TYSONS CORNER, Va., January 30, 2025 – 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 fourth quarter and year ended December 31, 2024.

“Our ability to deliver nine consecutive years of healthy balance sheet growth, is the product of our commitment to serve the dynamic needs of sophisticated local customers who value our team’s unmatched expertise and responsiveness,” Chief Executive Officer and Chairman Mark Merrill said. “With our significant earnings, revenue and net interest margin growth in the fourth quarter, we begin 2025 with strong asset quality, capital and liquidity positions that will position us to continue the profitable growth of our in-market lending and core deposit franchises for the benefit of our shareholders, customers, and community.”

Selected Highlights

  • Earnings Accelerating – Net income grew to $2.1 million in the quarter, compared to $1.3 million in the third quarter of 2024 and $1.4 million in the fourth quarter of 2023. Non-GAAP net income, excluding non-recurring items, was $2.3 million for the fourth quarter of 2024, compared to $1.2 million in the linked quarter and $1.4 million in the prior year same quarter. Pretax income was a record $2.4 million in the fourth quarter of 2024.
  • Increased Revenue – Net interest income grew to $9.0 million in the quarter, increasing $549 thousand or 6.5% from the third quarter of 2024, and $1.7 million or 23.0% from the fourth quarter of 2023. Net interest income grew to $32.4 million for the year ended December 31,2024, increasing $3.2 million or 11.1% from one year ago.
  • Margin Expansion – Net interest margin (“NIM”) expanded to 2.64% in the quarter, up 8 basis points from the third quarter of 2024 and 19 basis points from the fourth quarter of 2023.
  • Loan Growth – Loans grew to a record $1.18 billion at period end, increasing $24.7 million or 8.5% annualized during the quarter and $140.2 million or 13.4% from December 31, 2023. The Company continues to emphasize relationship-based lending to small- and mid-sized businesses, entrepreneurs and individuals in Northern Virginia and the Washington, D.C. metropolitan area, Pennsylvania, and Central Virginia.
  • Valuable Core Deposit Franchise – Deposits grew to a record $1.13 billion at period end, increasing $37.0 million or 13.6% annualized during the quarter and $141.4 million or 14.4% from December 31, 2023. Non-interest bearing deposits represented 21.1% of total deposits.
  • Pristine Asset Quality – The Company had no non-accrual loans or other real estate owned assets (“OREO”) at December 31, 2024. The Company released $176 thousand of provision for credit losses during the quarter as a result of improved economic forecasts in the quantitative portion of the Current Expected Credit Losses (“CECL”) model and the strong credit quality of our loan portfolio.
  • Tangible Book Value Per Share Increase – Tangible book value per share grew to $11.66 at December 31, 2024, from $11.54 at September 30, 2024, and $11.25 at December 31, 2023. Non-GAAP tangible book value per share, which excludes accumulated other comprehensive income (“AOCI”) was $12.14 per share at December 31, 2024.
  • Sound, Well Capitalized Balance Sheet – The Bank’s regulatory capital ratios remain well in excess of thresholds required to be considered “well capitalized,” with total risk-based capital to risk-weighted assets of 13.69% at December 31, 2024. The tangible common equity (“TCE”) to the tangible assets (“TA”) ratio for the Company was 9.61% at December 31, 2024.

Operating Results

Net interest income was $9.0 million for the fourth quarter of 2024, compared to $8.4 million in the linked quarter and $7.3 million for the fourth quarter of 2023. Net interest income was $32.4 million for the year ended December 31, 2024, compared to $29.1 million for the year ended December 31, 2023. Net interest income growth reflected the Company’s larger balance sheet and increases in interest income that outpaced interest expense.

NIM increased to 2.64% in the fourth quarter of 2024, up 8 basis points from 2.56% in the linked quarter and 19 basis points from 2.45% in the prior year period. Full year NIM was 2.54% in 2024 and 2.64% for the prior year.

Fourth quarter 2024 NIM expansion over the comparable periods primarily resulted from the Company’s ability to reduce its cost of deposits and other fundings at a faster rate than the decline in loan yields, after policymakers began cutting the Fed Funds Target Rate in September 2024.

Non-interest income was $541 thousand for the fourth quarter of 2024, compared to $372 thousand in the linked quarter and $349 thousand for the same period the year prior. Non-interest income was $1.6 million for the year ended December 31, 2024, compared to $1.4 million for the prior year. Non-interest income growth over comparable periods was primarily the result of increased fee-based transactions and other cash management service charges, as well as income from Bank-owned life insurance policies.

Non-interest expense totaled $7.3 million for the fourth quarter of 2024, $6.4 million in the linked quarter, and $5.7 million in the fourth quarter of 2023. Non-recurring items included $216 thousand in professional services expense for strategic initiatives in the fourth quarter of 2024, as well as the effect of a previously disclosed litigation matter that was settled in the linked quarter. Excluding non-recurring items, the Company’s non-GAAP operating expense was $7.1 million for the fourth quarter of 2024 and $6.6 million in the linked quarter. For the year ended December 31, 2024, non-GAAP operating expense was $26.8 million, compared to $23.4 million in the prior year.

Increased operating expenses for the three and twelve months ended December 31, 2024 primarily reflect investments in growth, including revenue producing personnel and related resources, data processing, as well as higher franchise taxes and FDIC deposit insurance expense reflecting the Company’s larger balance sheet.

Income tax expense of $278 thousand was recorded for the fourth quarter of 2024, compared to $423 thousand for the linked quarter and $512 thousand in the prior year period. The decline in income tax expense for the fourth quarter 2024 was primarily attributable to the change in the Company’s deferred tax rate from 2023. Income tax expense was $843 thousand and $1.5 million for the year ended December 31, 2024 and 2023, respectively.

Net income for the fourth quarter of 2024 was $2.1 million, compared to $1.3 million in the linked quarter and $1.4 million in the prior year period. Net income for the year ended December 31, 2024 was $3.7 million compared to $5.5 million in 2023. Non-GAAP net income, excluding non-recurring items, was $2.3 million for the fourth quarter of 2024, $1.2 million for the linked quarter, and $5.2 million for the year ended December 31, 2024.

Financial Condition

Total assets grew to $1.39 billion at December 31, 2024, increasing 2.9% from $1.35 billion at the end of the linked quarter and 11.4% from $1.24 billion at December 31, 2023. Gross loans were $1.18 billion at December 31, 2024, increasing 2.1% from $1.16 billion at the end of the linked quarter and 13.4% from $1.04 billion at December 31, 2023. The Company continues to source high quality in-market loans contributing to double-digit asset growth year over year.

Total deposits grew to $1.13 billion at December 31, 2024, increasing 3.4% from $1.09 billion at the end of the linked quarter and 14.4% from $984.2 million at December 31, 2023. As a percentage of total deposits at December 31, 2024, non-interest bearing deposits represented 21.1%, interest-bearing checking, savings and money market deposits represented 49.1%, and time deposits including brokered CDs represented 29.8%. ODNB continues to emphasize core customer deposit growth to reduce its total cost of funding and improve deposit concentration mix.

The Company’s balance sheet remains highly liquid. The liquidity ratio, defined as the sum of cash and unencumbered marketable securities totaling $163.8 million to total liabilities, was 13.1% at December 31, 2024.

Asset Quality and Capital Strength

Asset quality remained pristine. The Company’s single remaining non-accrual loan, which was originated well before the current management team, was fully paid off during the fourth quarter of 2024. As a result, non-accrual loans were zero at December 31, 2024, improving from $140 thousand, or 0.01% of total assets, at the end of the linked quarter and $165 thousand, or 0.01% of total assets, at December 31, 2023. The Company had no non-performing assets, including other real estate owned, at December 31, 2024.

The Company released $176 thousand of provision for credit losses during the quarter which was the result of improved economic forecasts in the quantitative portion of the CECL model and the strong credit quality of our loan portfolio. The allowance for credit losses during the fourth quarter was $11.7 million or 0.99% of gross loans at December 31, 2024, from $11.7 million or 1.01% of gross loans at September 30, 2024, and $10.4 million or 1.00% at the end of 2023.

The Bank’s regulatory capital ratios at December 31, 2024 remained above levels required to be considered well-capitalized, with tier one leverage of 11.15%, tier one risk based capital of 12.67%, and total risk based capital of 13.69%. The Company’s tangible common equity to total assets ratio was 9.61% at December 31, 2024.

Tangible book value (“TBV”) per share grew to $11.66 at December 31, 2024, increasing from $11.54 at the end of the linked quarter and $11.25 at December 31, 2023. Excluding the available for sale (“AFS”) securities losses reported in AOCI, non-GAAP TBV per share grew to $12.14, increasing from $11.94 at the end of the linked quarter and $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. ODNB serves the Washington, D.C. metro area from its full service branches in Tysons Corner and Leesburg, Va., as well as communities in Central Virgina from its Albemarle County branches and in Southeast Florida from its Boca Raton office. Centre 1st Bank, a division of the Bank, serves Pennsylvania and New Jersey markets from offices in State College, Pa. ODNB offers a full range of commercial and consumer financial services in the communities it serves. The Company had nearly $1.4 billion in assets at December 31, 2024.

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.

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