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OLD POINT FINANCIAL CORP (OPOF)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 diluted EPS was $0.24, down 42.5% QoQ and 50.9% YoY as higher noninterest expense (merger-related) and lower noninterest income offset modest NII growth, while adjusted EPS (non-GAAP) was $0.43 vs $0.50 YoY .
  • Core banking trends strengthened: NIM rose to 3.70% (3.71% FTE) from 3.63% in Q1; NPAs fell 19.7% QoQ to 0.24% of assets; management attributed margin gains to deliberate deposit mix actions .
  • Funding/credit positioned well but mix shifted: total deposits fell $46.2M (-3.7%) from year-end as time deposits declined 21.3% offset by growth in savings; liquidity remained robust at $455.7M (32.5% of assets) .
  • Dividend maintained at $0.14 (58.3% payout this quarter); merger with TowneBank advanced: shareholder approval (Jul 2) and all regulatory approvals received (Aug 14), with expected close on/around Sept 1, 2025—key stock catalyst into H2’25 .

What Went Well and What Went Wrong

  • What Went Well

    • “We continued to manage our deposit mix, leading to meaningful improvements in our net interest margin,” with NIM rising to 3.70% (3.71% FTE) vs 3.63% in Q1 and 3.62% YoY .
    • Asset quality improved sequentially: NPAs down 19.7% QoQ to $3.3M (0.24% of assets); nonaccrual loans fell; management affirmed ACL adequacy .
    • Capital/liquidity strength: Tier 1 13.29%; leverage 10.57%; liquidity $455.7M (32.5% of assets) supports flexibility through merger close .

  • What Went Wrong

    • Earnings pressure from expenses: noninterest expense rose $917K QoQ and $1.0M YoY, chiefly merger-related costs and higher compensation; efficiency ratio deteriorated to 86.6% from 78.5% in Q1 .
    • Noninterest income fell $598K QoQ (from $3.8M to $3.2M) as Q1’s subordinated notes gain did not recur and repossessed asset sales produced losses .
    • Deposit base declined $46.2M from year-end, driven by noninterest-bearing and time deposit declines (time -21.3%), partially offset by savings growth; loans were modestly lower from YE .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Net Interest Income ($M)12.116 12.008 12.179
Noninterest Income ($M)3.471 3.847 3.249
Provision for Credit Losses ($M)0.261 0.717 0.468
Net Income ($M)2.529 2.158 1.242
Diluted EPS ($)0.50 0.42 0.24
Net Interest Margin (FTE) (%)3.63% 3.64% 3.71%
Efficiency Ratio (%)79.07% 78.51% 86.62%
ROA (%)0.71% 0.61% 0.35%
ROE (%)9.43% 7.50% 4.25%
Estimates vs Actuals (S&P Global)Q2 2025
Revenue Consensus MeanN/A (consensus unavailable)
Primary EPS Consensus MeanN/A (consensus unavailable)

Note: S&P Global consensus estimates for OPOF were not available via our data connector this quarter; therefore, no beat/miss comparison can be made.

KPIs and Balance Sheet

KPIQ2 2024Q1 2025Q2 2025
Total Assets ($B)$1.423 $1.451 $1.403
Net Loans HFI ($B)$1.043 $1.001 $0.994
Deposits ($B)$1.237 $1.257 $1.209
NPAs ($M)$1.959 $4.147 $3.329
NPAs / Assets (%)0.14% 0.29% 0.24%
ACL / Loans (%)1.12% 1.17% 1.19%
Net Charge-Offs (annualized, %)0.12% 0.14% 0.13%
Liquidity ($M; % Assets)N/A$456.5; 31.5% $455.7; 32.5%
Book Value/Share ($)21.66 22.96 23.15
Tangible BV/Share ($)21.31 22.61 22.80

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareQuarterly$0.14 (Q1’25) $0.14 (Q2’25) Maintained
Merger timeline (TowneBank)2025 ClosePending shareholder/regulatory approval (Q1 update) Shareholders approved (Jul 2); all regulatory approvals received; expected close ~Sept 1, 2025 Updated timeline toward closing

No formal quantitative guidance on revenue, NIM, OpEx, or tax rate was provided in company materials this quarter .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Deposit mix/NIM managementNIM improved in Q1 vs Q4; focus on deposit costs Management emphasized deposit mix actions; NIM up to 3.70% (3.71% FTE) Improving NIM
Asset qualityQ4: NPAs ~0.19% of assets; Q1: NPAs rose to 0.29% NPAs down 19.7% QoQ to 0.24% of assets; nonaccruals down Sequential improvement
Operating efficiencyQ4/Q1 efficiency ~78–79% Higher expense (merger-related) drove efficiency ratio to 86.6% Deteriorated
Liquidity/capitalQ4: liquidity 31.7% of assets; Q1: 31.5% Liquidity 32.5% of assets; Tier 1 13.29%; leverage 10.57% Strong/stable
Loan/deposit mixQ1: deposits +$2.6M QoQ; time deposits -17.9% From YE, deposits -$46.2M; time -21.3%; savings +2.7% Funding mix shifting
Strategic/M&AQ1 announced TowneBank merger Shareholders approved; regulatory approvals received; close expected ~Sept 1 Advancing to close

Management Commentary

  • “During the second quarter, we continued to manage our deposit mix, leading to meaningful improvements in our net interest margin. This, coupled with a nearly 20% decrease in non-performing assets compared to the prior quarter, demonstrate the strength and health of Old Point.” — Robert F. Shuford, Jr., Chairman, President & CEO .
  • “We continue to believe this partnership [with TowneBank] will provide the combined company with a stronger platform for growth and create enhanced value for our shareholders, customers and employees.” .

Q&A Highlights

  • No earnings call transcript was available in our document set for Q2 2025; Q&A highlights are therefore not available for this quarter.

Estimates Context

  • Wall Street consensus (S&P Global) for OPOF’s Q2 2025 EPS and revenue was unavailable via our connector this quarter; we cannot assess beat/miss versus consensus at this time.

Key Takeaways for Investors

  • Near-term earnings were pressured by transitory items: merger-related costs (+$976K in Q2) and losses on repossessed asset sales, driving a higher efficiency ratio (86.6%) and lower EPS ($0.24) despite NIM expansion and slight NII growth .
  • Underlying profitability remains more resilient than GAAP suggests: adjusted operating earnings were $2.178M ($0.43/share) vs $2.529M YoY, narrowing the YoY gap as core margin trends improved .
  • Credit quality and reserves look adequate into the merger: NPAs fell 19.7% QoQ to 0.24% of assets; ACL/loans rose to 1.19% with low net charge-offs (0.13% annualized) .
  • Balance sheet/liquidity strength is a buffer: $455.7M of liquidity (32.5% of assets) and strong capital (Tier 1 13.29%, leverage 10.57%) support stability through closing .
  • Funding mix is shifting: time deposits down 21.3% from YE, savings up 2.7%, contributing to NIM gains; monitor further deposit migration post-close .
  • Merger timeline is the primary catalyst: shareholder approval secured; all regulatory approvals obtained; expected closing around Sept 1, 2025 (cash election $41.00 or stock 1.14x TOWN per share, subject to proration) .
  • Dividend maintained at $0.14 (58.3% payout this quarter); further distributions likely influenced by integration timing and earnings normalization post-merger .

Sources:

  • Q2 2025 earnings press release and financial tables ; 8-K incorporating the release .
  • Q1 2025 results and 8-K .
  • Q4 2024 results and 8-K .
  • Dividend release (May 27, 2025) .
  • Merger approvals and expected close (Jul–Aug 2025) .