First National Corporation reported earnings of $1.7 million and earnings per share of $0.34 for the third quarter ended September 30, 2016, an 18% increase compared to $1.4 million or $0.29 per share for the second quarter of 2016.
Earnings for the third quarter of 2015 were $398 thousand or $0.08 per share.
For the nine months ended September 30, 2016, reported earnings totaled $4.2 million or $0.86 per share, compared to $729 thousand or $0.15 per share for the nine months ended September 30, 2015.
Year‐to‐date earnings for 2016 were positively impacted by higher revenues from net interest income and noninterest income, combined with lower noninterest expenses.
In addition, net income available to common shareholders was favorably impacted by the elimination of dividends on preferred stock. Year‐to‐date earnings for 2015 were negatively impacted by integration expenses totaling $897 thousand related to the acquisition of six bank branches and the assumption of $186.8 million of deposit liabilities.
Select highlights for the third quarter include:
- Return on equity increased to 13.44%, compared to 11.90% for the second quarter of 2016, and 4.80% for the third quarter of 2015
- Net income available to common shareholders increased $261 thousand, or 18%, to $1.7 million compared to the second quarter of 2016, and increased $1.3 million compared to the third quarter of 2015
- The efficiency ratio improved to 68.56% for the quarter, compared to 71.62% in the prior quarter and 81.38% in the third quarter of 2015
- Noninterest income increased $199 thousand, or 9%, compared to the prior quarter, and increased $67 thousand, or 3%, compared to the third quarter of 2015
- Noninterest expense decreased for the fifth consecutive quarter, and decreased $848 thousand, or 13%, compared to the third quarter of 2015
- Assets per employee increased to $4.3 million, compared to $3.6 million at the end of the third quarter of 2015
- Net interest income increased $51 thousand compared to the prior quarter, and increased $421 thousand, or 8%, compared to the third quarter of 2015
- Net loans increased $5.4 million during the quarter, and increased $64.4 million, or 16%, over the prior year
- Noninterest‐bearing demand deposits increased $8.9 million, or 6%, compared to the prior quarter, and increased $19.0 million, or 13%, over the prior year
“The Company improved profitability for the fifth consecutive quarter by increasing revenue and lowering expense levels,” said Scott Harvard, president and chief executive officer of First National. Harvard added, “We continued to reap the benefits of the 2015 branch deposit acquisition, executing on our strategy of deploying deposits into loans, while reducing expenses and improving efficiency. Thanks to the hard work of our team of associates, productivity has improved from $3.6 million in assets per employee one year ago, to $4.3 million assets per employee at the end of the third quarter of 2016. We are also pleased that we have begun growing deposits in our expanded markets. Total deposits across our market footprint increased 4% from June 30, 2015 to June 30, 2016, according to FDIC data. During that same period, First Bank’s total non‐interest bearing deposits grew by 8%, as the company remained focused on retaining and growing low cost, non‐maturity deposits.”
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