First National (US:FXNC)2025-03-31 20:40Acquisition - The Company completed the acquisition of Touchstone Bankshares, Inc. on October 1, 2024[183]. - The decrease in net income was attributed to an $8.1 million increase in merger expenses related to the Touchstone acquisition[185]. - Noninterest income rose to $16.4 million, a 39% increase from $11.8 million in the previous year, driven by a $2.9 million bargain purchase gain related to the Touchstone acquisition[204]. - Total liabilities increased by $540.7 million to $1.8 billion, largely due to the acquisition of Touchstone, which added $614.6 million in liabilities[210]. - Total loans increased by $497.6 million to $1.5 billion at December 31, 2024, compared to $969.4 million at December 31, 2023, primarily due to the Touchstone acquisition[216]. Financial Performance - Net income available to common shareholders decreased to $7.0 million, or $1.00 per diluted share, compared to $9.6 million, or $1.53 per diluted share in 2023[183][184]. - Return on average equity was 5.33% for 2024, down from 8.59% in 2023[183][184]. - Net income decreased to $6.966 million in 2024 from $9.624 million in 2023, reflecting a decline in income before taxes[187]. - Noninterest expense increased by $15.7 million, or 42%, primarily due to merger expenses of $8.1 million and core deposit intangible amortization of $443 thousand[205]. Loans and Deposits - Period end loans, net, grew by $493.1 million in 2024 compared to 2023[183]. - Period end deposits increased by $570.1 million in 2024 compared to 2023[183]. - Total deposits grew by $570.1 million, including $555.4 million in deposits acquired from Touchstone, with noninterest-bearing demand deposits increasing by $140.9 million[210]. - Total loans increased to $1.466 billion at December 31, 2024, from $969.4 million at December 31, 2023[234]. Credit Losses - The provision for credit losses on loans totaled $7.9 million in 2024, up from $6.2 million in 2023[183]. - Provision for credit losses increased to $7.850 million in 2024 from $6.150 million in 2023, indicating a rise in expected credit losses[187]. - The total allowance for credit losses on loans increased by $4.4 million, driven by loan growth and net charge-offs of $3.8 million[201]. - The allowance for credit losses on loans totaled $16.4 million at December 31, 2024, up from $12.0 million at December 31, 2023, representing 1.12% and 1.24% of total loans, respectively[223]. Asset Growth - Total assets grew to $2,010.3 million in 2024, up from $1,419.3 million in 2023, primarily due to the acquisition of Touchstone[187]. - Total assets increased by $591 million to $2.0 billion as of December 31, 2024, primarily due to a $493.1 million increase in loans and a $68 million increase in interest-bearing deposits[209]. Income and Efficiency - Net interest income increased by $9.0 million, or 21%, and noninterest income rose by $4.6 million, or 39%[185]. - The efficiency ratio improved to 66.73% in 2024 from 67.69% in 2023, indicating enhanced operational efficiency[189]. - Net interest margin increased by ten basis points to 3.51% for 2024, compared to 3.41% in 2023[183]. Capital and Liquidity - Shareholders' equity increased to $166.5 million in 2024 from $116.3 million in 2023, reflecting strong capital growth[187]. - The Bank's total risk-based capital was $181.4 million at December 31, 2024, up from $142.3 million in 2023, indicating a growth of 27.5%[263]. - The common equity Tier 1 capital ratio decreased to 11.19% in 2024 from 12.82% in 2023[263]. - The estimated amount of total uninsured deposits was $537.0 million as of December 31, 2024[245]. - As of December 31, 2024, the Bank's liquidity sources totaled $758.0 million, an increase from $512.7 million on December 31, 2023[247].