Core Insights - First National Corporation reported a net loss of $933 thousand for Q4 2024, with a basic and diluted loss per share of $0.10, while adjusted operating earnings were $6.0 million, translating to adjusted earnings per share of $0.66 [1][2][34] - The year 2024 was marked by a significant acquisition of Touchstone Bankshares, which is expected to enhance operational performance and financial metrics [3][4] Financial Performance - For the year ended December 31, 2024, the company reported consolidated earnings of $7.0 million, with basic and diluted earnings per share of $1.00, and adjusted operating earnings of $14.6 million, leading to adjusted earnings per share of $2.10 [2][34] - Net interest income for Q4 2024 was $18.4 million, an increase of $6.6 million from the previous quarter, primarily due to a $545.3 million rise in average interest-earning assets [7][34] - Noninterest income rose to $6.4 million in Q4 2024, up from $3.2 million in the prior quarter, driven by a $2.9 million pre-tax bargain purchase gain from the acquisition [10][34] Acquisition Impact - The acquisition of Touchstone Bankshares on October 1, 2024, added $664.3 million in total assets and $614.6 million in total liabilities to First National's balance sheet [4][23] - The merger resulted in a preliminary bargain purchase gain of $2.9 million and increased the company's total assets to $2.0 billion, reflecting a 38.6% increase from the previous quarter [4][19][25] Asset Quality - As of December 31, 2024, loans past due greater than 30 days were 0.24% of total loans, unchanged from the previous quarter, while nonperforming assets decreased to 0.35% of total assets [13][14] - The allowance for credit losses on loans totaled $16.4 million, or 1.12% of total loans, down from 1.28% in the prior quarter [13][17] Balance Sheet Highlights - Total deposits increased to $1.80 billion, a rise of $550.5 million from the prior quarter, primarily due to the addition of deposits from the Touchstone acquisition [22][34] - Shareholders' equity reached $166.5 million, an increase of $41.4 million from the previous quarter, largely due to the issuance of 2.67 million shares related to the acquisition [25][34] Capital Ratios - As of December 31, 2024, the total capital ratio was 12.35%, while the Tier 1 capital ratio stood at 11.19% [26][34] - The efficiency ratio improved to 63.97% in Q4 2024, reflecting operational efficiencies gained from the merger [8][34]

Core Viewpoint - First National Corporation (FXNC) has increased its quarterly cash dividend by 3.3% to 15.5 cents per share, marking a consistent dividend growth over the past 10 years [1] Dividend Information - The new dividend will be paid on December 13, 2024, to shareholders of record as of November 29, 2024 [1] - FXNC's current dividend yield stands at 2.6%, based on a closing price of $23.80 as of November 15 [2] Capital Distribution Activities - FXNC currently does not have an active share repurchase program, with the previous plan allowing for the buyback of up to $5 million worth of shares expiring on December 31, 2023 [3] - The company had a prior repurchase plan in December 2019, which also authorized $5 million and expired in December 2020 [3] Financial Position - As of September 30, 2024, FXNC reported cash and cash equivalents of $126.5 million, net loans of $982 million, and total deposits of $1.3 billion [4] - The common equity Tier-1 capital ratio was 13%, and the total capital ratio was 14.3%, both exceeding regulatory requirements [4] Outlook - Given its solid capital and liquidity positions, FXNC is expected to maintain its current capital distribution activities and enhance shareholder value [5] - Year-to-date, FXNC shares have increased by 9.4%, while the industry has seen a growth of 29% [6]

Core Points - First National Corporation declared a quarterly cash dividend of $0.155 per share, marking a 3% increase from the previous quarter [1] - This is the tenth consecutive year that the company has increased its dividend to shareholders [1] - The dividend is scheduled to be paid on December 13, 2024, to shareholders of record as of November 29, 2024 [1] Company Overview - First National Corporation (NASDAQ: FXNC) is the parent company of First Bank, a community bank established in 1907 in Strasburg, Virginia [3] - The bank provides a range of loan and deposit products and services through various channels, including its website, mobile banking platform, ATMs, loan production offices, and thirty-three branch locations [3] - In addition to traditional banking services, the bank operates a wealth management division and owns First Bank Financial Services, Inc., which provides title insurance services [3]

Core Viewpoint - The article emphasizes the importance of identifying and sustaining stock price trends for successful short-term investing, highlighting the need for strong fundamentals and positive earnings revisions to maintain momentum [1][2]. Group 1: Stock Performance - First National Corp. (FXNC) has shown a solid price increase of 33.9% over the past 12 weeks, indicating strong investor interest [4]. - The stock has also increased by 19.5% in the last four weeks, suggesting that the upward trend is still intact [5]. - FXNC is currently trading at 94.7% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - FXNC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The article suggests using the "Recent Price Strength" screen to identify stocks like FXNC that are on an uptrend supported by strong fundamentals [3]. - It also mentions that there are over 45 Zacks Premium Screens available for investors to find winning stock picks based on their personal investing styles [8].

Exhibit 99.1 First National Corporation Reports Third Quarter 2024 Financial Results STRASBURG, Va., November 1, 2024 --- First National Corporation (the "Company" or "First National") (NASDAQ: FXNC), reported unaudited consolidated net income of $2.2 million and basic and diluted earnings per common share of $0.36 for the third quarter of 2024 and adjusted net income(1) of $2.4 million and adjusted basic and diluted earnings per common share(1) of $0.39. | --- | --- | --- | --- | --- | --- | --- | |------- ...

Group 1 - First National Corp. reported quarterly earnings of $0.39 per share, missing the Zacks Consensus Estimate of $0.49 per share, and down from $0.50 per share a year ago, representing an earnings surprise of -20.41% [1] - The company posted revenues of $14.95 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 3.83%, and up from $13.74 million year-over-year [2] - Over the last four quarters, First National has surpassed consensus revenue estimates four times and EPS estimates two times [2] Group 2 - The stock has underperformed, losing about 2.6% since the beginning of the year, compared to the S&P 500's gain of 19.6% [3] - The current consensus EPS estimate for the coming quarter is $0.49 on revenues of $14.5 million, and for the current fiscal year, it is $1.88 on revenues of $57.9 million [7] - The Zacks Industry Rank for Banks - Southeast is currently in the top 39% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Core Viewpoint First National Corporation reported a decline in net income and earnings per share for the third quarter of 2024, alongside improvements in net interest margin and noninterest income, while also completing the acquisition of Touchstone Bankshares, Inc. Financial Performance - The company reported unaudited consolidated net income of $2.2 million for Q3 2024, down from $3.1 million in Q3 2023, with basic and diluted earnings per share of $0.36 compared to $0.50 a year ago [1][2][38] - Adjusted net income for Q3 2024 was $2.4 million, with adjusted earnings per share of $0.39, down from $0.50 in Q3 2023 [1][2][38] - Return on average assets (ROA) decreased to 0.62% from 0.91% year-over-year, while return on average equity (ROE) fell to 7.28% from 10.96% [2][38] Key Highlights - Net interest margin improved to 3.43%, up from 3.35% a year ago [4][7] - Noninterest income increased by 19% to $3.2 million, driven by higher ATM and check card fees and wealth management fees [10] - Noninterest expense decreased by 2% to $10.5 million, primarily due to lower legal and professional fees [11] Asset Quality - Nonperforming assets (NPAs) as a percentage of total assets decreased to 0.41% from 0.59% in the previous quarter, but increased from 0.23% a year ago [12][14] - Loans past due greater than 30 days remained stable at $2.4 million, with no loans over 90 days past due [13][14] Merger Activity - The acquisition of Touchstone Bankshares, Inc. was completed on October 1, 2024, with the combined company having approximately $2.1 billion in assets and $1.8 billion in deposits [5][6] - The merger is expected to enhance the company's market presence in Virginia and North Carolina [5][6] Balance Sheet - Total assets were $1.5 billion, a decrease of 2% from the previous quarter but an increase of 6% year-over-year [23] - Total deposits decreased by approximately 4% from the previous quarter to $1.3 billion, but increased by 1% year-over-year [26] Capital Ratios - The total capital ratio improved to 14.29% from 14.13% in the previous quarter, while the Tier 1 capital ratio was 13.04% [28][39]

Core Viewpoint - First National Corporation has successfully completed the merger with Touchstone Bankshares, Inc., enhancing its market position and resources for small business customers [1][3]. Group 1: Merger Details - The merger became effective on October 1, 2024, with Touchstone Bank being merged into First Bank [1]. - Each outstanding share of Touchstone common and preferred stock is entitled to receive 0.8122 shares of First National's common stock [1]. - The former branches of Touchstone Bank will operate as divisions of First Bank until systems integration is completed in February 2025 [2]. Group 2: Financial Impact - Post-merger, the combined company will have approximately $2.1 billion in assets, $1.5 billion in loans, and $1.8 billion in deposits as of August 30, 2024 [2]. - The merger will enable the company to deliver banking services through 33 branch offices and 3 loan production offices across Virginia and North Carolina [2]. Group 3: Strategic Outlook - The merger is expected to provide significantly more resources to small business customers and positively impact the communities served [3]. - The combined market capitalization is anticipated to position the company near the Russell 2000 index [3]. Group 4: Company Background - First National Corporation is the parent company of First Bank, a community bank established in 1907, offering a range of banking services [4]. - The bank operates a wealth management division and has a network of ATMs and loan production offices [4].

Core Points - Touchstone Bankshares, Inc. announced a pro rata annual cash dividend of $0.16 per share in anticipation of its merger with First National Corporation [1][2] - The dividend is payable on September 27, 2024, to shareholders of record as of September 20, 2024 [2] - The merger is expected to close in the fourth quarter of 2024, pending customary closing conditions [3] Company Overview - Touchstone Bankshares, Inc. is the bank holding company for Touchstone Bank, a full-service community bank headquartered in Prince George, Virginia [4] - The bank operates ten branches in Southern and Central Virginia, along with two branches and two loan centers in Northern North Carolina [4]

Financial Performance - Net income for Q2 2024 decreased by $1.1 million to $2.4 million, or $0.39 per diluted share, compared to $3.5 million, or $0.56 per diluted share, in Q2 2023[147] - For the six months ended June 30, 2024, net income decreased by $1.7 million to $5.7 million, or $0.90 per diluted share, compared to $7.4 million, or $1.17 per diluted share, for the same period in 2023[152] - Net income for the three months ended June 30, 2024, decreased by $1.1 million, or 30%, to $2.4 million, compared to $3.5 million for the same period in 2023[165] - For the six months ended June 30, 2024, net income decreased by $1.7 million, or 23%, to $5.7 million, compared to $7.4 million for the same period in 2023[166] Interest Income and Expenses - Net interest income increased by $749 thousand due to a $2.8 million rise in total interest income, partially offset by a $2.0 million increase in total interest expense[149] - Net interest income increased by $749 thousand, or 7%, to $11.5 million for the second quarter of 2024, driven by a $2.8 million increase in total interest income[167] - Total interest income for the second quarter of 2024 increased by $2.1 million, or 18%, due to a 57-basis point increase in yield on loans and a 6% increase in average loan balances[168] - Total interest expense increased by $2.0 million, with a $1.4 million increase attributed to deposits and a $603 thousand increase from other borrowings[169] - The net interest margin for the second quarter of 2024 was 3.40%, up from 3.36% for the same period in the prior year[170] - For the six months ended June 30, 2024, net interest income increased by $423 thousand, or 2%, to $22.3 million, despite a $5.2 million increase in interest expense[172] - The net interest margin for the six months ended June 30, 2024, was 3.31%, down from 3.48% for the same period in the prior year[176] Noninterest Income and Expenses - Noninterest income decreased by $198 thousand, primarily due to declines in service charges on deposits and ATM fees[151] - Noninterest income increased by $1.1 million, or 19%, to $6.7 million for the six months ended June 30, 2024, compared to the same period in 2023[185] - Total noninterest expenses increased by $1.5 million, driven by a $650 thousand rise in salaries and employee benefits and a $702 thousand increase in legal and professional expenses[152] - Noninterest expenses increased by $2.2 million, or 12%, to $20.5 million for the six-month period ended June 30, 2024, compared to the same period in 2023[187] Credit Losses - Provision for credit losses increased by $300 thousand, totaling $400 thousand for Q2 2024, compared to $100 thousand in Q2 2023[150] - The provision for credit losses increased by $300 thousand for the three months ended June 30, 2024, impacting overall profitability[165] - Provision for credit losses totaled $1.4 million for the six-month period ended June 30, 2024, compared to $100 thousand for the same period in the prior year[183] - The provision for credit losses charged to expense was based on management's judgment considering various factors, indicating a proactive approach to managing credit risk[204] Assets and Liabilities - Total assets increased to $1,448,479 thousand as of June 30, 2024, compared to $1,372,781 thousand a year earlier, reflecting a growth of 5.5%[177] - Total assets increased by $38.2 million, or 5% (annualized), to $1.5 billion as of June 30, 2024, compared to December 31, 2023[191] - Total liabilities increased by $34.6 million during the six-month period ended June 30, 2024, primarily from a $32.1 million, or 5% (annualized), increase in total deposits[192] - Loans totaled $990.0 million as of June 30, 2024, reflecting a $20.5 million (4% annualized) increase from December 31, 2023, and a $59.8 million (6%) increase from June 30, 2023[194] - Deposits reached $1.3 billion on June 30, 2024, marking a $32 million increase from December 31, 2023, and a $23.4 million (2%) increase from June 30, 2023[209] Capital and Equity - Shareholders' equity rose to $118,255 thousand, up from $111,917 thousand in the previous year, indicating a growth of 5.4%[177] - Total shareholders' equity increased by $3.6 million during the first six months of 2024, primarily from a $3.8 million increase in retained earnings[193] - The Bank's total capital to risk-weighted assets ratio was 14.13% as of June 30, 2024, exceeding the regulatory requirement of 8%[216] - The common equity Tier 1 capital ratio was 12.88% as of June 30, 2024, well above the minimum requirement of 4.5%[216] Mergers and Acquisitions - The Company entered into an agreement to acquire Touchstone Bankshares, Inc. for approximately $47.0 million in stock, expected to close in Q4 2024[146] - The Company incurred $571 thousand in merger-related expenses for the six months ended June 30, 2024, with an estimated additional $10.6 million in pre-tax merger-related expenses expected during 2024[146] Risk Management - The interest rate swap agreements are part of the Company's strategy to mitigate exposure to interest rate fluctuations[223] - The Company has $9.0 million of junior subordinated debt converted from variable to fixed interest rates through cash flow hedges, with a fair value of $2.7 million as of June 30, 2024[224] - The cash flow hedges are set to mature between June 2034 and October 2036, effectively managing interest rate risk for the Company[224] Regulatory and Compliance - There were no material changes in the Company's internal control over financial reporting during the last fiscal quarter, ensuring stability in financial reporting processes[226] - The Company maintains effective disclosure controls and procedures, as confirmed by the Chief Executive Officer and Chief Financial Officer as of June 30, 2024[225] - The Company has no material pending legal proceedings, ensuring a stable legal environment for operations[228]