Toggle SGML Header (+)


Section 1: 8-K (FORM 8-K)

fxnc20190716_8k.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

___________

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 29, 2020

___________

 

FIRST NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

 

Virginia

(State or other jurisdiction of incorporation)

0-23976

(Commission File Number)

54-1232965

(IRS Employer Identification No.)

 

112 West King Street

Strasburg, Virginia

(Address of principal executive offices)

 

22657

(Zip Code)

 

Registrant’s telephone number, including area code: (540) 465-9121

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $1.25 per share

FXNC

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

      Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 



 

 

 

Item 2.02

Results of Operations and Financial Condition.

 

On April 29, 2020, the First National Corporation issued a press release reporting its financial results for the period ended March 31, 2020.  A copy of the press release is being furnished as an exhibit to this report and is incorporated by reference into this Item 2.02.

 

Item 9.01

Financial Statements and Exhibits.

 

(d)

Exhibits. The following exhibit is being furnished pursuant to Item 2.02 above.

 

Exhibit No.

Description

 

 

99.1

Press Release dated April 29, 2020

 

2

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

FIRST NATIONAL CORPORATION

 

(Registrant)

 

 

 

 

 

 

 

 

 

Date:  May 5, 2020

By:

/s/ M. Shane Bell

 

 

 

M. Shane Bell

 

 

 

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

3

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

ex_150371.htm

Exhibit 99.1

 

First National Corporation Reports First Quarter 2020 Net Income

 

STRASBURG, Va., April 29, 2020 --- First National Corporation (the “Company” or “First National”) (NASDAQ: FXNC) reported unaudited consolidated net income of $1.7 million, or $0.34 per diluted share, for the first quarter of 2020, which resulted in a return on average assets of 0.85% and a return on average equity of 8.72%. This was a $556 thousand, or 25%, decrease compared to net income for the first quarter of 2019, which totaled $2.3 million or $0.46 per diluted share, and a return on average assets of 1.21% and a return on average equity of 13.47%.

 

Highlights for the first quarter of 2020:

 

 

Provision for loan losses totaled $900 thousand, compared to no provision in Q1 2019
  Cash and unencumbered securities totaled $133.4 million, or 16% of assets 
  Nonperforming assets decreased to 0.19% of assets
  Loans increased $30.8 million, or 6% 
 

Deposits increased $36.4 million, or 5% 
 

Shareholders’ equity increased 13%, or $8.8 million

 

Wealth management revenue increased 20%, or $88 thousand

 

The Company’s banking subsidiary, First Bank (the “Bank”) exceeded all regulatory well-capitalized metrics

 

“Over the last month, our team of associates has demonstrated an incredible commitment to their customers, their communities, and one another,” said Scott Harvard, president and chief executive officer of First National. Harvard continued, “As the world was being turned upside down by the health crisis, our teammates overcame their own anxieties to support our neighbors and small businesses across our footprint. It has been so heartening to witness their dedication as financial first responders, working overtime to deliver payroll protection funds to small businesses, providing access to deposit accounts via changing delivery channels and reassuring customers, all while supporting their families and each other. We talk often about First Bank being a people business that depends on each employee’s powerful actions to enhance the customer experience. Those actions are occurring daily at First Bank, making all of us proud of how we serve our customers and communities.

 

“We were pleased with the financial performance of the Company in the first quarter. Expenses were under control while net interest income and noninterest income both improved over the first quarter of 2019. During this crisis, we have earned additional new business through our actions on behalf of small businesses. Looking forward, our team is focused on efficiently and effectively managing programs designed to relieve financial pressure on customers while mitigating what we expect to be increasing credit risk within the loan portfolio. We expect significant pressure on several sectors, including the hospitality and health care industries, which have been constrained by the Virginia governor’s stay at home order and the public’s adoption of social distancing. We are fortunate the Bank’s deposits are built on relationships, on-balance sheet and off-balance sheet liquidity is substantial, and capital levels exceed all regulatory thresholds to be considered well-capitalized.”

 

COVID-19 PANDEMIC UPDATE

 

In March 2020, the Bank activated its Pandemic Plan and began taking actions to protect the health of its employees and customers, while continuing to deliver essential banking services to small businesses and individuals. This has been accomplished by limiting access to banking offices and delivering a majority of its services through branch drive throughs, ATMs and mobile banking platforms. Approximately 40% of our employees have been working remotely, while social-distancing and split-shifts have been created for those employees working in the Bank’s facilities. Virtually all meetings are held using audio and/or video conference capabilities. The Company scheduled its annual meeting of shareholders in a virtual meeting online format.

 

 

 

The Company suspended future stock repurchases under its $5.0 million stock repurchase program due to the economic uncertainty caused by the pandemic. The stock repurchase program was previously announced in December 2019. During the first quarter of 2020, the Company repurchased and retired 129,035 shares at an average price paid per share of $16.05, for a total of $2.1 million. The Company will continue to update its enterprise risk assessment and capital plan as the operating environment develops. The Bank was considered well capitalized at March 31, 2020.

 

In response to the unknown impact of the pandemic on the economy and customers, the Bank implemented a loan payment deferral program for individual and business customers. Customers with favorable risk ratings and payment histories have been given the opportunity to defer monthly payments for 90 days. Approximately 27% of the Bank’s loan balances have participated in the program. There are no program fees and no late payment fees charged during the deferral period for participating loan customers. Interest income continues to accrue to the Bank during the deferral period.

 

In an effort to support local small businesses and non-profit organizations, the Bank is participating as a lender in the U.S. Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”) and began accepting loan applications in April. In the first round of funding, the Bank obtained approval of 91% of the 330 loan applications it received prior to the end of funding on April 16, 2020, which totaled $52.1 million. The Bank continues to accept applications for processing in the second round of funding which was approved and signed into law on April 24, 2020. The Bank did not recognize any revenue related to the program during the first quarter of 2020.

 

In light of the significant increase in unemployment claims and the stress on businesses from stay at home orders, the Bank has been monitoring liquidity on a daily basis. The Bank believes it has sufficient liquidity to meet demand from its customers with on-balance sheet liquidity with cash and unencumbered securities of $133.4 million, or 16% of assets at March 31, 2020, as well as $176.9 million, or 22% of assets, of off-balance sheet liquidity that was available overnight through secured funding sources. All loans originated by the Bank under the PPP are expected to be pledged to the Federal Reserve’s new Paycheck Protection Program Liquidity Facility (“PPPLF”). The Bank plans to borrow funds from the PPPLF to fund PPP loans as needed at an interest rate of 0.35%.

 

The Bank anticipates the pandemic will have an unfavorable impact on the financial condition of its customers, and as a result, has begun the process of identifying the related credit risk within its loan portfolio with the goal of mitigating the risk and minimizing potential loan charge-offs. We expect significant pressure on several sectors of the loan portfolio, including hospitality, retail shopping and health care. Those sectors comprise approximately 8%, 5% and 4% of the loan portfolio, respectively. The magnitude of the potential decline in the Bank’s loan quality will likely depend on the length and extent that the Bank’s customers experience business interruptions from the pandemic.

 

The Bank considered the impact of the pandemic on the loan portfolio while determining an appropriate allowance for loan losses, and as a result, recorded a provision for loan losses of $900 thousand for the first quarter of 2020, compared to no provision for loan losses in the first quarter of the prior year. The higher provision for loan losses was primarily attributable to an increase in the general reserve component of the allowance for loan losses. The general reserve was increased through the adjustment of qualitative factors based on recent unfavorable changes in economic indicators, which contributed to the majority of the increase in the provision for loan losses.

 

BALANCE SHEET

 

Total assets of First National increased $41.3 million, or 5%, to $816.4 million at March 31, 2020, compared to $775.1 million at March 31, 2019. Total securities increased $5.2 million, or 4%, and loans, net of the allowance for loan losses, increased $30.8 million, or 6%. The Bank increased its cash balances near the end of the first quarter in anticipation of increased demand for cash from its customers expecting to receive stimulus checks as a result of the CARES Act, which was recently signed into law. As a result, cash and due from banks increased $19.7 million, while interest-bearing deposits in banks decreased $14.3 million.

 

Total deposits increased $36.4 million, or 5%, to $720.6 million at March 31, 2020, compared to $684.2 million at March 31, 2019. Noninterest-bearing demand deposits increased $8.4 million, or 4%, and savings and interest-bearing demand deposits increased $29.9 million, or 8%, while time deposits decreased $1.9 million, or 2%.    

 

Shareholders’ equity increased $8.8 million, or 13%, to $78.5 million at March 31, 2020, compared to one year ago, primarily from a $7.1 million increase in retained earnings and a $3.4 million increase in accumulated other comprehensive income (loss). These increases were partially offset by $1.8 million decrease in common stock and surplus, which resulted from stock repurchases in the first quarter of 2020 under the Company’s stock repurchase plan.

 

 

 

ANALYSIS OF THE THREE-MONTH PERIOD

 

Net interest income increased $127 thousand, or 2%, to $7.0 million for the first quarter of 2020, compared to the same period of 2019. The increase resulted from a 6% increase in average earning assets, which was partially offset by a 20 basis point decrease in the net interest margin. Growth in average earning assets was led by a $30.2 million increase in average loans, net of the allowance for loan losses, followed by a $16.2 million increase in average interest-bearing deposits in banks. The decrease in the net interest margin resulted from a 23 basis point decrease in the yield on average earning assets, which was partially offset by a 3 basis point decrease in interest expense as a percent of average earning assets.

 

The lower yield on average earning assets was attributable to a 17 basis point decrease in the yield on loans, a 21 basis point decrease on securities, and an 87 basis point decrease on interest-bearing deposits in banks, which were all impacted by lower market rates. The decrease in interest expense as a percentage of average earning assets was attributable to lower interest rates paid on deposits and junior subordinated debt, which were also impacted by lower market rates. The decrease in cost of interest-bearing checking accounts, money market accounts and junior subordinated debt totaled 26 basis points, 10 basis points and 94 basis points, respectively.

 

Noninterest income increased $114 thousand, or 6%, to $2.1 million, compared to the same period of 2019. The increase was primarily attributable to an $88 thousand, or 20%, increase in wealth management fees, and a $32 thousand, or 18% increase in fees for other customer services. The increase in wealth management fees resulted primarily from higher balances of assets under management during the first quarter of 2020 compared to the same period one year ago. Assets under management increased as a result of new business relationships and from growth in the market values of existing accounts. Fees for other customer services increased due to revenue earned on letter of credit fees. 

 

Noninterest expense increased $46 thousand, or 1%, to $6.1 million, compared to the same period one year ago. The increase was primarily attributable to a $146 thousand, or 4%, increase in salaries and employee benefits, which was partially offset by a $39 thousand, or 57%, decrease in FDIC assessment, and a $50 thousand, or 8%, decrease in other operating expense. FDIC assessment expense was lower compared to the same period one year ago due to credits that were fully utilized during the first quarter of 2020. Other operating expense decreased from lower education and training costs, debit card losses, and loan servicing fees on purchased loans.

 

ASSET QUALITY/LOAN LOSS PROVISION

 

Provision for loan losses totaled $900 thousand for the first quarter of 2020, compared to no provision for loan losses for the same period of 2019. The increase in provision for loan losses was primarily attributable to an increase in the general reserve component of the allowance for loan losses. The general reserve component of the allowance for loan losses was increased through the adjustment of qualitative factors based on recent changes in economic indicators and contributed approximately $700 thousand of the higher provision for loan losses. Net charge offs totaled $250 thousand for the first quarter of 2020, compared to $63 thousand for the first quarter of 2019.  Net charge-offs also contributed to the increased provision for loan losses.

 

Nonperforming assets totaled $1.5 million, or 0.19% of total assets at March 31, 2020, compared to $1.9 million, or 0.25% of total assets, one year ago. The allowance for loan losses totaled $5.6 million, or 0.96% of total loans, and $4.9 million, or 0.90% of total loans, at March 31, 2020 and 2019, respectively.

 

FORWARD-LOOKING STATEMENTS

 

Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company’s future operations and are generally identified by phrases such as “the Company expects,” “the Company believes” or words of similar import. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including the rapidly changing uncertainties related to the COVID-19 pandemic and its potential adverse effect on the economy, our employees and customers, and our financial performance. For details on other factors that could affect expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and other filings with the Securities and Exchange Commission.

 

 

 

ABOUT FIRST NATIONAL CORPORATION

 

First National Corporation (NASDAQ: FXNC) is the parent company and bank holding company of First Bank, a community bank that first opened for business in 1907 in Strasburg, Virginia. The Bank offers loan and deposit products and services through its website, www.fbvirginia.com, its mobile banking platform, a network of ATMs located throughout its market area, one loan production office, a customer service center in a retirement community, and 14 bank branch office locations located throughout the Shenandoah Valley, the central regions of Virginia and in the city of Richmond. In addition to providing traditional banking services, the Bank operates a wealth management division under the name First Bank Wealth Management. First Bank also owns First Bank Financial Services, Inc., which invests in entities that provide investment services and title insurance.

 

CONTACTS

 

Scott C. Harvard

 

M. Shane Bell

President and CEO

 

Executive Vice President and CFO

(540) 465-9121

 

(540) 465-9121

[email protected]

 

[email protected]

 

 

 

 

 

 

 

FIRST NATIONAL CORPORATION

Quarterly Performance Summary

(in thousands, except share and per share data)

 

   

(unaudited)

   

For the Quarter Ended

   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

   

2020

 

2019

 

2019

 

2019

 

2019

Income Statement

                                       

Interest income

                                       

Interest and fees on loans

  $ 7,203     $ 7,333     $ 7,429     $ 7,200     $ 6,996  

Interest on deposits in banks

    118       163       97       133       110  

Interest on securities

                                       

Taxable interest

    670       627       645       696       737  

Tax-exempt interest

    151       156       157       159       156  

Dividends

    26       27       26       26       24  

Total interest income

  $ 8,168     $ 8,306     $ 8,354     $ 8,214     $ 8,023  

Interest expense

                                       

Interest on deposits

  $ 962     $ 1,042     $ 1,089     $ 1,051     $ 922  
Interest on federal funds purchased                 1              

Interest on subordinated debt

    90       91       90       90       89  

Interest on junior subordinated debt

    90       98       103       108       111  

Interest on other borrowings

                            2  

Total interest expense

  $ 1,142     $ 1,231     $ 1,283     $ 1,249     $ 1,124  

Net interest income

  $ 7,026     $ 7,075     $ 7,071     $ 6,965     $ 6,899  

Provision for loan losses

    900       250             200        

Net interest income after provision for loan losses

  $ 6,126     $ 6,825     $ 7,071     $ 6,765     $ 6,899  

Noninterest income

                                       

Service charges on deposit accounts

  $ 681     $ 753     $ 757     $ 715     $ 701  

ATM and check card fees

    519       654       586       573       517  

Wealth management fees

    525       496       477       458       437  

Fees for other customer services

    207       181       177       153       175  

Income from bank owned life insurance

    115       123       131       99       103  

Net gains (losses) on securities

          1                    

Net gains on sale of loans

    31       89       34       25       22  

Other operating income

    21       44       29       12       30  

Total noninterest income

  $ 2,099     $ 2,341     $ 2,191     $ 2,035     $ 1,985  

Noninterest expense

                                       

Salaries and employee benefits

  $ 3,589     $ 3,193     $ 3,556     $ 3,375     $ 3,443  

Occupancy

    402       415       398       401       438  

Equipment

    410       406       410       409       420  

Marketing

    106       128       143       239       141  

Supplies

    89       88       86       91       73  

Legal and professional fees

    279       311       231       303       241  

ATM and check card expense

    245       231       225       225       216  

FDIC assessment

    30       (53 )     (6 )     35       69  

Bank franchise tax

    153       136       136       136       130  

Data processing expense

    184       179       174       179       173  

Amortization expense

    52       61       71       80       90  

Other real estate owned expense (income), net

          1                    

Net losses (gains) on disposal of premises and equipment

    (9 )     14                    

Other operating expense

    614       694       762       757       664  

Total noninterest expense

  $ 6,144     $ 5,804     $ 6,186     $ 6,230     $ 6,098  

Income before income taxes

  $ 2,081     $ 3,362     $ 3,076     $ 2,570     $ 2,786  

Income tax expense

    376       646       583       484       525  

Net income

  $ 1,705     $ 2,716     $ 2,493     $ 2,086     $ 2,261  

 

 

 

 

FIRST NATIONAL CORPORATION

Quarterly Performance Summary

(in thousands, except share and per share data)

 

   

(unaudited)

   

For the Quarter Ended

   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

   

2020

 

2019

 

2019

 

2019

 

2019

Common Share and Per Common Share Data

                                       

Net income, basic

  $ 0.34     $ 0.55     $ 0.50     $ 0.42     $ 0.46  

Weighted average shares, basic

    4,950,887       4,968,574       4,966,641       4,963,737       4,960,264  

Net income, diluted

  $ 0.34     $ 0.55     $ 0.50     $ 0.42     $ 0.46  

Weighted average shares, diluted

    4,955,970       4,972,535       4,969,126       4,965,822       4,964,134  

Shares outstanding at period end

    4,849,692       4,969,716       4,968,277       4,964,824       4,963,487  

Tangible book value at period end

  $ 16.17     $ 15.50     $ 15.11     $ 14.60     $ 13.97  

Cash dividends

  $ 0.11     $ 0.09     $ 0.09     $ 0.09     $ 0.09  
                                         

Key Performance Ratios

                                       

Return on average assets

    0.85 %     1.36 %     1.27 %     1.08 %     1.21 %

Return on average equity

    8.72 %     14.10 %     13.31 %     11.76 %     13.47 %

Net interest margin

    3.77 %     3.79 %     3.87 %     3.88 %     3.97 %

Efficiency ratio (1)

    66.50 %     60.50 %     65.65 %     67.94 %     67.23 %
                                         

Average Balances

                                       

Average assets

  $ 806,609     $ 795,391     $ 780,376     $ 773,574     $ 757,910  

Average earning assets

    755,173       745,721       730,865       724,909       709,690  

Average shareholders’ equity

    78,659       76,424       74,291       71,124       68,089  
                                         

Asset Quality

                                       

Loan charge-offs

  $ 328     $ 281     $ 156     $ 219     $ 228  

Loan recoveries

    78       53       73       68       165  

Net charge-offs

    250       228       83       151       63  

Non-accrual loans

    1,522       1,459       1,566       1,775       1,915  

Other real estate owned, net

                             

Nonperforming assets

    1,522       1,459       1,566       1,775       1,915  

Loans 30 to 89 days past due, accruing

    2,901       2,372       902       792       1,002  

Loans over 90 days past due, accruing

    86       97       113       19       133  

Troubled debt restructurings, accruing

                            259  

Special mention loans

    6,058       6,069       1,458       2,610       1,910  

Substandard loans, accruing

    4,368       3,410       3,758       2,825       3,132  
                                         

Capital Ratios (2)

                                       

Total capital

  $ 86,849     $ 85,439     $ 83,591     $ 82,078     $ 80,780  

Tier 1 capital

    81,265       80,505       78,679       77,083       75,834  

Common equity tier 1 capital

    81,265       80,505       78,679       77,083       75,834  
Total capital to risk-weighted assets     14.98 %     14.84 %     14.57 %     14.24 %     14.49 %
Tier 1 capital to risk-weighted assets     14.02 %     13.99 %     13.71 %     13.37 %     13.60 %
Common equity tier 1 capital to risk-weighted assets     14.02 %     13.99 %     13.71 %     13.37 %     13.60 %

Leverage ratio

    10.08 %     10.13 %     10.09 %     9.96 %     10.01 %

 

 

 

 

FIRST NATIONAL CORPORATION

Quarterly Performance Summary

(in thousands, except share and per share data)

 

   

(unaudited)

   

For the Quarter Ended

   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

   

2020

 

2019

 

2019

 

2019

 

2019

Balance Sheet

                                       

Cash and due from banks

  $ 30,551     $ 9,675     $ 11,885     $ 12,354     $ 10,862  

Interest-bearing deposits in banks

    17,539       36,110       18,488       10,716       31,833  

Securities available for sale, at fair value

    128,660       120,983       114,568       119,510       121,202  

Securities held to maturity, at amortized cost

    17,086       17,627       18,222       18,828       19,489  

Restricted securities, at cost

    1,848       1,806       1,806       1,701       1,701  

Loans held for sale

    621       167       1,098       675       200  

Loans, net of allowance for loan losses

    576,283       569,412       566,341       569,959       545,529  

Premises and equipment, net

    19,619       19,747       19,946       20,182       20,282  

Accrued interest receivable

    2,124       2,065       2,053       2,163       2,143  

Bank owned life insurance

    17,562       17,447       17,324       17,193       17,094  

Core deposit intangibles, net

    118       170       231       302       382  

Other assets

    4,401       4,839       5,231       4,801       4,361  

Total assets

  $ 816,412     $ 800,048     $ 777,193     $ 778,384     $ 775,078  
                                         

Noninterest-bearing demand deposits

  $ 197,662     $ 189,623     $ 189,797     $ 186,553     $ 189,261  

Savings and interest-bearing demand deposits

    407,555       399,255       376,047       385,399       377,673  

Time deposits

    115,410       117,564       119,777       117,863       117,290  

Total deposits

  $ 720,627     $ 706,442     $ 685,621     $ 689,815     $ 684,224  

Other borrowings

                            5,000  

Subordinated debt

    4,987       4,983       4,978       4,974       4,969  

Junior subordinated debt

    9,279       9,279       9,279       9,279       9,279  

Accrued interest payable and other liabilities

    3,001       2,125       1,999       1,507       1,878  

Total liabilities

  $ 737,894     $ 722,829     $ 701,877     $ 705,575     $ 705,350  
                                         

Preferred stock

  $     $     $     $     $  

Common stock

    6,062       6,212       6,210       6,206       6,204  

Surplus

    5,899       7,700       7,648       7,566       7,515  

Retained earnings

    63,741       62,583       60,314       58,268       56,629  

Accumulated other comprehensive income (loss), net

    2,816       724       1,144       769       (620 )

Total shareholders’ equity

  $ 78,518     $ 77,219     $ 75,316     $ 72,809     $ 69,728  

Total liabilities and shareholders’ equity

  $ 816,412     $ 800,048     $ 777,193     $ 778,384     $ 775,078  
                                         

Loan Data

                                       

Mortgage loans on real estate:

                                       

Construction and land development

  $ 40,279     $ 43,164     $ 45,193     $ 46,281     $ 48,948  

Secured by farmland

    888       900       916       855       883  

Secured by 1-4 family residential

    230,980       229,438       226,828       225,820       217,527  

Other real estate loans

    240,486       235,655       232,151       236,515       220,513  

Loans to farmers (except those secured by real estate)

    1,221       1,423       1,461       1,006       806  

Commercial and industrial loans (except those secured by real estate)

    54,287       48,730       49,096       48,347       45,239  

Consumer installment loans

    9,505       10,400       11,040       11,572       11,890  

Deposit overdrafts

    238       374       263       208       204  

All other loans

    3,983       4,262       4,305       4,350       4,465  

Total loans

  $ 581,867     $ 574,346     $ 571,253     $ 574,954     $ 550,475  

Allowance for loan losses

    (5,584 )     (4,934 )     (4,912 )     (4,995 )     (4,946 )

Loans, net

  $ 576,283     $ 569,412     $ 566,341     $ 569,959     $ 545,529  

 

 

 

 

FIRST NATIONAL CORPORATION

Quarterly Performance Summary

(in thousands, except share and per share data)

 

   

(unaudited)

   

For the Quarter Ended

   

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

   

2020

 

2019

 

2019

 

2019

 

2019

Reconciliation of Tax-Equivalent Net Interest Income

                                       

GAAP measures:

                                       

Interest income – loans

  $ 7,203     $ 7,333     $ 7,429     $ 7,200     $ 6,996  

Interest income – investments and other

    965       973       925       1,014       1,027  

Interest expense – deposits

    (962 )     (1,042 )     (1,089 )     (1,051 )     (922 )
Interest expense – federal funds purchased                 (1 )            

Interest expense – subordinated debt

    (90 )     (91 )     (90 )     (90 )     (89 )

Interest expense – junior subordinated debt

    (90 )     (98 )     (103 )     (108 )     (111 )

Interest expense – other borrowings

                            (2 )

Total net interest income

  $ 7,026     $ 7,075     $ 7,071     $ 6,965     $ 6,899  

Non-GAAP measures:

                                       

Tax benefit realized on non-taxable interest income – loans

  $ 10     $ 10     $ 9     $ 10     $ 11  

Tax benefit realized on non-taxable interest income – municipal securities

    40       41       43       42       41  

Total tax benefit realized on non-taxable interest income

  $ 50     $ 51     $ 52     $ 52     $ 52  

Total tax-equivalent net interest income

  $ 7,076     $ 7,126     $ 7,123     $ 7,017     $ 6,951  

 

 

 

(1) The efficiency ratio is computed by dividing noninterest expense excluding other real estate owned income/expense, amortization of intangibles, and gains and losses on disposal of premises and equipment by the sum of net interest income on a tax-equivalent basis and noninterest income, excluding gains and losses on sales of securities.  Tax-equivalent net interest income is calculated by adding the tax benefit realized from interest income that is nontaxable to total interest income then subtracting total interest expense. The tax rate utilized in calculating the tax benefit is 21%. See the tables above for tax-equivalent net interest income and reconciliations of net interest income to tax-equivalent net interest income.  The efficiency ratio is a non-GAAP financial measure that management believes provides investors with important information regarding operational efficiency.  Such information is not prepared in accordance with U.S. generally accepted accounting principles (GAAP) and should not be construed as such.  Management believes; however, such financial information is meaningful to the reader in understanding operational performance, but cautions that such information not be viewed as a substitute for GAAP.

 

(2) All capital ratios reported are for First Bank.

 

 

 

(Back To Top)