Community bank holding company earned $1.7 million on improved operating efficiency and double-digit annual growth in revenue, loans, and deposits
TYSONS CORNER, Va., August 4, 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 second quarter ended June 30, 2025.
“ODNB continues to experience the benefits of prudent investments in revenue channels and key personnel through healthy growth in core deposits, local lending, and core earnings,” Chairman and Chief Executive Officer Mark Merrill said. “Our balance sheet metrics remain strong; we are well capitalized, highly liquid and poised to take full advantage of the Bank’s greater scale and established presence in growth markets. As we begin the second half of 2025, new business pipelines remain robust for ODNB’s banking and wealth management businesses across our Washington metro, Central Virginia, and Central Pennsylvania markets.”
Selected Second Quarter 2025 Highlights
Strong Earnings – Net income was $1.7 million in the second quarter of 2025 and $2.0 million in the linked quarter, bringing year-to-date net income to $3.7 million. Pre-tax, pre-provision earnings of $2.9 million for the three months ended June 30, 2025 represent a 13.6% increase over the $2.6 million for the three months ended March 31, 2025.
Improved Operating Leverage – The efficiency ratio declined to 71.12%, improving from 73.16% in the linked quarter and 81.76%, excluding non-recurring expenses, in the second quarter of 2024. Annualized noninterest expense represented 1.95% of average assets in the second quarter of 2025, improving from 2.02% in the linked quarter and 2.10%, excluding non-recurring expenses, in the second quarter of 2024.
Net Interest Margin – Net interest margin (“NIM”) was 2.70% in the current quarter, compared to 2.73% in the previous quarter and 2.52% in the second quarter of 2024.The NIM has expanded four of the last five quarters and has increased 24 basis points from its low of 2.46% in the first quarter of 2024.
Increased Revenue – Net interest income grew to a record $9.5 million, increasing 5.1% from the linked quarter and 22.5% from the second quarter of 2024 on higher average yield on loans and other earning asset balances. Non-interest income grew to $544 thousand, increasing 14.8% from the linked quarter and 46.7% from the second quarter of 2024, reflecting significant contributions from ODNB’s new wealth management division.
Loan Growth – Loans grew to a record $1.26 billion at period end, increasing $37.6 million or 12.3% annualized during the quarter and $152.1 million or 13.7% from June 30, 2024.
Solid Asset Quality – The Company had no loans 30 days or more past due as of June 30, 2025. Provision expense was $672 thousand in the second quarter of 2025 and period-end allowance for credit losses of $11.9 million or 0.94% of total gross loans. The Company’s increase in reserves to support continued loan growth during the quarter was partially offset by charge-offs related to two non-accrual commercial loans.
Valuable Core Deposit Franchise – Deposits grew to a record $1.22 billion at period end, increasing $44.2 million or 15.1% annualized during the quarter and $139.4 million or 12.87% from June 30, 2024. Non-interest bearing deposits represented 21.7% of total deposits on June 30, 2025.
Sound, Well Capitalized Balance Sheet – The Bank’s regulatory capital ratios remain well in excess of thresholds required to be considered “well capitalized,” with tier one leverage ratio of 10.85%, tier one risk based capital ratio of 12.23% and total risk-based capital ratio of 13.21% at June 30, 2025.
Tangible Book Value Per Share Growth – Tangible book value per share grew to $12.12 at June 30, 2025, from $11.91 at March 31, 2025 and $11.27 at June 30, 2024.
Operating Results
The Company earned $9.5 million in net interest income for the quarter, an increase of $464 thousand from the $9.0 million in the linked quarter and $1.7 million from the $7.8 million earned in the second quarter of 2024. Net interest income growth reflected the Company’s larger average balance sheet with the acceleration of interest income outpacing interest expense.
Net interest margin was 2.70% in the second quarter of 2025, down 3 basis points from 2.73% in the linked quarter and up 18 basis points from 2.52% in the second quarter of 2024. Compared to the linked quarter, the average yield on loans and total earning assets increased 3 basis points to 5.89% and 5.64%, respectively, offset by an increase of 4 basis points in the average cost of funds to 3.85%. Compared to the prior year period, the NIM expansion was driven by an increase to the average yield on loans and total earning assets by 9 basis points and 8 basis points, respectively, and a decrease in the average cost of total interest bearing funds by 30 basis points.
Non-interest income grew to $544 thousand in the second quarter of 2025, increasing 14.8% from $474 thousand in the linked quarter and 46.7% from $371 thousand in the prior year period. The increase from the linked and prior year periods was due to contributions from ODNB’s new wealth management division, as well as increases in fee-based transactions and other cash management service charges, gains on mortgage loans originated for sale, and bank-owned life insurance income. ODNB Wealth Management has grown from zero to $441 million in total assets under management since launching in the first quarter of 2025.
The Company recorded total non-interest expense of $7.1 million for the second quarter of 2025, compared with $7.0 million for the linked quarter, and $6.7 million in the prior year period exclusive of non-recurring items. Increased non-interest expense in the second quarter of 2025, compared to the linked quarter, reflected higher occupancy and equipment expense, investments to support balance sheet and revenue growth, professional services and other operating expenses, partially offset by lower salaries and employee benefits, data processing, and FDIC deposit insurance.
Net income was $1.7 million in the second quarter of 2025 and $2.0 million in the linked quarter. Year-to-date net income was $3.7 million.
Financial Condition
Total assets grew to $1.49 billion at June 30, 2025, increasing 3.3% from $1.44 billion at the end of the linked quarter and 11.3% from $1.34 billion at June 30, 2024. Gross loans were $1.26 billion at June 30, 2025, increasing 3.1% from $1.23 billion at the end of the linked quarter and 13.7% from $1.11 billion at June 30, 2024. The Company continues to source high quality in-market loans contributing to earning asset growth.
Total deposits grew to $1.22 billion at June 30, 2025, increasing 3.8% from $1.18 billion at the end of the linked quarter and 12.9% from $1.08 billion at June 30, 2024. As a percentage of total deposits at June 30, 2025, non-interest bearing deposits represented 21.7%, interest-bearing checking, savings and money market deposits represented 44.9%, and time deposits including brokered CDs represented 33.4%. ODNB continues to emphasize core customer deposit relationships 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 $182.2 million to total liabilities, was 13.5% at June 30, 2025.
Asset Quality and Capital Strength
Provision expense was $672 thousand in the second quarter of 2025, supporting continued loan growth and reflecting net charge-offs of $371 thousand related to two loans moved to non-accrual status. Provision expense was $20 thousand in the linked quarter and $385 thousand in the second quarter of 2024.
The allowance for credit losses was $11.9 million or 0.94% of gross loans at June 30, 2025, $11.9 million or 0.97% at March 31, 2025, and $10.8 million or 0.97% on June 30, 2024.
Non-accrual loans on June 30, 2025, totaling $14.0 million or 1.10% of total loans, consisted of two commercial real estate loans secured by mixed use and multifamily properties in the District of Columbia. The loans experienced credit deterioration and were placed on non-accrual, even though the borrowers remain current on their monthly loan payments. In fact, on June 30, 2025, the Bank had zero delinquencies, measured as loans 30 days or more past due, and no other real estate owned. Non-accrual loans were zero on March 31, 2025 and $242 thousand, or 0.02% of total loans, on June 30, 2024.
The Company’s ability to maintain attractive long-term asset quality metrics is largely due to the high quality of the Bank’s borrowers, the strength of customer relationships, and the Bank’s stringent underwriting criteria.
The Bank’s regulatory capital ratios at June 30, 2025 remained well above levels required to be considered well-capitalized, with tier one leverage of 10.85%, tier one risk based capital of 12.23%, and total risk based capital of 13.21%. The Company’s equity to assets ratio was 9.31% at June 30, 2025.
Book value per share grew to $12.12 at June 30, 2025, increasing from $11.91 at the end of the linked quarter and $11.27 at June 30, 2024. Non-GAAP book value, excluding available for sale (“AFS”) securities losses reported in accumulated other comprehensive income (“AOCI”), grew to $12.48 per share at June 30, 2025, increasing from $12.31 at the end of the linked quarter and $11.81 at June 30, 2024.
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, and its full service branches in Tysons Corner and Leesburg, Va., as well as communities in Central Virgina from its Albemarle County branches and in South Florida from its Boca Raton office. Centre 1st Bank, a division of the Bank, serves Pennsylvania and New Jersey from offices in State College, Pennsylvania. ODNB Wealth Management, a wholly owned division of the Bank, serves clients from its office in Haverford, Pa. ODNB offers a full range of commercial and consumer financial services in the communities it serves. The Company had $1.49 billion in assets at June 30, 2025.
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
Use of Non-GAAP Financial Measures
Certain information set forth in this press release refers to financial measures that are determined by methods other than in accordance with generally accepted accounting principles (“GAAP”). The Company believes that certain non-GAAP measures may be helpful to investors and provide a greater understanding of its business and financial results. These measures are not necessarily comparable to similar measures that may be presented by other companies and should not be considered in isolation or as a substitute for the related GAAP measure. See the table below for reconciliations of the non-GAAP information identified herein and its most comparable GAAP measures.
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