% $70 Cost of Deposits 1.67% CD 2019 2020 2021 2022 2023 2024 19% Interest Checking 34% Relationsh
Slide 19: Diversified Revenue / Assets Under Management
Diversified Revenue As of 12/31/2024, unless otherwise noted Wealth Management Adjusted noninterest Income1 Assets Under Management ($mm) $350.0 $1.9 $2.1 $1.7 Assets Under Management Bank owned life $300.0 $1.8 insurance, 6% $1.5 $1.4 $250.0 $1.3 $1.5 Other operating $1.2 Revenue income, 10% $200.0
Slide 20: Earnings and Profitability (Adjusted / Non-GAAP)
Earnings and Profitability (Adjusted / Non-GAAP) Adjusted Earnings Per Share1,2 Adjusted Return on Equity (ROE)1,2 $1.83 $1.80 $1.71 11.95% 12.13% $1.44 10.38% 10.69% $0.78 6.32% $0.71 5.49% 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024 Adjusted Return on Assets (ROA)1,2 Efficiency Rat
Slide 21: Liquidity and Interest Rate Risk
Liquidity and Interest Rate Risk As of 12/31/2024, unless otherwise noted Interest Rate Risk (10/31/2024) Securities Portfolio Net Interest Income Change % Year 1 Year 2 • $77.4 million of securities, AFS Up 200 bps -0.4% 12.3% • No HTM securities Base 0.0% 9.0% • 3.64% tax equivalent yield Down 200
Slide 22: Strong Capital Position
Strong Capital Position Bank 13.57% 12.52% 12.52% Bank Holding 10.50% Company 9.92% 10.00% 8.50% 8.37% 8.00% 7.00% 6.50% 5.00% 4.00% Tier 1 Capital to Average Assets Tier 1 Capital to Risk Weighted CET1 to Risk Weighted Assets Total Capital to Risk Weighted TCE/TA Assets Assets Regulatory Well Capit
Slide 23: Delivering Shareholder Value
Delivering Shareholder Value Price to Earnings Per Share Price to Tangible Book Value Per Share 18.1 140% 118% 120% 112% 106% 13.4 93% 93% 96% 100% 10.1 10.3 80% 9.2 8.5 60% 40% 20% 0% 2019 2020 2021 2022 2023 2024 2019 2020 2021 2022 2023 2024 Tangible Book Value Per Share1 Cash Dividends Per Share
Slide 24: Questions?
Questions? Se 4 POTOMAC AE BANCSHARES OTC: PTBS
Slide 25: Appendix
Appendix Se 4 POTOMAC AE BANCSHARES OTC: PTBS
Slide 26: Commercial Real Estate – Non-Owner Occupied
Commercial Real Estate – Non-Owner Occupied As of 12/31/2024 Exposure by Asset Class Asset Class Balances % of Total (in $100s) Pool Retail $58,587 29.4% Office $32,726 16.4% Medical Practice $11,430 5.7% Hotel $33,292 16.7% Industrial $27,468 13.8% Mixed Use $12,112 6.1% Self-Storage $14,880 7.5% O
Slide 27: Commercial Real Estate – Office Buildings (not including medical)
Commercial Real Estate – Office Buildings (not including medical) As of 12/31/2024 • Office real estate is primarily “Main Street” and not major city centers; tenants are commonly local real estate agents, accountants, and attorneys • Total exposure $28.1 million across 22 assets/ facilities • Large
Slide 28: Commercial Real Estate – Owner Occupied
Commercial Real Estate – Owner Occupied As of 12/31/2024 $ in thousands Industry Balances % of Total Construction $5,422 4.49% Diverse Across Multiple Industries Manufacturing $7,579 6.28% Retail Trade $9,098 7.53% Professional, $15,684 12.99% Scientific, and Technical Services Administrative $6,257
Slide 29: Diversified Loan Portfolio
Diversified Loan Portfolio As of 12/31/2024 C&Is and LOCs • In late 2022, we pivoted the loan portfolio for greater diversity by focusing on C&I Lending and Lines of Credit diversification • The bank pivoted business development focus to operating companies with deposit, equipment and working capita
Slide 30: Experienced Leadership Team/Proven Leadership
Experienced Leadership Team/Proven Leadership Alice P. Frazier joined Potomac Bancshares, Inc. in 2017 as President & Chief Executive Officer. She has over 33 years of banking experience. Prior to Potomac Bancshares Inc., she served as Executive Vice President and Chief Operating Officer of Cardinal
Slide 31: Diversified Board of Directors
Diversified Board of Directors In addition to its top-notch management team, the Company is proud of its board of directors and believes that it serves a critical role in formulating strategy while exemplifying sound corporate governance. The board is very diverse in terms of backgrounds, perspectiv
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Unaudited For the Years Ended December 31, 2019 2020 2021 2022 2023 2024 Adjusted Net Income: Net income (GAAP) $ 3,219 $ 3,798 $ 7,576 $ 7,311 $ 7,264 $ 6,829 Add: Net losses on sale of securities 7 (17) (8) 367 428 783 Subtract: PPP income - (1,082) (2,059) (667) - - Subtr
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Unaudited For the Years Ended December 31, 2019 2020 2021 2022 2023 2024 Adjusted Performance Ratios: Average assets $ 502,969 $ 584,308 $ 676,429 $ 738,485 $ 796,673 $ 858,988 Return on average assets (GAAP) 0.64% 0.65% 1.12% 0.99% 0.91% 0.80% Adjusted return on average ass
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