First National Corp (FXNC, Financial) released its Q3 2023 earnings report on October 27, 2023. The company reported unaudited consolidated net income of $3.1 million and diluted earnings per common share of $0.50 for the three-months ending September 30, 2023. This is a decrease compared to net income of $3.5 million and diluted earnings per common share of $0.56 for the three-month period ending June 30, 2023, and net income of $4.5 million and diluted earnings per common share of $0.71 for the third quarter of 2022.
Financial Highlights
The company's return on average assets was 0.91%. Nonperforming assets increased to 0.23% of total assets. The tangible book value per common share totaled $17.38, up $2.07 from one year ago. Despite the challenging interest rate environment, the company's interest margin stabilized during the period as higher earning asset yields offset the higher cost of funds. The Bank’s deposit portfolio, which is comprised of a high percentage of noninterest-bearing deposits, also mitigated pressure on deposit costs during the period.
Income Statement Summary
Net interest income decreased by $62 thousand, or 1%, to $10.7 million for the third quarter of 2023, compared to the linked second quarter of 2023. Total interest income increased by $345 thousand and was offset by an increase in total interest expense of $407 thousand. Noninterest income totaled $3.1 million for the third quarter of 2023, which was a $169 thousand, or 6%, increase compared to the second quarter of 2023.
Balance Sheet Summary
As of September 30, 2023, assets totaled $1.4 billion, which was an $8.0 million decrease from the linked quarter ended June 30, 2023. The asset composition changed slightly as interest bearing deposits in banks and securities decreased $21.4 million and $10.3 million, respectively, while loans, net of the allowance for credit losses, increased $22.3 million. Deposits totaled $1.2 billion at September 30, 2023, and decreased $7.2 million from the linked quarter ended June 30, 2023.
Outlook
First National Corp (FXNC, Financial) will continue to remain vigilant around credit quality, as well as loan and deposit pricing, as it navigates the impact of Federal Reserve actions on the economy. The company also authorized a stock repurchase plan to purchase up to $5.0 million of its common stock during the fourth quarter of 2022.
Explore the complete 8-K earnings release (here) from First National Corp for further details.
