First National (US:FXNC)2025-05-14 19:05Financial Performance - Net income decreased to $1,598 thousand for the three months ended March 31, 2025, down 50.24% from $3,209 thousand in the prior year[12]. - Earnings per common share for the three months ended March 31, 2025, was $0.18, a decline of 64.71% from $0.51 in the prior year[12]. - The company reported a total comprehensive income of $3,227 thousand for the three months ended March 31, 2025, compared to $2,398 thousand in the same period of 2024, an increase of 34.63%[13]. - The net cash provided by operating activities was $3,527 thousand for the three months ended March 31, 2025, down from $4,703 thousand in the same period of 2024, a decrease of 24.93%[14]. - Net income for the three months ended March 31, 2025, was $1,598 million, down from $3,209 million for the same period in 2024, resulting in basic and diluted earnings per share of $0.18[73]. - Net income for the three months ended March 31, 2025, decreased by $1.6 million to $1.6 million, or $0.18 per diluted share, compared to $3.2 million, or $0.51 per diluted share, for the same period in 2024[143]. Asset and Deposit Growth - Total assets increased to $2,033,347 thousand as of March 31, 2025, up from $2,010,281 thousand at December 31, 2024, representing a growth of 1.14%[9]. - Total deposits rose to $1,824,976 thousand as of March 31, 2025, compared to $1,803,778 thousand at December 31, 2024, marking an increase of 1.17%[9]. - Cash and cash equivalents increased to $206,032 thousand as of March 31, 2025, compared to $162,874 thousand at the end of 2024, reflecting a rise of 26.00%[15]. - As of March 31, 2025, total shareholders' equity increased to $168,676,000 from $166,531,000 as of December 31, 2024, reflecting a growth of approximately 1%[16]. - The total recorded investment in loans was $665,682,000, with $661,025,000 classified as pass loans[54]. Loan and Credit Quality - Total loans decreased to $1.450 billion as of March 31, 2025, from $1.467 billion on December 31, 2024, representing a decline of 1.1%[42]. - The allowance for credit losses on loans decreased from $16.4 million on December 31, 2024, to $14.735 million on March 31, 2025, a decrease of 10.1%[42]. - The total past due loans as of March 31, 2025, amounted to $7.678 million, compared to $3.451 million on December 31, 2024, indicating an increase in past due loans[46]. - The provision for credit losses on loans for the period ending March 31, 2025, was a recovery of $735, indicating improved credit quality[59]. - Nonaccrual loans totaled $4,864 million as of March 31, 2025, compared to $6,971 million at December 31, 2024, indicating a decrease in nonaccrual loans[61]. Noninterest Income and Expenses - Noninterest income for the three months ended March 31, 2025, was $3,275,000, compared to $2,540,000 for the same period in 2024, representing an increase of approximately 28.9%[101]. - Noninterest expenses increased by $8.4 million, primarily due to a $2.8 million increase in salaries and employee benefits and a $1.9 million increase in merger expenses[134]. - Noninterest income decreased by $436 thousand primarily due to a reduction in other operating income related to a loan recovery recognized in 2024[133]. - The efficiency ratio rose to 75.44% in Q1 2025 from 65.65% in Q1 2024, reflecting an increase in noninterest expenses[142]. Merger and Acquisition Impact - The company incurred merger costs totaling $1.9 million related to the acquisition of Touchstone Bankshares, Inc. on October 1, 2024[21]. - The Company completed the acquisition of Touchstone on October 1, 2024, resulting in the issuance of 2.7 million additional shares valued at $46.8 million[109]. - The merger with Touchstone added 12 branches, expanding the Company's presence in central Virginia and into northern North Carolina[109]. - The Company recognized a preliminary bargain purchase gain of $2.9 million from the Touchstone acquisition[109]. Capital Adequacy - The Bank's total capital to risk-weighted assets ratio was 12.44% as of March 31, 2025, exceeding the minimum requirement of 8.00%[180]. - The Tier 1 capital to risk-weighted assets ratio was 11.39% as of March 31, 2025, above the minimum requirement of 6.00%[180]. - The common equity Tier 1 capital to risk-weighted assets ratio was 11.39% as of March 31, 2025, surpassing the minimum requirement of 4.50%[180]. - The Bank maintained a capital conservation buffer ratio of 4.44% as of March 31, 2025, indicating strong capital adequacy[180]. Securities and Fair Value - As of March 31, 2025, total securities amounted to $259,921 thousand, with gross unrealized losses of $29,536 thousand[26]. - The total unrealized losses for securities available for sale were $20,097 thousand as of March 31, 2025, compared to $22,132 thousand at December 31, 2024[28]. - The fair value of U.S. Treasury securities available for sale was $11,840 thousand, reflecting a gross unrealized loss of $646 thousand[26]. - The fair value of cash flow hedges decreased from $2,690,000 as of December 31, 2024, to $2,474,000 as of March 31, 2025[80].