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First National Corp (FXNC) SEC Filing 10-Q Quarterly Report for the period ending Thursday, September 30, 2021

SEC Filings

First National Corp

CIK: 719402 Ticker: FXNC

Exhibit 99.1

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First National Corporation Reports Third Quarter 2021 Financial Results

 

 

STRASBURG, Va., October 29, 2021 --- First National Corporation (the “Company” or “First National”) (NASDAQ: FXNC), the bank holding company of First Bank (the “Bank”), reported unaudited consolidated net income of $2.4 million, or $0.38 per diluted share for the third quarter of 2021, which resulted in return on average assets of 0.71% and return on average equity of 8.64%. This compares to net income of $1.8 million, or $0.36 per diluted share, and return on average assets of 0.74% and return on average equity of 8.52% for the third quarter of 2020.

 

Net income for the third quarter of 2021 included $1.3 million of merger related expenses from the Company’s acquisition of The Bank of Fincastle (the “Merger”), which was consummated on July 1, 2021. In addition, there was no provision for loan losses in the third quarter of 2021, compared to provision for loan losses of $1.5 million for the third quarter of 2020.

 

During the third quarter of 2021, First Bank also negotiated and completed the acquisition of an $82.6 million loan portfolio originated from SmartBank’s branch located in the Richmond, Virginia market. In connection with the purchase of the loan portfolio, the Bank hired a team of employees based out of the branch. SmartBank decided to close their branch operation on December 31, 2021. First Bank will continue to operate a loan production office from this location.

 

President and Chief Executive Officer Scott C. Harvard commented, “The third quarter may have been the most productive in our company’s 114 year history as we completed the acquisition of The Bank of Fincastle and also seized the opportunity for a team lift and loan portfolio acquisition in the Richmond market. The transactions boosted assets to $1.4 billion and increased loan balances by $205.1 million, while extending the Bank’s reach into the Roanoke market and bolstering the banking team in Richmond. These transactions reflect our strategy of hiring talented bankers to support organic growth, which in turn positions the company well for strategic acquisitions. I am incredibly proud of our people, not just for the level of work and effort it took to successfully complete two transformative transactions concurrently, but for their can-do attitude when asked to step up to the challenge. We believe our banking company is well positioned to be a leader in Virginia banking for years to come.”

 

Key highlights of the third quarter of 2021 are as follows. Comparisons are to the corresponding period in the prior year unless otherwise stated:

 

 

Successful team lift and $83 million loan portfolio acquisition in the Richmond market
  Completed the acquisition of The Bank of Fincastle
  Total assets increased 44% to $1.4 billion
  Total loans, excluding PPP loans, increased 39% to $799.6 million
  Noninterest-bearing deposits increased 60% to $411.5 million
  Net interest income increased 29%, or $2.2 million
  Noninterest income increased 20%, or $447 thousand
 

Merger related expenses totaled $1.3 million
 

Nonperforming assets totaled $4.0 million, or 0.30% of total assets

 

ACQUISITION OF THE BANK OF FINCASTLE

 

On July 1, 2021, the Company completed the acquisition of The Bank of Fincastle (“Fincastle”) for an aggregate purchase price of $33.8 million of cash and stock.  Fincastle was merged with and into First Bank. The former Fincastle branches continued to operate as The Bank of Fincastle, a division of First Bank, until the systems were converted on October 16, 2021. For the three-month and nine-month periods ended September 30, 2021, the Company recorded merger related expenses of $1.3 million and $2.0 million, respectively. The Company estimates it will incur an additional $1.4 million of merger related costs throughout the fourth quarter of 2021 and first quarter of 2022, which would result in aggregate costs related to the Merger of $3.4 million.

 

 

The following information was filed by First National Corp (FXNC) on Friday, October 29, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside First National Corp's 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Consolidated Balance Sheets (Current Period Unaudited)
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals)
Consolidated Statements Of Cash Flows (Unaudited)
Consolidated Statements Of Changes In Shareholders' Equity (Unaudited)
Consolidated Statements Of Changes In Shareholders' Equity (Unaudited) (Parentheticals)
Consolidated Statements Of Comprehensive Income (Unaudited)
Consolidated Statements Of Comprehensive Income (Unaudited) (Parentheticals)
Consolidated Statements Of Income (Unaudited)
Note 1 - General
Note 1 - General (Details Textual)
Note 10 - Benefit Plans
Note 10 - Benefit Plans (Details Textual)
Note 11 - Earnings Per Common Share
Note 11 - Earnings Per Common Share (Details Textual)
Note 11 - Earnings Per Common Share (Tables)
Note 11 - Earnings Per Common Share - Basic And Diluted Earnings Per Share (Details)
Note 12 - Fair Value Measurements
Note 12 - Fair Value Measurements (Details Textual)
Note 12 - Fair Value Measurements (Tables)
Note 12 - Fair Value Measurements - Assets Measured At Fair Value On A Nonrecurring Basis (Details)
Note 12 - Fair Value Measurements - Balances Of Assets Measured At Fair Value On Recurring Basis (Details)
Note 12 - Fair Value Measurements - Carrying Values And Estimated Values Of Financial Instruments (Details)
Note 12 - Fair Value Measurements - Quantitative Information About Level 3 Fair Value Measurements (Details)
Note 13 - Stock Compensation Plans
Note 13 - Stock Compensation Plans (Details Textual)
Note 13 - Stock Compensation Plans (Tables)
Note 13 - Stock Compensation Plans - Summary Of Restricted Stock Unit Activity (Details)
Note 14 - Accumulated Other Comprehensive Income (Loss)
Note 14 - Accumulated Other Comprehensive Income (Loss) (Tables)
Note 14 - Accumulated Other Comprehensive Income (Loss) - Changes In Each Component Of Accumulated Other Comprehensive Income (Loss) (Details)
Note 14 - Accumulated Other Comprehensive Income (Loss) - Changes In Each Component Of Accumulated Other Comprehensive Income (Loss) (Details) (Parentheticals)
Note 14 - Accumulated Other Comprehensive Income (Loss) - Reclassifications From Accumulated Other Comprehensive Loss (Details)
Note 15 - Revenue Recognition
Note 15 - Revenue Recognition (Tables)
Note 15 - Revenue Recognition - Disaggregation Of Revenue (Details)
Note 16 - Derivative Financial Instruments
Note 16 - Derivative Financial Instruments (Details Textual)
Note 16 - Derivative Financial Instruments (Tables)
Note 16 - Derivative Financial Instruments - Derivative Instruments Components (Details)
Note 17 - Acquisitions
Note 17 - Acquisitions (Details Textual)
Note 17 - Acquisitions (Tables)
Note 17 - Acquisitions - Consideration Paid And The Assets Acquired And Liabilities Assumed (Details)
Note 17 - Acquisitions - Unaudited Pro Forma Amounts (Details)
Note 2 - Securities
Note 2 - Securities (Details Textual)
Note 2 - Securities (Tables)
Note 2 - Securities - Amortized Cost And Fair Value Of Securities (Details)
Note 2 - Securities - Composition Of Restricted Securities (Details)
Note 2 - Securities - Investments In An Unrealized Loss Position That Were Temporarily Impaired (Details)
Note 2 - Securities - Summary Of Amortized Costs And Fair Values Of Securities (Details)
Note 3 - Loans
Note 3 - Loans (Details Textual)
Note 3 - Loans (Tables)
Note 3 - Loans - Analysis Of The Credit Risk Profile Of Each Loan Class (Details)
Note 3 - Loans - Loans Acquired In Business Combinations (Details)
Note 3 - Loans - Summary Of Loan Classes And An Aging Of Past Due Loans (Details)
Note 3 - Loans - Summary Of Loans (Details)
Note 4 - Allowance For Loan Losses
Note 4 - Allowance For Loan Losses (Details Textual)
Note 4 - Allowance For Loan Losses (Tables)
Note 4 - Allowance For Loan Losses - Allowance By Impairment Methodology And Loans By Impairment Methodology (Details)
Note 4 - Allowance For Loan Losses - Impaired Loans And Related Allowances (Details)
Note 5 - Other Real Estate Owned (Oreo)
Note 5 - Other Real Estate Owned (Oreo) (Details Textual)
Note 5 - Other Real Estate Owned (Oreo) (Tables)
Note 5 - Other Real Estate Owned (Oreo) - Changes In Balance For Oreo (Details)
Note 6 - Other Borrowings
Note 6 - Other Borrowings (Details Textual)
Note 7 - Capital Requirements
Note 7 - Capital Requirements (Details Textual)
Note 7 - Capital Requirements (Tables)
Note 7 - Capital Requirements - Comparison Of Capital Of Company And Bank With Minimum Regulatory Guidelines (Details)
Note 8 - Subordinated Debt
Note 8 - Subordinated Debt (Details Textual)
Note 9 - Junior Subordinated Debt
Note 9 - Junior Subordinated Debt (Details Textual)

Material Contracts, Statements, Certifications & more

First National Corp provided additional information to their SEC Filing as exhibits

Ticker: FXNC
CIK: 719402
Form Type: 10-Q Quarterly Report
Accession Number: 0001437749-21-026753
Submitted to the SEC: Mon Nov 15 2021 4:50:31 PM EST
Accepted by the SEC: Mon Nov 15 2021
Period: Thursday, September 30, 2021
Industry: State Commercial Banks

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