Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - FIRST NATIONAL CORP /VA/ | fnc8-k.htm |
Exhibit 99.1
Contact:
|
Scott C. Harvard
|
M. Shane Bell
|
||
|
President and CEO
|
Executive Vice President and CFO
|
||
|
(540) 465-9121
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(540) 465-9121
|
||
|
sharvard@fbvirginia.com
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Sbell@fbvirginia.com
|
News Release
October 29, 2014
First National Corporation Announces Third Quarter Net Income of $1.2 Million
Strasburg, Virginia (October 29, 2014) --- First National Corporation (the “Company”) (OTCBB: FXNC), the parent company of First Bank (the “Bank”), reported earnings of $1.2 million, or $0.19 per basic and diluted share, for the quarter ended September 30, 2014.
Operating Highlights for the Third Quarter
|
·
|
Return on average assets was 0.95%
|
|
·
|
Net interest margin improved to 3.92%
|
|
·
|
Third consecutive quarter of loan growth
|
|
·
|
Revenue from wealth management increased 22% to $494 thousand
|
|
·
|
Loan Production Office opened in Harrisonburg with experienced business banker
|
|
·
|
Mortgage division expanded to Harrisonburg
|
|
·
|
Book value per share increased from $5.93 to $8.77 per common share
|
|
·
|
Hired new Chief Credit Officer
|
“During the third quarter, our banking company delivered solid performance while adding new potential sources of revenue and growth. We are excited about our entry into Harrisonburg and the greater Augusta County markets through the addition of First Mortgage and a new commercial loan production office,” said Scott C. Harvard, President and CEO of the Company and the Bank. “Double digit growth in noninterest-bearing deposits since year-end, three consecutive quarters of loan growth, and double digit growth in wealth management income validate our commitment to service driven by our philosophy that People Matter.”
Third Quarter Earnings
Net income totaled $1.2 million for the third quarter of 2014, which was unchanged compared to the same period of 2013. The return on average assets was 0.95% for the third quarter compared to 0.92% for the same quarter one year ago, and the return on average equity was 8.65% compared to 11.44%.
Net interest income totaled $4.8 million for the quarter, compared to $4.6 million for the same period one year ago. The net interest margin was 3.92% compared to 3.68% for the third quarter of 2013. Revenue from wealth management fees increased by $88 thousand, or 22%, and other operating income increased by $49 thousand, or 57%, comparing the third quarter to the same period one year ago. Increases in other operating income included income from bank owned life insurance that increased by $35 thousand, or 51%, to $103 thousand for the quarter compared to $68 thousand for the same period one year ago. These increases were partially offset by losses on securities transactions totaling $91 thousand. Total noninterest income increased by $29 thousand, or 2% comparing the same periods.
Noninterest expense increased by $105 thousand, or 2%, to $4.8 million for the quarter compared to $4.6 million for the same period in the prior year. Salaries and employee benefits increased by $257 thousand, or 11%, and other operating expenses increased by $173 thousand, or 28%. Increases in salaries and employee benefits were impacted by the launch of First Mortgage, a new division of First Bank that began operations in May, along with the addition of a chief credit officer and three experienced commercial lenders. Increases in other operating expenses were primarily attributable to higher bank franchise tax from higher levels of capital, recruiting expenses, and additional expenses relating to the launch of the new mortgage division. These increases were partially offset by a $275 thousand decrease in expenses from other real estate owned and a $99 thousand decrease in FDIC assessment expense, comparing the third quarter to the same period one year ago.
The Bank recorded a recovery of loan losses totaling $100 thousand during the quarter, which resulted in a total allowance for loan losses of $9.7 million, or 2.59% of total loans at September 30, 2014. The recovery of loan losses was primarily a result of a decrease in the specific allocation from the improvement and resolution of certain impaired loans during the quarter. This compared to a provision for loan losses of $275 thousand and an allowance for loan losses of $11.9 million, or 3.24% of total loans, at the end of the third quarter of 2013.
Year-to-Date Earnings
Net income totaled $3.9 million for the nine months ended September 30, 2014, compared to $2.5 million for the same period of 2013. The return on average assets was 1.00% for the period compared to 0.62% for the same period one year ago, and the return on average equity was 9.41% compared to 7.48% for the same period in 2013.
Net interest income totaled $13.8 million for the period, compared to $13.9 million for the same period one year ago. The net interest margin was 3.82% compared to 3.73% for the same period of 2013. Noninterest income, excluding a one-time gain on termination of a postretirement benefit, increased by $378 thousand, or 8% when comparing the periods. Revenues from service charges on deposits increased $378 thousand, or 24%, and revenues from wealth management increased $217 thousand, or 18%, when comparing the nine months ended September 30, 2014 to the same period of 2013.
Noninterest expense decreased $604 thousand, or 4%, to $13.9 million for the period compared to $14.5 million for the same period in the prior year. Expenses from other real estate owned decreased by $797 thousand and the FDIC assessment expense decreased by $326 thousand, or 46%. These decreases were partially offset by increases in expenses that included other operating expense, which was $213 thousand, or 10%, higher than the nine months ended September 30, 2013 and salaries and employee benefits, which was $243 thousand, or 3% higher than the same period one year ago.
The Bank recorded a recovery of loan losses totaling $700 thousand for the period. The recovery of loan losses was primarily a result of a decrease in the general allocation from an improvement in the historical loss experience and improved asset quality. This compared to a provision for loan losses of $2.5 million for the same period of 2013.
Balance Sheet
At September 30, 2014, the Company’s total assets were $519.3 million, total loans were $374.9 million, and total deposits were $438.9 million. Due to three consecutive quarters of loan growth, the Company’s cash balance decreased in order to fund new loans. The Company also experienced an improvement in the deposit mix with higher levels of non-interest bearing deposits compared to lower levels of time deposits. Both of these changes had a favorable impact on the net interest margin.
Capital and Asset Quality
Substandard loans decreased by $11.0 million, or 35%, to $20.1 million at the end of the third quarter compared to $31.1 million for the same period one year ago. Nonperforming assets decreased to $10.5 million at September 30, 2014 compared to $11.8 million one year ago, and troubled debt restructurings decreased to $796 thousand from $834 thousand, comparing the same periods.
Total shareholders’ equity increased $14.0 million to $57.6 million at September 30, 2014, compared to $43.6 million one year ago. The book value per common share was $8.77 at the end of the third quarter. Regulatory capital ratios were higher than previous periods, with the total risk-based capital ratio at 18.91% at September 30, 2014.
Caution about 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. For details on 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, 2013, and other filings with the Securities and Exchange Commission.
About the Company
First National Corporation, headquartered in Strasburg, Virginia, is the bank holding company of First Bank. First Bank offers loan, deposit, trust and investment products and services from 12 office locations located throughout the Shenandoah Valley region of Virginia. Banking services are also accessed from the Bank’s website, www.fbvirginia.com, and from a network of ATMs located throughout its market area. First Bank also owns First Bank Financial Services, Inc., which invests in entities that provide investment services and title insurance.
FIRST NATIONAL CORPORATION
Quarterly Performance Summary
(in thousands, except share and per share data)
|
(unaudited)
For the Quarter Ended
|
||||||||||
|
Income Statement
|
September 30, 2014
|
June 30, 2014
|
March 31, 2014
|
December 31, 2013
|
September 30, 2013
|
|||||
|
Interest income
|
||||||||||
|
Interest and fees on loans
|
$ 4,536
|
$ 4,403
|
$ 4,215
|
$ 4,422
|
$ 4,673
|
|||||
|
Interest on deposits in banks
|
3
|
14
|
16
|
16
|
18
|
|||||
|
Interest on securities available for sale
|
622
|
657
|
657
|
636
|
577
|
|||||
|
Dividends on restricted securities
|
20
|
21
|
21
|
19
|
18
|
|||||
|
Total interest income
|
$ 5,181
|
$ 5,095
|
$ 4,909
|
$ 5,093
|
$ 5,286
|
|||||
|
Interest expense
|
||||||||||
|
Interest on deposits
|
$ 343
|
$ 373
|
$ 400
|
$ 458
|
$ 572
|
|||||
|
Interest on federal funds purchased
|
2
|
-
|
-
|
-
|
-
|
|||||
|
Interest on trust preferred capital notes
|
55
|
54
|
54
|
56
|
55
|
|||||
|
Interest on other borrowings
|
30
|
30
|
29
|
30
|
30
|
|||||
|
Total interest expense
|
$ 430
|
$ 457
|
$ 483
|
$ 544
|
$ 657
|
|||||
|
Net interest income
|
$ 4,751
|
$ 4,638
|
$ 4,426
|
$ 4,549
|
$ 4,629
|
|||||
|
Provision for (recovery of) loan losses
|
(100)
|
(400)
|
(200)
|
(2,950)
|
275
|
|||||
|
Net interest income after provision for (recovery of) loan losses
|
$ 4,851
|
$ 5,038
|
$ 4,626
|
$ 7,499
|
$ 4,354
|
|||||
|
Noninterest income
|
||||||||||
|
Service charges on deposit accounts
|
$ 655
|
$ 642
|
$ 630
|
$ 654
|
$ 627
|
|||||
|
ATM and check card fees
|
367
|
366
|
335
|
354
|
373
|
|||||
|
Wealth management fees
|
494
|
472
|
484
|
463
|
406
|
|||||
|
Fees for other customer services
|
94
|
126
|
87
|
89
|
86
|
|||||
|
Gains on sale of loans
|
-
|
-
|
3
|
22
|
47
|
|||||
|
Gains (losses) on sale of securities
|
(91)
|
22
|
-
|
-
|
-
|
|||||
|
Other operating income
|
135
|
96
|
77
|
189
|
86
|
|||||
|
Total noninterest income
|
$ 1,654
|
$ 1,724
|
$ 1,616
|
$ 1,771
|
$ 1,625
|
|||||
|
Noninterest expense
|
||||||||||
|
Salaries and employee benefits
|
$ 2,668
|
$ 2,554
|
$ 2,509
|
$ 3,040
|
$ 2,411
|
|||||
|
Occupancy
|
303
|
278
|
315
|
302
|
306
|
|||||
|
Equipment
|
299
|
295
|
304
|
319
|
302
|
|||||
|
Marketing
|
114
|
125
|
109
|
41
|
81
|
|||||
|
Stationery and supplies
Legal and professional fees
|
84
250
|
93
246
|
80
202
|
66
340
|
66
237
|
|||||
|
ATM and check card fees
|
167
|
163
|
163
|
166
|
176
|
|||||
|
FDIC assessment
|
90
|
122
|
172
|
174
|
189
|
|||||
|
Other real estate owned, net
|
(23)
|
(70)
|
31
|
380
|
252
|
|||||
|
Net losses on disposal of premises and equipment
|
-
|
-
|
2
|
393
|
-
|
|||||
|
Loss on lease termination
|
-
|
-
|
-
|
263
|
-
|
|||||
|
Other operating expense
|
801
|
740
|
726
|
748
|
628
|
|||||
|
Total noninterest expense
|
$ 4,753
|
$ 4,546
|
$ 4,613
|
$ 6,232
|
$ 4,648
|
|||||
|
Income before income taxes
|
$ 1,752
|
$ 2,216
|
$ 1,629
|
$ 3,038
|
$ 1,331
|
|||||
|
Income tax provision (benefit)
|
505
|
674
|
483
|
(4,352)
|
91
|
|||||
|
Net income
|
$ 1,247
|
$ 1,542
|
$ 1,146
|
$ 7,390
|
$ 1,240
|
|||||
|
Effective dividend and accretion on preferred stock
|
329
|
260
|
221
|
228
|
229
|
|||||
|
Net income available to common shareholders
|
$ 918
|
$ 1,282
|
$ 925
|
$ 7,162
|
$ 1,011
|
|||||
|
Common Share and Per Common Share Data
|
||||||||||
|
Net income, basic and diluted
|
$ 0.19
|
$ 0.26
|
$ 0.19
|
$ 1.46
|
$ 0.21
|
|||||
|
Shares outstanding at period end
|
4,903,612
|
4,902,582
|
4,901,464
|
4,901,464
|
4,901,464
|
|||||
|
Weighted average shares, basic and diluted
|
4,902,716
|
4,901,599
|
4,901,464
|
4,901,464
|
4,901,464
|
|||||
|
Book value at period end
|
$ 8.77
|
$ 8.58
|
$ 8.24
|
$ 7.96
|
$ 5.93
|
|||||
|
Cash dividends
|
$ 0.025
|
$ 0.025
|
$ -
|
$ -
|
$ -
|
|||||
FIRST NATIONAL CORPORATION
Quarterly Performance Summary
(in thousands, except share and per share data)
|
(unaudited)
For the Quarter Ended
|
||||||||||||
|
September 30,
2014
|
June 30,
2014
|
March 31, 2014
|
December 31, 2013
|
September 30, 2013
|
||||||||
|
Key Performance Ratios
|
||||||||||||
|
Return on average assets
|
0.95%
|
1.16%
|
0.88%
|
5.55%
|
0.92%
|
|||||||
|
Return on average equity
|
8.65%
|
11.05%
|
8.53%
|
62.92%
|
11.44%
|
|||||||
|
Net interest margin
|
3.92%
|
3.81%
|
3.72%
|
3.68%
|
3.68%
|
|||||||
|
Efficiency ratio (1)
|
72.74%
|
71.94%
|
74.85%
|
81.40%
|
69.60%
|
|||||||
|
Average Balances
|
||||||||||||
|
Average assets
|
$ 521,611
|
$ 531,250
|
$ 525,337
|
$ 528,475
|
$ 535,885
|
|||||||
|
Average earning assets
|
487,540
|
496,304
|
490,521
|
496,619
|
505,888
|
|||||||
|
Average shareholders’ equity
|
57,206
|
55,965
|
54,460
|
46,569
|
43,001
|
|||||||
|
Asset Quality
|
||||||||||||
|
Loan charge-offs
|
$ 910
|
$ 306
|
$ 239
|
$ 192
|
$ 955
|
|||||||
|
Loan recoveries
|
720
|
429
|
79
|
1,911
|
77
|
|||||||
|
Net charge-offs (recoveries)
|
190
|
(123)
|
160
|
(1,719)
|
878
|
|||||||
|
Non-accrual loans
|
8,673
|
11,221
|
11,697
|
11,678
|
8,000
|
|||||||
|
Other real estate owned, net
|
1,807
|
2,221
|
2,991
|
3,030
|
3,833
|
|||||||
|
Nonperforming assets
|
10,480
|
13,443
|
14,688
|
14,708
|
11,833
|
|||||||
|
Loans over 90 days past due, still accruing
|
2,148
|
325
|
111
|
49
|
2,150
|
|||||||
|
Troubled debt restructurings, accruing
|
796
|
978
|
986
|
829
|
834
|
|||||||
|
Special mention loans
|
18,411
|
19,807
|
20,606
|
19,660
|
23,226
|
|||||||
|
Substandard loans, accruing
|
20,088
|
20,315
|
21,917
|
22,909
|
31,119
|
|||||||
|
Doubtful loans
|
-
|
-
|
-
|
-
|
-
|
|||||||
|
Capital Ratios
|
||||||||||||
|
Tier 1 capital
|
$ 66,302
|
$ 64,732
|
$ 63,041
|
$ 61,800
|
$ 56,830
|
|||||||
|
Total capital
|
71,060
|
69,455
|
67,687
|
66,437
|
61,565
|
|||||||
|
Total capital to risk-weighted assets
|
18.91%
|
18.64%
|
18.49%
|
18.21%
|
16.57%
|
|||||||
|
Tier 1 capital to risk-weighted assets
|
17.65%
|
17.38%
|
17.22%
|
16.94%
|
15.29%
|
|||||||
|
Leverage ratio
|
12.73%
|
12.22%
|
12.05%
|
11.75%
|
10.61%
|
|||||||
|
Balance Sheet
|
||||||||||||
|
Cash and due from banks
|
$ 6,862
|
$ 6,587
|
$ 7,106
|
$ 5,767
|
$ 8,649
|
|||||||
|
Interest-bearing deposits in banks
|
3,885
|
12,735
|
27,017
|
25,741
|
29,221
|
|||||||
|
Securities available for sale, at fair value
|
104,643
|
108,884
|
110,561
|
103,301
|
105,321
|
|||||||
|
Restricted securities, at cost
|
1,636
|
1,636
|
1,636
|
1,804
|
1,804
|
|||||||
|
Loans, net of allowance for loan losses
|
365,155
|
357,484
|
349,250
|
346,449
|
354,952
|
|||||||
|
Premises and equipment, net
|
16,175
|
16,305
|
16,470
|
16,642
|
17,417
|
|||||||
|
Accrued interest receivable
|
1,327
|
1,258
|
1,305
|
1,302
|
1,339
|
|||||||
|
Other assets
|
19,682
|
20,434
|
21,250
|
21,884
|
17,752
|
|||||||
|
Total assets
|
$ 519,365
|
$ 525,323
|
$ 534,595
|
$ 522,890
|
$ 536,455
|
|||||||
|
Noninterest-bearing demand deposits
|
$ 103,019
|
$ 99,396
|
$ 101,813
|
$ 92,901
|
$ 95,609
|
|||||||
|
Savings and interest-bearing demand deposits
|
224,655
|
235,929
|
239,725
|
234,054
|
229,990
|
|||||||
|
Time deposits
|
111,245
|
115,873
|
120,151
|
123,756
|
145,664
|
|||||||
|
Total deposits
|
$ 438,919
|
$ 451,198
|
$ 461,689
|
$ 450,711
|
$ 471,263
|
|||||||
|
Federal funds purchased
|
5,325
|
-
|
-
|
-
|
-
|
|||||||
|
Other borrowings
|
6,033
|
6,039
|
6,046
|
6,052
|
6,058
|
|||||||
|
Trust preferred capital notes
|
9,279
|
9,279
|
9,279
|
9,279
|
9,279
|
|||||||
|
Other liabilities
|
2,231
|
2,151
|
2,614
|
3,288
|
6,244
|
|||||||
|
Total liabilities
|
$ 461,787
|
$ 468,667
|
$ 479,628
|
$ 469,330
|
$ 492,844
|
|||||||
|
FIRST NATIONAL CORPORATION
Quarterly Performance Summary
(in thousands, except share and per share data)
|
|||||||||||||||||||||||||||||||
|
(unaudited)
|
|||||||||||||||||||||||||||||||
|
September 30,
2014
|
June 30,
2014
|
March 31,
2014
|
December 31, 2013
|
September 30, 2013
|
|||||||||||||||||||||||||||
|
Balance Sheet (continued)
|
|||||||||||||||||||||||||||||||
|
Preferred stock
|
$ 14,595
|
$ 14,595
|
$ 14,595
|
$ 14,564
|
$ 14,525
|
||||||||||||||||||||||||||
|
Common stock
|
6,130
|
6,128
|
6,127
|
6,127
|
6,127
|
||||||||||||||||||||||||||
|
Surplus
|
6,828
|
6,821
|
6,813
|
6,813
|
6,813
|
||||||||||||||||||||||||||
|
Retained earnings
|
30,312
|
29,516
|
28,286
|
27,360
|
20,199
|
||||||||||||||||||||||||||
|
Accumulated other comprehensive loss, net
|
(287)
|
(404)
|
(854)
|
(1,304)
|
(4,053)
|
||||||||||||||||||||||||||
|
Total shareholders’ equity
|
$ 57,578
|
$ 56,656
|
$ 54,967
|
$ 53,560
|
$ 43,611
|
||||||||||||||||||||||||||
|
Total liabilities and shareholders’ equity
|
$ 519,365
|
$ 525,323
|
$ 534,595
|
$ 522,890
|
$ 536,455
|
||||||||||||||||||||||||||
|
Loan Data
|
|||||||||||||||||||||||||||||||
|
Mortgage loans on real estate:
|
|||||||||||||||||||||||||||||||
|
Construction and land development
|
$ 29,862
|
$ 32,795
|
$ 33,876
|
$ 34,060
|
$ 34,404
|
||||||||||||||||||||||||||
|
Secured by farm land
|
1,193
|
1,234
|
1,257
|
1,264
|
1,302
|
||||||||||||||||||||||||||
|
Secured by 1-4 family residential
|
155,479
|
151,043
|
147,541
|
141,961
|
142,446
|
||||||||||||||||||||||||||
|
Other real estate loans
|
153,576
|
145,249
|
141,462
|
144,704
|
155,389
|
||||||||||||||||||||||||||
|
Loans to farmers (except those secured by real estate)
|
2,905
|
3,067
|
3,060
|
3,418
|
2,130
|
||||||||||||||||||||||||||
|
Commercial and industrial loans (except those secured by real estate)
|
20,038
|
21,730
|
20,321
|
19,385
|
19,186
|
||||||||||||||||||||||||||
|
Consumer installment loans
|
4,881
|
4,859
|
4,816
|
4,935
|
5,420
|
||||||||||||||||||||||||||
|
Deposit overdrafts
|
248
|
229
|
213
|
279
|
187
|
||||||||||||||||||||||||||
|
All other loans
|
6,689
|
7,284
|
6,987
|
7,087
|
6,363
|
||||||||||||||||||||||||||
|
Total loans
|
$ 374,871
|
$ 367,490
|
$ 359,533
|
$ 357,093
|
$ 366,827
|
||||||||||||||||||||||||||
|
Allowance for loan losses
|
(9,716)
|
(10,006)
|
(10,283)
|
(10,644)
|
(11,875)
|
||||||||||||||||||||||||||
|
Loans, net
|
$ 365,155
|
$ 357,484
|
$ 349,250
|
$ 346,449
|
$ 354,952
|
||||||||||||||||||||||||||
|
Reconciliation of Tax-Equivalent Net Interest Income
|
|||||||||||||||||||||||||||||||
|
GAAP measures:
|
|||||||||||||||||||||||||||||||
|
Interest income – loans
|
$ 4,536
|
$ 4,403
|
$ 4,215
|
$ 4,422
|
$ 4,673
|
||||||||||||||||||||||||||
|
Interest income – investments and other
|
645
|
692
|
694
|
671
|
613
|
||||||||||||||||||||||||||
|
Interest expense – deposits
|
343
|
373
|
400
|
458
|
572
|
||||||||||||||||||||||||||
|
Interest expense – other borrowings
|
30
|
30
|
29
|
30
|
30
|
||||||||||||||||||||||||||
|
Interest expense – trust preferred capital notes
|
55
|
54
|
54
|
56
|
55
|
||||||||||||||||||||||||||
|
Interest expense – other
|
2
|
-
|
-
|
-
|
-
|
||||||||||||||||||||||||||
|
Total net interest income
|
$ 4,751
|
$ 4,638
|
$ 4,426
|
$ 4,549
|
$ 4,629
|
||||||||||||||||||||||||||
|
Non-GAAP measures:
|
|||||||||||||||||||||||||||||||
|
Tax benefit realized on non-taxable interest income – loans
|
$ 27
|
$ 28
|
$ 29
|
$ 21
|
$ 23
|
||||||||||||||||||||||||||
|
Tax benefit realized on non-taxable interest income – municipal securities
|
44
|
49
|
49
|
43
|
39
|
||||||||||||||||||||||||||
|
Total tax benefit realized on non-taxable interest income
|
$ 71
|
$ 77
|
$ 78
|
$ 64
|
$ 62
|
||||||||||||||||||||||||||
|
Total tax-equivalent net interest income
|
$ 4,822
|
$ 4,715
|
$ 4,504
|
$ 4,613
|
$ 4,691
|
||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||
FIRST NATIONAL CORPORATION
Year-to-Date Performance Summary
(in thousands, except share and per share data)
|
(unaudited)
For the Nine Months Ended
|
|||||||
|
Income Statement
|
September 30, 2014
|
September 30, 2013
|
|||||
|
Interest and dividend income
|
|||||||
|
Interest and fees on loans
|
$ 13,154
|
$ 14,422
|
|||||
|
Interest on federal funds sold
|
-
|
-
|
|||||
|
Interest on deposits in banks
|
33
|
45
|
|||||
|
Interest and dividends on securities available for sale:
|
|||||||
|
Taxable interest
|
1,660
|
1,313
|
|||||
|
Tax-exempt interest
|
276
|
228
|
|||||
|
Dividends
|
62
|
56
|
|||||
|
Total interest and dividend income
|
$ 15,185
|
$ 16,064
|
|||||
|
Interest expense
|
|||||||
|
Interest on deposits
|
$ 1,115
|
$ 1,910
|
|||||
|
Interest on federal funds purchased
|
2
|
-
|
|||||
|
Interest on trust preferred capital notes
|
163
|
166
|
|||||
|
Interest on other borrowings
|
89
|
89
|
|||||
|
Total interest expense
|
$ 1,369
|
$ 2,165
|
|||||
|
Net interest income
|
$ 13,816
|
$ 13,899
|
|||||
|
Provision for (recovery of) loan losses
|
(700)
|
2,525
|
|||||
|
Net interest income after provision for (recovery of) loan losses
|
$ 14,516
|
$ 11,374
|
|||||
|
Noninterest income
|
|||||||
|
Service charges on deposit accounts
|
$ 1,928
|
$ 1,550
|
|||||
|
ATM and check card fees
|
1,067
|
1,071
|
|||||
|
Wealth management fees
|
1,450
|
1,233
|
|||||
|
Fees for other customer services
|
307
|
302
|
|||||
|
Gains on sale of loans
|
3
|
171
|
|||||
|
Gains (losses) on sale of securities available for sale
|
(69)
|
-
|
|||||
|
Other operating income
|
309
|
833
|
|||||
|
Total noninterest income
|
$ 4,995
|
$ 5,160
|
|||||
|
Noninterest expense
|
|||||||
|
Salaries and employee benefits
|
$ 7,731
|
$ 7,488
|
|||||
|
Occupancy
|
896
|
980
|
|||||
|
Equipment
|
898
|
889
|
|||||
|
Marketing
|
349
|
304
|
|||||
|
Stationery and supplies
Legal and professional fees
|
258
699
|
222
635
|
|||||
|
ATM and check card fees
|
493
|
502
|
|||||
|
FDIC assessment
|
384
|
710
|
|||||
|
Other real estate owned, net
|
(62)
|
735
|
|||||
|
Net losses on disposal of premises and equipment
|
2
|
-
|
|||||
|
Other operating expense
|
2,266
|
2,053
|
|||||
|
Total noninterest expense
|
$ 13,914
|
$ 14,518
|
|||||
|
Income before income taxes
|
$ 5,597
|
$ 2,016
|
|||||
|
Income tax provision (benefit)
|
1,662
|
(468)
|
|||||
|
Net income
|
$ 3,935
|
$ 2,484
|
|||||
|
Effective dividend and accretion on preferred stock
|
810
|
684
|
|||||
|
Net income available to common shareholders
|
$ 3,125
|
$ 1,800
|
|||||
|
Common Share and Per Common Share Data
|
|||||||
|
Net income, basic and diluted
|
$ 0.64
|
$ 0.37
|
|||||
|
Shares outstanding at period end
|
4,903,612
|
4,901,464
|
|||||
|
Weighted average shares, basic and diluted
|
4,901,931
|
4,901,464
|
|||||
|
Book value at period end
|
$ 8.77
|
$ 5.93
|
|||||
|
Cash dividends
|
$ 0.05
|
$ -
|
|||||
FIRST NATIONAL CORPORATION
Year-to-Date Performance Summary
(in thousands, except share and per share data)
|
(unaudited)
For the Nine Months Ended
|
|||||||
|
September 30, 2014
|
September 30, 2013
|
||||||
|
Key Performance Ratios
|
|||||||
|
Return on average assets
|
1.00%
|
0.62%
|
|||||
|
Return on average equity
|
9.41%
|
7.48%
|
|||||
|
Net interest margin
|
3.82%
|
3.73%
|
|||||
|
Efficiency ratio
|
73.15%
|
72.62%
|
|||||
|
Average Balances
|
|||||||
|
Average assets
|
$ 526,044
|
$ 535,258
|
|||||
|
Average earning assets
|
491,443
|
504,797
|
|||||
|
Average shareholders’ equity
|
55,877
|
44,414
|
|||||
|
Asset Quality
|
|||||||
|
Loan charge-offs
|
$ 1,455
|
$ 4,300
|
|||||
|
Loan recoveries
|
1,227
|
575
|
|||||
|
Net charge-offs
|
228
|
3,725
|
|||||
|
Reconciliation of Tax-Equivalent Net Interest Income
|
|||||||
|
GAAP measures:
|
|||||||
|
Interest income – loans
|
$ 13,154
|
$ 14,422
|
|||||
|
Interest income – investments and other
|
2,031
|
1,642
|
|||||
|
Interest expense – deposits
|
1,115
|
1,910
|
|||||
|
Interest expense – other borrowings
|
89
|
89
|
|||||
|
Interest expense – trust preferred capital notes
|
163
|
166
|
|||||
|
Interest expense – other
|
2
|
-
|
|||||
|
Total net interest income
|
$ 13,816
|
$ 13,899
|
|||||
|
Non-GAAP measures:
|
|||||||
|
Tax benefit realized on non-taxable interest income – loans
|
$ 83
|
$ 60
|
|||||
|
Tax benefit realized on non-taxable interest income – municipal securities
|
142
|
117
|
|||||
|
Total tax benefit realized on non-taxable interest income
|
$ 225
|
$ 177
|
|||||
|
Total tax-equivalent net interest income
|
$ 14,041
|
$ 14,076
|
|||||
(1) The efficiency ratio is computed by dividing noninterest expense excluding other real estate owned expense, loss on land lease termination and net losses on disposal of premises and equipment by the sum of net interest income on a tax equivalent basis and noninterest income excluding gains and losses on sales of securities and gain on termination of postretirement benefit. 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 34%. See the table above for the quarterly tax-equivalent net interest income and a reconciliation 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 in accordance with generally accepted accounting principles (GAAP) and should not be construed as such. Management believes 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.