10-Q - FIRST NATIONAL CORP /VA/ (0000719402) (Filer)

Wed, May 14, 7:06 PM (66 days ago)

### Summary of First National Corporation (FXNC) Q1 2025 Financial Performance **Company Overview:** First National Corporation (FXNC) is a bank holding company with subsidiaries including First Bank, which offers a range of financial services. The company completed the acquisition of Touchstone Bankshares, Inc. in October 2024, expanding its presence in Virginia and North Carolina. **Financial Highlights:** - **Revenue:** Total revenue for Q1 2025 was $24.022 million, up from $16.334 million in Q1 2024. - **Net Income:** Net income decreased to $1.598 million from $3.209 million in the same period last year. - **Earnings per Share (EPS):** Basic and diluted EPS were $0.18, down from $0.51 in Q1 2024. - **Profit Margins:** The net interest margin increased to 3.77% from 3.24%. - **Cash Flow:** Net cash provided by operating activities was $3.527 million, down from $4.703 million in Q1 2024. - **Loans:** Total loans were $1.435 billion, a decrease from $1.450 billion in Q1 2024. - **Deposits:** Total deposits increased to $1.825 billion from $1.804 billion. - **Capital Ratios:** The company maintained strong capital ratios, exceeding regulatory requirements. **Performance Metrics:** - **Interest Income:** Increased by $7.7 million, driven by higher loan balances and yields. - **Interest Expense:** Increased by $1.1 million, primarily due to higher deposit costs. - **Noninterest Income:** Decreased by $436 thousand, mainly due to lower other operating income. - **Noninterest Expense:** Increased by $8.4 million, including $1.9 million in merger-related costs. **Trends and Uncertainties:** - **Merger Impact:** The acquisition of Touchstone Bankshares, Inc. contributed to higher operating expenses and loan growth. - **Economic Conditions:** The company faces risks related to economic conditions, interest rates, and regulatory changes. - **Market Risk:** The company is exposed to interest rate risk and market volatility. **Future Operations:** - **Growth Strategy:** The company aims to continue expanding its market presence and improving operational efficiency. - **Risk Management:** The company will focus on maintaining strong credit quality and managing interest rate risk. **Conclusion:** First National Corporation faced challenges in Q1 2025 due to higher expenses related to the Touchstone merger and economic uncertainties. However, the company maintained strong capital ratios and is positioned for future growth through strategic expansions and risk management.