First National Corporation FXNC hiked its quarterly cash dividend by 3.3% to 15.5 cents per share. The dividend will be paid out on Dec. 13, 2024, to shareholders of record as of Nov. 29.

FXNC has raised its dividend consecutively in the last 10 years. Before the recent hike, the bank increased its dividend by 7.1% to 15 cents per share in February 2023. The bank has a dividend payout ratio of 48%.

Based on its closing price of $23.80 as of Nov. 15, FXNC’s current dividend yield is 2.6%.

First National Corp.’s Other Capital Distribution Activities

At present, FXNC does not have a repurchase program. The previous plan, announced in October 2022, authorized the buyback of up to $5 million worth of shares and expired on Dec. 31, 2023.

Before that, the company had announced a $5 million repurchase plan in December 2019, which expired in December 2020.

Our Take on FXNC Stock

FXNC enjoys a decent balance sheet position. As of Sept. 30, 2024, cash and cash equivalents were $126.5 million and other borrowings were $50 million. Further, net loans were $982 million and total deposits were $1.3 billion.

Further, at the end of the third quarter of 2024, its common equity Tier-1 capital ratio of 13% and the total capital ratio of 14.3% were well above regulatory requirements.

Given its decent capital and liquidity positions, FXNC is expected to sustain its current capital distribution activities and enhance shareholder value.

Year to date, shares of First National have risen 9.4% compared with the industry’s growth of 29%.

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Currently, FXNC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Banks That Announced Dividend Hike

Earlier this month, Zions Bancorporation ZION hiked its quarterly cash dividend by 4.9% to 43 cents per share. The dividend will be paid out on Nov. 21, 2024, to shareholders of record as of Nov. 15.

Before this, ZION increased its dividend by 7.9% to 41 cents per share in July 2022. The bank has increased its dividend thrice in the last five years, with a dividend payout ratio of 33%.

Similarly, last month, Prosperity Bancshares, Inc. PB announced a quarterly cash dividend of 58 cents per share. This indicates an increase of 3.6% from the prior payout. The dividend will be paid out on Jan. 2, 2025, to shareholders of record as of Dec. 13, 2024.

PB has increased its dividend six times during the last five years with an annualized dividend growth of 5%. The bank has a dividend payout ratio of 45%.

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