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OLD POINT FINANCIAL CORP (OPOF)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 2024 delivered resilient community-bank performance: diluted EPS was $0.47 (down 6% QoQ; up 74% YoY), net income was $2.4M, and total revenue (FTE, non-GAAP) was $15.8M, with net interest income up 1.6% QoQ and 7.7% YoY .
  • Balance sheet quality and liquidity improved: deposits rose $52.4M YTD (+4.3%) and liquidity reached $497.7M (33.7% of assets); book value/tangible book grew 15%+ YoY .
  • Cost actions are complete: $997k one-time costs finalized; management reiterates ~$5.0M annualized pre-tax noninterest expense reduction run-rate (excluding one-time costs), with ~12% headcount reduction achieved .
  • Net interest margin (NIM) eased to 3.56% (3.57% FTE) from 3.62% (3.63% FTE) in Q2, reflecting lower average yields and higher rates on interest-bearing liabilities; asset quality remains strong despite modest NPA uptick .
  • No S&P Global Wall Street consensus available for OPOF; beat/miss vs estimates cannot be assessed (consensus unavailable via S&P Global).

What Went Well and What Went Wrong

What Went Well

  • Deposit and liquidity strength: total deposits +$52.4M YTD (+4.3%); liquidity $497.7M (33.7% of assets), enabling paydown of high-cost borrowings .
  • Cost discipline advancing: “we incurred $997 thousand of one-time costs… [and] believe these initiatives will reduce noninterest expense by approximately $5.0 million on an annualized pre-tax basis” — Robert Shuford, Jr. .
  • YoY profitability improvement: net income +75% YoY; NIM up vs prior-year quarter (3.56% vs 3.33%; 3.57% FTE vs 3.35% FTE), with net interest income +7.7% YoY .

What Went Wrong

  • NIM compression QoQ: NIM fell to 3.56% (3.57% FTE) from 3.62% (3.63% FTE) due to lower average yields and higher rates on interest-bearing liabilities, partially offset by higher average earning assets .
  • Modest uptick in NPAs: NPAs rose to $2.7M (0.18% of assets) from $2.0M (0.14%) QoQ, with repossessed assets increasing as certain past-due loans resolved via repossession .
  • Mortgage banking softness and legal costs: mortgage banking income was weak (-$2k) and the quarter included $240k settlement of two legal matters; total noninterest income remained flat QoQ .

Financial Results

MetricQ3 2023Q2 2024Q3 2024
Total Revenue (FTE) ($USD Millions, non-GAAP)$14.950 $15.624 $15.819
Net Interest Income ($USD Millions)$11.426 $12.116 $12.310
Noninterest Income ($USD Millions)$3.482 $3.471 $3.472
Provision for Credit Losses ($USD Thousands)$505 $261 $282
Net Income ($USD Millions)$1.362 $2.529 $2.382
Diluted EPS ($USD)$0.27 $0.50 $0.47
Margins & RatiosQ3 2023Q2 2024Q3 2024
NIM (GAAP, %)3.33% 3.62% 3.56%
NIM (FTE, non-GAAP, %)3.35% 3.63% 3.57%
ROA (%)0.37% 0.71% 0.64%
ROE (%)5.25% 9.43% 8.39%
Efficiency Ratio (%)86.40% 79.07% 78.53%
Efficiency Ratio (FTE, %)86.16% 78.88% 78.35%
Balance SheetQ3 2023Q2 2024Q3 2024
Total Assets ($USD Billions)$1.447 $1.423 $1.478
Loans, Net ($USD Billions)$1.071 $1.043 $1.014
Deposits ($USD Billions)$1.238 $1.237 $1.283
Stockholders’ Equity ($USD Millions)$99.526 $109.996 $115.457
Noninterest Income Components ($USD Thousands)Q3 2023Q2 2024Q3 2024
Fiduciary & Asset Mgmt Fees1,012 1,129 1,126
Service Charges on Deposit Accounts751 837 858
Other Service Charges, Commissions & Fees1,119 1,150 1,070
Bank-Owned Life Insurance Income263 270 285
Mortgage Banking Income (Loss)144 2 (2)
Gain (Loss) on AFS Securities, Net30 — —
Loss on Sale of Repossessed Assets— (58) (25)
Other Operating Income163 141 160
Total Noninterest Income3,482 3,471 3,472
KPIsQ3 2023Q2 2024Q3 2024
NPAs / Total Assets (%)0.19% 0.14% 0.18%
Annualized Net Charge-Offs / Avg Loans (%)0.09% 0.12% 0.18%
ACL on Loans / Total Loans (%)1.09% 1.12% 1.14%
Book Value per Share ($)19.75 21.66 22.74
Tangible Book Value per Share ($, non-GAAP)19.39 21.31 22.38
Tier 1 Capital Ratio (%)—12.07% 12.76%
Leverage Ratio (%)—9.87% 9.99%

Notes: Revenue presented as Total Revenue (FTE, non-GAAP). NIM FTE and efficiency ratio FTE are non-GAAP measures with reconciliations provided in the company’s exhibits .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Noninterest expense reduction (annualized, pre-tax)Ongoing~$5.0M expected (excluding one-time costs) ~$5.0M reiterated; one-time costs finalized ($997k YTD) Maintained
Headcount reduction2024~12% reduction expected ~12% achieved by late Q1 into Q3 Achieved
Crown Center branch closure9/27/2024Announced closure forthcoming Closure effects flowing through (ROU impairment Q2; lower occupancy in Q3) Achieved
Dividend per shareQ3 2024$0.14 (Q3 2023) $0.14 declared (paid 9/27/24) Maintained

Earnings Call Themes & Trends

No Q3 2024 earnings call transcript was available in our document set; themes are compiled from Q1–Q3 press releases.

TopicPrevious Mentions (Q1 & Q2 2024)Current Period (Q3 2024)Trend
Expense savings programInitiatives to cut noninterest expense by ~$5.0M annualized; ~12% headcount reduction underway One-time costs finalized ($997k YTD); ~$5.0M run-rate reiterated Improving execution
Net interest marginQ1: 3.45% (3.46% FTE) → Q2: 3.62% (3.63% FTE) Q3: 3.56% (3.57% FTE) as higher liability costs offset asset yields Stabilizing, slight pressure QoQ
Deposit growth/core deposit mixQ1: deposits -$2.1M; Q2: +$6.2M YTD +$52.4M (+4.3%); growth led by large commercial customers Strengthening
Asset qualityQ1 NPAs/Assets 0.15%; Q2 0.14% Q3 0.18%; repossessed assets up, nonaccrual down YoY Slightly softer but still strong
Mortgage banking incomeQ1 weaker; Q2 very low Q3 negative (-$2k) amid strategic shift and market softness Weak
Loan portfolioQ1–Q2 reductions (consumer auto shrinking) Loans down 5.1% YTD; declines in consumer, construction, commercial; residential real estate up Contracting strategically

Management Commentary

  • “Old Point delivered strong financial performance in the third quarter of 2024… We saw meaningful growth in our deposit base and net interest income during the quarter.” — Robert Shuford, Jr. .
  • “Through the third quarter, we incurred $997 thousand of one-time costs… we continue to believe these initiatives will reduce noninterest expense by approximately $5.0 million on an annualized pre-tax basis.” — Robert Shuford, Jr. .
  • Q2 tone set expectations: “We grew our earnings, we increased our net interest margin, and our asset quality remained strong… While loan growth slowed as expected, our core deposit growth was stronger than anticipated.” — Robert Shuford, Jr. .
  • Q1 framing: initiatives began in late 2023 to reduce noninterest expense by ~$5.0M annualized, with substantial benefits expected to begin in Q3 2024 .

Q&A Highlights

  • No Q3 2024 earnings call transcript or Q&A content was available in our document set. Management’s prepared remarks and operational detail are captured in the press releases and 8-K exhibits .

Estimates Context

  • S&P Global Wall Street consensus estimates for OPOF’s Q3 2024 EPS and revenue were unavailable via our SPGI integration; therefore, beat/miss vs estimates cannot be determined at this time. Values retrieved from S&P Global were not accessible due to a mapping issue.

Key Takeaways for Investors

  • Deposit-led balance sheet momentum: deposits +$52.4M YTD (+4.3%), with liquidity at ~$497.7M (33.7% of assets) supporting lower borrowing costs and flexibility .
  • Net interest income growth despite NIM pressure: NII +1.6% QoQ and +7.7% YoY; NIM modestly down QoQ to 3.56% (3.57% FTE) on higher liability costs; monitor liability pricing and mix .
  • Cost saves should be a near-term earnings lever: $997k one-time costs completed; ~$5.0M annualized pre-tax noninterest expense reduction reiterated; headcount down ~12% .
  • Asset quality remains strong, albeit slightly softer QoQ: NPAs/Assets 0.18% (vs 0.14% in Q2), net charge-offs annualized 0.18%; ACL/loans at 1.14% with proactive portfolio adjustments (consumer auto down) .
  • Loan contraction is strategic: loans down 5.1% YTD led by consumer, construction, and commercial; residential real estate up; expect revenue mix to lean on deposits and securities while loan demand normalizes .
  • Dividend appears stable: $0.14 declared for Q3, ~29.8% payout ratio, consistent with prior year; watch cost saves and NIM trajectory for dividend capacity .
  • Near-term trading: catalysts include confirmation of expense save run-rate, further deposit growth from commercial clients, and stabilization of NIM; lack of consensus estimates may reduce headline volatility around prints .