First National Corporation Reports Fourth Quarter and Annual 2024 Financial Results

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]