Press Releases

STRASBURG, Va., Feb. 10, 2012 /PRNewswire/ -- First National Corporation (the "Company") (OTCBB: FXNC), the parent company of First Bank (the "Bank"), reported financial results for the quarter and year ending December 31, 2011.  The core banking operation continued strong performance during the quarter.  However, financial results were impacted by a one-time, non-cash charge to income tax expense, provisions for loan losses and charges related to other real estate owned (OREO).  As a result, net loss was $7.8 million and net loss to common shareholders was $8.0 million, or $2.72 per basic and diluted share, for the fourth quarter of 2011.  For the same quarter of 2010, net loss was $6.1 million and net loss to common shareholders was $6.3 million, or $2.14 per basic and diluted share.  The one-time, non-cash charge to income tax expense totaling $6.1 million in the fourth quarter of 2011 was due to the establishment of a valuation allowance on net deferred tax assets.  Fourth quarter results also included a $3.0 million provision for loan losses and $1.4 million of OREO valuation adjustments and losses on OREO dispositions.

Scott C. Harvard, President and CEO of the Company and the Bank commented, "The fourth quarter of 2011 wrapped up a very challenging year for First National Corporation and our subsidiary, First Bank.  During the year, we came to grips with our asset quality problems and we believe that we have taken prudent and appropriate actions to both recognize potential losses in the loan portfolio and to rebuild the credit function to support a stronger growth oriented banking company.  Nonperforming assets improved by decreasing 36% in the fourth quarter as a result of aggressive marketing of OREO, charge offs of loans believed to be unsalvageable, and improvement in specific loans.  During the year the Bank maintained strong performance in its core banking functions while making an effective transition to new leadership. In spite of the losses we experienced during the quarter and the year, they were a necessary part of rebuilding our banking company for the future.  Our net interest margin exceeded four percent for the fourth quarter and non-interest income continued to exceed peer banks.  We are looking forward to providing banking services to our customers in 2012 and beyond, and delivering the level of customer service that can only be found in a strong bank committed to the communities it serves."        

Operating Highlights for the Fourth Quarter

• The core banking company continued to deliver strong performance supported by a net interest margin of 4.07%, total revenues of $6.7 million, and continued strong non-interest income from trust and investment advisory services.  

• Nonperforming assets decreased $10.1 million or 36% during the fourth quarter to 3.38% of total assets at December 31, 2011.

• The Bank sold eight OREO properties with carrying values of $2.8 million and contracted to sell thirteen additional properties with carrying values just under $1.0 million.  OREO charge-downs and losses from disposition totaled $1.4 million for the quarter.

• The Bank charged-off $8.5 million of impaired loans and added $3.0 million to the allowance for loan losses.

• The allowance for loan losses stood at 3.30% of loans, or $12.9 million, at December 31, 2011.

• The Company recorded a $6.1 million non-recurring charge to earnings by establishing a full valuation allowance on its net deferred tax asset.

• Capital levels continued to exceed regulatory requirements for well-capitalized financial institutions.  

Quarterly Performance

Fourth quarter 2011 results reflect a $6.1 million charge to income tax expense to establish a valuation allowance on net deferred tax assets. The provisions for loan losses and other real estate owned decreased $8.2 million when compared to the same prior year quarter.  Net interest income was 1% lower and noninterest income was 8% lower while noninterest expense, excluding the provision for other real estate owned and net losses on sale of other real estate owned, was 8% higher when comparing the two periods.

The net interest margin increased to 4.07% for the quarter ended December 31, 2011 compared to 4.05% for the same period of 2010.  Net interest income was flat for the quarter compared to the same quarter of 2010.  Net interest income totaled $5.1 million.  Average interest-earning assets were $507.3 million for the quarter, representing a slight decline of $4.9 million when comparing the two periods.  Total deposits ended the quarter at $469.2 million, a slight increase over $463.5 million at the end of the fourth quarter of 2010.   Noninterest-bearing deposits, savings, and interest-bearing demand deposits increased $22.3 million or 9% to $279.9 million compared to $257.6 million at the end of the fourth quarter of 2010.  

Noninterest income was $1.6 million for the fourth quarter of 2011 compared to $1.7 million for the same quarter of 2010. The decrease in noninterest income was primarily the result of declines in net gains on sale of loans and other operating income.  These decreases were partially offset by higher trust and investment advisory income and fees for other customer services.  

Noninterest expense, excluding the provision for other real estate owned and net losses on sale of other real estate owned, was $5.0 million for the fourth quarter of 2011, compared to $4.6 million for the same quarter of 2010, resulting in an efficiency ratio of 73.48% compared to 66.20% for the prior year period.  The increase in expense was primarily attributable to a one-time pension charge that increased salaries and employee benefit expense in the fourth quarter of 2011.  The charge to pension expense resulted primarily from a former executive officer that terminated employment during 2011.  

Net charge-offs were $8.5 million for the fourth quarter of 2011 compared to $1.7 million for the same quarter of 2010.  The provision for loan losses was $3.0 million which resulted in a total allowance for loan losses of $12.9 million or 3.30% of total loans at December 31, 2011, compared to a provision of $9.1 million and an allowance of $16.0 million or 3.69% of total loans at December 31, 2010.  

Year-to-Date Performance

For the year ended December 31, 2011, net loss totaled $10.6 million compared to net loss of $3.6 million for the same period in 2010.  After the effective dividend on preferred stock, net loss to common shareholders was $11.5 million, or $3.91 per basic and diluted share, compared to net loss to common shareholders of $4.5 million, or $1.53 per basic and diluted share, for the same period in 2010.  The increase in the net loss for 2011 compared to 2010 was primarily a result of establishing a $6.1 million valuation allowance on net deferred tax assets.

Net interest income was $20.2 million for the year ended December 31, 2011 compared to $20.4 million for the same period in 2010.  The net interest margin was 3.98% for the year ended December 31, 2011, compared to 4.07% for the same period in 2010. The provision for loan losses totaled $12.4 million for the year ended December 31, 2011 compared to $11.7 million for the same period in 2010.  

Noninterest income totaled $5.9 million for the year ended December 31, 2011 compared to $6.1 million for the same period in 2010.  Decreases in overdraft fee income and gains on sales of loans were partially offset by increases in trust and investment advisory income and ATM and check card income.  Noninterest expense, excluding the provision for other real estate owned and loss on sale of other real estate owned, increased $445 thousand or 2%, to $18.3 million for the fourth quarter of 2011, compared to $17.9 million for the same period in 2010.  The provision for other real estate owned totaled $1.6 million for the year ended December 31, 2011 compared to $2.6 million for the same period in 2010.  Net losses on sale of other real estate owned totaled $910 thousand for the year ended December 31, 2011 compared to $19 thousand for the same period in 2010.

Cautionary Statements

The Company notes to investors that past results of operations do not necessarily indicate future results.  Certain factors that affect the Company's operations and business environment are subject to uncertainties that could in turn affect future results.  These factors are identified in the Annual Report on Form 10-K for the year ended December 31, 2010, which can be accessed from the Company's website at www.therespowerinone.com, as filed with the Securities and Exchange Commission.

About the Company

First National Corporation, headquartered in Strasburg, Virginia, is the financial holding company of First Bank. First Bank offers loan, deposit, trust and investment products and services from 10 branch offices in the northern Shenandoah Valley region of Virginia, including Shenandoah County, Warren County, Frederick County and the City of Winchester.  First Bank also owns First Bank Financial Services, Inc., which invests in entities that provide investment services and title insurance.

SOURCE First National Corporation

TOLEDO, Ohio, Feb. 10, 2012 /PRNewswire/ -- Block Communications, Inc. (the "Company") announced today the results of its previously announced cash tender offer and consent solicitation (the "Tender Offer") with respect to its outstanding 8 1/4% senior notes due 2015 (the "Old Notes").  The Tender Offer was made upon the terms and conditions of the Offer to Purchase and Consent Solicitation Statement dated January 12, 2012.  As previously announced, as of 5:00 p.m. Eastern Time on January 26, 2012 (the "Early Tender Deadline"), $105,694,000.00 aggregate principal amount of Old Notes had been validly tendered and not withdrawn, which represented approximately 70.46% of the outstanding aggregate principal amount of the Old Notes (the "Early Tendered Notes").  On January 26, 2012 (the "Initial Acceptance Date"), the Company accepted for purchase and payment all of the Old Notes that were validly tendered at or prior to the Early Tender Deadline. Payment for the Early Tendered Notes was made on January 27, 2012 (the "Initial Payment Date"). Holders of Early Tendered Notes received $1,030.00 for each $1,000 principal amount of the Early Tendered Notes validly tendered, which included the consent payment of $10.00 per $1,000 principal amount of Old Notes, plus any accrued and unpaid interest up to, but not including, the Initial Payment Date.  Since the Early Tender Deadline, no additional Old Notes have been tendered. 

As previously announced, the Company will redeem all of the Old Notes that were not tendered under the Tender Offer pursuant to its optional redemption rights under the Old Notes and related indenture.

About Block Communications, Inc.

Block Communications, Inc, an Ohio corporation, is a privately held diversified media company with operations in cable television, commercial telecommunications, newspaper publishing and television broadcasting.  The Company owns and operates Buckeye CableSystem, its cable system serving Toledo and Erie County, Ohio. Its cable system is a 870 MHz, hybrid fiber coaxial and two-way interactive system, enabling the Company to offer advanced products such as digital cable, high-speed data, telephony, high-definition television, video on demand and digital video recorder services.  The Company also owns and operates a facilities-based commercial telecommunications business, Buckeye TeleSystem, serving commercial customers primarily in northwest Ohio and southeast Michigan.  In addition, the Company publishes two daily metropolitan newspapers, the Pittsburgh Post-Gazette in Pittsburgh, Pennsylvania and The Blade in Toledo, Ohio, each of which is the dominant newspaper publication in its market.  The Company also owns and operates five full power television broadcast stations and one wide coverage Class A digital television station. These television broadcast stations currently carry eight separate network affiliated channels and one independent channel in: Lima, Ohio; Louisville, Kentucky; Boise, Idaho; and Champaign-Springfield-Decatur, Illinois.

This press release may contain statements that constitute forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results or developments may differ materially from those in the forward-looking statements as a result of various factors. The Company disclaims any obligation to update the forward-looking statements contained herein.

SOURCE Block Communications, Inc.