First National Corp ( (FXNC) ) has released its Q4 earnings. Here is a breakdown of the information First National Corp presented to its investors.
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First National Corporation, a bank holding company for First Bank, provides community banking services and wealth management through its branches in Virginia and North Carolina. The company recently completed a significant acquisition of Touchstone Bankshares, which has impacted its financial results for the fourth quarter of 2024. The acquisition has led to an increase in the company’s total assets to $2.0 billion and a notable rise in net interest income, although it also resulted in a consolidated net loss of $933 thousand due to merger-related expenses.
Key financial highlights include a 40 basis point increase in net interest margin to 3.83%, driven by the Touchstone acquisition, and a bargain purchase gain of $2.9 million. Despite the net loss, adjusted operating earnings were strong at $6.0 million for the quarter, with adjusted earnings per share of $0.66. The merger also brought about a significant increase in noninterest income to $6.4 million, largely attributable to the acquisition.
The acquisition has also impacted asset quality measures, with non-performing assets decreasing as a percentage of total assets, although actual NPAs increased due to the addition of Touchstone’s portfolio. The company recorded a $4.8 million provision for credit losses in the fourth quarter, reflecting the inclusion of acquired loans with credit deterioration. The company’s balance sheet showed robust growth, with total loans and deposits substantially increasing due to the merger.
Looking forward, First National management remains optimistic about the benefits of the Touchstone acquisition, anticipating full integration in the coming months. They expect the merger to enhance operational efficiency and expand their market presence, although they acknowledge potential risks related to integration and economic conditions.
