INVESTOR RELATIONS
Contact information
First National Corporation,
112 West King Street
Strasburg, VA 22657
(540) 465-9121

Investor Relations Contact
Mr. M. Shane Bell
(540) 465-6130
sbell@fbvirginia.com

Transfer Agent
Broadridge Corporate Issuer Solutions
P.O. Box 1342
Brentwood, NY 11717
Phone: 1-800-685-4509
Fax: 215-553-5402
shareholder@broadridge.com

First National Corporation Announces Third Quarter Earnings

Company Release - 10/23/2019 7:30 AM ET

STRASBURG, Va., Oct. 23, 2019 (GLOBE NEWSWIRE) -- First National Corporation (the “Company” or “First National”) (NASDAQ:FXNC) reported net income of $2.5 million, or $0.50 per diluted share, for the third quarter of 2019, which resulted in a return on average assets of 1.27% and a return on average equity of 13.31%. This compared to $2.7 million or $0.54 per diluted share, and a return on average assets of 1.41% and a return on average equity of 16.89% for the third quarter of 2018.

Highlights for the third quarter of 2019:

  • Return on average equity of 13.31%
  • Return on average assets of 1.27%
  • Wealth management revenue increased 13%
  • Net interest margin of 3.87%
  • Nonperforming assets decreased to 0.20% of assets

“While our company delivered another quarter of excellent financial performance for our shareholders, the challenges of lower interest rates with a flat or inverted yield curve continue to put pressure on the net interest margin,” said Scott Harvard, president and chief executive officer of First National. Harvard added, “We are pleased with loan growth of five percent year-to-date, while underlying asset quality remains very good based on all metrics. Management has seen no trends that would indicate forward deterioration in the underlying businesses in our portfolio.”

BALANCE SHEET

Total assets of First National increased $30.7 million, or 4%, to $777.2 million at September 30, 2019, compared to $746.5 million at September 30, 2018. The earning asset composition changed favorably as loans, net of the allowance for loan losses, increased $31.3 million, or 6%, while securities and interest-bearing deposits in banks decreased $5.6 million, or 4%.

Total deposits increased $18.5 million, or 3%, to $685.6 million at September 30, 2019, compared to $667.1 million at September 30, 2018. There was a slight change in the deposit composition as noninterest-bearing deposits was unchanged at 28% of total deposits, while savings and interest-bearing demand deposits increased from 54% to 55% of total deposits and time deposits decreased from 18% to 17% of total deposits.

Shareholders’ equity increased $11.7 million to $75.3 million at September 30, 2019, compared to $63.7 million one year ago, primarily from a $7.6 million increase in retained earnings and a $3.9 million increase in accumulated other comprehensive income. Tangible common equity totaled $75.1 million at the end of the third quarter, an increase of 19% compared to $63.1 million at September 30, 2018. The Company’s wholly owned subsidiary, First Bank (the “Bank”), was considered well capitalized at September 30, 2019.

ANALYSIS OF THE THREE-MONTH PERIOD

Net interest income was unchanged at $7.1 million for the quarter ended September 30, 2019, compared to the third quarter of 2018. Average earning asset balances increased 4%, while the net interest margin decreased 15 basis points to 3.87%, compared to 4.02% for the same period in 2018. The decrease in the net interest margin resulted from an 18 basis point increase in interest expense as a percent of average earning assets, which was partially offset by a 3 basis point increase in the yield on average earning assets.

The higher yield on average earning assets was attributable to the change in the earning asset composition, as loans increased from 76% to 79% of average earning assets, while interest-bearing deposits in banks and securities decreased from 24% to 21% of average earning assets. The increase in interest expense was primarily attributable to higher interest rates paid on deposits, as the cost of total interest-bearing deposits increased 29 basis points.

Noninterest income was unchanged at $2.2 million, compared to the same period of 2018. Wealth management fees increased $54 thousand, or 13%, ATM and check card fees increased $46 thousand, or 8%, fees for other customer services increased $34 thousand, or 24%, and income from bank owned life insurance increased $24 thousand, or 22%. These increases were partially offset by a $61 thousand, or 7%, decrease in service charges on deposits and a $79 thousand decrease in other operating income. Other operating income decreased primarily as a result of revenue earned during the prior year from a settlement and release agreement related to brokerage services, which is no longer being earned in the current year.

Noninterest expense increased $236 thousand, or 4%, to $6.2 million, compared to the same period one year ago. The increase was primarily attributable to a $185 thousand, or 6%, increase in salaries and employee benefits, an $86 thousand, or 16%, increase in other operating expense, a $20 thousand, or 16%, increase in marketing expense, and an $18 thousand, or 15%, increase in bank franchise tax expense. The increase in other operating expense was attributable to an increase in fraud losses on ATM and debit card transactions. These increases were partially offset by an $84 thousand decrease in FDIC assessments.

ANALYSIS OF THE NINE-MONTH PERIOD

Net interest income increased $474 thousand, or 2%, to $20.9 million for the nine months ended September 30, 2019, compared to $20.5 million for the same period of 2018. The increase resulted from a higher net interest margin and higher average earning asset balances. Average earning asset balances increased 2%, and the net interest margin increased 2 basis points to 3.91%. The increase in the net interest margin resulted from a 21 basis point increase in the yield on average earning assets, which was partially offset by a 19 basis point increase in interest expense as a percent of average earning assets. 

The higher yield on average earning assets was attributable to a change in the earning asset composition, a 13 basis point increase in the yield on loans, and a 53 basis point increase in the yield on interest-bearing deposits in banks. The change in the earning asset composition favorably impacted the yield on average earning assets as loans increased from 74% to 78% of average earning assets, while interest-bearing deposits in banks and securities decreased from 26% to 22% of average earning assets. The increase in interest expense was primarily attributable to higher interest rates paid on deposits, as the cost of total interest-bearing deposits increased by 29 basis points.

Noninterest income decreased to $6.2 million, compared to $6.9 million for the same period of 2018. The decrease was primarily attributable to a $410 thousand decrease in income from bank-owned life insurance, a $337 thousand decrease in other operating income, and a $191 thousand, or 8%, decrease in service charges on deposits. These decreases were partially offset by a $133 thousand, or 11%, increase in wealth management fees, a $62 thousand, or 4%, increase in ATM and check card fees, and a $58 thousand, or 13%, increase in fees for other customer services. The decrease in income from bank-owned life insurance resulted from a death benefit recorded in the first quarter of 2018. The decrease in other operating income was impacted by the termination of the Company’s pension plan and subsequent distribution of plan assets in the prior year, which resulted in a one-time increase in other operating income of $126 thousand during the first quarter of 2018, as well as revenue earned during the prior year from a settlement and release agreement related to brokerage services.

Noninterest expense increased $834 thousand, or 5%, to $18.5 million, compared to $17.7 million for the same period one year ago. The increase was primarily attributable to a $393 thousand, or 4%, increase in salaries and employee benefits, a $208 thousand increase in other operating expense, a $132 thousand, or 21%, increase in legal and professional fees, a $130 thousand, or 33%, increase in marketing expense, a $63 thousand, or 5%, increase in occupancy expense, and a $51 thousand, or 15%, increase in bank franchise tax. The increase in other operating expense was attributable to fraud losses on ATM and debit card transactions, costs of listing the Company’s common stock on the Nasdaq Capital Market stock exchange, and higher education and training expenses. The increase in legal and professional fees resulted primarily from legal costs related to an evaluation of strategic initiatives, an increase in investment advisory costs of the wealth management department, and consulting expenses related to bank compliance testing and implementation of new accounting standards. The increase in investment advisory costs correlated with the increase in wealth management revenue, when comparing the same periods. The increase in marketing expense was attributable to strategic initiatives. These increases were partially offset by a $128 thousand decrease in FDIC assessments.

ASSET QUALITY/LOAN LOSS PROVISION

There was no provision for loan losses recorded during the third quarters of 2019 and 2018. Net charge-offs totaled $83 thousand for the third quarter of 2019 compared to $238 thousand for the same period of 2018. Nonperforming assets totaled $1.6 million, or 0.20% of total assets at September 30, 2019, compared to $2.7 million, or 0.37% of total assets, one year ago. The allowance for loan losses totaled $4.9 million, or 0.86% of total loans, and $4.8 million, or 0.89% of total loans, at September 30, 2019 and 2018, respectively.

The provision for loan losses totaled $200 thousand for the nine-month period ended September 30, 2019, compared to $100 thousand for the same period in 2018. Net charge-offs totaled $297 thousand for the nine months ended September 30, 2019 compared to $625 thousand for the same period of 2018.

FORWARD-LOOKING STATEMENTS

Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company’s future operations and are generally identified by phrases such as “the Company expects,” “the Company believes” or words of similar import. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. For details on factors that could affect expectations, see the risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and other filings with the Securities and Exchange Commission.

ABOUT FIRST NATIONAL CORPORATION

First National Corporation (NASDAQ:FXNC) is the parent company and bank holding company of First Bank, a community bank that first opened for business in 1907 in Strasburg, Virginia. The Bank offers loan and deposit products and services through its website, www.fbvirginia.com, its mobile banking platform, a network of ATMs located throughout its market area, one loan production office, a customer service center in a retirement community, and 14 bank branch office locations located throughout the Shenandoah Valley and central regions of Virginia. In addition to providing traditional banking services, the Bank operates a wealth management division under the name First Bank Wealth Management. First Bank also owns First Bank Financial Services, Inc., which invests in entities that provide investment services and title insurance.

   
CONTACTS  
   
Scott C. Harvard M. Shane Bell
President and CEO Executive Vice President and CFO
(540) 465-9121 (540) 465-9121
shavard@fbvirginia.com sbell@fbvirginia.com


FIRST NATIONAL CORPORATION
Quarterly Performance Summary
(in thousands, except share and per share data)
 
  (unaudited)
  For the Quarter Ended
  September 30, June 30, March 31, December 31, September 30,
  2019 2019 2019 2018 2018
Income Statement                    
Interest income                    
Interest and fees on loans $7,429  $7,200  $6,996  $7,106  $6,917 
Interest on deposits in banks  97   133   110   105   88 
Interest on securities                    
Taxable interest  645   696   737   771   797 
Tax-exempt interest  157   159   156   153   156 
Dividends  26   26   24   24   23 
Total interest income $8,354  $8,214  $8,023  $8,159  $7,981 
Interest expense                    
Interest on deposits $1,089  $1,051  $922  $798  $702 
Interest on federal funds purchased  1             
Interest on subordinated debt  90   90   89   91   91 
Interest on junior subordinated debt  103   108   111   105   105 
Interest on other borrowings        2       
Total interest expense $1,283  $1,249  $1,124  $994  $898 
Net interest income $7,071  $6,965  $6,899  $7,165  $7,083 
Provision for loan losses     200      500    
Net interest income after provision for loan losses $7,071  $6,765  $6,899  $6,665  $7,083 
Noninterest income                    
Service charges on deposit accounts $757  $715  $701  $814  $818 
ATM and check card fees  586   573   517   642   540 
Wealth management fees  477   458   437   443   423 
Fees for other customer services  177   153   175   154   143 
Income from bank owned life insurance  131   99   103   97   107 
Net gains (losses) on securities           (1)   
Net gains on sale of loans  34   25   22   23   39 
Other operating income  29   12   30   107   108 
Total noninterest income $2,191  $2,035  $1,985  $2,279  $2,178 
Noninterest expense                    
Salaries and employee benefits $3,556  $3,375  $3,443  $3,306  $3,371 
Occupancy  398   401   438   424   387 
Equipment  410   409   420   410   396 
Marketing  143   239   141   155   123 
Supplies  86   91   73   91   75 
Legal and professional fees  231   303   241   343   229 
ATM and check card expense  225   225   216   178   217 
FDIC assessment  (6)  35   69   68   78 
Bank franchise tax  136   136   130   117   118 
Telecommunications expense  82   79   83   79   83 
Data processing expense  174   179   173   173   168 
Postage expense  43   44   48   51   42 
Amortization expense  71   80   90   99   108 
Other real estate owned expense (income), net              2 
Net loss on disposal of premises and equipment              2 
Other operating expense  637   634   533   587   551 
Total noninterest expense $6,186  $6,230  $6,098  $6,081  $5,950 
Income before income taxes $3,076  $2,570  $2,786  $2,863  $3,311 
Income tax expense  583   484   525   542   635 
Net income $2,493  $2,086  $2,261  $2,321  $2,676 


FIRST NATIONAL CORPORATION
Quarterly Performance Summary
(in thousands, except share and per share data)
 
  (unaudited)
  For the Quarter Ended
  September 30, June 30, March 31, December 31, September 30,
  2019 2019 2019 2018 2018
Common Share and Per Common Share Data                
Net income, basic $0.50  $0.42  $0.46  $0.47  $0.54 
Weighted average shares, basic  4,966,641   4,963,737   4,960,264   4,957,055   4,955,162 
Net income, diluted $0.50  $0.42  $0.46  $0.47  $0.54 
Weighted average shares, diluted  4,969,126   4,965,822   4,964,134   4,960,597   4,958,162 
Shares outstanding at period end  4,968,277   4,964,824   4,963,487   4,957,694   4,956,925 
Tangible book value at period end $15.11  $14.60  $13.97  $13.35  $12.72 
Cash dividends $0.09  $0.09  $0.09  $0.05  $0.05 
                     
Key Performance Ratios                    
Return on average assets  1.27%  1.08%  1.21%  1.22%  1.41%
Return on average equity  13.31%  11.76%  13.47%  14.15%  16.89%
Net interest margin  3.87%  3.88%  3.97%  4.05%  4.02%
Efficiency ratio (1)  65.65%  67.94%  67.23%  62.99%  62.68%
                     
Average Balances                    
Average assets $780,376  $773,574  $757,910  $753,112  $750,619 
Average earning assets  730,865   724,909   709,690   706,323   703,894 
Average shareholders’ equity  74,291   71,124   68,089   65,077   62,882 
                     
Asset Quality                    
Loan charge-offs $156  $219  $228  $374  $295 
Loan recoveries  73   68   165   82   57 
Net charge-offs  83   151   63   292   238 
Non-accrual loans  1,566   1,775   1,915   3,172   2,738 
Other real estate owned, net               
Nonperforming assets  1,566   1,775   1,915   3,172   2,738 
Loans 30 to 89 days past due, accruing  902   792   1,002   1,446   2,707 
Loans over 90 days past due, accruing  113   19   133   235   261 
Troubled debt restructurings, accruing        259   264   269 
Special mention loans  1,458   2,610   1,910   2,078   2,718 
Substandard loans, accruing  3,758   2,825   3,132   3,522   1,216 
                     
Capital Ratios (2)                    
Total capital $83,591  $82,078  $80,780  $74,697  $72,807 
Tier 1 capital  78,679   77,083   75,834   69,688   68,006 
Common equity tier 1 capital  78,679   77,083   75,834   69,688   68,006 
Total capital to risk-weighted assets  14.57%  14.24%  14.49%  13.62%  13.25%
Tier 1 capital to risk-weighted assets  13.71%  13.37%  13.60%  12.71%  12.38%
Common equity tier 1 capital to risk-weighted assets  13.71%  13.37%  13.60%  12.71%  12.38%
Leverage ratio  10.09%  9.96%  10.01%  9.26%  9.07%


FIRST NATIONAL CORPORATION
Quarterly Performance Summary
(in thousands, except share and per share data)
 
  (unaudited)
  For the Quarter Ended
  September 30, June 30, March 31, December 31, September 30,
  2019 2019 2019 2018 2018
Balance Sheet                    
Cash and due from banks $11,885  $12,354  $10,862  $13,378  $11,370 
Interest-bearing deposits in banks  18,488   10,716   31,833   15,240   10,068 
Securities available for sale, at fair value  114,568   119,510   121,202   99,857   102,748 
Securities held to maturity, at amortized cost  18,222   18,828   19,489   43,408   44,239 
Restricted securities, at cost  1,806   1,701   1,701   1,688   1,590 
Loans held for sale  1,098   675   200   419   516 
Loans, net of allowance for loan losses  566,341   569,959   545,529   537,847   535,020 
Premises and equipment, net  19,946   20,182   20,282   20,066   19,557 
Accrued interest receivable  2,053   2,163   2,143   2,113   2,138 
Bank owned life insurance  17,324   17,193   17,094   13,991   13,894 
Core deposit intangibles, net  231   302   382   472   571 
Other assets  5,231   4,801   4,361   4,490   4,743 
Total assets $777,193  $778,384  $775,078  $752,969  $746,454 
                     
Noninterest-bearing demand deposits $189,797  $186,553  $189,261  $181,964  $186,293 
Savings and interest-bearing demand deposits  376,047   385,399   377,673   369,383   360,988 
Time deposits  119,777   117,863   117,290   119,219   119,823 
Total deposits $685,621  $689,815  $684,224  $670,566  $667,104 
Other borrowings        5,000       
Subordinated debt  4,978   4,974   4,969   4,965   4,961 
Junior subordinated debt  9,279   9,279   9,279   9,279   9,279 
Accrued interest payable and other liabilities  1,999   1,507   1,878   1,485   1,459 
Total liabilities $701,877  $705,575  $705,350  $686,295  $682,803 
                     
Preferred stock $  $  $  $  $ 
Common stock  6,210   6,206   6,204   6,197   6,196 
Surplus  7,648   7,566   7,515   7,471   7,438 
Retained earnings  60,314   58,268   56,629   54,814   52,741 
Accumulated other comprehensive income (loss), net  1,144   769   (620)  (1,808)  (2,724)
Total shareholders’ equity $75,316  $72,809  $69,728  $66,674  $63,651 
Total liabilities and shareholders’ equity $777,193  $778,384  $775,078  $752,969  $746,454 
                     
Loan Data                    
Mortgage loans on real estate:                    
Construction and land development $45,193  $46,281  $48,948  $45,867  $42,982 
Secured by farmland  916   855   883   880   942 
Secured by 1-4 family residential  226,828   225,820   217,527   215,945   211,938 
Other real estate loans  232,151   236,515   220,513   218,673   223,961 
Loans to farmers (except those secured by real estate)  1,461   1,006   806   1,035   937 
Commercial and industrial loans (except those secured by real estate)  49,096   48,347   45,239   43,570   41,924 
Consumer installment loans  11,040   11,572   11,890   12,061   12,301 
Deposit overdrafts  263   208   204   275   249 
All other loans  4,305   4,350   4,465   4,550   4,587 
Total loans $571,253  $574,954  $550,475  $542,856  $539,821 
Allowance for loan losses  (4,912)  (4,995)  (4,946)  (5,009)  (4,801)
Loans, net $566,341  $569,959  $545,529  $537,847  $535,020 


FIRST NATIONAL CORPORATION
Quarterly Performance Summary
(in thousands, except share and per share data)
 
  (unaudited)
  For the Quarter Ended
  September 30, June 30, March 31, December 31, September 30,
  2019 2019 2019 2018 2018
Reconciliation of Tax-Equivalent Net Interest Income                 
GAAP measures:                    
Interest income – loans $7,429  $7,200  $6,996  $7,106  $6,917 
Interest income – investments and other  925   1,014   1,027   1,053   1,064 
Interest expense – deposits  (1,089)  (1,051)  (922)  (798)  (702)
Interest expense – federal funds purchased  (1)            
Interest expense – subordinated debt  (90)  (90)  (89)  (91)  (91)
Interest expense – junior subordinated debt  (103)  (108)  (111)  (105)  (105)
Interest expense – other borrowings        (2)      
Total net interest income $7,071  $6,965  $6,899  $7,165  $7,083 
Non-GAAP measures:                    
Tax benefit realized on non-taxable interest income – loans $9  $10  $11  $11  $12 
Tax benefit realized on non-taxable interest income – municipal securities  43   42   41   42   41 
Total tax benefit realized on non-taxable interest income $52  $52  $52  $53  $53 
Total tax-equivalent net interest income $7,123  $7,017  $6,951  $7,218  $7,136 


FIRST NATIONAL CORPORATION
Year-to-Date Performance Summary
(in thousands, except share and per share data)
 
  (unaudited)
  For the Nine Months Ended
  September 30, September 30,
  2019 2018
Income Statement        
Interest income        
Interest and fees on loans $21,625  $19,768 
Interest on deposits in banks  340   434 
Interest on securities        
Taxable interest  2,078   2,253 
Tax-exempt interest  472   457 
Dividends  76   67 
Total interest income $24,591  $22,979 
Interest expense        
Interest on deposits $3,062  $1,957 
Interest on federal funds purchased  1    
Interest on subordinated debt  269   269 
Interest on junior subordinated debt  322   292 
Interest on other borrowings  2    
Total interest expense $3,656  $2,518 
Net interest income $20,935  $20,461 
Provision for loan losses  200   100 
Net interest income after provision for loan losses $20,735  $20,361 
Noninterest income        
Service charges on deposit accounts $2,173  $2,364 
ATM and check card fees  1,676   1,614 
Wealth management fees  1,372   1,239 
Fees for other customer services  505   447 
Income from bank owned life insurance  333   743 
Net gains on sale of loans  81   63 
Other operating income  71   408 
Total noninterest income $6,211  $6,878 
Noninterest expense        
Salaries and employee benefits $10,374  $9,981 
Occupancy  1,237   1,174 
Equipment  1,239   1,239 
Marketing  523   393 
Supplies  250   243 
Legal and professional fees  775   643 
ATM and check card expense  666   631 
FDIC assessment  98   226 
Bank franchise tax  402   351 
Telecommunications expense  244   217 
Data processing expense  526   500 
Postage expense  135   145 
Amortization expense  241   359 
Other real estate owned expense (income), net     (20)
Net loss on disposal of premises and equipment     2 
Other operating expense  1,804   1,596 
Total noninterest expense $18,514  $17,680 
Income before income taxes $8,432  $9,559 
Income tax expense  1,592   1,745 
Net income $6,840  $7,814 


FIRST NATIONAL CORPORATION
Year-to-Date Performance Summary
(in thousands, except share and per share data)
 
  (unaudited)
  For the Nine Months Ended
  September 30, September 30,
  2019 2018
Common Share and Per Common Share Data        
Net income, basic $1.38  $1.58 
Weighted average shares, basic  4,963,571   4,952,351 
Net income, diluted $1.38  $1.58 
Weighted average shares, diluted  4,966,384   4,954,955 
Shares outstanding at period end  4,968,277   4,956,925 
Tangible book value at period end $15.11  $12.72 
Cash dividends $0.27  $0.15 
         
Key Performance Ratios        
Return on average assets  1.19%  1.38%
Return on average equity  12.85%  17.17%
Net interest margin  3.91%  3.89%
Efficiency ratio (1)  66.93%  63.07%
         
Average Balances        
Average assets $770,777  $754,856 
Average earning assets  721,899   707,998 
Average shareholders’ equity  71,148   60,848 
         
Asset Quality        
Loan charge-offs $603  $795 
Loan recoveries  306   170 
Net charge-offs  297   625 
         
Reconciliation of Tax-Equivalent Net Interest Income        
GAAP measures:        
Interest income – loans $21,625  $19,768 
Interest income – investments and other  2,966   3,211 
Interest expense – deposits  (3,062)  (1,957)
Interest expense – federal funds purchased  (1)   
Interest expense – subordinated debt  (269)  (269)
Interest expense – junior subordinated debt  (322)  (292)
Interest expense – other borrowings  (2)   
Total net interest income $20,935  $20,461 
Non-GAAP measures:        
Tax benefit realized on non-taxable interest income – loans $30  $33 
Tax benefit realized on non-taxable interest income – municipal securities  126   121 
Total tax benefit realized on non-taxable interest income $156  $154 
Total tax-equivalent net interest income $21,091  $20,615 
 
(1) The efficiency ratio is computed by dividing noninterest expense excluding other real estate owned income/expense, amortization of intangibles, and gains and losses on disposal of premises and equipment by the sum of net interest income on a tax-equivalent basis and noninterest income, excluding gains and losses on sales of securities. Tax-equivalent net interest income is calculated by adding the tax benefit realized from interest income that is nontaxable to total interest income then subtracting total interest expense. The tax rate utilized in calculating the tax benefit is 21%. See the tables above for tax-equivalent net interest income and reconciliations of net interest income to tax-equivalent net interest income. The efficiency ratio is a non-GAAP financial measure that management believes provides investors with important information regarding operational efficiency. Such information is not prepared in accordance with U.S. generally accepted accounting principles (GAAP) and should not be construed as such. Management believes; however, such financial information is meaningful to the reader in understanding operational performance, but cautions that such information not be viewed as a substitute for GAAP.
 
(2) All capital ratios reported are for First Bank.
 

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Source: First National Corporation