First National Corporation 第二季淨收入570萬美元 每股盈利0.64美元

EX-99.1
2
ex_984992.htm
EXHIBIT 99.1

 ex_984992.htm
 

 

Exhibit 99.1

 

First National Corporation Reports SECOND Quarter 2026 FINANCIAL PERFORMANCE

 

STRASBURG, Va., July 29, 2026 --- 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.

 

1

 

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. 

 

2

 

 

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. 

 

3

 

 

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
 %
 

  

4

 

 

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

 
 

 
 
 [email protected]

 
 
  

 
 
 [email protected]

 
 

 

5

 

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
  
 

 

6

 

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
 %
 

 

7

 

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
  
 

 

8

 

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
 %
 

 

9

 

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
 %
 

 

10

 

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 Perfo