STRASBURG, Va., April 30, 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 $4.9 million and basic and diluted earnings per common share of $0.54 for the first quarter ended March 31, 2026.
“After a slow start to the first quarter, loan production picked up in March and lifted loan balances for the quarter. Deposit flows were also strong in the quarter with an eight percent annualized growth rate. We were excited to see our recently hired bankers teaming up with our legacy bankers to produce solid success on both sides of the balance sheet. With fewer days, the first quarter is typically the most challenging of the year for profitability, yet we were pleased to exceed our budgeted metrics for earnings, deposits, loans, and asset quality. We expect that the loan production late in the quarter will reap benefits going forward and we will begin the year with good momentum.” said Scott C. Harvard, President and Chief Executive Officer of First National.
FINANCIAL HIGHLIGHTS FOR FIRST QUARTER 2026
●Diluted earnings per share of $0.54 per share, compared to $0.18 one year prior, and $0.61 in the previous quarter ●Adjusted diluted earnings per share(1) of $0.54 per share, compared to $0.35 one year prior adjusted for merger expenses ●Return on average assets of 0.98% compared to 0.32% one year prior, and 1.06% in the previous quarter ●Return on average equity of 10.51% compared to 3.85% one year prior, and 11.86% in the previous quarter ●Tax equivalent(1) net interest margin of 3.99%, up from 3.77% one year prior, and 3.95% in the previous quarter ●Asset quality improved with non-performing assets declining to 0.21% of total assets ●Net loan growth of $14.7 million for the quarter, a 4.0% annualized growth rate ●Deposit growth of $37.7 million, an 8.4% annualized growth rate, in lower cost demand deposits and interest-bearing checking, money market, and savings accounts. Time deposits declined slightly during the quarter ●Noninterest bearing deposits of $524.3 million, or 29% of deposits, contributed to our low funding cost
NET INTEREST INCOME
For the first quarter of 2026, the Company’s net interest margin fully tax equivalent ("FTE")(1) was 3.99%, compared to 3.95% for the fourth quarter of 2025 and 3.77% in the first quarter of 2025. The Company’s net interest margin (FTE)(1) for the first quarter of 2026 includes the impact of acquisition accounting fair value adjustments. Net accretion income related to acquisition accounting was $211 thousand, a 4-basis point incremental increase to the net interest margin for the first quarter ended March 31, 2026. Prior period acquisition accounting resulted in net accretion income of $201 thousand, or a 5-basis point incremental increase to the net interest margin for the quarter ended December 31, 2025, and net amortization expense of $36 thousand, or a one basis point incremental decrease to the net interest margin for the first quarter ended March 31, 2025.
Earning asset yields for the first quarter of 2026 decreased 4-basis points to 5.20% compared to the fourth quarter of 2025. For the first quarter of 2026, net interest income was $18.8 million, a decrease of $276 thousand from $19.0 million in the fourth quarter of 2025 due to a decrease in average interest-earning assets. Loan growth occurred late in the first quarter of 2026 and was negative in the first two months of the quarter, limiting interest income growth for the quarter.
The quarterly impact of acquisition accretion and amortization is reflected in the following table (dollars in thousands):
For the quarter ended: Mar 31, 2026 Dec 31, 2025 Mar 31, 2025 Loans $294 $283 $(194)Deposits (10) (10) 443 Borrowings (73) (72) (285) $211 $201 $(36)
ALLOWANCE AND PROVISION FOR CREDIT LOSSES
The Company recorded a $450 thousand provision for credit losses in the first quarter of 2026, compared to $951 thousand for the fourth quarter of 2025. The first quarter provision was comprised of a $521 thousand provision for credit losses on loans, a $56 thousand reduction in provision for credit losses on unfunded commitments, and a $15 thousand reduction in the credit losses on securities. Net charge-offs totaled $542 thousand in the first quarter of 2026, compared to net charge-offs of $651 thousand in the fourth quarter of 2025 and net charge-offs of $2.4 million in the first quarter of 2025.
The allowance for credit losses on loans totaled $14.7 million, or 1.00% of total loans on March 31, 2026, compared to $14.7 million, or 1.02% of total loans on December 31, 2025, and $14.7 million, or 1.02% of total loans on March 31, 2025. The decrease in allowance for credit losses to total loans from the prior period is primarily driven by lower individually analyzed loans balances following charge-offs recorded during the quarter. The allowance for credit losses to non-performing assets coverage increased to 331% on March 31, 2026, compared to 316% on December 31, 2025, and 303% on March 31, 2025.
NONINTEREST INCOME AND EXPENSE
Noninterest income decreased $1.2 million to $3.8 million for the first quarter of 2026 from $5.0 million in the prior quarter. This decrease was primarily due to a one-time recovery, recognized in the prior period, of $895 thousand related to an acquired loan that was charged off prior to the acquisition of Touchstone Bank. The decrease in noninterest income includes additional decreases in income from bank owned life insurance, decreases in ATM and check card income, and decreases in brokered mortgage fees compared to the prior quarter.
Adjusted operating noninterest income(1), which excludes the loan recovery ($895 thousand in the fourth quarter of 2025), decreased $299 thousand to $3.8 million for the first quarter of 2026 from $4.1 million in the prior quarter, due to nominal decreases in income from bank owned life insurance, in ATM and check card income, and in brokered mortgage fees.
Noninterest expense decreased $143 thousand to $16.0 million for the first quarter of 2026 from $16.1 million in the prior quarter. Decreases in other operating expenses, merger expenses, data processing expense, and equipment expense were partially offset by the increase in salaries and employee benefits. Merger expenses in the prior quarter were incurred due to the one-time early lease termination of $127 thousand for the now closed Raleigh loan production office acquired in the Touchstone Bank merger.
Adjusted operating noninterest expense(1), which excludes the Raleigh LPO lease termination in the fourth quarter of 2025 and amortization of intangible assets ($434 thousand in the first quarter of 2026 and $442 thousand in the fourth quarter of 2025), decreased $8 thousand to $15.5 million for the first quarter of 2026 from $15.6 million in the prior quarter, due to decreases in equipment expense, data processing expense, and other operating expense that were offset by increases in salaries and employee benefits.
INCOME TAXES
Income tax expense was $1.2 million for the first quarter of 2026, compared to $1.4 million for the fourth quarter of 2025. The effective tax rate of 19.5% for the first quarter of 2026 decreased from 20.2% in the fourth quarter of 2025. This decreased effective tax rate in the first quarter was driven by the impact of nondeductible merger expenses in the prior quarter.
BALANCE SHEET
On March 31, 2026, total assets were $2.076 billion, an increase of $37.8 million or 1.9% (7.5% annualized) from December 31, 2025, and an increase of $42.5 million or 2.1% (8.5% annualized) from March 31, 2025. Total assets increased from the prior quarter due to loan growth and increased cash and cash equivalents, and the increase from the prior year was driven by loan growth and additional investment in securities available for sale.
On March 31, 2026, loans held for investment ("LHFI") net of allowance totaled $1.450 billion, an increase of $14.7 million or 4.0% annualized from $1.435 billion on December 31, 2025, and an increase of $13.8 million or 4.0% annualized from March 31, 2025. Loans grew in the first quarter of 2026 due to higher new loan production.
On March 31, 2026, total investments were $324.6 million, a decrease of $1.5 million or 0.5% from December 31, 2025, and an increase of $50.9 million or 18.6% from March 31, 2025. Available for sale ("AFS") securities totaled $217.7 million on March 31, 2026, and $217.5 million on December 31, 2025, and $161.0 million on March 31, 2025. The increase compared to the prior year was driven by security purchases exceeding portfolio cashflows and utilization of excess cash from the Touchstone Bank acquisition. Total net unrealized losses on the AFS securities portfolio were $16.2 million on March 31, 2026, compared to $14.8 million on December 31, 2025, and $20.1 million on March 31, 2025. Held to maturity securities are carried at amortized cost and totaled $101.3 million on March 31, 2026, $102.9 million on December 31, 2025, and $108.3 million on March 31, 2025.
On March 31, 2026, total deposits were $1.837 billion, an increase of $37.7 million or 2.1% from the prior quarter, and an increase of $12.3 million or 0.7% from March 31, 2025. 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 March 31, 2026, and December 31, 2025, compared to no other borrowings on March 31, 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 $764.2 million on March 31, 2026, $743.0 million on December 31, 2025, and $800.2 million on March 31, 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 $558.9 million on March 31, 2026, $538.2 million on December 31, 2025, and $549.3 million on March 31, 2025. Excluding municipal deposits that have collateral pledged, the estimated amount of uninsured customer deposits totaled $461.3 million on March 31, 2026, $448.8 million on December 31, 2025, and $458.7 million on March 31, 2025.
ASSET QUALITY
Overall non-performing assets ("NPAs") improved over the prior period and prior year as previously reserved loans were charged off in the first quarter of 2026. Management classifies NPAs as non-accrual loans and other real estate owned ("OREO"). The Bank had no OREO on March 31, 2026, December 31, 2025, or March 31, 2025. NPAs as a percentage of total loans declined to 0.30% on March 31, 2026, down from 0.32% on December 31, 2025, and down from 0.34% on March 31, 2025. NPAs decreased by $209 thousand to $4.4 million on March 31, 2026, compared to $4.7 million on December 31, 2025, and $4.9 million on March 31, 2025.
There were no loans past due over 90 days or more and still accruing interest on March 31, 2026, December 31, 2025, or March 31, 2025. Loans past-due 30-89 days and still accruing interest increased to $5.0 million, or 0.34% of total loans on March 31, 2026, compared to $3.8 million, or 0.26% of total loans on December 31, 2025, and $5.0 million, or 0.35%, of total loans on March 31, 2025. The health care provider portfolio balance continues to decline with $9.1 million in loan balances and $3.7 million in unamortized premiums. The portfolio has loans totaling $1.8 million currently on non-accrual that are specifically reserved for $1.2 million.
CAPITAL
During the first quarter of 2026, the Company declared and paid cash dividends of $0.17 per common share, compared to $0.17 in the fourth quarter of 2025 and $0.155 in the first quarter of 2025. Tangible book value per share(1) grew to $19.11 at March 31, 2026, from $18.83 per share at December 31, 2025, and $16.81 at March 31, 2025.
The following table provides capital ratios and values for the periods ended:
First National Corporation(2)Mar 31, 2026 Dec 31, 2025 Mar 31, 2025 Total risk-based capital ratio 14.64% 14.53% 14.58%Tier 1 risk-based capital ratio 13.06% 12.93% 12.07%Common equity Tier 1 capital ratio 12.44% 12.30% 11.44%Leverage ratio 9.65% 9.29% 8.78%Tangible common equity to tangible assets(1) 8.39% 8.41% 7.50%Tangible book value per share(1)$19.11 $18.83 $16.81 First BankMar 31, 2026 Dec 31, 2025 Mar 31, 2025 Total risk-based capital ratio(3) 13.75% 13.64% 12.44%Tier 1 risk-based capital ratio(3) 12.73% 12.59% 11.39%Common equity Tier 1 capital ratio(3) 12.73% 12.59% 11.39%Leverage ratio(3) 9.38% 9.13% 8.28%Tangible common equity to tangible assets(1) 8.49% 8.51% 7.35%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 an entity that provides title insurance services.
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 operating non-interest income, 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, expectations and intentions 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 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. For details on factors that could affect expectations, future events, or results, see the risk factors and other cautionary language included in First National’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. SchwartzPresident and CEO Executive Vice President and CFO(540) 545-7695 (540) [email protected] [email protected]FIRST NATIONAL CORPORATION
Performance Summary
(in thousands)
2026 Dec 31,
2025 Sep 30,
2025 Jun 30,
2025 Mar 31,
2025 Income Statement Interest and dividend income Interest and fees on loans $21,017 $21,513 $21,430 $21,594 $20,639 Interest on deposits in banks 1,170 1,618 1,733 1,891 1,671 Interest on federal funds sold — 1 1 — 39 Taxable interest on securities 1,786 1,734 1,562 1,313 1,314 Tax-exempt interest on securities 292 292 296 298 300 Dividends 64 66 65 69 59 Total interest and dividend income $24,329 $25,224 $25,087 $25,165 $24,022 Interest expense Interest on deposits $5,414 $5,929 $6,246 $6,080 $6,038 Interest on subordinated debt 168 273 479 468 467 Interest on junior subordinated debt 66 67 67 66 66 Interest on other borrowings 5 3 — 3 — Total interest expense $5,653 $6,272 $6,792 $6,617 $6,571 Net interest income $18,676 $18,952 $18,295 $18,548 $17,451 Provision for credit losses 450 951 193 911 832 Net interest income after provision for credit losses $18,226 $18,001 $18,102 $17,637 $16,619 Noninterest income Service charges on deposit accounts $924 $937 $985 $1,020 $1,013 ATM and check card fees 1,047 1,124 1,336 1,128 996 Wealth management fees 911 936 910 867 898 Fees for other customer services 287 292 407 230 258 Brokered mortgage fees 115 190 166 183 110 Income from bank owned life insurance 259 383 284 231 246 Net gains on securities available for sale 8 — — — — Net gains on sale of loans held for sale 1 3 5 — — Bargain purchase gain — — 304 — — Net gain on subordinated debt payoff — — — 80 — Other operating income 272 1,153 103 150 90 Total noninterest income $3,824 $5,018 $4,500 $3,889 $3,611 Noninterest expense Salaries and employee benefits $8,982 $8,454 $8,487 $8,033 $8,689 Occupancy 972 996 1,025 944 1,069 Equipment 1,093 1,167 1,056 1,057 1,025 Marketing 341 350 324 286 220 Supplies 146 207 158 198 217 Legal and professional fees 688 667 660 594 522 ATM and check card expense 571 570 569 537 439 FDIC assessment 227 258 305 315 414 Bank franchise tax 380 349 350 348 317 Data processing expense 394 501 495 504 762 Core deposit intangible amortization expense 434 442 442 441 442 Other real estate owned expense (income), net — — — — (8)Net (gain) loss on disposal of premises and equipment — — (7) 7 — Merger expense — 127 — 92 1,940 Other operating expense 1,754 2,037 1,918 1,835 2,287 Total noninterest expense $15,982 $16,125 $15,782 $15,191 $18,335 Income before income taxes $6,068 $6,894 $6,820 $6,335 $1,895 Income tax expense 1,181 1,390 1,270 1,284 297 Net income $4,887 $5,504 $5,550 $5,051 $1,598
FIRST NATIONAL CORPORATION
Performance Summary
(in thousands, except share and per share data)
2026 Dec 31,
2025 Sep 30,
2025 Jun 30,
2025 Mar 31,
2025 Common Share and Per Common Share Data Earnings per common share, basic $0.54 $0.61 $0.62 $0.56 $0.18 Adjusted earnings per common share, basic(1) $0.54 $0.62 $0.58 $0.57 $0.35 Weighted average shares, basic 9,031,591 9,011,378 8,999,153 8,987,179 8,979,527 Earnings per common share, diluted $0.54 $0.61 $0.62 $0.56 $0.18 Adjusted earnings per common share, diluted(1) $0.54 $0.62 $0.58 $0.57 $0.35 Weighted average shares, diluted 9,047,416 9,030,437 9,023,185 9,001,972 9,005,923 Shares outstanding at period end 9,040,967 9,025,395 9,009,209 8,989,138 8,986,696 Tangible book value per share at period end(1) $19.11 $18.83 $18.26 $17.40 $16.81 Market price per share at period end $26.92 $25.24 $22.68 $19.47 $22.45 Cash dividends declared $0.170 $0.170 $0.155 $0.155 $0.155 Key Performance Ratios Return on average assets(4) 0.98% 1.06% 1.09% 1.00% 0.32%Adjusted return on average assets(1)(4) 0.98% 1.08% 1.03% 1.02% 0.63%Return on average equity(4) 10.51% 11.86% 12.43% 11.85% 3.85%Adjusted return on average equity(1)(4) 10.51% 12.08% 11.75% 12.05% 7.61%Net interest margin(4) 3.98% 3.93% 3.83% 3.93% 3.75%Net interest margin fully tax equivalent(1)(4) 3.99% 3.95% 3.84% 3.95% 3.77%Efficiency ratio(1) 68.86% 67.16% 67.97% 65.27% 75.44% Average Balances Average assets $2,026,947 $2,061,973 $2,022,958 $2,019,344 $2,016,958 Average earning assets 1,905,400 1,914,802 1,897,328 1,893,133 1,888,427 Average noninterest deposits to total average deposits 27.96% 29.28% 29.13% 29.88% 29.01%Average shareholders’ equity $188,585 $184,167 177,130 $170,920 168,245 Asset Quality Allowance for credit losses on loans to nonperforming assets 330.66% 316.27% 253.37% 223.45% 302.94%Allowance for credit losses on loans to period end loans 1.00% 1.02% 1.01% 1.05% 1.02%Nonperforming assets to period end loans 0.30% 0.32% 0.40% 0.47% 0.34%Nonperforming assets to total assets 0.21% 0.23% 0.28% 0.33% 0.24%Loan charge-offs $709 $753 $1,027 $535 $2,490 Loan recoveries 167 102 88 87 89 Net charge-offs 542 651 939 448 2,401 Non-accrual loans 4,445 4,654 5,702 6,796 4,864 Other real estate owned, net — — — — — Nonperforming assets 4,445 4,654 5,702 6,796 4,864 Loans 30 to 89 days past due, accruing 5,025 3,830 3,580 3,190 5,021 Loans over 90 days past due, accruing — — 388 — — Capital Ratios(5) Total capital $205,509 $201,622 $194,910 $189,115 $182,563 Tier 1 capital 190,173 186,193 179,781 173,240 167,150 Common equity Tier 1 capital 190,173 186,193 179,781 173,240 167,150 Total capital to risk-weighted assets(3) 13.75% 13.64% 13.40% 12.89% 12.44%Tier 1 capital to risk-weighted assets(3) 12.73% 12.59% 12.36% 11.81% 11.39%Common equity Tier 1 capital / risk-weighted assets(3) 12.73% 12.59% 12.36% 11.81% 11.39%Leverage ratio(3) 9.38% 9.13% 8.88% 8.56% 8.28%
FIRST NATIONAL CORPORATION
Performance Summary
(in thousands)
2026 Dec 31,
2025 Sept 30,
2025 Jun 30,
2025 Mar 31,
2025 Balance Sheet Cash and due from banks $22,624 $20,836 $23,716 $34,435 $27,432 Interest-bearing deposits in banks 165,185 140,074 165,601 159,880 178,600 Cash and cash equivalents $187,809 $160,910 $189,317 $194,315 $206,032 Securities available for sale, at fair value 217,655 217,538 196,476 187,579 160,976 Securities held to maturity, at amortized cost (net of allowance for credit losses) 101,261 102,872 104,608 106,430 108,292 Restricted securities, at cost 5,642 5,624 4,436 5,624 4,436 Loans, net of allowance for credit losses 1,449,708 1,435,026 1,418,750 1,428,251 1,435,895 Premises and equipment, net 34,327 34,561 34,107 34,530 34,609 Accrued interest receivable 6,656 6,467 6,238 6,143 6,126 Bank owned life insurance 38,837 38,577 38,652 38,367 38,136 Goodwill 3,030 3,030 3,030 3,030 3,030 Core deposit intangibles, net 12,785 13,219 13,661 14,102 14,544 Other assets 18,113 20,154 21,479 23,070 21,270 Total assets $2,075,823 $2,037,978 $2,030,754 $2,041,441 $2,033,346 Noninterest-bearing demand deposits $524,323 $509,874 $511,482 $541,204 $540,387 Savings and interest-bearing demand deposits 953,399 926,579 931,241 900,658 922,197 Time deposits 359,570 363,095 366,860 361,304 362,392 Total deposits $1,837,292 $1,799,548 $1,809,583 $1,803,166 $1,824,976 Other borrowings 25,000 25,000 — 25,000 — Subordinated debt, net 8,385 8,312 21,241 21,148 21,461 Junior subordinated debt 9,279 9,279 9,279 9,279 9,279 Accrued interest payable and other liabilities 7,305 9,643 9,442 9,316 8,955 Total liabilities $1,887,261 $1,851,782 $1,849,545 $1,867,909 $1,864,671 Common stock 11,301 11,282 11,262 11,236 11,233 Surplus 78,400 78,216 78,187 77,578 77,354 Retained earnings 112,288 108,937 104,964 100,810 97,152 Accumulated other comprehensive (loss), net (13,427) (12,239) (13,204) (16,092) (17,064)Total shareholders’ equity $188,562 $186,196 $181,209 $173,532 $168,675 Total liabilities and shareholders’ equity $2,075,823 $2,037,978 $2,030,754 $2,041,441 $2,033,346 Loan Portfolio Real estate loans: Construction and land development $97,487 $88,424 $78,470 $78,169 $81,596 Secured by farmland 11,554 11,879 12,812 12,514 12,314 Secured by 1-4 family residential 520,821 527,282 533,458 544,577 550,183 Other real estate loans 701,013 685,099 671,723 667,550 653,367 Commercial and industrial loans (except those secured by real estate) 114,517 117,256 117,047 119,910 131,539 Consumer installment loans 8,060 8,419 8,358 8,113 8,034 Deposit overdrafts 547 543 535 454 486 All other loans 10,407 10,843 10,794 12,150 13,111 Total loans $1,464,406 $1,449,745 $1,433,197 $1,443,437 $1,450,630 Allowance for credit losses (14,698) (14,719) (14,447) (15,186) (14,735)Loans, net $1,449,708 $1,435,026 $1,418,750 $1,428,251 $1,435,895
FIRST NATIONAL CORPORATION
Average Balances, Yields and Rates Paid
(in thousands)
FIRST NATIONAL CORPORATION
Non-GAAP Reconciliation
(in thousands, except share and per share data)
2026 Dec 31,
2025 Sept 30,
2025 Jun 30,
2025 Mar 31,
2025 Operating Net Income Net income (GAAP) $4,887 $5,504 $5,550 $5,051 $1,598 Add: Merger-related expenses — 127 — 92 1,940 Subtract: Bargain purchase gain — — (304) — — Subtract: Tax effect of adjustment(5) — (27) 64 (10) (381)Adjusted operating net income (non-GAAP) $4,887 $5,604 $5,310 $5,133 $3,157 Adjusted Earnings Per Share, Basic Weighted average shares, basic 9,031,591 9,011,378 8,999,153 8,987,179 8,979,527 Basic earnings per share (GAAP) $0.54 $0.61 $0.62 $0.56 $0.18 Adjusted earnings per share, basic (non-GAAP) $0.54 $0.62 $0.58 $0.57 $0.35 Adjusted Earnings Per Share, Diluted Weighted average shares, diluted 9,047,416 9,030,437 9,023,185 9,001,972 9,005,923 Diluted earnings per share (GAAP) $0.54 $0.61 $0.62 $0.56 $0.18 Adjusted diluted earnings per share (non-GAAP) $0.54 $0.62 $0.58 $0.57 $0.35 Adjusted Pre-Provision, Pre-Tax Earnings Net interest income $18,676 $18,952 $18,295 $18,548 $17,451 Total noninterest income 3,824 5,018 4,500 3,889 3,611 Net revenue $22,500 $23,970 $22,795 $22,437 $21,062 Total noninterest expense 15,982 16,125 15,782 15,191 18,335 Pre-provision, pre-tax earnings $6,518 $7,845 $7,013 $7,246 $2,727 Add: Merger expenses — 127 — 92 1,940 Subtract: One time recovery gain — (895) — — — Subtract: Bargain purchase gain — — (304) — — Adjusted pre-provision, pre-tax earnings $6,518 $7,077 $6,709 $7,338 $4,667 Adjusted Performance Ratios Average assets $2,026,947 $2,061,973 $2,022,958 $2,019,344 $2,016,958 Return on average assets (GAAP) 0.98% 1.06% 1.09% 1.00% 0.32%Adjusted return on average assets (non-GAAP) 0.98% 1.08% 1.03% 1.02% 0.63% Average shareholders’ equity $188,585 $184,167 $177,130 $170,920 $168,245 Return on average equity (GAAP) 10.51% 11.86% 12.43% 11.85% 3.85%Adjusted return on average equity (non-GAAP) 10.51% 12.08% 11.75% 12.05% 7.61% Net Interest Margin Net interest income $18,676 $18,952 $18,295 $18,548 $17,451 Tax-equivalent net interest income (non-GAAP) 18,764 19,041 18,385 18,639 17,547 Average earning assets 1,905,400 1,914,802 1,897,328 1,893,133 1,888,427 Net interest margin 3.98% 3.93% 3.83% 3.93% 3.75%Net interest margin fully tax equivalent (non-GAAP) 3.99% 3.95% 3.84% 3.95% 3.77%
FIRST NATIONAL CORPORATION
Non-GAAP Reconciliation
(in thousands)
2026 Dec 31,
2025 Sept 30,
2025 Jun 30,
2025 Mar 31,
2025 Adjusted Operating Noninterest Income Total noninterest income (GAAP) $3,824 $5,018 $4,500 $3,889 $3,611 Subtract: bargain purchase gain — — (304) — — Subtract: loan recovery — (895) — — — Adjusted operating noninterest income (non-GAAP) $3,824 $4,123 $4,196 $3,889 $3,611 Adjusted Operating Noninterest Expense Total noninterest expense (GAAP) $15,982 $16,125 $15,782 $15,191 $18,335 Subtract: merger expenses — (127) — (92) (1,940)Subtract: amortization expense (434) (442) (442) (441) (442)Adjusted operating noninterest expense (non-GAAP) $15,548 $15,556 $15,340 $14,658 $15,953 Efficiency Ratio Total noninterest expense (GAAP) $15,982 $16,125 $15,782 $15,191 $18,335 Add: other real estate owned (expense) income, net — — — — 8 Subtract: amortization of intangibles (434) (442) (442) (441) (442)Add/Subtract: gain (loss) on disposal of premises and equipment, net — — 9 (7) 1 Subtract: merger expenses — (127) — (92) (1,940)Adjusted operating non-interest expense (non-GAAP) $15,548 $15,556 $15,349 $14,651 $15,962 Tax-equivalent net interest income (non-GAAP) $18,764 $19,041 $18,385 $18,639 $17,547 Total noninterest income (GAAP) 3,824 5,018 4,500 3,889 3,611 Subtract: net gain on subordinated debt payoff — — — (80) — Subtract: bargain purchase gain — — (304) — — Subtract: securities (gains), net (8) — — — — Subtract: one time recovery gain — (895) — — — Adjusted income for efficiency ratio (non-GAAP) $22,580 $23,164 $22,581 $22,448 $21,158 Efficiency ratio (non-GAAP) 68.86% 67.16% 67.97% 65.27% 75.44%
FIRST NATIONAL CORPORATION
Non-GAAP Reconciliation
(in thousands, except share and per share data)
2026 Dec 31,
2025 Sep 30,
2025 Jun 30,
2025 Mar 31,
2025 Tax-Equivalent Net Interest Income GAAP measures: Interest income – loans $21,017 $21,513 $21,430 $21,594 $20,639 Interest income – investments and other 3,312 3,711 3,657 3,571 3,383 Interest expense – deposits (5,414) (5,929) (6,246) (6,080) (6,038)Interest expense – subordinated debt (168) (273) (479) (468) (467)Interest expense – junior subordinated debt (66) (67) (67) (66) (66)Interest expense – other borrowings (5) (3) — (3) — Net interest income $18,676 $18,952 $18,295 $18,548 $17,451 Non-GAAP measures: Add: Tax benefit realized on non-taxable interest income – loans(6) $11 $12 $11 $12 $16 Add: Tax benefit realized on non-taxable interest income – municipal securities(6) 77 77 79 79 80 Tax benefit realized on non-taxable interest income $88 $89 $90 $91 $96 Tax-equivalent net interest income (non-GAAP) $18,764 $19,041 $18,385 $18,639 $17,547 Tangible Common Equity and Tangible Assets Total assets (GAAP) $2,075,823 $2,037,978 $2,030,754 $2,041,441 $2,033,346 Subtract: goodwill (3,030) (3,030) (3,030) (3,030) (3,030)Subtract: core deposit intangibles, net (12,785) (13,219) (13,661) (14,102) (14,544)Tangible assets (Non-GAAP) $2,060,008 $2,021,729 $2,014,063 $2,024,309 $2,015,772 Total shareholders’ equity (GAAP) $188,562 $186,196 $181,209 $173,532 $168,675 Subtract: goodwill (3,030) (3,030) (3,030) (3,030) (3,030)Subtract: core deposit intangibles, net (12,785) (13,219) (13,661) (14,102) (14,544)Tangible common equity (Non-GAAP) $172,747 $169,947 $164,518 $156,400 $151,101 Tangible common equity to tangible assets ratio (non-GAAP) 8.39% 8.41% 8.17% 7.73% 7.50% Tangible Book Value Per Share Tangible common equity (non-GAAP) $172,747 $169,947 $164,518 $156,400 $151,101 Common shares outstanding, ending 9,040,967 9,025,395 9,009,209 8,989,138 8,986,696 Tangible book value per share (non-GAAP) $19.11 $18.83 $18.26 $17.40 $16.81
(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 above, along with the Company's capital ratios as determined under those regulations.
(3) All ratios on March 31, 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%