First National Corporation today reported earnings of $1.1 million and earnings per share of $0.22 for the quarter ended March 31, 2016, compared to $813 thousand or $0.17 per share for the fourth quarter of 2015, and $215 thousand or $0.04 per share for the first quarter of 2015.
“The Company benefited from loan growth, lower expenses and a full quarter with no outstanding preferred stock,” said Scott C. Harvard, president and chief executive officer of First National. “During the first quarter, net interest income and net interest margin increased over prior quarters as the earning asset mix continued to improve from loan growth while the Company was able to maintain its low cost funding. Expenses decreased again this quarter with lower legal and professional fees and lower other real estate owned expense.
“We’ve been pleased with the execution of our balance sheet strategies that included growing deposits through acquisition, deploying liquidity into the loan portfolio, and reducing the cost of capital by redeeming preferred stock. Profitability has improved for three consecutive quarters from balance sheet changes and cost reductions. We continued working on our initiative to streamline, serve and save. This initiative is being driven by a team of employees from across the Company who are diligently working to improve efficiency by updating processes, improving service to customers, and reducing costs. The goal of this initiative is to increase capacity for balance sheet growth and to improve profitability.”
Select highlights for the first quarter include:
- Return on equity increased to 9.39%, compared to 7.01% for the fourth quarter of 2015, and 3.67% for the first quarter of 2015
- Net income available to common shareholders increased $286 thousand, or 35%, to $1.1 million compared to the fourth quarter of 2015, and increased $884 thousand compared to the first quarter of 2015
- Net loans increased $15.1 million, or 3%, during the quarter, and increased $56.8 million, or 15%, over the prior year
- Net interest margin increased to 3.63% compared to 3.53% for the fourth quarter of 2015
- Net interest income increased $101 thousand, or 2%, over the fourth quarter of 2015, and increased $1.1 million, or 23%, compared to the first quarter of 2015
- Noninterest income, excluding gains on sale of securities, decreased by $264 thousand, or 12%, compared to the fourth quarter of 2015, and increased $294 thousand, or 18%, compared to the first quarter of 2015
- Noninterest expense decreased $395 thousand, or 6%, compared to the fourth quarter of 2015, and increased $630 thousand, or 11%, compared to the first quarter of 2015
- Effective dividend on preferred stock decreased $128 thousand compared to the fourth quarter of 2015, and decreased $329 thousand compared to the first quarter of 2015
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