First National Corporation Reports Second Quarter 2026 Financial Performance
STRASBURG, Va., July 29, 2026 (GLOBE NEWSWIRE) -- First National Corporation (the “Company” or “First National”) (NASDAQ: FXNC), the bank holding company of First Bank (the “Bank”), reported consolidated net income of $5.7 million and basic and diluted earnings per common share of $0.64 and $0.63, respectively, for the second quarter ended June 30, 2026.
"Our quarterly and year-to-date results reflect steady execution of our intentional, profitable growth strategy. Growth in average loan and deposit balances lifted net interest income, and net loans expanded for a second straight quarter as our new and legacy banking teams continue to deepen customer relationships. The net interest margin in excess of four percent combined with expense management and strong asset quality delivered a strong second quarter and first half of the year. I am also pleased to report that we received all regulatory approvals for the pending sale of our North Carolina branches which we expect to close early in the fourth quarter, continuing our branch optimization initiative announced earlier this year," said Scott C. Harvard, President and Chief Executive Officer of First National Corporation.
FINANCIAL HIGHLIGHTS FOR SECOND QUARTER 2026
| ● | Basic earnings per share of $0.64 per share, compared to $0.56 one year prior, and $0.54 in the previous quarter | |
| ● | Adjusted basic earnings per share(1) of $0.64 per share, compared to $0.57 one year prior, and $0.54 in the previous quarter | |
| ● | Return on average assets of 1.11% compared to 1.00% one year prior, and 0.98% in the previous quarter | |
| ● | Return on average equity of 12.03% compared to 11.85% one year prior, and 10.51% in the previous quarter | |
| ● | Tax equivalent net interest margin(1) of 4.15%, up from 3.95% one year prior, and 3.99% in the previous quarter | |
| ● | Net loan growth of $22.7 million for the quarter, a 6.3% annualized growth rate | |
| ● | Asset quality remained sound with non-performing assets at 0.23% of total assets | |
| ● | Noninterest bearing deposits of $520.5 million, or 28% of deposits, contributed to our low funding cost |
NET INTEREST INCOME
For the second quarter of 2026, the Company’s net interest margin fully tax equivalent ("FTE")(1) was 4.15%, compared to 3.99% for the first quarter of 2026 and 3.95% in the second quarter of 2025. The Company’s net interest margin (FTE)(1) for the second quarter of 2026 includes the impact of acquisition accounting fair value adjustments. Net accretion income related to acquisition accounting was $245 thousand, a 5-basis point incremental increase to the net interest margin for the second quarter ended June 30, 2026. Prior period acquisition accounting resulted in net accretion income of $211 thousand, or a 4-basis point incremental increase to the net interest margin for the quarter ended March 31, 2026, and net accretion income of $907 thousand, or a 19-basis point incremental increase to the net interest margin for the second quarter ended June 30, 2025.
Earning asset yields for the second quarter of 2026 increased 11-basis points to 5.31% compared to the first quarter of 2026. For the second quarter of 2026, net interest income FTE(1) was $20.1 million, an increase of $1.3 million from $18.8 million in the first quarter of 2026 due to an increase in average interest-earning assets, improved yields, reduced funding costs and average and net loan growth.
The impact of acquisition accretion and amortization is reflected in the following table (dollars in thousands):
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| Jun 30, 2026 | Mar 31, 2026 | Jun 30, 2025 | Jun 30, 2026 | Jun 30, 2025 | ||||||||||||||||
| Loans | $ | 334 | $ | 294 | $ | 930 | $ | 628 | $ | 736 | ||||||||||
| Deposits | (14 | ) | (10 | ) | 163 | (24 | ) | 606 | ||||||||||||
| Borrowings | (75 | ) | (73 | ) | (186 | ) | (148 | ) | (471 | ) | ||||||||||
| $ | 245 | $ | 211 | $ | 907 | $ | 456 | $ | 871 | |||||||||||
ALLOWANCE AND PROVISION FOR CREDIT LOSSES
The Company recorded a $426 thousand provision for credit losses in the second quarter of 2026, compared to $450 thousand for the first quarter of 2026. The second quarter provision was comprised of a $350 thousand provision for credit losses on loans, a $79 thousand provision for credit losses on unfunded commitments, and a $3 thousand reduction in the credit losses on securities. Net charge-offs totaled $105 thousand in the second quarter of 2026, compared to net charge-offs of $542 thousand in the first quarter of 2026 and net charge-offs of $448 thousand in the second quarter of 2025.
The allowance for credit losses on loans totaled $14.9 million, or 1.00% of total loans on June 30, 2026, compared to $14.7 million, or 1.00% of total loans on March 31, 2026, and $15.2 million, or 1.05% of total loans on June 30, 2025. The allowance for credit losses to total loans remained consistent with the prior period and decreased from the prior year due to declines in specific reserves on individually analyzed loans. The allowance for credit losses to non-performing assets coverage was 315% on June 30, 2026, compared to 331% on March 31, 2026, and 223% on June 30, 2025.
NONINTEREST INCOME AND EXPENSE
Noninterest income increased $194 thousand to $4.0 million for the second quarter of 2026 from $3.8 million in the prior quarter. The increase in noninterest income includes increases in ATM and check card income, other operating income, and brokered mortgage fees compared to the prior quarter.
Noninterest expense increased $455 thousand to $16.4 million for the second quarter of 2026 from $16.0 million in the prior quarter. The increase in noninterest expense includes increases in other operating expense, marketing expense, legal and professional fees, supplies expense, and data processing expense.
The sale of two banking offices in Roanoke Rapids and Louisburg, North Carolina, including most of the deposit and loan accounts associated with those offices, has received all required regulatory approvals with a planned transaction date in October 2026. The company anticipates a one-time gain on the sale of the offices in the fourth quarter of 2026. The Bank also plans to consolidate three additional banking offices and discontinue low volume ATMs at non-branch locations before year-end. The sale and consolidation combined will reduce the number of banking offices from 33 to 28 by year end. The goals of these branch optimization actions are to streamline operations, improve profitability and allocate resources to faster growing markets.
INCOME TAXES
Income tax expense was $1.4 million for the second quarter of 2026, compared to $1.2 million for the first quarter of 2026. The effective tax rate of 19.5% for the second quarter of 2026 remained consistent with 19.5% in the first quarter of 2026.
BALANCE SHEET
On June 30, 2026, total assets were $2.076 billion, an increase of $34.2 million or 1.7% from June 30, 2025. Total assets were consistent with the prior quarter with the increase in loan growth offset by the decrease in cash and cash equivalents, and the increase from the prior year was driven by loan growth and additional securities available for sale.
On June 30, 2026, loans held for investment ("LHFI") net of allowance totaled $1.472 billion, an increase of $22.7 million or 3.0% annualized from $1.450 billion on March 31, 2026, and an increase of $44.2 million or 3.1% from June 30, 2025. Net loan growth in the second quarter and for the year has been driven by increased production from newly hired bankers along with our continued focus on relationship banking.
On June 30, 2026, total investments were $322.8 million, a decrease of $1.7 million or 0.5% from March 31, 2026, and an increase of $23.2 million or 7.7% from June 30, 2025. Available for sale ("AFS") securities totaled $227.8 million on June 30, 2026, and $217.7 million on March 31, 2026, and $187.6 million on June 30, 2025. The increase compared to the prior year was driven by security purchases exceeding portfolio cashflows and utilization of excess cash. Total net unrealized losses on the AFS securities portfolio were $15.8 million on June 30, 2026, compared to $16.2 million on March 31, 2026, and $18.9 million on June 30, 2025. Held to maturity securities are carried at amortized cost and totaled $89.4 million on June 30, 2026, $101.3 million on March 31, 2026, and $106.4 million on June 30, 2025.
On June 30, 2026, total deposits were $1.831 billion, a decrease of $6.2 million or 0.3% from the prior quarter, and an increase of $28.0 million or 1.6% from June 30, 2025. While total deposits as of June 30, 2026 declined when compared to March 31, 2026, average deposit balances for the second quarter were up $49.6 million or 2.7%. Overall, the deposit balances were relatively stable in comparison with the prior quarter and the prior year with increases primarily in savings and interest-bearing demand deposits. There were $25.0 million in other borrowings with the Federal Home Loan Bank on June 30, 2026, March 31, 2026, and June 30, 2025.
LIQUIDITY
Liquidity sources available to the Bank, including interest-bearing deposits in banks, unpledged securities available for sale, at fair value, and available lines of credit totaled $747.8 million on June 30, 2026, $764.2 million on March 31, 2026, and $633.7 million on June 30, 2025.
The Bank maintains liquidity to fund loan growth and to meet potential demand from deposit customers, including potential volatile deposits. The estimated amount of uninsured customer deposits totaled $573.8 million on June 30, 2026, $558.9 million on March 31, 2026, and $545.7 million on June 30, 2025. Excluding municipal deposits that have collateral pledged, the estimated amount of uninsured customer deposits totaled $466.9 million on June 30, 2026, $461.3 million on March 31, 2026, and $451.9 million on June 30, 2025.
ASSET QUALITY
Non-performing assets ("NPAs") increased slightly from the prior period and improved from the prior year as previously reserved loans were charged off since the second quarter of 2025. Management classifies NPAs as non-accrual loans and other real estate owned ("OREO"). The Bank had no OREO on June 30, 2026, March 31, 2026, or June 30, 2025. NPAs as a percentage of total loans were 0.32% on June 30, 2026, up from 0.30% on March 31, 2026, but down from 0.47% on June 30, 2025. NPAs increased by $292 thousand to $4.7 million on June 30, 2026, compared to $4.4 million on March 31, 2026, but decreased by $2.1 million from $6.8 million on June 30, 2025.
There were no loans past due over 90 days or more and still accruing interest on June 30, 2026, March 31, 2026, or June 30, 2025. Loans past-due 30-89 days and still accruing interest decreased to $2.5 million, or 0.17% of total loans on June 30, 2026, compared to $5.0 million, or 0.34% of total loans on March 31, 2026, and $3.2 million, or 0.22%, of total loans on June 30, 2025. The health care provider portfolio balance continues to decline with $8.6 million in loan balances and $3.4 million in unamortized premiums. The portfolio has loans totaling $1.8 million currently on non-accrual that are specifically reserved for $1.3 million.
CAPITAL
During the second quarter of 2026, the Company declared and paid cash dividends of $0.17 per common share, compared to $0.17 in the first quarter of 2026 and $0.155 in the second quarter of 2025. Tangible book value per share(1) grew to $19.71 at June 30, 2026, from $19.11 per share at March 31, 2026, and $17.40 at June 30, 2025.
The following table provides capital ratios and values for the periods ended:
| First National Corporation (2) | Jun 30, 2026 | Mar 31, 2026 | Jun 30, 2025 | ||||||
| Total risk-based capital ratio | 14.81 | % | 14.64 | % | 14.89 | % | |||
| Tier 1 risk-based capital ratio | 13.22 | % | 13.06 | % | 12.37 | % | |||
| Common equity Tier 1 capital ratio | 12.60 | % | 12.44 | % | 11.74 | % | |||
| Leverage ratio | 9.62 | % | 9.65 | % | 8.99 | % | |||
| Tangible common equity to tangible assets (1) | 8.65 | % | 8.39 | % | 7.73 | % | |||
| Tangible book value per share (1) | $ | 19.71 | $ | 19.11 | $ | 17.40 | |||
| First Bank | Jun 30, 2026 | Mar 31, 2026 | Jun 30, 2025 | ||||||
| Total risk-based capital ratio (3) | 13.91 | % | 13.75 | % | 12.89 | % | |||
| Tier 1 risk-based capital ratio (3) | 12.87 | % | 12.73 | % | 11.81 | % | |||
| Common equity Tier 1 capital ratio (3) | 12.87 | % | 12.73 | % | 11.81 | % | |||
| Leverage ratio (3) | 9.44 | % | 9.38 | % | 8.56 | % | |||
| Tangible common equity to tangible assets (1) | 8.75 | % | 8.49 | % | 7.68 | % | |||
ABOUT FIRST NATIONAL CORPORATION
First National Corporation (NASDAQ: FXNC) is the parent company and bank holding company of First Bank, a community bank that first opened for business in 1907 in Strasburg, Virginia. The Bank offers loan and deposit products and services through its bankers, consumer and business mobile banking platforms, a network of ATMs located throughout its market area, a loan production office, a customer service center in a retirement community, and thirty-three banking office locations located throughout the Shenandoah Valley, the Roanoke Valley, the Richmond MSA, the south-central regions of Virginia, and in northern North Carolina. In addition to providing traditional banking services, the Bank operates a wealth management division under the name First Bank Wealth Management. First Bank also owns First Bank Financial Services, Inc., which owns an interest in a title insurance company.
NON-GAAP FINANCIAL MEASURES
In addition to financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company uses certain non-GAAP financial measures that provide useful information for financial and operational decision making, evaluating trends, and comparing financial results to other financial institutions. The non-GAAP financial measures presented in this document include adjusted operating net income, adjusted operating non-interest expense, adjusted basic and diluted earnings per share, adjusted return on average assets, adjusted return on average equity, pre-provision pre-tax earnings, adjusted pre-provision pre-tax earnings, fully taxable equivalent interest income, the net interest margin, the efficiency ratio, tangible book value per share, and tangible common equity to tangible assets.
The Company believes certain non-GAAP financial measures enhance the understanding of its business and performance. Non-GAAP financial measures are supplemental and not a substitute for, or more important than, financial measures prepared in accordance with GAAP and may not be comparable to those reported by other financial institutions. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure is included at the end of this release.
FORWARD-LOOKING STATEMENTS
Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to the Company’s plans, objectives, strategies, expectations and intentions, including with respect to pending branch sales and other branch optimization initiatives, and other statements that are not historical facts, and other statements identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” "will," "continue," and “projects,” as well as similar expression. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that the Company will achieve the anticipated benefits of its plans and strategies or that its actual results, performance, or achievements will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties and speak only as of the date of this release. The Company undertakes no obligations to update or revise any forward-looking statement, except as required by law. For details on factors that could affect expectations, future events, or results, see the risk factors and other cautionary language included in First National Corporation’s Annual Report on Form 10-K for the year ended December 31, 2025 and other filings with the Securities and Exchange Commission (the “SEC”).
CONTACTS
| Scott C. Harvard | Brad E. Schwartz |
| President and CEO | Executive Vice President and CFO |
| (540) 545-7695 | (540) 465-6130 |
| sharvard@fbvirginia.com | bschwartz@fbvirginia.com |
FIRST NATIONAL CORPORATION
Performance Summary
(in thousands)
(unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| Jun 30, 2026 |
Mar 31, 2026 |
Jun 30, 2025 |
Jun 30, 2026 |
Jun 30, 2025 |
||||||||||||||||
| Income Statement | ||||||||||||||||||||
| Interest and dividend income | ||||||||||||||||||||
| Interest and fees on loans | $ | 22,145 | $ | 21,017 | $ | 21,594 | $ | 43,162 | $ | 42,231 | ||||||||||
| Interest on deposits in banks | 1,288 | 1,170 | 1,891 | 2,458 | 3,562 | |||||||||||||||
| Interest on federal funds sold | — | — | — | — | 40 | |||||||||||||||
| Taxable interest on securities | 1,843 | 1,786 | 1,313 | 3,629 | 2,627 | |||||||||||||||
| Tax-exempt interest on securities | 293 | 292 | 298 | 585 | 598 | |||||||||||||||
| Dividends | 64 | 64 | 69 | 128 | 129 | |||||||||||||||
| Total interest and dividend income | $ | 25,633 | $ | 24,329 | $ | 25,165 | $ | 49,962 | $ | 49,187 | ||||||||||
| Interest expense | ||||||||||||||||||||
| Interest on deposits | $ | 5,410 | $ | 5,414 | $ | 6,080 | $ | 10,824 | $ | 12,118 | ||||||||||
| Interest on subordinated debt | 170 | 168 | 468 | 338 | 935 | |||||||||||||||
| Interest on junior subordinated debt | 69 | 66 | 66 | 135 | 132 | |||||||||||||||
| Interest on other borrowings | 3 | 5 | 3 | 8 | 3 | |||||||||||||||
| Total interest expense | $ | 5,652 | $ | 5,653 | $ | 6,617 | $ | 11,305 | $ | 13,188 | ||||||||||
| Net interest income | $ | 19,981 | $ | 18,676 | $ | 18,548 | $ | 38,657 | $ | 35,999 | ||||||||||
| Provision for credit losses | 426 | 450 | 911 | 876 | 1,743 | |||||||||||||||
| Net interest income after provision for credit losses | $ | 19,555 | $ | 18,226 | $ | 17,637 | $ | 37,781 | $ | 34,256 | ||||||||||
| Noninterest income | ||||||||||||||||||||
| Service charges on deposit accounts | $ | 913 | $ | 924 | $ | 1,020 | $ | 1,837 | $ | 2,033 | ||||||||||
| ATM and check card fees | 1,155 | 1,047 | 1,128 | 2,202 | 2,124 | |||||||||||||||
| Wealth management fees | 902 | 911 | 867 | 1,813 | 1,765 | |||||||||||||||
| Fees for other customer services | 295 | 287 | 230 | 582 | 488 | |||||||||||||||
| Brokered mortgage fees | 153 | 115 | 183 | 268 | 293 | |||||||||||||||
| Income from bank owned life insurance | 239 | 259 | 231 | 498 | 477 | |||||||||||||||
| Net (loss) gains on securities available for sale | — | 8 | — | 8 | — | |||||||||||||||
| Net gains on sale of loans held for sale | 4 | 1 | — | 5 | — | |||||||||||||||
| Net gain on subordinated debt payoff | — | — | 80 | — | 80 | |||||||||||||||
| Gain on disposal of premises and equipment | 56 | — | — | 56 | — | |||||||||||||||
| Other operating income | 301 | 272 | 150 | 573 | 240 | |||||||||||||||
| Total noninterest income | $ | 4,018 | $ | 3,824 | $ | 3,889 | $ | 7,842 | $ | 7,500 | ||||||||||
| Noninterest expense | ||||||||||||||||||||
| Salaries and employee benefits | $ | 9,006 | $ | 8,982 | $ | 8,033 | $ | 17,988 | $ | 16,722 | ||||||||||
| Occupancy | 974 | 972 | 944 | 1,946 | 2,013 | |||||||||||||||
| Equipment | 1,131 | 1,093 | 1,057 | 2,224 | 2,082 | |||||||||||||||
| Marketing | 476 | 341 | 286 | 817 | 506 | |||||||||||||||
| Supplies | 192 | 146 | 198 | 338 | 415 | |||||||||||||||
| Legal and professional fees | 742 | 688 | 594 | 1,430 | 1,115 | |||||||||||||||
| ATM and check card expense | 608 | 571 | 537 | 1,179 | 976 | |||||||||||||||
| FDIC assessment | 224 | 227 | 315 | 451 | 729 | |||||||||||||||
| Bank franchise tax | 395 | 380 | 348 | 775 | 665 | |||||||||||||||
| Data processing expense | 435 | 394 | 504 | 829 | 1,266 | |||||||||||||||
| Core deposit intangible amortization expense | 433 | 434 | 441 | 867 | 883 | |||||||||||||||
| Other real estate owned (income), net | — | — | — | — | (7 | ) | ||||||||||||||
| Net loss on disposal of premises and equipment | — | — | 7 | — | 7 | |||||||||||||||
| Merger expense | — | — | 92 | — | 2,032 | |||||||||||||||
| Other operating expense | 1,821 | 1,754 | 1,835 | 3,575 | 4,122 | |||||||||||||||
| Total noninterest expense | $ | 16,437 | $ | 15,982 | $ | 15,191 | $ | 32,419 | $ | 33,526 | ||||||||||
| Income before income taxes | $ | 7,136 | $ | 6,068 | $ | 6,335 | $ | 13,204 | $ | 8,230 | ||||||||||
| Income tax expense | 1,393 | 1,181 | 1,284 | 2,574 | 1,581 | |||||||||||||||
| Net income | $ | 5,743 | $ | 4,887 | $ | 5,051 | $ | 10,630 | $ | 6,649 | ||||||||||
FIRST NATIONAL CORPORATION
Performance Summary
(in thousands, except share and per share data)
(unaudited)
| At or for the Three Months Ended | At or for the Six Months Ended | |||||||||||||||||||
| Jun 30, 2026 |
Mar 31, 2026 |
Jun 30, 2025 |
Jun 30, 2026 |
Jun 30, 2025 |
||||||||||||||||
| Common Share and Per Common Share Data | ||||||||||||||||||||
| Earnings per common share, basic | $ | 0.64 | $ | 0.54 | $ | 0.56 | $ | 1.18 | $ | 0.74 | ||||||||||
| Adjusted earnings per common share, basic(1) | $ | 0.64 | $ | 0.54 | $ | 0.57 | $ | 1.18 | $ | 0.92 | ||||||||||
| Weighted average shares, basic | 9,041,314 | 9,031,591 | 8,987,179 | 9,036,479 | 8,983,374 | |||||||||||||||
| Earnings per common share, diluted | $ | 0.63 | $ | 0.54 | $ | 0.56 | $ | 1.17 | $ | 0.74 | ||||||||||
| Adjusted earnings per common share, diluted(1) | $ | 0.63 | $ | 0.54 | $ | 0.57 | $ | 1.17 | $ | 0.92 | ||||||||||
| Weighted average shares, diluted | 9,068,347 | 9,047,416 | 9,001,972 | 9,057,908 | 9,003,969 | |||||||||||||||
| Shares outstanding at period end | 9,042,629 | 9,040,967 | 8,989,138 | 9,042,629 | 8,989,138 | |||||||||||||||
| Tangible book value per share at period end(1) | $ | 19.71 | $ | 19.11 | $ | 17.40 | $ | 19.71 | $ | 17.40 | ||||||||||
| Market price per share at period end | $ | 30.02 | $ | 26.92 | $ | 19.47 | $ | 30.02 | $ | 19.47 | ||||||||||
| Cash dividends declared | $ | 0.170 | $ | 0.170 | $ | 0.155 | $ | 0.340 | $ | 0.310 | ||||||||||
| Key Performance Ratios | ||||||||||||||||||||
| Return on average assets(4) | 1.11 | % | 0.98 | % | 1.00 | % | 1.05 | % | 0.66 | % | ||||||||||
| Adjusted return on average assets(1)(4) | 1.11 | % | 0.98 | % | 1.02 | % | 1.05 | % | 0.83 | % | ||||||||||
| Return on average equity(4) | 12.03 | % | 10.51 | % | 11.85 | % | 11.27 | % | 7.90 | % | ||||||||||
| Adjusted return on average equity(1)(4) | 12.03 | % | 10.51 | % | 12.05 | % | 11.27 | % | 9.85 | % | ||||||||||
| Net interest margin(4) | 4.13 | % | 3.98 | % | 3.93 | % | 4.05 | % | 3.84 | % | ||||||||||
| Net interest margin fully tax equivalent(1)(4) | 4.15 | % | 3.99 | % | 3.95 | % | 4.07 | % | 3.86 | % | ||||||||||
| Efficiency ratio(1) | 66.59 | % | 68.86 | % | 65.27 | % | 67.69 | % | 70.20 | % | ||||||||||
| Average Balances | ||||||||||||||||||||
| Average assets | $ | 2,079,467 | $ | 2,026,947 | $ | 2,019,344 | $ | 2,046,074 | $ | 2,020,425 | ||||||||||
| Average earning assets | 1,941,385 | 1,905,400 | 1,893,133 | 1,923,459 | 1,890,749 | |||||||||||||||
| Average deposits | 1,861,554 | 1,811,967 | 1,808,340 | 1,829,354 | 1,809,644 | |||||||||||||||
| Average noninterest deposits to total average deposits | 29.15 | % | 27.96 | % | 29.88 | % | 28.27 | % | 29.49 | % | ||||||||||
| Average shareholders’ equity | $ | 191,465 | $ | 188,585 | $ | 170,920 | 190,234 | $ | 169,713 | |||||||||||
| Asset Quality | ||||||||||||||||||||
| Allowance for credit losses on loans to nonperforming assets | 315.45 | % | 330.66 | % | 223.45 | % | 315.45 | % | 223.45 | % | ||||||||||
| Allowance for credit losses on loans to period end loans | 1.00 | % | 1.00 | % | 1.05 | % | 1.00 | % | 1.05 | % | ||||||||||
| Nonperforming assets to period end loans | 0.32 | % | 0.30 | % | 0.47 | % | 0.32 | % | 0.47 | % | ||||||||||
| Nonperforming assets to total assets | 0.23 | % | 0.21 | % | 0.33 | % | 0.23 | % | 0.33 | % | ||||||||||
| Loan charge-offs | $ | 266 | $ | 709 | $ | 535 | $ | 975 | $ | 3,025 | ||||||||||
| Loan recoveries | 161 | 167 | 87 | 328 | 176 | |||||||||||||||
| Net charge-offs | 105 | 542 | 448 | 647 | 2,849 | |||||||||||||||
| Non-accrual loans | 4,737 | 4,445 | 6,796 | 4,737 | 6,796 | |||||||||||||||
| Other real estate owned, net | — | — | — | — | — | |||||||||||||||
| Nonperforming assets | 4,737 | 4,445 | 6,796 | 4,737 | 6,796 | |||||||||||||||
| Loans 30 to 89 days past due, accruing | 2,534 | 5,025 | 3,190 | 2,534 | 3,190 | |||||||||||||||
| Loans over 90 days past due, accruing | — | — | — | — | — | |||||||||||||||
| Capital Ratios(5) | ||||||||||||||||||||
| Total capital | $ | 210,436 | $ | 205,509 | $ | 189,115 | $ | 210,436 | $ | 189,115 | ||||||||||
| Tier 1 capital | 194,778 | 190,173 | 173,240 | 194,778 | 173,240 | |||||||||||||||
| Common equity Tier 1 capital | 194,778 | 190,173 | 173,240 | 194,778 | 173,240 | |||||||||||||||
| Total capital to risk-weighted assets(3) | 13.91 | % | 13.75 | % | 12.89 | % | 13.91 | % | 12.89 | % | ||||||||||
| Tier 1 capital to risk-weighted assets(3) | 12.87 | % | 12.73 | % | 11.81 | % | 12.87 | % | 11.81 | % | ||||||||||
| Common equity Tier 1 capital / risk-weighted assets(3) | 12.87 | % | 12.73 | % | 11.81 | % | 12.87 | % | 11.81 | % | ||||||||||
| Leverage ratio(3) | 9.44 | % | 9.38 | % | 8.56 | % | 9.44 | % | 8.56 | % | ||||||||||
FIRST NATIONAL CORPORATION
Performance Summary
(in thousands)
(unaudited)
| For the Period Ended | ||||||||||||||||||||
| Jun 30, 2026 |
Mar 31, 2026 |
Dec 31, 2025 |
Sept 30, 2025 |
Jun 30, 2025 |
||||||||||||||||
| Balance Sheet | ||||||||||||||||||||
| Cash and due from banks | $ | 23,294 | $ | 22,624 | $ | 20,836 | $ | 23,716 | $ | 34,435 | ||||||||||
| Interest-bearing deposits in banks | 142,854 | 165,185 | 140,074 | 165,601 | 159,880 | |||||||||||||||
| Cash and cash equivalents | $ | 166,148 | $ | 187,809 | $ | 160,910 | $ | 189,317 | $ | 194,315 | ||||||||||
| Securities available for sale, at fair value | 227,792 | 217,655 | 217,538 | 196,476 | 187,579 | |||||||||||||||
| Securities held to maturity, at amortized cost (net of allowance for credit losses) | 89,392 | 101,261 | 102,872 | 104,608 | 106,430 | |||||||||||||||
| Restricted securities, at cost | 5,642 | 5,642 | 5,624 | 4,436 | 5,624 | |||||||||||||||
| Loans, net of allowance for credit losses | 1,472,455 | 1,449,708 | 1,435,026 | 1,418,750 | 1,428,251 | |||||||||||||||
| Premises and equipment, net | 34,021 | 34,327 | 34,561 | 34,107 | 34,530 | |||||||||||||||
| Accrued interest receivable | 6,516 | 6,656 | 6,467 | 6,238 | 6,143 | |||||||||||||||
| Bank owned life insurance | 39,078 | 38,837 | 38,577 | 38,652 | 38,367 | |||||||||||||||
| Goodwill | 3,030 | 3,030 | 3,030 | 3,030 | 3,030 | |||||||||||||||
| Core deposit intangibles, net | 12,352 | 12,785 | 13,219 | 13,661 | 14,102 | |||||||||||||||
| Other assets | 19,219 | 18,113 | 20,154 | 21,479 | 23,070 | |||||||||||||||
| Total assets | $ | 2,075,645 | $ | 2,075,823 | $ | 2,037,978 | $ | 2,030,754 | $ | 2,041,441 | ||||||||||
| Noninterest-bearing demand deposits | $ | 520,548 | $ | 524,323 | $ | 509,874 | $ | 511,482 | $ | 541,204 | ||||||||||
| Savings and interest-bearing demand deposits | 953,639 | 953,399 | 926,579 | 931,241 | 900,658 | |||||||||||||||
| Time deposits | 356,943 | 359,570 | 363,095 | 366,860 | 361,304 | |||||||||||||||
| Total deposits | $ | 1,831,130 | $ | 1,837,292 | $ | 1,799,548 | $ | 1,809,583 | $ | 1,803,166 | ||||||||||
| Other borrowings | 25,000 | 25,000 | 25,000 | — | 25,000 | |||||||||||||||
| Subordinated debt, net | 8,460 | 8,385 | 8,312 | 21,241 | 21,148 | |||||||||||||||
| Junior subordinated debt | 9,279 | 9,279 | 9,279 | 9,279 | 9,279 | |||||||||||||||
| Accrued interest payable and other liabilities | 8,188 | 7,305 | 9,643 | 9,442 | 9,316 | |||||||||||||||
| Total liabilities | $ | 1,882,057 | $ | 1,887,261 | $ | 1,851,782 | $ | 1,849,545 | $ | 1,867,909 | ||||||||||
| Common stock | 11,303 | 11,301 | 11,282 | 11,262 | 11,236 | |||||||||||||||
| Surplus | 78,667 | 78,400 | 78,216 | 78,187 | 77,578 | |||||||||||||||
| Retained earnings | 116,494 | 112,288 | 108,937 | 104,964 | 100,810 | |||||||||||||||
| Accumulated other comprehensive (loss), net | (12,876 | ) | (13,427 | ) | (12,239 | ) | (13,204 | ) | (16,092 | ) | ||||||||||
| Total shareholders’ equity | $ | 193,588 | $ | 188,562 | $ | 186,196 | $ | 181,209 | $ | 173,532 | ||||||||||
| Total liabilities and shareholders’ equity | $ | 2,075,645 | $ | 2,075,823 | $ | 2,037,978 | $ | 2,030,754 | $ | 2,041,441 | ||||||||||
| Loan Portfolio | ||||||||||||||||||||
| Real estate loans: | ||||||||||||||||||||
| Construction and land development | $ | 113,289 | $ | 97,487 | $ | 88,424 | $ | 78,470 | $ | 78,169 | ||||||||||
| Secured by farmland | 10,348 | 11,554 | 11,879 | 12,812 | 12,514 | |||||||||||||||
| Secured by 1-4 family residential | 522,763 | 520,821 | 527,282 | 533,458 | 544,577 | |||||||||||||||
| Other real estate loans | 709,772 | 701,013 | 685,099 | 671,723 | 667,550 | |||||||||||||||
| Commercial and industrial loans (except those secured by real estate) | 113,205 | 114,517 | 117,256 | 117,047 | 119,910 | |||||||||||||||
| Consumer installment loans | 8,105 | 8,060 | 8,419 | 8,358 | 8,113 | |||||||||||||||
| Deposit overdrafts | 478 | 547 | 543 | 535 | 454 | |||||||||||||||
| All other loans | 9,438 | 10,407 | 10,843 | 10,794 | 12,150 | |||||||||||||||
| Total loans | $ | 1,487,398 | $ | 1,464,406 | $ | 1,449,745 | $ | 1,433,197 | $ | 1,443,437 | ||||||||||
| Allowance for credit losses | (14,943 | ) | (14,698 | ) | (14,719 | ) | (14,447 | ) | (15,186 | ) | ||||||||||
| Loans, net | $ | 1,472,455 | $ | 1,449,708 | $ | 1,435,026 | $ | 1,418,750 | $ | 1,428,251 | ||||||||||
FIRST NATIONAL CORPORATION
Average Balances, Yields and Rates Paid
(in thousands)
| (unaudited) | Three Months Ended | ||||||||||||||||||||||||||||
| June 30, 2026 | March 31, 2026 | June 30, 2025 | |||||||||||||||||||||||||||
| Average Balance |
Interest Income/ Expense |
Yield/ Rate(7) |
Average Balance |
Interest Income/ Expense |
Yield/ Rate(7) |
Average Balance |
Interest Income/ Expense |
Yield/ Rate(7) |
|||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Securities: | |||||||||||||||||||||||||||||
| Taxable | $ | 256,750 | $ | 1,843 | 2.88 | % | $ | 259,592 | $ | 1,786 | 2.79 | % | $ | 220,100 | $ | 1,313 | 2.39 | % | |||||||||||
| Tax-exempt(1) | 62,353 | 372 | 2.39 | % | 61,705 | 369 | 2.43 | % | 50,871 | 377 | 2.98 | % | |||||||||||||||||
| Restricted | 4,468 | 64 | 5.76 | % | 4,465 | 64 | 5.85 | % | 4,449 | 70 | 6.27 | % | |||||||||||||||||
| Total securities | $ | 323,571 | $ | 2,279 | 2.82 | % | $ | 325,762 | $ | 2,219 | 2.76 | % | $ | 275,420 | $ | 1,760 | 2.56 | % | |||||||||||
| Loans: | |||||||||||||||||||||||||||||
| Taxable | $ | 1,473,064 | $ | 22,103 | 6.02 | % | $ | 1,446,201 | $ | 20,974 | 5.88 | % | $ | 1,441,800 | $ | 21,551 | 6.00 | % | |||||||||||
| Tax-exempt(1) | 3,460 | 54 | 6.31 | % | 3,479 | 54 | 6.30 | % | 4,095 | 54 | 5.26 | % | |||||||||||||||||
| Total loans | $ | 1,476,524 | $ | 22,157 | 6.02 | % | $ | 1,449,680 | $ | 21,028 | 5.88 | % | $ | 1,445,895 | $ | 21,605 | 5.99 | % | |||||||||||
| Federal funds sold | 1 | — | — | 38 | — | — | 1 | — | — | ||||||||||||||||||||
| Interest-bearing deposits with other institutions | 141,289 | 1,287 | 3.66 | % | 129,920 | 1,170 | 3.65 | % | 171,817 | 1,891 | 4.41 | % | |||||||||||||||||
| Total earning assets | $ | 1,941,385 | $ | 25,723 | 5.31 | % | $ | 1,905,400 | $ | 24,417 | 5.20 | % | $ | 1,893,133 | $ | 25,256 | 5.35 | % | |||||||||||
| Less: allowance for credit losses on loans | (15,039 | ) | (15,039 | ) | (14,888 | ) | |||||||||||||||||||||||
| Total non-earning assets | 153,121 | 136,586 | 141,099 | ||||||||||||||||||||||||||
| Total assets | $ | 2,079,467 | $ | 2,026,947 | $ | 2,019,344 | |||||||||||||||||||||||
| Liabilities and Shareholders’ Equity | |||||||||||||||||||||||||||||
| Interest bearing deposits: | |||||||||||||||||||||||||||||
| Checking | $ | 416,041 | $ | 1,101 | 1.06 | % | $ | 403,086 | $ | 1,078 | 1.09 | % | $ | 364,686 | $ | 1,208 | 1.33 | % | |||||||||||
| Regular savings | 212,451 | 171 | 0.32 | % | 211,058 | 177 | 0.34 | % | 212,433 | 191 | 0.36 | % | |||||||||||||||||
| Money market accounts | 335,904 | 1,573 | 1.88 | % | 330,735 | 1,492 | 1.83 | % | 329,273 | 1,869 | 2.28 | % | |||||||||||||||||
| Time deposits | 354,558 | 2,565 | 2.90 | % | 360,515 | 2,667 | 3.00 | % | 361,571 | 2,812 | 3.12 | % | |||||||||||||||||
| Total interest-bearing deposits | $ | 1,318,954 | $ | 5,410 | 1.65 | % | $ | 1,305,394 | $ | 5,414 | 1.68 | % | $ | 1,267,963 | $ | 6,080 | 1.92 | % | |||||||||||
| Federal funds purchased | 2 | — | — | 20 | — | — | 2 | — | — | ||||||||||||||||||||
| Subordinated debt | 8,422 | 170 | 8.09 | % | 8,384 | 168 | 8.11 | % | 21,304 | 468 | 8.80 | % | |||||||||||||||||
| Junior subordinated debt | 9,279 | 69 | 2.96 | % | 9,279 | 66 | 2.91 | % | 9,279 | 66 | 2.86 | % | |||||||||||||||||
| Other borrowings | 275 | 3 | 3.93 | % | 556 | 5 | 3.93 | % | 275 | 3 | 4.63 | % | |||||||||||||||||
| Total interest-bearing liabilities | $ | 1,336,932 | $ | 5,652 | 1.70 | % | $ | 1,323,633 | $ | 5,653 | 1.73 | % | $ | 1,298,823 | $ | 6,617 | 2.04 | % | |||||||||||
| Non-interest bearing liabilities | |||||||||||||||||||||||||||||
| Demand deposits | 542,600 | 506,573 | 540,377 | ||||||||||||||||||||||||||
| Other liabilities | 8,470 | 8,156 | 9,224 | ||||||||||||||||||||||||||
| Total liabilities | $ | 1,888,002 | $ | 1,838,362 | $ | 1,848,424 | |||||||||||||||||||||||
| Shareholders’ equity | 191,465 | 188,585 | 170,920 | ||||||||||||||||||||||||||
| Total liabilities and Shareholders’ equity | $ | 2,079,467 | $ | 2,026,947 | $ | 2,019,344 | |||||||||||||||||||||||
| Net interest income(1) | $ | 20,071 | $ | 18,764 | $ | 18,639 | |||||||||||||||||||||||
| Interest rate spread(1) | 3.61 | % | 3.47 | % | 3.31 | % | |||||||||||||||||||||||
| Cost of funds | 1.21 | % | 1.25 | % | 1.44 | % | |||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 1.17 | % | 1.20 | % | 1.40 | % | |||||||||||||||||||||||
| Net interest margin FTE(1) | 4.15 | % | 3.99 | % | 3.95 | % | |||||||||||||||||||||||
FIRST NATIONAL CORPORATION
Average Balances, Yields and Rates Paid
(in thousands)
| (unaudited) | Six Months Ended | |||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | |||||||||||||||||||||||
| Average Balance |
Interest Income/ Expense |
Yield / Rate(7) |
Average Balance |
Interest Income/ Expense |
Yield / Rate(7) |
|||||||||||||||||||
| Assets | ||||||||||||||||||||||||
| Securities: | ||||||||||||||||||||||||
| Taxable | $ | 258,287 | $ | 3,629 | 2.83 | % | $ | 219,990 | $ | 2,627 | 2.41 | % | ||||||||||||
| Tax-exempt(1) | 61,873 | 741 | 2.41 | % | 51,323 | 757 | 2.98 | % | ||||||||||||||||
| Restricted | 4,467 | 128 | 5.80 | % | 4,311 | 129 | 6.04 | % | ||||||||||||||||
| Total securities | $ | 324,627 | $ | 4,498 | 2.79 | % | $ | 275,624 | $ | 3,513 | 2.57 | % | ||||||||||||
| Loans: | ||||||||||||||||||||||||
| Taxable | $ | 1,459,707 | $ | 43,076 | 5.95 | % | $ | 1,448,191 | $ | 42,127 | 5.87 | % | ||||||||||||
| Tax-exempt(1) | 3,470 | 109 | 6.31 | % | 4,445 | 132 | 5.99 | % | ||||||||||||||||
| Total loans | $ | 1,463,177 | $ | 43,185 | 5.95 | % | $ | 1,452,636 | $ | 42,259 | 5.87 | % | ||||||||||||
| Federal funds sold | 19 | — | — | 1,755 | 39 | 4.53 | % | |||||||||||||||||
| Interest-bearing deposits with other institutions | 135,636 | 2,457 | 3.65 | % | 160,734 | 3,562 | 4.47 | % | ||||||||||||||||
| Total earning assets | $ | 1,923,459 | $ | 50,140 | 5.26 | % | $ | 1,890,749 | $ | 49,373 | 5.27 | % | ||||||||||||
| Less: allowance for credit losses on loans | (15,039 | ) | (15,749 | ) | ||||||||||||||||||||
| Total non-earning assets | 137,654 | 145,425 | ||||||||||||||||||||||
| Total assets | $ | 2,046,074 | $ | 2,020,425 | ||||||||||||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||
| Interest bearing deposits: | ||||||||||||||||||||||||
| Checking | $ | 409,600 | $ | 2,180 | 1.07 | % | $ | 366,843 | $ | 2,439 | 1.34 | % | ||||||||||||
| Regular savings | 211,759 | 347 | 0.33 | % | 212,513 | 366 | 0.35 | % | ||||||||||||||||
| Money market accounts | 333,333 | 3,066 | 1.85 | % | 334,261 | 3,831 | 2.31 | % | ||||||||||||||||
| Time deposits | 357,517 | 5,231 | 2.95 | % | 362,431 | 5,481 | 3.05 | % | ||||||||||||||||
| Total interest-bearing deposits | $ | 1,312,209 | $ | 10,824 | 1.66 | % | $ | 1,276,048 | $ | 12,117 | 1.91 | % | ||||||||||||
| Federal funds purchased | 11 | — | — | 1 | — | — | ||||||||||||||||||
| Subordinated debt | 8,460 | 338 | 8.04 | % | 22,500 | 935 | 8.38 | % | ||||||||||||||||
| Junior subordinated debt | 9,279 | 135 | 2.94 | % | 9,279 | 132 | 2.87 | % | ||||||||||||||||
| Other borrowings | 414 | 8 | 3.93 | % | 138 | 3 | 4.63 | % | ||||||||||||||||
| Total interest-bearing liabilities | $ | 1,330,373 | $ | 11,305 | 1.71 | % | $ | 1,307,966 | $ | 13,187 | 2.03 | % | ||||||||||||
| Non-interest bearing liabilities | ||||||||||||||||||||||||
| Demand deposits | 517,145 | 533,596 | ||||||||||||||||||||||
| Other liabilities | 8,322 | 9,150 | ||||||||||||||||||||||
| Total liabilities | $ | 1,855,840 | $ | 1,850,712 | ||||||||||||||||||||
| Shareholders’ equity | 190,234 | 169,713 | ||||||||||||||||||||||
| Total liabilities and Shareholders’ equity | $ | 2,046,074 | $ | 2,020,425 | ||||||||||||||||||||
| Net interest income(1) | $ | 38,835 | $ | 36,186 | ||||||||||||||||||||
| Interest rate spread(1) | 3.55 | % | 3.24 | % | ||||||||||||||||||||
| Cost of funds | 1.23 | % | 1.44 | % | ||||||||||||||||||||
| Interest expense as a percent of average earning assets | 1.19 | % | 1.41 | % | ||||||||||||||||||||
| Net interest margin FTE(1) | 4.07 | % | 3.86 | % | ||||||||||||||||||||
FIRST NATIONAL CORPORATION
Non-GAAP Reconciliation
(in thousands, except share and per share data)
(unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| Jun 30, 2026 |
Mar 31, 2026 |
Jun 30, 2025 |
Jun 30, 2026 |
Jun 30, 2025 |
||||||||||||||||
| Operating Net Income | ||||||||||||||||||||
| Net income (GAAP) | $ | 5,743 | $ | 4,887 | $ | 5,051 | $ | 10,630 | $ | 6,649 | ||||||||||
| Add: Merger-related expenses | — | — | 92 | — | 2,032 | |||||||||||||||
| Subtract: Tax effect of adjustment (6) | — | — | (10 | ) | — | (391 | ) | |||||||||||||
| Adjusted operating net income (non-GAAP) | $ | 5,743 | $ | 4,887 | $ | 5,133 | $ | 10,630 | $ | 8,290 | ||||||||||
| Adjusted Earnings Per Share, Basic | ||||||||||||||||||||
| Weighted average shares, basic | 9,041,314 | 9,031,591 | 8,987,179 | 9,036,479 | 8,983,374 | |||||||||||||||
| Basic earnings per share (GAAP) | $ | 0.64 | $ | 0.54 | $ | 0.56 | $ | 1.18 | $ | 0.74 | ||||||||||
| Adjusted earnings per share, basic (non-GAAP) | $ | 0.64 | $ | 0.54 | $ | 0.57 | $ | 1.18 | $ | 0.92 | ||||||||||
| Adjusted Earnings Per Share, Diluted | ||||||||||||||||||||
| Weighted average shares, diluted | 9,068,347 | 9,047,416 | 9,001,972 | 9,057,908 | 9,003,969 | |||||||||||||||
| Diluted earnings per share (GAAP) | $ | 0.63 | $ | 0.54 | $ | 0.56 | $ | 1.17 | $ | 0.74 | ||||||||||
| Adjusted diluted earnings per share (non-GAAP) | $ | 0.63 | $ | 0.54 | $ | 0.57 | $ | 1.17 | $ | 0.92 | ||||||||||
| Adjusted Pre-Provision, Pre-Tax Earnings | ||||||||||||||||||||
| Net interest income | $ | 19,981 | $ | 18,676 | $ | 18,548 | $ | 38,657 | $ | 35,999 | ||||||||||
| Total noninterest income | 4,018 | 3,824 | 3,889 | 7,842 | 7,500 | |||||||||||||||
| Net revenue | $ | 23,999 | $ | 22,500 | $ | 22,437 | $ | 46,499 | $ | 43,499 | ||||||||||
| Total noninterest expense | 16,437 | 15,982 | 15,191 | 32,419 | 33,526 | |||||||||||||||
| Pre-provision, pre-tax earnings (non-GAAP) | $ | 7,562 | $ | 6,518 | $ | 7,246 | $ | 14,080 | $ | 9,973 | ||||||||||
| Add: Merger expenses | — | — | 92 | — | 2,032 | |||||||||||||||
| Adjusted pre-provision, pre-tax earnings (non-GAAP) | $ | 7,562 | $ | 6,518 | $ | 7,338 | $ | 14,080 | $ | 12,005 | ||||||||||
| Adjusted Performance Ratios | ||||||||||||||||||||
| Average assets | $ | 2,079,467 | $ | 2,026,947 | $ | 2,019,344 | $ | 2,046,074 | $ | 2,020,425 | ||||||||||
| Return on average assets (GAAP) | 1.11 | % | 0.98 | % | 1.00 | % | 1.05 | % | 0.66 | % | ||||||||||
| Adjusted return on average assets (non-GAAP) | 1.11 | % | 0.98 | % | 1.02 | % | 1.05 | % | 0.83 | % | ||||||||||
| Average shareholders’ equity | $ | 191,465 | $ | 188,585 | $ | 170,920 | $ | 190,234 | $ | 169,713 | ||||||||||
| Return on average equity (GAAP) | 12.03 | % | 10.51 | % | 11.85 | % | 11.27 | % | 7.90 | % | ||||||||||
| Adjusted return on average equity (non-GAAP) | 12.03 | % | 10.51 | % | 12.05 | % | 11.27 | % | 9.85 | % | ||||||||||
| Net Interest Margin | ||||||||||||||||||||
| Net interest income | $ | 19,981 | $ | 18,676 | $ | 18,548 | $ | 38,657 | $ | 35,999 | ||||||||||
| Tax-equivalent net interest income (non-GAAP) | 20,071 | 18,764 | 18,639 | 38,835 | 36,186 | |||||||||||||||
| Average earning assets | 1,941,385 | 1,905,400 | 1,893,133 | 1,923,459 | 1,890,749 | |||||||||||||||
| Net interest margin | 4.13 | % | 3.98 | % | 3.93 | % | 4.05 | % | 3.84 | % | ||||||||||
| Net interest margin fully tax equivalent (non-GAAP) | 4.15 | % | 3.99 | % | 3.95 | % | 4.07 | % | 3.86 | % | ||||||||||
FIRST NATIONAL CORPORATION
Non-GAAP Reconciliation
(in thousands)
| (unaudited) | For the Three Months Ended | For the Six Months Ended | ||||||||||||||||||
| Jun 30, 2026 |
Mar 31, 2026 |
Jun 30, 2025 |
Jun 30, 2026 |
Jun 30, 2025 |
||||||||||||||||
| Adjusted Operating Noninterest Expense | ||||||||||||||||||||
| Total noninterest expense (GAAP) | $ | 16,437 | $ | 15,982 | $ | 15,191 | $ | 32,419 | $ | 33,526 | ||||||||||
| Subtract: merger expenses | — | — | (92 | ) | — | (2,032 | ) | |||||||||||||
| Subtract: amortization expense | (433 | ) | (434 | ) | (441 | ) | (867 | ) | (883 | ) | ||||||||||
| Adjusted operating noninterest expense (non-GAAP) | $ | 16,004 | $ | 15,548 | $ | 14,658 | $ | 31,552 | $ | 30,611 | ||||||||||
| Efficiency Ratio | ||||||||||||||||||||
| Total noninterest expense (GAAP) | $ | 16,437 | $ | 15,982 | $ | 15,191 | $ | 32,419 | $ | 33,526 | ||||||||||
| Add: other real estate owned income, net | — | — | — | — | 7 | |||||||||||||||
| Subtract: amortization of intangibles | (433 | ) | (434 | ) | (441 | ) | (867 | ) | (883 | ) | ||||||||||
| Add/Subtract: (loss) on disposal of premises and equipment, net | — | — | (7 | ) | — | (7 | ) | |||||||||||||
| Subtract: merger expenses | — | — | (92 | ) | — | (2,032 | ) | |||||||||||||
| Adjusted operating non-interest expense (non-GAAP) | $ | 16,004 | $ | 15,548 | $ | 14,651 | $ | 31,552 | $ | 30,611 | ||||||||||
| Tax-equivalent net interest income (non-GAAP) | $ | 20,071 | $ | 18,764 | $ | 18,639 | $ | 38,835 | $ | 36,186 | ||||||||||
| Total noninterest income (GAAP) | 4,018 | 3,824 | 3,889 | 7,842 | 7,500 | |||||||||||||||
| Subtract: (gain) on disposal of premises and equipment | (56 | ) | — | — | (56 | ) | — | |||||||||||||
| Subtract: net (gain) on subordinated debt payoff | — | — | (80 | ) | — | (80 | ) | |||||||||||||
| Subtract: securities (gains), net | — | (8 | ) | — | (8 | ) | — | |||||||||||||
| Adjusted income for efficiency ratio (non-GAAP) | $ | 24,033 | $ | 22,580 | $ | 22,448 | $ | 46,613 | $ | 43,606 | ||||||||||
| Efficiency ratio (non-GAAP) | 66.59 | % | 68.86 | % | 65.27 | % | 67.69 | % | 70.20 | % | ||||||||||
FIRST NATIONAL CORPORATION
Non-GAAP Reconciliation
(in thousands, except share and per share data)
| (unaudited) | ||||||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||
| Jun 30, 2026 |
Mar 31, 2026 |
Jun 30, 2025 |
Jun 30, 2026 |
Jun 30, 2025 |
||||||||||||||||
| Tax-Equivalent Net Interest Income | ||||||||||||||||||||
| GAAP measures: | ||||||||||||||||||||
| Interest income – loans | $ | 22,145 | $ | 21,017 | $ | 21,594 | $ | 43,162 | $ | 42,231 | ||||||||||
| Interest income – investments and other | 3,488 | 3,312 | 3,571 | 6,800 | 6,956 | |||||||||||||||
| Interest expense – deposits | (5,410 | ) | (5,414 | ) | (6,080 | ) | (10,824 | ) | (12,118 | ) | ||||||||||
| Interest expense – subordinated debt | (170 | ) | (168 | ) | (468 | ) | (338 | ) | (935 | ) | ||||||||||
| Interest expense – junior subordinated debt | (69 | ) | (66 | ) | (66 | ) | (135 | ) | (132 | ) | ||||||||||
| Interest expense – other borrowings | (3 | ) | (5 | ) | (3 | ) | (8 | ) | (3 | ) | ||||||||||
| Net interest income | $ | 19,981 | $ | 18,676 | $ | 18,548 | $ | 38,657 | $ | 35,999 | ||||||||||
| Non-GAAP measures: | ||||||||||||||||||||
| Add: Tax benefit realized on non-taxable interest income – loans(6) | $ | 12 | $ | 11 | $ | 12 | $ | 23 | $ | 28 | ||||||||||
| Add: Tax benefit realized on non-taxable interest income – municipal securities(6) | 78 | 77 | 79 | 155 | 159 | |||||||||||||||
| Tax benefit realized on non-taxable interest income | $ | 90 | $ | 88 | $ | 91 | $ | 178 | $ | 187 | ||||||||||
| Tax-equivalent net interest income (non-GAAP) | $ | 20,071 | $ | 18,764 | $ | 18,639 | $ | 38,835 | $ | 36,186 | ||||||||||
| Tangible Common Equity and Tangible Assets | ||||||||||||||||||||
| Total assets (GAAP) | $ | 2,075,645 | $ | 2,075,823 | $ | 2,041,441 | $ | 2,075,645 | $ | 2,041,441 | ||||||||||
| Subtract: goodwill | (3,030 | ) | (3,030 | ) | (3,030 | ) | (3,030 | ) | (3,030 | ) | ||||||||||
| Subtract: core deposit intangibles, net | (12,352 | ) | (12,785 | ) | (14,102 | ) | (12,352 | ) | (14,102 | ) | ||||||||||
| Tangible assets (Non-GAAP) | $ | 2,060,263 | $ | 2,060,008 | $ | 2,024,309 | $ | 2,060,263 | $ | 2,024,309 | ||||||||||
| Total shareholders’ equity (GAAP) | $ | 193,588 | $ | 188,562 | $ | 173,532 | $ | 193,588 | $ | 173,532 | ||||||||||
| Subtract: goodwill | (3,030 | ) | (3,030 | ) | (3,030 | ) | (3,030 | ) | (3,030 | ) | ||||||||||
| Subtract: core deposit intangibles, net | (12,352 | ) | (12,785 | ) | (14,102 | ) | (12,352 | ) | (14,102 | ) | ||||||||||
| Tangible common equity (Non-GAAP) | $ | 178,206 | $ | 172,747 | $ | 156,400 | $ | 178,206 | $ | 156,400 | ||||||||||
| Tangible common equity to tangible assets ratio (non-GAAP) | 8.65 | % | 8.39 | % | 7.73 | % | 8.65 | % | 7.73 | % | ||||||||||
| Tangible Book Value Per Share | ||||||||||||||||||||
| Tangible common equity (non-GAAP) | $ | 178,206 | $ | 172,747 | $ | 156,400 | $ | 178,206 | $ | 156,400 | ||||||||||
| Common shares outstanding, ending | 9,042,629 | 9,040,967 | 8,989,138 | 9,042,629 | 8,989,138 | |||||||||||||||
| Tangible book value per share (non-GAAP) | $ | 19.71 | $ | 19.11 | $ | 17.40 | $ | 19.71 | $ | 17.40 | ||||||||||
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” and “Non-GAAP Reconciliation” tables for additional information and detailed calculations of adjustments.
(2) The Company is a small bank holding company under applicable regulations and guidance and is not subject to the minimum regulatory capital regulations for bank holding companies. The regulatory requirements that apply to bank holding companies that are subject to regulatory capital requirements are presented below, along with the Company's capital ratios as determined under those regulations.
(3) All ratios on June 30, 2026, are estimates and subject to change pending the Bank's filing of its Call Report. All other periods are presented as filed.
(4) Ratios are annualized.
(5) Capital ratios presented are for First Bank.
(6) The tax rate utilized in calculating the tax benefit is 21%
(7) Yields and interest income are presented on a taxable-equivalent basis using the federal statutory tax rate of 21%
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