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First National Corp (FXNC) SEC Filing 10-K Annual Report for the fiscal year ending Friday, December 31, 2021

SEC Filings

First National Corp

CIK: 719402 Ticker: FXNC

Exhibit 99.1

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First National Corporation Reports Fourth Quarter 2021 Financial Results

 

STRASBURG, Va., January 31, 2022 --- 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 $2.2 million, or $0.35 per diluted share, for the fourth quarter of 2021, which included $1.3 million of merger expenses and provision for loan losses of $350 thousand. This compares to net income of $3.2 million, or $0.65 per diluted share for the fourth quarter of 2020 that included recovery of loan losses of $200 thousand.

 

For the year ending December 31, 2021, net income totaled $10.4 million, or $1.86 per diluted share, which included $3.5 million of merger expenses, and resulted in a return on average assets of 0.88% and a return on average equity of 10.30%. This compares to net income of $8.9 million, or $1.82 per diluted share, and a return on average assets of 0.98% and a return on average equity of 10.92% for the same period of 2020. Recovery of loan losses of $650 thousand and provision for loan losses of $3.0 million were included in net income for the years ending December 31, 2021 and 2020, respectively.

 

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

 

 

Completed operational merger of The Bank of Fincastle into First Bank
    Conversion, employee severance and vendor contract termination costs completed
    Tangible book value per share from merger less dilutive than initial estimate
    Goodwill from merger totaled $1.2 million, compared to initial estimate of $3.9 million
  Completed transaction with SmartBank, which included:
    Seven-person team lift
    Assumption of office lease in the Richmond market
    Acquisition of $82.6 million of loans and branch assets
  Efficiency ratio of 64.69%
  Net interest income increased $2.6 million, or 35%
  Noninterest income increased $794 thousand, or 37%
  Loans increased $195.2 million, or 31%
  Tangible book value per share increased by 5% to $18.28

 

“The Company delivered impressive financial performance for the fourth quarter and for the year while absorbing expenses associated with two strategic acquisitions,” said Scott Harvard, president and chief executive officer of First National.  Harvard continued, “During the quarter, our team successfully completed expansion initiatives into the Richmond and Roanoke markets and began to experience some momentum growing the loan portfolio. We are pleased that we’ve retained the total amount of deposits assumed from the Fincastle acquisition and are optimistic about the impact our newly acquired bankers and markets could have on profitability. With the combination of the dedicated employees and the recent new additions to our team, we believe our banking company is well-positioned to be a leader in Virginia banking and deliver solid returns to our investors.”

 

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 (the “Merger”).  Fincastle was merged with and into First Bank. The former Fincastle branches operated as The Bank of Fincastle, a division of First Bank, until their systems were converted on October 16, 2021. For the three-month and twelve-month periods ended December 31, 2021, the Company incurred merger expenses of $1.3 million and $3.5 million, respectively. The Company estimates it will incur approximately $20 thousand of additional merger expenses in the first quarter of 2022.

 

 

The following information was filed by First National Corp (FXNC) on Friday, February 4, 2022 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-K Annual 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-K Annual Report:

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (Parentheticals)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Changes In Shareholders' Equity
Consolidated Statements Of Changes In Shareholders' Equity (Parentheticals)
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Comprehensive Income (Parentheticals)
Consolidated Statements Of Income
Note 1 - Nature Of Banking Activities And Significant Accounting Policies
Note 1 - Nature Of Banking Activities And Significant Accounting Policies (Details Textual)
Note 10 - Junior Subordinated Debt
Note 10 - Junior Subordinated Debt (Details Textual)
Note 11 - Income Taxes
Note 11 - Income Taxes (Tables)
Note 11 - Income Taxes - Income Tax Expense (Details)
Note 11 - Income Taxes - Income Tax Rate Reconciliation (Details)
Note 11 - Income Taxes - Net Deferred Tax Assets (Details)
Note 12 - Funds Restrictions And Reserve Balance
Note 12 - Funds Restrictions And Reserve Balance (Details Textual)
Note 13 - Benefit Plans
Note 13 - Benefit Plans (Details Textual)
Note 14 - Earnings Per Common Share
Note 14 - Earnings Per Common Share (Tables)
Note 14 - Earnings Per Common Share - Basic And Diluted Earnings Per Share (Details)
Note 15 - Commitments And Unfunded Credits
Note 15 - Commitments And Unfunded Credits (Details Textual)
Note 15 - Commitments And Unfunded Credits (Tables)
Note 15 - Commitments And Unfunded Credits - Financial Instruments Representing Credit Risk (Details)
Note 16 - Transactions With Related Parties
Note 16 - Transactions With Related Parties (Details Textual)
Note 17 - Lease Commitments
Note 17 - Lease Commitments (Details Textual)
Note 17 - Lease Commitments (Tables)
Note 17 - Lease Commitments - Operating Lease Right-Of-Use Asset And Operating Lease Liability (Details)
Note 17 - Lease Commitments - Schedule Of Lease Cost And Additional Information Related To Operating Leases (Details)
Note 17 - Lease Commitments - Schedule Of Undiscounted Cash Flows That Contribute To The Operating Lease Liability (Details)
Note 18 - Dividend Reinvestment Plan
Note 18 - Dividend Reinvestment Plan (Details Textual)
Note 19 - Fair Value Measurements
Note 19 - Fair Value Measurements (Details Textual)
Note 19 - Fair Value Measurements (Tables)
Note 19 - Fair Value Measurements - Assets Measured At Fair Value On A Nonrecurring Basis (Details)
Note 19 - Fair Value Measurements - Balances Of Assets Measured At Fair Value On Recurring Basis (Details)
Note 19 - Fair Value Measurements - Carrying Values And Estimated Values Of Financial Instruments (Details)
Note 19 - Fair Value Measurements - Quantitative Information About Level 3 Fair Value Measurements (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 20 - Regulatory Matters
Note 20 - Regulatory Matters (Details Textual)
Note 20 - Regulatory Matters (Tables)
Note 20 - Regulatory Matters - Comparison Of Capital Of Company And Bank With Minimum Regulatory Guidelines (Details)
Note 21 - Accumulated Other Comprehensive Income (Loss)
Note 21 - Accumulated Other Comprehensive Income (Loss) (Tables)
Note 21 - Accumulated Other Comprehensive Income (Loss) - Changes In Each Component Of Accumulated Other Comprehensive Income (Loss) (Details)
Note 21 - Accumulated Other Comprehensive Income (Loss) - Changes In Each Component Of Accumulated Other Comprehensive Income (Loss) (Details) (Parentheticals)
Note 21 - Accumulated Other Comprehensive Income (Loss) - Reclassifications From Accumulated Other Comprehensive Loss (Details)
Note 22 - Stock Compensation Plans
Note 22 - Stock Compensation Plans (Details Textual)
Note 22 - Stock Compensation Plans (Tables)
Note 22 - Stock Compensation Plans - Summary Of Restricted Stock Unit Activity (Details)
Note 23 - Revenue Recognition
Note 23 - Revenue Recognition (Tables)
Note 23 - Revenue Recognition - Disaggregation Of Revenue (Details)
Note 24 - Derivative Financial Instruments
Note 24 - Derivative Financial Instruments (Details Textual)
Note 24 - Derivative Financial Instruments (Tables)
Note 24 - Derivative Financial Instruments - Derivative Instruments Components (Details)
Note 25 - Acquisitions
Note 25 - Acquisitions (Details Textual)
Note 25 - Acquisitions (Tables)
Note 25 - Acquisitions - Consideration Paid And The Assets Acquired And Liabilities Assumed (Details)
Note 25 - Acquisitions - Unaudited Pro Forma Amounts (Details)
Note 26 - Subsequent Events
Note 26 - Subsequent Events (Details Textual)
Note 27 - Parent Company Only Financial Statements
Note 27 - Parent Company Only Financial Statements (Tables)
Note 27 - Parent Company Only Financial Statements - Balance Sheet (Details)
Note 27 - Parent Company Only Financial Statements - Statements Of Cash Flows (Details)
Note 27 - Parent Company Only Financial Statements - Statements Of Income (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
Note 5 - Other Real Estate Owned (Details Textual)
Note 5 - Other Real Estate Owned (Tables)
Note 5 - Other Real Estate Owned - Changes In Balance For Oreo (Details)
Note 6 - Premises And Equipment
Note 6 - Premises And Equipment (Details Textual)
Note 6 - Premises And Equipment (Tables)
Note 6 - Premises And Equipment - Premises And Equipment (Details)
Note 7 - Deposits
Note 7 - Deposits (Details Textual)
Note 7 - Deposits (Tables)
Note 7 - Deposits - Scheduled Maturities Of Time Deposits (Details)
Note 8 - Other Borrowings
Note 8 - Other Borrowings (Details Textual)
Note 9 - Subordinated Debt
Note 9 - Subordinated Debt (Details Textual)
Significant Accounting Policies (Policies)
Ticker: FXNC
CIK: 719402
Form Type: 10-K Annual Report
Accession Number: 0001437749-22-007721
Submitted to the SEC: Wed Mar 30 2022 5:23:47 PM EST
Accepted by the SEC: Wed Mar 30 2022
Period: Friday, December 31, 2021
Industry: State Commercial Banks

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