First National Corporation (the “Company” or “First National”)
(NASDAQ: FXNC), the bank holding company of First Bank (the
“Bank”), reported unaudited consolidated net income of $2.4
million, or $0.50 per diluted share, for the first quarter of 2021,
which resulted in return on average assets of 1.00% and return on
average equity of 11.53%. This compares to net income of $1.7
million, or $0.34 per diluted share, and return on average assets
of 0.85% and return on average equity of 8.72% for the first
quarter of 2020.
During the first quarter of 2021, the Company entered into an
agreement to acquire The Bank of Fincastle (the “Merger”) and
incurred merger related expenses totaling $405 thousand. The merger
related expenses were comprised of legal and professional fees and
had a $0.07 per share impact to basic and diluted earnings per
share for the period.
Key highlights of the first quarter of 2021 are as follows.
Comparisons are to the corresponding period in the prior year
unless otherwise stated:
|
• |
Merger related expenses totaled $405 thousand, which impacted
earnings per share by $0.07 |
|
• |
Return on average assets of
1.00% |
|
• |
Return on average equity of
11.53% |
|
• |
Efficiency ratio of
64.53% |
|
• |
Net interest income increased
$486 thousand, or 7% |
|
• |
Wealth management revenue
increased $118 thousand, or 22% |
|
• |
Tangible book value increased
9% to $17.65 per share |
“During the first quarter, our banking company exceeded $1.0
billion in assets, announced an agreement to acquire The Bank of
Fincastle, absorbed merger related expenses, and delivered
excellent financial results,” said Scott Harvard, president and
chief executive officer of First National. Harvard continued, “The
entire team continues to adopt more efficient delivery processes
resulting in the highest levels of productivity in our history.
During the quarter, customers continued to take advantage of Bank’s
digital delivery channels as the number of accounts opened online
increased 88% when compared to same period of 2020 and represented
10% of all accounts opened in the quarter. Growth in net
interest income combined with diligent expense management also
positively contributed to profitability.”
COVID-19 PANDEMIC UPDATE
Operations
During the first quarter, the Bank continued to follow its
Pandemic Plan that strives to protect the health of its employees
and customers, while continuing to deliver essential banking
services. In response to vaccinations that continued to be provided
to thousands of people in our market areas, and the decrease in the
number of COVID-19 cases in our communities, the Bank entered phase
two of its plan in late March 2021 after operating in phase one
since early December 2020. After operating for almost four months
primarily through branch drive throughs, ATMs, and mobile and
internet banking platforms, lobbies re-opened for walk-in customers
to conduct their banking business.
Paycheck Protection Program
The Bank continued to participate as a lender in the U.S. Small
Business Administration’s (“SBA”) Paycheck Protection Program
(“PPP”) to support local small businesses and non-profit
organizations by providing forgivable loans. During the second and
third quarters of 2020, the Bank originated $76.6 million of PPP
loans, received $2.5 million of loan fees from the SBA, and
incurred $535 thousand of loan origination costs. The PPP stopped
accepting applications in August of 2020. The loan fees continue to
be accreted into earnings evenly over the life of the loans, net of
loan origination costs, through interest and fees on loans. PPP
loans originated in 2020 totaled $46.5 at March 31, 2021, and 99%
of the PPP loan balances are scheduled to mature in the second
quarter of 2022.
Congress revived the PPP as part of the COVID-19 relief
bill that was signed into law on December 27, 2020. The Bank
began participating again as a lender in the PPP in January of
2021. During the first quarter of 2021, the Bank originated $19.8
million of PPP loans and incurred $51 thousand of loan origination
costs. First Bank expects to receive $1.1 million of loan fees from
the SBA as a result of the loan originations. Like the PPP loans
originated in 2020, loan fees received will be accreted into
earnings evenly over the life of the loans, net of loan origination
costs, through interest and fees on loans. PPP loans that were
originated in 2021 totaled $19.8 million at March 31, 2021, and
100% of the PPP loan balances are scheduled to mature in the first
quarter of 2026.
Asset Quality Impact
The pandemic has negatively impacted the financial condition of
certain loan customers. The Bank expects customers in certain
sectors of its commercial real estate loan portfolio, including
retail shopping, lodging and leisure, may experience elevated
financial pressure in future periods. Those sectors comprised 5%,
4% and 2% of the loan portfolio, respectively, excluding PPP loans,
at March 31, 2021. The Bank also expects that loans in those same
sectors of its commercial and industrial loan portfolio may also
experience financial pressure in future periods. The magnitude of
the potential decline in the Bank’s loan quality in future periods
will likely depend on the duration of the pandemic and the extent
that the Bank’s customers experience business interruptions.
Loan Modifications
In response to the unknown impact of the pandemic on the economy
and its customers, the Bank created and implemented a loan payment
deferral program for individual and business customers beginning in
the first quarter of 2020, which provided them the opportunity to
defer monthly payments for 90 days. By June 30, 2020, loans
participating in the program reached $182.6 million. The majority
of these loans resumed regular payments during the second half of
2020 after their deferral periods ended. There were no loans
remaining in the program at March 31, 2021.
During the fourth quarter of 2020, the Bank modified terms of
certain loans for customers that continued to be negatively
impacted by the pandemic by lowering borrower’s loan payments with
interest only payments for periods ranging between 6 and 24 months.
Modified loans totaled $14.3 million at March 31, 2021, with $14.2
million in the Bank’s commercial real estate loan portfolio and $83
thousand in the commercial and industrial loans portfolio. The
loans were comprised of $12.8 million in the lodging sector and
$1.5 million in the leisure sector.
Capital
The Company issued $5.0 million of subordinated debt in June
2020 as a result of its risk management program and capital
planning. The purpose of the issuance was primarily to further
strengthen holding company liquidity and to remain a source of
strength for the Bank in the event of a severe economic downturn.
The Company may also use the proceeds of the issuance for general
corporate purposes, including the potential repayment of the
Company’s subordinated debt that was issued in 2015 and became
callable on a quarterly basis beginning January 1, 2021. The
Company issued the debt with a 5.50% fixed-to-floating rate
subordinated note due 2030 to an institutional investor and was
structured to qualify as Tier 2 capital under bank regulatory
guidelines.
After being suspended for most of 2020, the Company’s stock
repurchase plan ended on December 31, 2020. The Company has not
authorized another stock repurchase plan due to the continued
uncertainty and potential impact of the pandemic on the economy and
the Bank’s customers. The Company continued to pay cash dividends
on common stock of $0.11 per share throughout 2020, and in February
2021, it declared a quarterly cash dividend on common stock of
$0.12 per share, which was a 9% increase.
BALANCE SHEET
Total assets of First National increased $211.7 million, or 26%,
to $1.0 billion at March 31, 2021, compared to $816.4 million at
March 31, 2020. Interest-bearing deposits in banks increased $146.8
million, total securities increased $27.2 million, or 18%, and
loans, net of the allowance for loan losses, increased $54.4
million, or 9%. These increases were partially offset by a $19
thousand decrease in cash and due from banks. The growth in the
loan portfolio included PPP loans that totaled $66.2 million at the
end of the first quarter.
Total liabilities increased $204.3 million, or 28%, to $942.2
million at March 31, 2021, compared to $737.9 million one year ago.
The increase in total liabilities was primarily attributable to
significant growth in deposits. Total deposits increased $195.4
million, or 27%, to $916.1 million. Noninterest-bearing demand
deposits increased $94.6 million, or 48%, savings and
interest-bearing demand deposits increased $118.5 million, or 29%,
while time deposits decreased $17.6 million, or 15%. The
origination of PPP loans during the last twelve-month period
contributed to the deposit growth as many customers deposited
proceeds of the loans in their deposit accounts at the Bank.
Although proceeds from PPP loan originations contributed to the
increase in deposits, the Bank also experienced a significant
amount of deposit growth that was not related to proceeds from PPP
loan originations.
Shareholders’ equity increased $7.4 million, or 9%, to $85.9
million at March 31, 2021, compared to one year ago, primarily from
an increase in retained earnings. The Bank was considered
well-capitalized at March 31, 2021.
PERFORMANCE ANALYSIS OF THE THREE-MONTH
PERIOD
Net interest income increased $486 thousand, or 7%, to $7.5
million for the first quarter of 2021, compared to the same period
of 2020. The increase resulted from a $559 thousand, or 49%,
decrease in total interest expense, which was partially offset by a
$73 thousand decrease in total interest and dividend income. The
net interest margin decreased 50 basis points to 3.27%. The
decrease in the net interest margin was offset by growth in average
earning assets of $182.0 million, or 24%, and resulted in an
increase in net interest income.
The decrease in interest expense was primarily a result of a
$599 thousand, or 62%, decrease in interest expense on deposits,
which was attributable to reduced interest rates paid on deposits.
The impact of an $88.6 million, or 17% increase in average
interest-bearing deposits was offset by a 51-basis point decrease
in the cost of interest-bearing deposits. A 42-basis point
reduction of the cost of interest-bearing checking accounts and a
96-basis point reduction of the cost of money market accounts made
the largest contributions to the decrease in interest
expense.
The decrease in total interest and dividend income resulted from
an 85-basis point decrease in the yield on earning assets, which
was partially offset by a $182.0 million, or 24%, increase in
average earning assets. The decrease in the yield on earning assets
resulted from a 46-basis point decrease in the yield on loans and a
120-basis point decrease in the yield on interest-bearing deposits
in banks. The loan yield was negatively impacted by PPP loans
earning a 1.00% interest rate. Additionally, the mix of earning
assets had an unfavorable impact on the yield on average earning
assets as lower yielding interest-bearing deposits in banks
increased from 5% to 15% of average earning assets.
Noninterest income increased $44 thousand, or 2%, to $2.1
million compared to the same period of 2020. Service charges on
deposits decreased $239 thousand, or 35%, which was offset by ATM
and check card fees that increased $82 thousand, or 16%, wealth
management fees that increased $118 thousand, or 22%, and fees for
other customer services that increased $79 thousand, or 38%. The
decrease in service charges on deposits resulted from a reduction
in overdraft fee income, which the Bank believes may have resulted
from the significant increase in deposit balances over the last
twelve months. Wealth management fees increased from a higher
amount of assets under management, and fees for other customer
services increased primarily from fee revenue on brokered mortgage
loans sold to the secondary market.
Noninterest expense increased $506 thousand, or 8%, to $6.7
million, compared to the same period one year ago. The increase was
primarily attributable to a $458 thousand increase in legal and
professional fees, which included merger related expenses of $405
thousand.
ASSET QUALITY/LOAN LOSS PROVISION
There was no provision for loan losses for the first quarter of
2021, which was attributable to net recoveries of loans previously
charged off and no significant changes to the general and specific
reserve components of the allowance for loan losses. Net recoveries
totaled $1 thousand for the quarter compared to net charge-offs of
$250 thousand for the same period one year ago. The allowance for
loan losses totaled $7.5 million, or 1.17% of total loans at March
31, 2021. Excluding PPP loans, the allowance for loan losses
totaled 1.30% of total loans. Provision for loan losses totaled
$900 thousand for the same period of 2020 and the allowance for
loan losses totaled $5.6 million, or 0.96% of total loans at March
31, 2020.
Loans 30 to 89 days past due and accruing totaled $906 thousand,
or 0.14% of total loans at March 31, 2021 compared to $2.9 million,
or 0.50% of total loans one year ago. Accruing substandard loans
totaled $1.3 million at March 31, 2021 and $4.4 million at March
31, 2020. Nonperforming assets consisted only of non-accrual loans
and totaled $6.8 million, or 0.66% of total assets at March 31.
2021, compared to $1.5 million, or 0.19% of total assets one year
ago.
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, 2020, 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 |
sharvard@fbvirginia.com |
sbell@fbvirginia.com |
FIRST NATIONAL CORPORATIONQuarterly
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, |
|
|
|
2021 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
Income Statement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on loans |
|
$ |
7,143 |
|
|
$ |
7,310 |
|
|
$ |
7,568 |
|
|
$ |
7,416 |
|
|
$ |
7,203 |
|
Interest on deposits in banks |
|
|
33 |
|
|
|
31 |
|
|
|
25 |
|
|
|
16 |
|
|
|
118 |
|
Interest on securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable interest |
|
|
717 |
|
|
|
567 |
|
|
|
575 |
|
|
|
636 |
|
|
|
670 |
|
Tax-exempt interest |
|
|
180 |
|
|
|
163 |
|
|
|
152 |
|
|
|
151 |
|
|
|
151 |
|
Dividends |
|
|
22 |
|
|
|
24 |
|
|
|
23 |
|
|
|
26 |
|
|
|
26 |
|
Total interest income |
|
$ |
8,095 |
|
|
$ |
8,095 |
|
|
$ |
8,343 |
|
|
$ |
8,245 |
|
|
$ |
8,168 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposits |
|
$ |
363 |
|
|
$ |
410 |
|
|
$ |
541 |
|
|
$ |
676 |
|
|
$ |
962 |
|
Interest on subordinated debt |
|
|
154 |
|
|
|
160 |
|
|
|
160 |
|
|
|
91 |
|
|
|
90 |
|
Interest on junior subordinated debt |
|
|
66 |
|
|
|
68 |
|
|
|
68 |
|
|
|
67 |
|
|
|
90 |
|
Total interest expense |
|
$ |
583 |
|
|
$ |
638 |
|
|
$ |
769 |
|
|
$ |
834 |
|
|
$ |
1,142 |
|
Net interest income |
|
$ |
7,512 |
|
|
$ |
7,457 |
|
|
$ |
7,574 |
|
|
$ |
7,411 |
|
|
$ |
7,026 |
|
Provision for (recovery of)
loan losses |
|
|
— |
|
|
|
(200 |
) |
|
|
1,500 |
|
|
|
800 |
|
|
|
900 |
|
Net interest income after
provision for (recovery of) loan losses |
|
$ |
7,512 |
|
|
$ |
7,657 |
|
|
$ |
6,074 |
|
|
$ |
6,611 |
|
|
$ |
6,126 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit accounts |
|
$ |
442 |
|
|
$ |
553 |
|
|
$ |
446 |
|
|
$ |
348 |
|
|
$ |
681 |
|
ATM and check card fees |
|
|
601 |
|
|
|
576 |
|
|
|
669 |
|
|
|
550 |
|
|
|
519 |
|
Wealth management fees |
|
|
643 |
|
|
|
598 |
|
|
|
573 |
|
|
|
512 |
|
|
|
525 |
|
Fees for other customer services |
|
|
286 |
|
|
|
216 |
|
|
|
323 |
|
|
|
237 |
|
|
|
207 |
|
Income from bank owned life insurance |
|
|
113 |
|
|
|
124 |
|
|
|
131 |
|
|
|
99 |
|
|
|
115 |
|
Net gains on securities |
|
|
37 |
|
|
|
2 |
|
|
|
38 |
|
|
|
— |
|
|
|
— |
|
Net gains on sale of loans |
|
|
7 |
|
|
|
10 |
|
|
|
3 |
|
|
|
26 |
|
|
|
31 |
|
Other operating income |
|
|
14 |
|
|
|
73 |
|
|
|
18 |
|
|
|
1 |
|
|
|
21 |
|
Total noninterest income |
|
$ |
2,143 |
|
|
$ |
2,152 |
|
|
$ |
2,201 |
|
|
$ |
1,773 |
|
|
$ |
2,099 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
$ |
3,555 |
|
|
$ |
3,212 |
|
|
$ |
3,498 |
|
|
$ |
3,022 |
|
|
$ |
3,589 |
|
Occupancy |
|
|
447 |
|
|
|
422 |
|
|
|
433 |
|
|
|
409 |
|
|
|
402 |
|
Equipment |
|
|
431 |
|
|
|
440 |
|
|
|
439 |
|
|
|
418 |
|
|
|
410 |
|
Marketing |
|
|
106 |
|
|
|
112 |
|
|
|
63 |
|
|
|
74 |
|
|
|
106 |
|
Supplies |
|
|
88 |
|
|
|
90 |
|
|
|
112 |
|
|
|
103 |
|
|
|
89 |
|
Legal and professional fees |
|
|
737 |
|
|
|
310 |
|
|
|
262 |
|
|
|
301 |
|
|
|
279 |
|
ATM and check card expense |
|
|
231 |
|
|
|
253 |
|
|
|
259 |
|
|
|
223 |
|
|
|
245 |
|
FDIC assessment |
|
|
69 |
|
|
|
105 |
|
|
|
52 |
|
|
|
60 |
|
|
|
30 |
|
Bank franchise tax |
|
|
168 |
|
|
|
161 |
|
|
|
162 |
|
|
|
161 |
|
|
|
153 |
|
Data processing expense |
|
|
204 |
|
|
|
196 |
|
|
|
191 |
|
|
|
188 |
|
|
|
184 |
|
Amortization expense |
|
|
14 |
|
|
|
24 |
|
|
|
33 |
|
|
|
42 |
|
|
|
52 |
|
Other operating expense |
|
|
600 |
|
|
|
569 |
|
|
|
631 |
|
|
|
612 |
|
|
|
605 |
|
Total noninterest expense |
|
$ |
6,650 |
|
|
$ |
5,894 |
|
|
$ |
6,135 |
|
|
$ |
5,613 |
|
|
$ |
6,144 |
|
Income before income
taxes |
|
$ |
3,005 |
|
|
$ |
3,915 |
|
|
$ |
2,140 |
|
|
$ |
2,771 |
|
|
$ |
2,081 |
|
Income tax expense |
|
|
569 |
|
|
|
759 |
|
|
|
386 |
|
|
|
528 |
|
|
|
376 |
|
Net income |
|
$ |
2,436 |
|
|
$ |
3,156 |
|
|
$ |
1,754 |
|
|
$ |
2,243 |
|
|
$ |
1,705 |
|
FIRST NATIONAL CORPORATIONQuarterly
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, |
|
|
|
2021 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
Common Share and Per Common Share Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, basic |
|
$ |
0.50 |
|
|
$ |
0.65 |
|
|
$ |
0.36 |
|
|
$ |
0.46 |
|
|
$ |
0.34 |
|
Weighted average shares,
basic |
|
|
4,863,823 |
|
|
|
4,858,288 |
|
|
|
4,854,144 |
|
|
|
4,849,719 |
|
|
|
4,950,887 |
|
Net income, diluted |
|
$ |
0.50 |
|
|
$ |
0.65 |
|
|
$ |
0.36 |
|
|
$ |
0.46 |
|
|
$ |
0.34 |
|
Weighted average shares,
diluted |
|
|
4,872,097 |
|
|
|
4,861,208 |
|
|
|
4,854,649 |
|
|
|
4,849,719 |
|
|
|
4,955,970 |
|
Shares outstanding at period
end |
|
|
4,868,462 |
|
|
|
4,860,399 |
|
|
|
4,858,217 |
|
|
|
4,852,187 |
|
|
|
4,849,692 |
|
Tangible book value at period
end |
|
$ |
17.65 |
|
|
$ |
17.47 |
|
|
$ |
16.92 |
|
|
$ |
16.63 |
|
|
$ |
16.17 |
|
Cash dividends |
|
$ |
0.12 |
|
|
$ |
0.11 |
|
|
$ |
0.11 |
|
|
$ |
0.11 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Performance
Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
1.00 |
% |
|
|
1.31 |
% |
|
|
0.74 |
% |
|
|
1.00 |
% |
|
|
0.85 |
% |
Return on average equity |
|
|
11.53 |
% |
|
|
15.03 |
% |
|
|
8.52 |
% |
|
|
11.30 |
% |
|
|
8.72 |
% |
Net interest margin |
|
|
3.27 |
% |
|
|
3.30 |
% |
|
|
3.41 |
% |
|
|
3.59 |
% |
|
|
3.77 |
% |
Efficiency ratio (1) |
|
|
64.53 |
% |
|
|
61.00 |
% |
|
|
62.35 |
% |
|
|
60.34 |
% |
|
|
66.50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
Balances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average assets |
|
$ |
988,324 |
|
|
$ |
954,810 |
|
|
$ |
944,390 |
|
|
$ |
899,301 |
|
|
$ |
806,609 |
|
Average earning assets |
|
|
937,199 |
|
|
|
904,511 |
|
|
|
889,127 |
|
|
|
836,741 |
|
|
|
755,173 |
|
Average shareholders’
equity |
|
|
85,708 |
|
|
|
83,545 |
|
|
|
81,894 |
|
|
|
79,845 |
|
|
|
78,659 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan charge-offs |
|
$ |
66 |
|
|
$ |
165 |
|
|
$ |
115 |
|
|
$ |
176 |
|
|
$ |
328 |
|
Loan recoveries |
|
|
67 |
|
|
|
73 |
|
|
|
96 |
|
|
|
88 |
|
|
|
78 |
|
Net charge-offs
(recoveries) |
|
|
(1 |
) |
|
|
92 |
|
|
|
19 |
|
|
|
88 |
|
|
|
250 |
|
Non-accrual loans |
|
|
6,814 |
|
|
|
6,714 |
|
|
|
6,974 |
|
|
|
1,480 |
|
|
|
1,522 |
|
Other real estate owned,
net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Nonperforming assets |
|
|
6,814 |
|
|
|
6,714 |
|
|
|
6,974 |
|
|
|
1,480 |
|
|
|
1,522 |
|
Loans 30 to 89 days past due,
accruing |
|
|
906 |
|
|
|
996 |
|
|
|
885 |
|
|
|
1,094 |
|
|
|
2,901 |
|
Loans over 90 days past due,
accruing |
|
|
— |
|
|
|
302 |
|
|
|
6 |
|
|
|
1 |
|
|
|
86 |
|
Troubled debt restructurings,
accruing |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,313 |
|
|
|
— |
|
Special mention loans |
|
|
— |
|
|
|
— |
|
|
|
510 |
|
|
|
2,034 |
|
|
|
6,058 |
|
Substandard loans,
accruing |
|
|
1,343 |
|
|
|
1,394 |
|
|
|
3,804 |
|
|
|
8,616 |
|
|
|
4,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Ratios
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital |
|
$ |
94,044 |
|
|
$ |
91,243 |
|
|
$ |
89,155 |
|
|
$ |
88,109 |
|
|
$ |
86,849 |
|
Tier 1 capital |
|
|
86,717 |
|
|
|
84,032 |
|
|
|
81,883 |
|
|
|
81,813 |
|
|
|
81,265 |
|
Common equity tier 1
capital |
|
|
86,717 |
|
|
|
84,032 |
|
|
|
81,883 |
|
|
|
81,813 |
|
|
|
81,265 |
|
Total capital to risk-weighted
assets |
|
|
16.05 |
% |
|
|
15.82 |
% |
|
|
15.34 |
% |
|
|
15.20 |
% |
|
|
14.98 |
% |
Tier 1 capital to
risk-weighted assets |
|
|
14.80 |
% |
|
|
14.57 |
% |
|
|
14.09 |
% |
|
|
14.11 |
% |
|
|
14.02 |
% |
Common equity tier 1 capital
to risk-weighted assets |
|
|
14.80 |
% |
|
|
14.57 |
% |
|
|
14.09 |
% |
|
|
14.11 |
% |
|
|
14.02 |
% |
Leverage ratio |
|
|
8.78 |
% |
|
|
8.80 |
% |
|
|
8.67 |
% |
|
|
9.08 |
% |
|
|
10.08 |
% |
FIRST NATIONAL CORPORATIONQuarterly
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, |
|
|
|
2021 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
Balance Sheet |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
|
$ |
11,940 |
|
|
$ |
13,115 |
|
|
$ |
13,349 |
|
|
$ |
17,717 |
|
|
$ |
30,551 |
|
Interest-bearing deposits in
banks |
|
|
164,322 |
|
|
|
114,182 |
|
|
|
108,857 |
|
|
|
90,562 |
|
|
|
17,539 |
|
Securities available for sale,
at fair value |
|
|
159,742 |
|
|
|
140,225 |
|
|
|
117,132 |
|
|
|
123,193 |
|
|
|
128,660 |
|
Securities held to maturity,
at amortized cost |
|
|
13,424 |
|
|
|
14,234 |
|
|
|
15,101 |
|
|
|
16,211 |
|
|
|
17,086 |
|
Restricted securities, at
cost |
|
|
1,631 |
|
|
|
1,875 |
|
|
|
1,848 |
|
|
|
1,848 |
|
|
|
1,848 |
|
Loans held for sale |
|
|
— |
|
|
|
245 |
|
|
|
— |
|
|
|
170 |
|
|
|
621 |
|
Loans, net of allowance for
loan losses |
|
|
630,716 |
|
|
|
622,429 |
|
|
|
640,591 |
|
|
|
645,220 |
|
|
|
576,283 |
|
Premises and equipment,
net |
|
|
19,087 |
|
|
|
19,319 |
|
|
|
19,548 |
|
|
|
19,792 |
|
|
|
19,619 |
|
Accrued interest
receivable |
|
|
2,609 |
|
|
|
2,717 |
|
|
|
3,156 |
|
|
|
3,863 |
|
|
|
2,124 |
|
Bank owned life insurance |
|
|
18,029 |
|
|
|
17,916 |
|
|
|
17,792 |
|
|
|
17,661 |
|
|
|
17,562 |
|
Core deposit intangibles,
net |
|
|
5 |
|
|
|
19 |
|
|
|
43 |
|
|
|
76 |
|
|
|
118 |
|
Other assets |
|
|
6,625 |
|
|
|
4,656 |
|
|
|
5,316 |
|
|
|
5,777 |
|
|
|
4,401 |
|
Total assets |
|
$ |
1,028,130 |
|
|
$ |
950,932 |
|
|
$ |
942,733 |
|
|
$ |
942,090 |
|
|
$ |
816,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand
deposits |
|
$ |
292,280 |
|
|
$ |
263,229 |
|
|
$ |
256,733 |
|
|
$ |
253,974 |
|
|
$ |
197,662 |
|
Savings and interest-bearing
demand deposits |
|
|
526,012 |
|
|
|
479,035 |
|
|
|
480,017 |
|
|
|
470,764 |
|
|
|
407,555 |
|
Time deposits |
|
|
97,765 |
|
|
|
100,197 |
|
|
|
101,645 |
|
|
|
114,277 |
|
|
|
115,410 |
|
Total deposits |
|
$ |
916,057 |
|
|
$ |
842,461 |
|
|
$ |
838,395 |
|
|
$ |
839,015 |
|
|
$ |
720,627 |
|
Subordinated debt |
|
|
9,992 |
|
|
|
9,991 |
|
|
|
9,987 |
|
|
|
9,982 |
|
|
|
4,987 |
|
Junior subordinated debt |
|
|
9,279 |
|
|
|
9,279 |
|
|
|
9,279 |
|
|
|
9,279 |
|
|
|
9,279 |
|
Accrued interest payable and
other liabilities |
|
|
6,876 |
|
|
|
4,285 |
|
|
|
2,816 |
|
|
|
3,026 |
|
|
|
3,001 |
|
Total liabilities |
|
$ |
942,204 |
|
|
$ |
866,016 |
|
|
$ |
860,477 |
|
|
$ |
861,302 |
|
|
$ |
737,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Common stock |
|
|
6,086 |
|
|
|
6,075 |
|
|
|
6,073 |
|
|
|
6,065 |
|
|
|
6,062 |
|
Surplus |
|
|
6,214 |
|
|
|
6,151 |
|
|
|
6,081 |
|
|
|
5,967 |
|
|
|
5,899 |
|
Retained earnings |
|
|
71,144 |
|
|
|
69,292 |
|
|
|
66,670 |
|
|
|
65,451 |
|
|
|
63,741 |
|
Accumulated other
comprehensive income, net |
|
|
2,482 |
|
|
|
3,398 |
|
|
|
3,432 |
|
|
|
3,305 |
|
|
|
2,816 |
|
Total shareholders’
equity |
|
$ |
85,926 |
|
|
$ |
84,916 |
|
|
$ |
82,256 |
|
|
$ |
80,788 |
|
|
$ |
78,518 |
|
Total liabilities and
shareholders’ equity |
|
$ |
1,028,130 |
|
|
$ |
950,932 |
|
|
$ |
942,733 |
|
|
$ |
942,090 |
|
|
$ |
816,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage loans on real
estate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction and land development |
|
$ |
25,720 |
|
|
$ |
27,328 |
|
|
$ |
27,472 |
|
|
$ |
31,981 |
|
|
$ |
40,279 |
|
Secured by farmland |
|
|
507 |
|
|
|
521 |
|
|
|
533 |
|
|
|
872 |
|
|
|
888 |
|
Secured by 1-4 family residential |
|
|
236,870 |
|
|
|
235,814 |
|
|
|
234,198 |
|
|
|
234,188 |
|
|
|
230,980 |
|
Other real estate loans |
|
|
248,357 |
|
|
|
246,362 |
|
|
|
249,786 |
|
|
|
247,623 |
|
|
|
240,486 |
|
Loans to farmers (except those
secured by real estate) |
|
|
436 |
|
|
|
637 |
|
|
|
1,120 |
|
|
|
711 |
|
|
|
1,221 |
|
Commercial and industrial
loans (except those secured by real estate) |
|
|
117,109 |
|
|
|
109,201 |
|
|
|
124,157 |
|
|
|
123,995 |
|
|
|
54,287 |
|
Consumer installment
loans |
|
|
5,684 |
|
|
|
6,458 |
|
|
|
7,378 |
|
|
|
8,401 |
|
|
|
9,505 |
|
Deposit overdrafts |
|
|
112 |
|
|
|
143 |
|
|
|
194 |
|
|
|
170 |
|
|
|
238 |
|
All other loans |
|
|
3,407 |
|
|
|
3,450 |
|
|
|
3,530 |
|
|
|
3,575 |
|
|
|
3,983 |
|
Total loans |
|
$ |
638,202 |
|
|
$ |
629,914 |
|
|
$ |
648,368 |
|
|
$ |
651,516 |
|
|
$ |
581,867 |
|
Allowance for loan losses |
|
|
(7,486 |
) |
|
|
(7,485 |
) |
|
|
(7,777 |
) |
|
|
(6,296 |
) |
|
|
(5,584 |
) |
Loans, net |
|
$ |
630,716 |
|
|
$ |
622,429 |
|
|
$ |
640,591 |
|
|
$ |
645,220 |
|
|
$ |
576,283 |
|
FIRST NATIONAL CORPORATIONQuarterly
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, |
|
|
|
2021 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
|
2020 |
|
Reconciliation of Tax-Equivalent Net Interest
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP measures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income – loans |
|
$ |
7,143 |
|
|
$ |
7,310 |
|
|
$ |
7,568 |
|
|
$ |
7,416 |
|
|
$ |
7,203 |
|
Interest income – investments and other |
|
|
952 |
|
|
|
785 |
|
|
|
775 |
|
|
|
829 |
|
|
|
965 |
|
Interest expense – deposits |
|
|
(363 |
) |
|
|
(410 |
) |
|
|
(541 |
) |
|
|
(676 |
) |
|
|
(962 |
) |
Interest expense – subordinated debt |
|
|
(154 |
) |
|
|
(160 |
) |
|
|
(160 |
) |
|
|
(91 |
) |
|
|
(90 |
) |
Interest expense – junior subordinated debt |
|
|
(66 |
) |
|
|
(68 |
) |
|
|
(68 |
) |
|
|
(67 |
) |
|
|
(90 |
) |
Total net interest income |
|
$ |
7,512 |
|
|
$ |
7,457 |
|
|
$ |
7,574 |
|
|
$ |
7,411 |
|
|
$ |
7,026 |
|
Non-GAAP measures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit realized on non-taxable interest income – loans |
|
$ |
8 |
|
|
$ |
8 |
|
|
$ |
8 |
|
|
$ |
8 |
|
|
$ |
10 |
|
Tax benefit realized on non-taxable interest income – municipal
securities |
|
|
48 |
|
|
|
43 |
|
|
|
41 |
|
|
|
40 |
|
|
|
40 |
|
Total tax benefit realized on
non-taxable interest income |
|
$ |
56 |
|
|
$ |
51 |
|
|
$ |
49 |
|
|
$ |
48 |
|
|
$ |
50 |
|
Total tax-equivalent net
interest income |
|
$ |
7,568 |
|
|
$ |
7,508 |
|
|
$ |
7,623 |
|
|
$ |
7,459 |
|
|
$ |
7,076 |
|
(1) The efficiency ratio is computed by dividing
noninterest expense excluding other real estate owned
income/expense, amortization of intangibles, gains and losses on
disposal of premises and equipment, and merger related
expenses 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.
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