ODNB delivers strong start to 2026 with record quarterly earnings, improved operating efficiency, and continued balance sheet strength
TYSONS CORNER, Va., April 29, 2026 – 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, 2026.
“ODNB delivered a strong start to 2026, building on the Company’s record performance in 2025,” said Chairman and Chief Executive Officer Mark Merrill. “Record earnings, solid loan origination and core deposit growth, improved operating efficiency, and stable asset quality demonstrate the discipline with which we manage the balance sheet and serve our clients. Our relationship-based, in-market lending strategy, funded by customer deposits, continues to drive performance. Supported by a strong and growing capital base generated through retained earnings and ample liquidity, ODNB is well positioned to fund future growth and deliver sustainable long-term value for our shareholders.”
Selected First Quarter 2026 Highlights
- Record Earnings – Net income reached a quarterly record of $3.7 million, increasing 22.0% from $3.0 million in the prior quarter and 86.1% from $2.0 million in the first quarter of 2025. Pre-tax income totaled $4.7 million, increasing 23.9% from the prior quarter and 86.9% from the prior-year period.
- Disciplined Loan Growth – Loans totaled $1.33 billion at period end, increasing $104.0 million, or 8.5%, from March 31, 2025. New loan fundings of $38.7 million were offset by $57.9 million in elevated loan payoffs during the quarter, resulting in a modest decline from the prior quarter.
- Valuable Core Deposit Franchise – Deposits grew to a record $1.32 billion at period end, increasing 0.5% from the prior quarter and 11.8% from the prior-year period. Deposit mix continued to improve as time deposits declined 11.8% from the prior-year period, while noninterest-bearing, interest-bearing demand, and money market and savings deposits increased 19.1%, 27.6%, and 26.5%, respectively, from the prior-year period. Noninterest-bearing deposits totaled $275.0 million and represented 20.9% of total deposits at period end.
- Improved Operating Efficiency – The efficiency ratio improved to 63.95%, compared to 66.42% in the prior quarter and 73.16% in the first quarter of 2025, reflecting disciplined expense management and positive operating leverage.
- Strong Asset Quality – Asset quality metrics remained stable during the quarter. Loans past due 30–89 days totaled $130 thousand, while loans past due 90 days or more and still accruing totaled $4.4 million. Nonperforming loans totaled $13.5 million, or 1.02% of total loans. The Company recorded net recoveries of $3 thousand for the first quarter of 2026. The allowance for credit losses totaled $12.3 million, or 0.92% of total loans.
- Tangible Book Value Growth – Tangible book value per share increased to $12.99, up from $12.67 at December 31, 2025, and $11.91 at March 31, 2025. Tangible book value per share, excluding AOCI, increased to $13.29.
- Well-Capitalized Balance Sheet – Regulatory capital ratios remained well in excess of “well-capitalized” thresholds, with a Tier 1 leverage ratio of 12.02%, a Tier 1 risk-based capital ratio of 14.08%, and a total risk-based capital ratio of 15.01%. The Company’s tangible equity to assets ratio was 9.18% at March 31, 2026.
Operating Results
Net income was $3.7 million for the first quarter of 2026, increasing 22.0% from $3.0 million in the prior quarter and 86.1% from $2.0 million in the first quarter of 2025. Pre-tax income totaled $4.7 million, compared to $3.8 million in the prior quarter and $2.5 million in the prior-year period.
Net interest income totaled $10.9 million in the first quarter of 2026, decreasing 2.1% from $11.1 million in the prior quarter and increasing 20.1% from $9.0 million in the first quarter of 2025. The linked-quarter decline was primarily attributable to interest expense associated with subordinated debt issued in December 2025. Growth over the prior-year period reflects higher average earning assets and improved loan yields, as well as continued reductions in deposit costs.
Net interest margin was 2.83% in the first quarter of 2026, compared to 2.93% in the prior quarter and 2.73% in the prior-year period. The modest decline from the prior quarter was primarily due to a lower average yield on earning assets and the addition of higher-cost subordinated debt, partially offset by continued improvement in deposit costs.
The average cost of interest-bearing deposits declined to 3.45%, down 11 basis points from the prior quarter and 27 basis points from the prior-year period. The Company expects continued improvement in funding costs through deposit repricing and deposit mix optimization, as well as improvement in earning asset yields through loan growth and repricing activity, which should support margin expansion over the remainder of 2026.
Noninterest income totaled $690 thousand in the first quarter of 2026, decreasing from $806 thousand in the prior quarter and increasing from $474 thousand in the first quarter of 2025. The decline from the prior quarter primarily reflects lower fee-based transactions, reduced gains on mortgage loans sold, and lower wealth management income following elevated fourth-quarter activity, partially offset by higher bank-owned life insurance income and income from the Company’s investment in Frost & Conn. Growth over the prior-year period reflects increased wealth management activity, higher bank-owned life insurance income, and investment income from Frost & Conn.
Noninterest expense totaled $7.4 million in the first quarter of 2026, decreasing 6.5% from $7.9 million in the prior quarter and increasing 6.1% from $7.0 million in the first quarter of 2025. The decrease from the prior quarter reflects lower salaries and employee benefits, occupancy and equipment costs, FDIC insurance expense, and other operating expenses. The increase from the prior-year period reflects continued investments in personnel and infrastructure to support growth, along with higher data processing costs and franchise taxes, partially offset by reductions in professional services.
Improved operating leverage continued to drive efficiency gains, resulting in an efficiency ratio of 63.95%, compared to 66.42% in the prior quarter and 73.16% in the prior-year period.
Financial Condition
Total assets increased to $1.62 billion at March 31, 2026, rising 0.6% from the prior quarter and 12.5% from the prior-year period.
Gross loans totaled $1.33 billion at March 31, 2026, decreasing 1.3% from the prior quarter and increasing 8.5% from the prior-year period. The linked-quarter decrease was primarily driven by elevated loan payoffs totaling $57.9 million, partially offset by new loan fundings of $38.7 million. The Company continues to emphasize high-quality, relationship-based loan growth.
Total deposits increased to $1.32 billion at March 31, 2026, rising 0.5% from the prior quarter and 11.8% from the prior-year period. Deposit mix continued to improve, with noninterest-bearing and core interest-bearing deposits representing a growing proportion of total deposits. At period end, noninterest-bearing deposits represented 20.9% of total deposits, while time deposits declined to 27.9%.
The Company’s balance sheet remains highly liquid. The liquidity ratio, defined as the sum of cash and unencumbered marketable securities totaling $236.9 million to total liabilities, was 16.1% at March 31, 2026.
Asset Quality and Capital Strength
At March 31, 2026, loans past due 30–89 days totaled $130 thousand, and loans past due 90 days or more and still accruing totaled $4.4 million. Nonperforming loans totaled $13.5 million, or 1.02% of total loans, and consist of two commercial real estate relationships secured by mixed-use and multifamily properties in the Washington, D.C. metropolitan area.
The Company recorded a recovery of $572 thousand in provision for credit losses during the quarter. The allowance for credit losses totaled $12.3 million, or 0.92% of total loans, compared to $12.8 million, or 0.95%, at December 31, 2025.
The Bank’s regulatory capital ratios remained well above levels required to be considered well-capitalized. The Company’s equity to assets ratio was 9.18% at March 31, 2026.
Book value per share increased to $12.99 at March 31, 2026, compared to $12.67 at the end of the prior quarter and $11.91 at March 31, 2025. Non-GAAP book value per share, excluding AOCI, increased to $13.29.
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. metropolitan area. The Bank’s executive headquarters is located in the heart of Northern Virginia in Tysons Corner, with full-service branches in Tysons Corner and Leesburg, Virginia, as well as communities in Central Virginia through its Albemarle County branches and in South Florida through its Boca Raton office.
Centre 1st Bank, a wholly owned division of Old Dominion National Bank, serves customers in Pennsylvania and New Jersey from offices in State College, Pennsylvania.
ODNB provides clients with a full spectrum of financial services, ensuring access to top-tier technology and personalized solutions to help achieve their financial goals. The Company had $1.6 billion in total assets at March 31, 2026.
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.
Read the PDF Version Here
Investor Contact
Mark Merrill
Chairman & Chief Executive Officer
571.299.6942
shareholders@ODNB.Bank
