First National Corporation reports second quarter 2020 net income

First National CorporationFirst National Corporation reported unaudited consolidated net income of $2.2 million, or $0.46 per diluted share, for the second quarter of 2020, which resulted in a return on average assets of 1.00% and a return on average equity of 11.30%.

This compares to net income of $2.1 million, or $0.42 per diluted share, and a return on average assets of 1.08% and a return on average equity of 11.76% for the second quarter of 2019.

Provision for loan losses of $800 thousand and $200 thousand was included in net income for the three-month periods ending June 30, 2020 and 2019, respectively.

For the six months ending June 30, 2020, net income totaled $3.9 million, or $0.81 per diluted share, which resulted in a return on average assets of 0.93% and a return on average equity of 10.01%. This compares to net income of $4.3 million, or $0.88 per diluted share, and a return on average assets of 1.14% and a return on average equity of 12.60% for the same period of 2019.

Provision for loan losses of $1.7 million and $200 thousand was included in net income for the six-month periods ending June 30, 2020 and 2019, respectively.

Highlights for the second quarter of 2020:

  • Return on assets of 1.00% and return on equity of 11.30%
  • Provision for loan losses totaled $800 thousand compared to $200 thousand in Q2 2019
  • Originated $76.2 million of Payroll Protection Program loans
  • Nonperforming assets at 0.16% of assets
  • Loans in the Bank’s deferred payment program totaled $182.6 million
  • Subordinated debt issuance of $5.0 million further strengthened holding company liquidity
  • Tangible book value increased 14% to $16.63 per share compared to $14.60 one year ago

“Our team of associates continued to demonstrate an incredible commitment to their customers, their communities, and one another throughout the second quarter,” said Scott Harvard, president and chief executive officer of First National. Harvard continued, “Our teammates worked overtime to deliver over $76 million of payroll protection funds to small businesses and provided access to deposit accounts via the drive throughs at branches, through First Bank’s mobile and internet banking platforms, and with in-person meetings by appointment. On July 1, we were pleased to re-open branch lobbies for in-person transactions to serve our customers and communities, while taking precautions to help keep our customers and employees healthy.”

“We were pleased once again with the financial performance of the company in the second quarter. Expenses decreased, while net interest income improved over the second quarter of 2019. We continued to earn new business customers from our commitment to serving small businesses by participating in the payroll protection program and by offering programs designed to provide financial relief to customers. We still expect significant pressure on loans to borrowers in several sectors, including the hospitality and health care industries, which have been impacted by government orders and the public’s adoption of social distancing. The company’s liquidity position continues to be very strong and capital levels exceed all regulatory thresholds to be considered well-capitalized,” Harvard said.


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