FXNC

First National Corp($FXNC) CEO Buys Shares After Stock Plunge: Insider Confidence Amid Touchstone Acquisition Integration Challenges

05/06/2025 20:51

First National Corp ($FXNC) CEO Brad Schwartz purchased 1,000 shares at $19.57 per share on May 6, according to a recent SEC filing. This transaction, executed pursuant to a Rule 10b5-1 trading plan, was made at a price slightly below the May 2 closing price of $19.88. The purchase comes after significant volatility in $FXNC's stock price over recent months. The company's shares had been on an upward trajectory until early this year. Starting from around $15 in June 2024, the stock steadily climbed, surpassing $25 by the end of 2024 and reaching a peak of $26.50 in early February 2025. However, March brought a sharp reversal, with the stock falling to the $18 level by early April. Notably, on April 3, the stock plummeted more than 8% in a single trading day, dropping from $20.29 to $18.66. This decline coincided with broader market concerns, including the U.S. dollar's largest daily decline since November 2022 (approximately 1.7%) on April 4. To understand the current buying pattern, it's worth examining the history of insider transactions. Particularly noteworthy was the strong buying signal from board members in June and July 2024. Director James R. Wilkins III made consecutive purchases throughout June 2024, acquiring a total of 18,520 shares worth approximately $284,000. Wilkins maintains significant indirect holdings in addition to his direct ownership, making his buying activity particularly meaningful. Additionally, Director Kirtesh Patel purchased 7,500 shares for $116,700 in early July. Following this substantial insider buying, $FXNC shares demonstrated strong performance in the latter half of 2024. From mid-June levels around $15, the stock rose more than 60% to over $24 by late November. During this period, the company's key strategic move was its merger with Touchstone Bankshares, which received shareholder approval in early September and was completed on October 1. However, First National's financial performance post-acquisition has yielded mixed results. In its Q1 2025 earnings report, the company reported adjusted earnings of $0.18 per share, significantly below analyst expectations of $0.54. Revenue increased by 46% year-over-year to $20.2 million, but net income declined by 50% to $1.6 million. The profit margin also fell substantially, dropping to 7.9% from 23% a year earlier. These disappointing results appear to stem from increased costs associated with the Touchstone Bankshares acquisition and efficiency challenges during the integration process. Noninterest expenses rose considerably due to merger-related costs, negatively impacting short-term profitability. Despite these challenges, First National's long-term outlook remains positive. The company projects revenue growth averaging 20% annually over the next two years, significantly outpacing the U.S. banking industry's forecasted growth of 7.1%. Total assets have reached $2.0 billion post-acquisition, reflecting the company's expanded operational base. CEO Brad Schwartz's recent purchase, while made according to a 10b5-1 plan, is notable for occurring during a period of stock price decline. This may indicate that management maintains confidence in the company's long-term value and growth prospects. The timing of the purchase, following the stock's adjustment after the Q1 earnings announcement, adds significance to the transaction. Investors should balance First National's short-term challenges in integrating the Touchstone Bankshares acquisition with the consistent buying signals from insiders. The current analyst consensus price target of $24 suggests approximately 20% upside from current levels. However, given recent earnings disappointments and market instability, short-term price volatility may continue. In summary, First National Corp's insider buying patterns, particularly the substantial purchases in mid-2024 and the recent CEO buy, demonstrate internal confidence in the company's long-term prospects, but short-term challenges related to the Touchstone Bankshares integration may continue to pressure the stock price. Investors should weigh these factors comprehensively when making investment decisions.

You can receive notifications when news is published.