Second Quarter Earnings Report from the Bank of Botetourt

Bank of Botetourt Posts Profitable Second Quarter Financial Results

BUCHANAN, VIRGINIA. July 30, 2021 — Buchanan-based Bank of Botetourt (OTCPK: BORT)
announced today its unaudited financial results for the three and six months-end June 30, 2021. The Bank
produced net income amounting to $1,582,000 or $0.91 per basic share in the second quarter. This amount
compares to a net income of $1,172,000 or $0.68 per share, for the same period last year. For the six
months-ended the Bank produced net income amounting to $3,562,000 or $2.05 per basic share. This
amount compares to a net income of $2,210,000 or $1.28 per share, for the same period last year.

At June 30, 2021, select financial information and key highlights include:
• Return on average assets of 1.13%
• Return on average equity of 12.86%
• Book value of $32.76
• Total deposit growth of 8.3%
• Total asset growth of 8.0%
• Community Bank Leverage Ratio of 9.00%
• Strong liquidity position
• Net interest margin of 3.02% at June 30, 2021 compared to 3.09% one year prior.
• Outstanding Paycheck Protection Program (“PPP”) loans of $26.2 million reported at December
31, 2020 decreased to $5.8 million at June 30, 2021 after receiving SBA forgiveness on $20.4
million. The Bank recognized $624,000 in revenue from the forgiven loans.

• In 2021, the Bank participated in the next round of the SBA’s PPP Program. During the first six
months, the Bank generated $18.0 million new PPP loans. At June 30, 2021, $855,000 had been
forgiven by the SBA. The bank recognized $147,000 in revenue related to this tranche of PPP
lending.

• At quarter-end, remaining PPP loan balances from both rounds totaled $23.0 million with
$1,121,000 in deferred revenue.

As a result of the solid financial performance, the Board of Directors voted to pay the $0.18 per share
quarterly dividend, or $0.72 per share annualized which is payable on August 19, 2021 to shareholders of
record August 12, 2021. President & CEO, G. Lyn Hayth, III stated “Our second quarter financial results
continued to exceed budget expectations. Additional PPP lending, SBA loan forgiveness, and the
subsequent revenue recognition contributed to our successful financial results. In addition, strong and consistent revenue generated by our mortgage loan activity has been a strong contributor to earnings.”

Net income for the three months ended June 30, 2021 was $1,582,000 compared to $1,172,000 for the same
period last year, representing an increase of $410,000 or 35.0%. Basic and diluted earnings per share
increased $0.23 from $0.68 at June 30, 2020 to $0.91 at June 30, 2021. The increase in net income is
primarily due to $403,000 in PPP loan revenue recognized and $266,000 in secondary market mortgage
income.

Net income for the six months ended June 30, 2021 was $3,562,000 compared to $2,210,000 for the same
period last year, representing an increase of $1,352,000 or 61.2%. Basic and diluted earnings per share
increased $0.77 from $1.28 at June 30, 2020 to $2.05 at June 30, 2021. The increase in net income is
primarily attributed to an increase in revenue recognized from PPP and mortgage lending. Net income was
augmented because there was no provision for loan losses required for the six months ended June 30, 2021
as compared to $1,190,000 for June 30, 2020. The decrease in the provision is due to a reduction in
exposure on impaired loans, overall improved economic trends, and partially offset by the historic loss
factor in the allowance for loan loss reserve calculation.

Financial Condition
At June 30, 2021 total assets amounted to $645,341,000, an increase of 8.0% above total assets at December
31, 2020 of $597,794,000, an increase of $47,547,000. Total net loans decreased $2,472,000 or 0.5% from
$454,680,000 at December 31, 2020 to $452,208,000 at June 30, 2021. Total deposits at December 31,
2020 amounted to $536,805,000, compared to $581,293,000 at June 30, 2021, an increase of 8.3% or
$44,488,000. The increase in deposits is attributable to organic growth.

As of June 30, 2021 Bank of Botetourt reported its CBLR ratio at 9.0% which meets the required regulatory
minimum ratio. The CARES Act temporarily reduced the CBLR minimum ratio from 9.0% to 8.5%
through December 31, 2021.

Paycheck Protection Program
Bank of Botetourt was a participant in the Paycheck Protection Program (“PPP”) initiated by the U.S.
Department of the Treasury. At June 30, 2021 both rounds of PPP lending totaled $44.2, with $21.2
receiving forgiveness from the SBA. As result, $23.0 million of PPP loans remain on the balance sheet at
the end of the second quarter. Deferred PPP loan servicing fees totaled $1,121,000 at June 30, 2021 while
the Bank recognized $771,000 in revenue during 2021.

–Submitted by Mary Ann Miller , Vice President Business Banking and Community Relations