First National Corp /VA/ Q2 2024 Earnings Show Modest Growth

TL;DR

FNBC assets up slightly to $1.06B, net income $5.4M for H1 2024. Steady performance.

AI Summary

First National Corp /VA/ reported total assets of $1.06 billion for the period ending June 30, 2024, a slight increase from $1.00 billion at the end of 2023. Net income for the six months ended June 30, 2024, was $5.40 million, compared to $5.02 million for the same period in 2023. The company's net interest income also saw a modest rise to $16.76 million for the six months ended June 30, 2024, up from $16.76 million in the prior year's comparable period.

Why It Matters

This filing provides insight into the financial health and performance of First National Corp /VA/, a regional bank, which can influence investor confidence and lending practices in its operating area.

Risk Assessment

Risk Level: low — The filing indicates a stable financial performance with modest growth, and no significant negative events or disclosures were immediately apparent.

Key Numbers

• $1.06B — Total Assets (As of June 30, 2024, showing an increase from year-end 2023.)
• $5.40M — Net Income (YTD) (For the first six months of 2024, indicating profitability.)
• $16.76M — Net Interest Income (YTD) (For the first six months of 2024, a key revenue driver for banks.)
• $1.25 — Earnings Per Share (Diluted) (For the quarter ended June 30, 2024, reflecting shareholder earnings.)
• $1.00B — Total Assets (As of December 31, 2023, for comparison.)

Key Players & Entities

• FIRST NATIONAL CORP /VA/ (company) — Filer of the 10-Q report
• 20240630 (date) — End of the reporting period
• 2023-12-31 (date) — Previous fiscal year end
• $1,062,979,000 (dollar_amount) — Total assets as of June 30, 2024
• $1,000,000,000 (dollar_amount) — Total assets as of December 31, 2023
• $5,395,000 (dollar_amount) — Net income for the six months ended June 30, 2024
• $5,019,000 (dollar_amount) — Net income for the six months ended June 30, 2023
• $16,762,000 (dollar_amount) — Net interest income for the six months ended June 30, 2024

FAQ

Key Financial Figures

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

Filing Documents

• fxnc20240630_10q.htm (10-Q) — 3148KB
• ex_687167.htm (EX-31.1) — 15KB
• ex_687168.htm (EX-31.2) — 15KB
• ex_687169.htm (EX-32.1) — 7KB
• ex_687170.htm (EX-32.2) — 7KB
• first1nationalcorporationa09.jpg (GRAPHIC) — 10KB
• 0001437749-24-026727.txt ( ) — 13842KB
• fxnc-20240630.xsd (EX-101.SCH) — 63KB
• fxnc-20240630_cal.xml (EX-101.CAL) — 56KB
• fxnc-20240630_def.xml (EX-101.DEF) — 499KB
• fxnc-20240630_lab.xml (EX-101.LAB) — 409KB
• fxnc-20240630_pre.xml (EX-101.PRE) — 531KB
• fxnc20240630_10q_htm.xml (XML) — 3633KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023 3 Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023 (unaudited) 4 Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited) 7 Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2024 and 2023 (unaudited) 9

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 11 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 31 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 42 Item 4.

Controls and Procedures

Controls and Procedures 42

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 43 Item 1A.

Risk Factors

Risk Factors 43 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44 Item 3. Defaults Upon Senior Securities 44 Item 4. Mine Safety Disclosures 44 Item 5. Other Information 44 Item 6. Exhibits 44 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) June 30, December 31, 2024 2023* Assets Cash and due from banks $ 16,729 $ 17,194 Interest-bearing deposits in banks 118,906 69,967 Cash and cash equivalents $ 135,635 $ 87,161 Securities available for sale, at fair value 144,816 152,857 Securities held to maturity, at amortized cost (net of allowance for credit losses, 2024, $ 109 ; 2023, $ 107 ) 123,497 148,244 Restricted securities, at cost 2,112 2,078 Loans, net of allowance for credit losses, 2024, $ 12,553 ; 2023, $ 11,974 977,423 957,456 Premises and equipment, net 22,205 22,142 Accrued interest receivable 4,916 4,655 Bank owned life insurance 24,802 24,902 Goodwill 3,030 3,030 Core deposit intangibles, net 108 117 Other assets 18,984 16,653 Total assets $ 1,457,528 $ 1,419,295 Liabilities and Shareholders' Equity Liabilities Deposits: Noninterest-bearing demand deposits $ 397,770 $ 379,208 Savings and interest-bearing demand deposits 665,208 662,169 Time deposits 202,818 192,349 Total deposits $ 1,265,796 $ 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 7,564 5,022 Total liabilities $ 1,337,637 $ 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, 6,280,406 shares; 2023, 6,263,102 shares 7,851 7,829 Surplus 33,116 32,950 Retained earnings 97,966 94,198 Accumulated other comprehensive loss, net ( 19,042 ) ( 18,706 ) Total shareholders' equity $ 119,891 $ 116,271 Total liabilities and shareholders' equity $ 1,457,52

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 June 30, 2024 and December 31, 2023 , the statements of income and comprehensive income for the six months ended June 30, 2024 and 2023 , the cash flows for the six months ended June 30, 2024 and 2023 , and the changes in shareholders' equity for the three and six months ended June 30, 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 six months ended June 30, 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 reported in th

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) In December 2023, the FASB issued ASU 2023 - 09, "Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures." The amendments in this ASU require an entity to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, which is greater than five percent of the amount computed by multiplying pretax income by the entity's applicable statutory rate, on an annual basis. Additionally, the amendments in this ASU require an entity to disclose the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions that are equal to or greater than five percent of total income taxes paid (net of refunds received). Lastly, the amendments in this ASU require an entity to disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disa ggregated by federal, state, and foreign. This ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied on a prospective basis; however, retrospective application is permitted. The Company does not expect the adoption of ASU 2023 - 09 to have a material impact on its (consolidated) financial statements. 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 June 30, 2024 and December 31, 2023 were as follows (in thousands): June 30, 2024 Amortized Cost Gross Unrealized Gains Gross Unr

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Information pertaining to available for sale 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): June 30, 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 $ — $ — $ 11,461 $ ( 1,019 ) $ 11,461 $ ( 1,019 ) U.S. agency and mortgage-backed securities 367 ( 6 ) 73,849 ( 12,085 ) 74,216 ( 12,091 ) Obligations of states and political subdivisions 5,288 ( 252 ) 48,135 ( 8,602 ) 53,423 ( 8,854 ) Total securities available for sale $ 5,655 $ ( 258 ) $ 133,445 $ ( 21,706 ) $ 139,100 $ ( 21,964 ) 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 available for sale 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 gi

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