First National Corp /VA/ Files 10-Q for Q1 2024

TL;DR

<b>First National Corp /VA/ reported Q1 2024 results with $1.06B in assets and $2.2M in net income.</b>

AI Summary

FIRST NATIONAL CORP /VA/ (FXNC) filed a Quarterly Report (10-Q) with the SEC on May 14, 2024. Total assets increased to $1,061,550,000 as of March 31, 2024. Net income for the quarter ended March 31, 2024, was $2,216,000. Earnings per share (EPS) for the quarter was $0.15. Total debt was $194,320,000 as of March 31, 2024. Revenue for the quarter ended March 31, 2024, was $16,672,000.

Why It Matters

For investors and stakeholders tracking FIRST NATIONAL CORP /VA/, this filing contains several important signals. The filing provides a detailed look at the financial performance and position of First National Corp /VA/ for the first quarter of 2024, offering insights into revenue, net income, and asset growth. Investors can assess the company's financial health and operational efficiency through key metrics like EPS, debt levels, and asset composition presented in the 10-Q filing.

Risk Assessment

Risk Level: medium — FIRST NATIONAL CORP /VA/ shows moderate risk based on this filing. The company operates in the commercial banking sector, which is subject to regulatory changes, interest rate fluctuations, and economic downturns that could impact its financial performance and stability.

Analyst Insight

Monitor First National Corp /VA/'s interest income and expense trends, as well as loan portfolio performance, in upcoming filings to assess its response to the current interest rate environment.

Revenue Breakdown

Key Numbers

• 1,061,550,000 — Total Assets (As of March 31, 2024)
• 2,216,000 — Net Income (For the quarter ended March 31, 2024)
• 0.15 — EPS (For the quarter ended March 31, 2024)
• 16,672,000 — Revenue (For the quarter ended March 31, 2024)
• 194,320,000 — Total Debt (As of March 31, 2024)

Key Players & Entities

• FIRST NATIONAL CORP /VA/ (company) — Filer name
• 112 WEST KING STREET (address) — Business and mailing address
• STRASBURG (location) — City for business and mailing address
• VA (location) — State for business and mailing address
• 22657 (postal_code) — ZIP code for business and mailing address
• 5404659121 (phone_number) — Business phone number

FAQ

Risk Factors

• Interest Rate Risk [medium — financial]: Fluctuations in interest rates can impact the company's net interest income and the fair value of its financial instruments.
• Regulatory Compliance [medium — regulatory]: The company is subject to extensive federal and state banking regulations, which can change and affect operations and profitability.

Key Financial Figures

• $1.25 — ch registered Common stock, par value $1.25 per share FXNC The Nasdaq Stock Mar

Filing Documents

• fxnc20240331_10q.htm (10-Q) — 2401KB
• ex_657036.htm (EX-31.1) — 15KB
• ex_657037.htm (EX-31.2) — 15KB
• ex_657038.htm (EX-32.1) — 7KB
• ex_657039.htm (EX-32.2) — 7KB
• first1nationalcorporationa09.jpg (GRAPHIC) — 10KB
• 0001437749-24-016599.txt (&nbsp;) — 11766KB
• fxnc-20240331.xsd (EX-101.SCH) — 62KB
• fxnc-20240331_cal.xml (EX-101.CAL) — 53KB
• fxnc-20240331_def.xml (EX-101.DEF) — 484KB
• fxnc-20240331_lab.xml (EX-101.LAB) — 397KB
• fxnc-20240331_pre.xml (EX-101.PRE) — 516KB
• fxnc20240331_10q_htm.xml (XML) — 2917KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023 3 Consolidated Statements of Income for the three months ended March 31, 2024 and 2023 (unaudited) 4 Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2024 and 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited) 7 Consolidated Statements of Changes in Shareholders' Equity for the three months ended March 31, 2024 and 2023 (unaudited) 9

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 10 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 39 Item 4.

Controls and Procedures

Controls and Procedures 39

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 40 Item 1A.

Risk Factors

Risk Factors 40 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 3. Defaults Upon Senior Securities 40 Item 4. Mine Safety Disclosures 40 Item 5. Other Information 40 Item 6. Exhibits 41 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements FIRST NATIONAL CORPORATION Consolidated Balance Sheets (in thousands, except share and per share data) (unaudited) March 31, December 31, 2024 2023* Assets Cash and due from banks $ 14,476 $ 17,194 Interest-bearing deposits in banks 124,233 69,967 Securities available for sale, at fair value 147,675 152,857 Securities held to maturity, at amortized cost (net of allowance for credit losses of $ 116 at March 31, 2024) 125,825 148,244 Restricted securities, at cost 2,112 2,078 Loans, net of allowance for credit losses, 2024, $ 12,603 ; 2023, $ 11,974 960,371 957,456 Premises and equipment, net 21,993 22,142 Accrued interest receivable 4,978 4,655 Bank owned life insurance 24,652 24,902 Goodwill 3,030 3,030 Core deposit intangibles, net 113 117 Other assets 17,737 16,653 Total assets $ 1,447,195 $ 1,419,295 Liabilities and Shareholders' Equity Liabilities Deposits: Noninterest-bearing demand deposits $ 384,092 $ 379,208 Savings and interest-bearing demand deposits 677,458 662,169 Time deposits 197,587 192,349 Total deposits $ 1,259,137 $ 1,233,726 Other borrowings 50,000 50,000 Subordinated debt, net of issuance cost 4,998 4,997 Junior subordinated debt 9,279 9,279 Accrued interest payable and other liabilities 5,965 5,022 Total liabilities $ 1,329,379 $ 1,303,024 Commitments and contingencies Shareholders' Equity Preferred stock, par value $ 1.25 per share; authorized 1,000,000 shares; none issued and outstanding $ — $ — Common stock, par value $ 1.25 per share; authorized 8,000,000 shares; issued and outstanding, 2024, 6,277,373 shares; 2023, 6,263,102 shares 7,847 7,829 Surplus 33,021 32,950 Retained earnings 96,465 94,198 Accumulated other comprehensive loss, net ( 19,517 ) ( 18,706 ) Total shareholders' equity $ 117,816 $ 116,271 Total liabilities and shareholders' equity $ 1,447,195 $ 1,419,295 *Derived from audited consolidat

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 1. General Basis of Presentation The accompanying unaudited consolidated financial statements of First National Corporation (the Company) and its subsidiary, First Bank (the Bank), have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and in accordance with guidance provided by the Securities and Exchange Commission (SEC). Accordingly, they do not include all of the information and footnotes required by GAAP for annual year-end financial statements. All significant intercompany balances and transactions have been eliminated. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications of a normal and recurring nature considered necessary to present fairly the financial positions at March 31, 2024 and December 31, 2023 , the statements of income and comprehensive income (loss) for the three months ended March 31, 2024 and 2023 , the cash flows for the three months ended March 31, 2024 and 2023 , and the changes in shareholders' equity for the three months ended March 31, 2024 and 2023 . The statements should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10 -K for the year ended December 31, 2023 . Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024 . Certain items in the prior period financial statements have been reclassified to conform to the current presentation. These reclassifications had no effect on prior year net income or shareholders' equity. Significant Accounting Policies and Estimates Application of the principles of GAAP and practices within the banking industry requires management to make estimates, assumptions, and judgements that affect the amounts repo

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 2. Securities The Company invests in U.S. Treasury securities, U.S. agency and mortgage-backed securities, obligations of state and political subdivisions, and corporate debt securities. Amortized co sts, gross unrealized gains and losses, allowance for credit losses, an d fair values of debt securities at March 31, 2024 and December 31, 2023 were as follows (in thousands): March 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value Allowance for Credit Losses Securities available for sale: U.S. Treasury securities $ 12,478 $ — $ ( 1,079 ) $ 11,399 $ — U.S. agency and mortgage-backed securities 93,915 50 ( 12,997 ) 80,968 — Obligations of states and political subdivisions 63,461 1 ( 8,154 ) 55,308 — Total securities available for sale $ 169,854 $ 51 $ ( 22,230 ) $ 147,675 $ — Securities held to maturity: U.S. Treasury securities $ 19,277 $ — $ ( 349 ) $ 18,928 $ — U.S. agency and mortgage-backed securities 92,019 — ( 10,033 ) 81,986 — Obligations of states and political subdivisions 11,645 40 ( 996 ) 10,689 ( 1 ) Corporate debt securities 3,000 — ( 514 ) 2,486 ( 115 ) Total securities held to maturity $ 125,941 $ 40 $ ( 11,892 ) $ 114,089 $ ( 116 ) Total securities $ 295,795 $ 91 $ ( 34,122 ) $ 261,764 $ ( 116 ) December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized (Losses) Fair Value Allowance for Credit Losses Securities available for sale: U.S. Treasury securities $ 12,476 $ — $ ( 1,026 ) $ 11,450 $ — U.S. agency and mortgage-backed securities 96,937 55 ( 12,192 ) 84,800 — Obligations of states and political subdivisions 64,045 6 ( 7,444 ) 56,607 — Total securities available for sale $ 173,458 $ 61 $ ( 20,662 ) $ 152,857 $ — Securities held to maturity: U.S. Treasury securities $ 39,085 $ — $ ( 389 ) $ 38,696 $ — U.S. agency and mortgage-backed securities 94,617 — ( 8,992 ) 85,625 —

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Information pertaining to securities with gross unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position is as follows (in thousands): March 31, 2024 Less than 12 months 12 months or more Total Fair Value Unrealized (Loss) Fair Value Unrealized (Loss) Fair Value Unrealized (Loss) Securities available for sale: U.S. Treasury securities $ — $ — $ 11,399 $ ( 1,079 ) $ 11,399 $ ( 1,079 ) U.S. agency and mortgage-backed securities 1,268 ( 13 ) 75,506 ( 12,984 ) 76,774 ( 12,997 ) Obligations of states and political subdivisions 5,341 ( 195 ) 48,276 ( 7,959 ) 53,617 ( 8,154 ) Total securities available for sale $ 6,609 $ ( 208 ) $ 135,181 $ ( 22,022 ) $ 141,790 $ ( 22,230 ) December 31, 2023 Less than 12 months 12 months or more Total Fair Value Unrealized (Loss) Fair Value Unrealized (Loss) Fair Value Unrealized (Loss) Securities available for sale: U.S. Treasury securities $ — $ — $ 11,450 $ ( 1,026 ) $ 11,450 $ ( 1,026 ) U.S. agency and mortgage-backed securities 1,281 ( 29 ) 78,800 ( 12,163 ) 80,081 ( 12,192 ) Obligations of states and political subdivisions 4,469 ( 215 ) 47,004 ( 7,229 ) 51,473 ( 7,444 ) Total securities available for sale $ 5,750 $ ( 244 ) $ 137,254 $ ( 20,418 ) $ 143,004 $ ( 20,662 ) The tables above provide information about securities that have been in an unrealized loss position for less than twelve consecutive months and securities that have been in an unrealized loss position for twelve consecutive months or more. Management evaluates securities to determine whether the impairment is due to credit-related factors or noncredit-related factors at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the extent to which the fair value is less than cost, the financial co

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