Botetourt Bankshares (BORT) 8-K Botetourt Bankshares, Inc Announces Financial Results

Section 2: EX-99 (PRESS RELEASE)

Exhibit 99

FOR RELEASE August 10, 2011

BOTETOURT BANKSHARES, Inc.

19747 Main Street

Buchanan, Virginia 24066

For Further Information Contact:

Michelle A. Crook, Chief Financial Officer

(540) 591-5013

BOTETOURT BANKSHARES, INC ANNOUNCES FINANCIAL RESULTS

BUCHANAN, VIRGINIA.August 10, 2011 — Buchanan-based Botetourt Bankshares, Inc. announced today its consolidated financial results for the quarter ending June 30, 2011. The Company experienced a net loss for the three months ended June 30, 2011 in the amount of $(1,124,099) compared to net income of $255,786 for the same period last year, representing a decrease of $1,379,885. Both basic and diluted earnings per share decreased $1.11 from $0.21 at June 30, 2010 to $(0.90) at June 30, 2011.

The net loss for the six months ended June 30, 2011 amounted to $(1,447,578) compared to net income of $571,937 for the same period last year, representing a decrease of $2,019,515. Both basic and diluted earnings per share decreased $1.62 from $0.46 at June 30, 2010 to $(1.16) at June 30, 2011. The decrease in net income and earnings per share is primarily due to a higher provision for loan losses.

At June 30, 2011 total assets amounted to $314,776,522, total deposits were $287,759,716, net loans were $251,582,538 and total stockholders’ equity was $24,548,001.

H. Watts Steger, Chairman and Chief Executive Officer of Botetourt Bankshares, Inc., states “The Company’s performance remains below our own expectations as second quarter’s earnings were adversely impacted by a higher provision for loan losses as we continue to respond to loan delinquencies, impaired loans, and loss exposure resulting from the decline in real estate values collateralizing specific loans. The pace of the economic recovery has been sluggish, which has impacted the ability of some borrowers to service debt as well as negatively impacting the market value of real estate secured loans. Our Company’s 112-year history and “well capitalized” position will enable us to weather the current financial storm.”

Botetourt Bankshares, Inc. is the holding company for Bank of Botetourt, which was chartered in 1899. Bank of Botetourt operates ten full service offices in Botetourt, Rockbridge, Roanoke and Franklin counties.

Information in this press release contains “forward-looking statements.” These statements involve risks and uncertainties that could cause actual results to differ materially including, without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Botetourt Bankshares, Inc.’s recent filings with the Securities and Exchange Commission, included but not limited to its Annual Report on Form 10-K and its other periodic reports.

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Botetourt Bankshares, Inc.

Consolidated Balance Sheets

June 30, 2011 and December 31, 2010

	(Unaudited) June  30, 2011			(Audited) December 31, 2010
Assets
Cash and due from banks	$	7,202,071		$	6,232,356
Interest-bearing deposits with banks		22,215,351			12,190,985
Federal funds sold		1,178,000			1,728,000
Total cash and cash equivalents		30,595,422			20,151,341
Time deposits with banks		250,000			500,000
Investment securities available for sale		13,714,252			15,042,933
Investment securities held to maturity (fair value approximates $100,000 in 2010)		—			100,000
Restricted equity securities		558,700			581,000
Loans, net of allowance for loan losses of $6,792,836 at June 30, 2011 and $5,147,790 at December 31, 2010		251,582,538			257,557,882
Property and equipment, net		7,478,326			7,661,323
Accrued income		1,170,886			1,338,662
Foreclosed assets		4,224,850			1,850,665
Other assets		5,201,548			4,700,925
Total assets	$	314,776,522		$	309,484,731
Liabilities and Stockholders' Equity
Liabilities
Noninterest-bearing deposits	$	36,220,275		$	33,006,463
Interest-bearing deposits		251,539,441			248,041,302
Total deposits		287,759,716			281,047,765
Accrued interest payable		495,568			520,373
Other liabilities		1,973,237			2,051,912
Total liabilities		290,228,521			283,620,050
Commitments and contingencies		—			—
Stockholders' equity
Common stock, $1.00 par value; 2,500,000 shares authorized; 1,251,922 issued and outstanding at June 30, 2011 and 1,250,375 shares issued and outstanding at December 31, 2010		1,251,922			1,250,375
Additional paid-in capital		1,702,164			1,687,446
Retained earnings		22,194,475			23,692,067
Accumulated other comprehensive loss		(600,560	)		(765,207	)
Total stockholders’ equity		24,548,001			25,864,681
Total liabilities and stockholders’ equity	$	314,776,522		$	309,484,731

Botetourt Bankshares, Inc.

Consolidated Statements of Operations

For Six Months and Three Months Ended June 30, 2011 and 2010(unaudited)

	Six Months Ended June 30,					Three Months Ended June 30,
	2011			2010		2011			2010
Interest income
Loans and fees on loans	$	7,362,962		$	7,840,864	$	3,732,094		$	3,871,138
Federal funds sold		890			4,665		510			2,615
Investment securities:
Taxable		103,967			187,417		47,752			94,009
Exempt from federal income tax		108,923			115,670		49,024			57,663
Dividend income		2,522			870		1,381			786
Deposits with banks		16,947			5,018		10,899			3,563
Total interest income		7,596,211			8,154,504		3,841,660			4,029,774
Interest expense
Deposits		2,115,514			2,652,272		1,049,367			1,281,660
Total interest expense		2,115,514			2,652,272		1,049,367			1,281,660
Net interest income		5,480,697			5,502,232		2,792,293			2,748,114
Provision for loan losses		4,125,000			1,225,000		2,610,000			655,000
Net interest income after provision for loan losses		1,355,697			4,277,232		182,293			2,093,114
Noninterest income
Service charges on deposit accounts		352,931			318,176		179,498			153,190
Mortgage origination fees		74,340			85,623		43,158			51,093
Net realized gain on sale of AFS securities		2,650			1,075		2,650			—
Other income		595,304			566,108		295,631			285,175
Total noninterest income		1,025,225			970,982		520,937			489,458
Noninterest expense
Salaries and employee benefits		2,333,495			2,327,706		1,152,469			1,150,225
Occupancy and equipment expense		421,892			482,230		219,144			244,207
Foreclosed assets, net		303,879			79,209		234,184			32,881
Other expense		1,584,811			1,565,799		821,388			804,292
Total noninterest expense		4,644,077			4,454,944		2,427,185			2,231,605
Income (loss) before income taxes		(2,263,155	)		793,270		(1,723,955	)		350,967
Income tax expense (benefit)		(815,577	)		221,333		(599,856	)		95,181
Net income (loss)	$	(1,447,578	)	$	571,937	$	(1,124,099	)	$	255,786
Basic earnings (loss) per share	$	(1.16	)	$	0.46	$	(0.90	)	$	0.21
Diluted earnings (loss) per share	$	(1.16	)	$	0.46	$	(0.90	)	$	0.21
Dividends declared per share	$	0.04		$	0.16	$	—		$	0.08
Basic weighted average shares outstanding		1,251,273			1,247,082		1,251,671			1,247,570
Diluted weighted average shares outstanding		1,251,273			1,247,082		1,251,671			1,247,570