Executive Summary

Q4 2024 GAAP net loss of $0.933M (diluted EPS -$0.10) driven by $7.3M merger costs and $3.9M day‑2 provision on Touchstone non‑PCD loans; adjusted operating EPS was $0.66 as underlying operating metrics improved .
Net interest margin expanded 40 bps sequentially to 3.83% on Touchstone acquisition accretion and lower cost of funds; efficiency ratio improved to 63.97% from 68.13% in Q3 .
Touchstone acquisition added $664.3M assets, $479.3M loans and $555.4M deposits; a $2.9M preliminary bargain purchase gain was recorded; ending assets reached $2.010B and deposits $1.804B .
No formal numerical guidance; dividend raised to $0.155/quarter and systems conversion expected to complete in February 2025, positioning for synergy capture and continued NIM uplift .

What Went Well and What Went Wrong

What Went Well

Net interest margin increased 40 bps to 3.83% on Touchstone impacts and rate/cost-of-funds tailwinds; management noted “solid operating metrics adjusting for merger costs” .
Integration momentum: “We are completing system conversions in several weeks which will allow us to operate as one bank across our footprint,” positioning for cost synergies and unified operations .
Balance sheet scale and deposit mix: assets $2.010B, LHFI $1.451B, deposits $1.804B; noninterest-bearing deposits comprised 29% of total deposits, supporting lower funding costs .

What Went Wrong

GAAP profitability hit by merger-related expenses ($7.3M) and day‑2 provision ($3.9M) on acquired loans; noninterest expense rose $11.5M QoQ to $21.9M .
Asset quality mixed: NPAs increased to $7.1M (0.35% of assets) and net charge-offs were $1.334M, including $774K tied to a health care professional loan pool via a third‑party lender .
Tangible book per share fell to $16.55, reflecting acquisition accounting and share issuance; leverage ratio decreased to 7.95% vs 9.23% in Q3 .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Net Revenue ($USD Millions)	$13.878	$14.273	$14.952	$24.803
Net Interest Income ($USD Millions)	$10.809	$11.494	$11.749	$18.359
Noninterest Income ($USD Millions)	$3.069	$2.686	$3.203	$6.444
Total Noninterest Expense ($USD Millions)	$9.100	$10.659	$10.459	$21.929
Diluted EPS ($)	$1.00	$0.39	$0.36	-$0.10
Adjusted Diluted EPS ($)	-$0.14	$0.48	$0.39	$0.66
Net Interest Margin (%)	3.51%	3.40%	3.43%	3.83%
Efficiency Ratio (%)	66.73%	70.65%	67.95%	63.97%
ROA (%)	0.44%	0.68%	0.62%	-0.18%
ROE (%)	5.33%	8.31%	7.28%	-2.35%

KPIs and Balance Sheet

KPI	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Total Assets ($USD Billions)	$1.419	$1.458	$1.451	$2.010
Loans, Net ($USD Billions)	$0.957	$0.977	$0.982	$1.451
Total Deposits ($USD Billions)	$1.234	$1.266	$1.253	$1.804
Noninterest-Bearing Deposits (% of Total)	N/A	31%	31%	29%
NPAs ($USD Millions)	$6.763	$8.549	$5.985	$7.111
NPA Ratio (% of Assets)	0.48%	0.59%	0.41%	0.35%
Net Charge-offs ($USD Millions)	$3.750	$0.482	$1.572	$1.334
ACL on Loans ($USD Millions)	$11.974	$12.553	$12.704	$16.400
ACL / Loans (%)	1.24%	1.27%	1.28%	1.12%
Tangible Book Value/Share ($)	$18.06	$18.59	$19.37	$16.55
Dividend/Share (Quarterly, $)	$0.150	$0.150	$0.150	$0.155

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share (quarterly)	Q4 2024	$0.150 (Q3 2024)	$0.155 (declared Nov 13, 2024; paid Dec 13, 2024)	Raised
Systems conversion timeline	Q4 2024	Completion targeted Feb 2025 (post-merger plan)	“Completing system conversions in several weeks” (Feb 2025 schedule affirmed)	Maintained
Financial guidance (revenue/margins/OpEx)	Q4 2024	Not provided	Not provided	Maintained (no formal guidance)

Earnings Call Themes & Trends

No Q4 2024 earnings call transcript was available in the document set; themes below reflect management commentary from press releases and 8‑K materials.

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4 2024)	Trend
M&A Integration	Merger announced/approved; incurred $571K (Q2) and $219K (Q3) merger expenses; pro‑forma combined size ~$2.1B assets	Touchstone closed Oct 1; $664.3M assets and $555.4M deposits acquired; $2.9M bargain purchase gain; system conversion near complete	Acceleration; integration near completion
Deposit Mix & NIM	NIM improved to 3.24%→3.40%; noninterest‑bearing deposits ~31%	NIM 3.83% (+40 bps QoQ); noninterest‑bearing deposits 29%	Positive NIM momentum; modest shift in mix
Asset Quality	NPAs rose to 0.59% (Q2) then fell to 0.41% (Q3); net charge‑offs increased QoQ	NPAs 0.35%; net charge‑offs $1.334M; health care loan pool contributed $774K	Mixed but improving NPA ratio; persistent C&I headwinds
Liquidity/Capital	Liquidity >$499M (Q3); BTFP borrowings $50M at 4.76% (Q2/Q3)	Repaid $50M other borrowings; CET1 11.19%; leverage 7.95%	Capital/borrowings de‑risked post‑quarter
Technology/Operations	Routine efficiency improvement; efficiency ~68–71%	Efficiency 63.97%; post‑conversion expected to operate “as one bank”	Efficiency improving; operating leverage potential

Management Commentary

“2024 was a transformational year... Our results for the quarter reflected solid operating metrics adjusting for merger costs... We believe the fourth quarter financial operating performance is indicative of the benefits of the acquisition and look forward to fully completing the integration of our two companies.” — Scott Harvard, President & CEO .
On NIM drivers: earning asset yields +22 bps and cost of funds −21 bps QoQ; net accretion income $408K added ~9 bps to NIM .
Acquisition accounting overview: fair value assets $664.3M (loans $479.3M with $13.5M discount); liabilities $614.6M (deposits $555.4M with $1.1M time deposit mark); $2.9M preliminary bargain purchase gain; no goodwill .

Q&A Highlights

No Q4 2024 earnings call transcript was available; therefore, there were no public Q&A disclosures to analyze within the document set [ListDocuments earnings-call-transcript returned none].

Estimates Context

Wall Street consensus estimates from S&P Global were unavailable due to data access limitations during retrieval. As a result, we cannot assess Q4 2024 beats/misses versus consensus. If you want, we can rerun S&P Global estimates later to update this section.

Key Takeaways for Investors

Core operating performance is stronger than GAAP optics: adjusted EPS $0.66 vs GAAP EPS -$0.10, with merger costs and day‑2 provisioning masking improved NIM and efficiency .
Balance sheet scale and deposit franchise expanded meaningfully post‑Touchstone: assets $2.010B, deposits $1.804B, and noninterest‑bearing deposits at 29% help sustain lower funding costs .
NIM tailwinds likely into 2025 as accretion normalizes and cost of funds benefits persist; Q4 NIM 3.83% with accretion contribution of ~9 bps .
Asset quality is a watch item: NPAs increased to $7.1M and C&I exposures (health care loan pool) contributed to charge‑offs; ACL increased to $16.4M (1.12% of loans) providing greater coverage on a larger loan book .
Capital and funding de‑risking: repayment of $50M other borrowings (BTFP) and CET1 11.19% position the bank to absorb integration variability .
Dividend signaling remains positive: quarterly dividend raised to $0.155, marking the tenth consecutive annual increase .
Near‑term trading implications: potential positive sentiment around completion of systems conversion and synergy realization; medium‑term thesis centers on operating leverage from integration, sustained NIM improvements, and disciplined credit risk management .

FIRST NATIONAL CORP /VA/ (FXNC)·Q4 2024 Earnings Summary