Financial Results

Potomac Bancshares, Inc. Releases 2013 First Quarter Results, Declares Dividend and 
Announces New Loan Production Office in Middleburg, Virginia

CHARLES TOWN, WV, April 19, 2013--Robert F. Baronner Jr., President and CEO, of Potomac Bancshares, Inc., the One Bank Holding Company for Bank of Charles Town, announced its quarterly results for the period ending March 31, 2013. The Charles Town, West Virginia based company earned $566 thousand or 17 cents per share compared to net income of $320 thousand or 9 cents a share for the quarter ended March 31, 2012. The improvement in earnings is largely the result of declining credit costs to include a reduction in the loan loss provision compared to a year ago. Loans, net of reserve for the quarter ended March 31, 2013 were $217.4 million compared to $211.4 million at year end December 31, 2012, an improvement of 11% on an annualized basis. This is the first significant loan growth in a number of years.

Baronner reports, “The economy continues to slowly improve in our area with real estate prices stabilizing over the last six months and unemployment trending downward.  Although there is still work to do, clearly the volume and severity of problem assets continues to decline and as a result, earnings are becoming more predictable from quarter to quarter”.

Based on the improvement in the bank’s performance and the overall economic outlook in the bank’s trade area, the Board of Directors of Potomac Bancshares at its April 2013 meeting declared a 4 cent per share dividend for all shareholders of record on April 15, 2013. This cash dividend will be payable on May 1, 2013.

The bank also announced the opening of a new loan production office in Middleburg, Virginia under the trade name of BCT Mortgage and Commercial Loan Company. Baronner said “We decided to open this office in an effort to give us additional growth opportunities and some market diversification for our loan portfolio.  We have existing personnel, specifically Arch Moore III and Grant Wetmore, who have ties to the market and our newest Director, Barbara Scott, is a long time resident of Middleburg”. The new office is located at 2 West Washington Street in Middleburg also known as the ‘Noble House’ across the street from the Red Fox Inn & Tavern. The phone number is 540-687-5304.

In addition to the Middleburg loan production office, Bank of Charles Town has locations in Charles Town, Harpers Ferry, Kearneysville, Martinsburg and Hedgesville West Virginia.  For more information visit us online at or speak to our staff at 304-725-8431.



      Three Months Ended
(Unaudited - dollars in thousands, except per share data)   March 31, 2013   March 31, 2012
Earnings Performance          
     Interest Income     $2,818   $2,942
     Interest Expense     326   459
     Net Interest Income     2,492   2,483
     Provision For Loan Losses     0   309
     Non-Interest Income     1,024   1,038
     Non-Interest Expense     2,663   2,763
          Income  Before Income Tax Expense     853   449
     Income Tax Expense     287   129
          Net Income      $566   $320
     Annualized Return  On Average Equity     8.38%   4.95%
     Annualized Return  On Average Assets     0.78%   0.44%
      March 31, 2013   December 31, 2012
Balance Sheet Highlights          
     Total Assets     $296,983   $296,811
     Investment Securities     32,198   32,236
     Loans, Net     217,371   211,364
     Deposits And Cash Management Accounts     266,960   266,402
     Shareholders' Equity*     27,505   26,923
      March 31, 2013   March 31, 2012
Shareholders' Value (per share)          
     Earnings  Per Share, Basic     $0.17   $0.09
     Earnings  Per Share, Diluted                             0.17                           0.09
     Cash Dividends Declared (per share)      - -     - - 
     Book Value At Period End (per share)                             8.11                           7.63
      March 31, 2013   December 31, 2012
Safety and Soundness          
     Tier 1 Capital Ratio (Leverage Ratio)     9.47%   9.15%
     Non-Performing Assets As A Percentage Of           
          Total Assets Including OREO     2.97%   2.97%
     Allowance For Loan Losses As A Percentage Of          
          Period End Loans     1.58%   1.69%
     Ratio Of Net Charge-Offs Annualized During The Period To        
          Average Loans Outstanding During The Period     0.28%   0.82%
*When computing capital ratios, the net of unrealized holding gains (losses) on securities available for sale and the unfunded liability for pension and other post-retirement benefits, all computed net of tax, are added back to these shareholders' equity figures. Capital ratios are preliminary.