First National Corporation (the Company) reported significant financial growth for the fiscal year ending December 31, 2025, with net income available to common shareholders reaching $17.7 million, or $1.96 per diluted share, compared to $7.0 million, or $1.00 per diluted share, in 2024. This increase in profitability was driven by a $20.8 million rise in net interest income, which totaled $73.2 million for the year, alongside a reduction in merger-related expenses and a decrease in the provision for credit losses, which fell to $2.9 million from $7.9 million in the previous year. The return on average equity improved to 10.10% from 5.33% in 2024, reflecting enhanced operational efficiency.

The Company completed its acquisition of Touchstone Bankshares, Inc. on October 1, 2024, which contributed to the increase in net interest income and overall asset growth. The operational merger was finalized in early 2025, resulting in the addition of 12 branches and expanding the Company's market presence in central Virginia and northern North Carolina. As of December 31, 2025, total assets increased to $2.04 billion, up from $2.01 billion in 2024, primarily due to the acquisition and a $53.7 million increase in securities available for sale.

Operationally, First National Corporation reported a decrease in period-end loans, net, which fell by $15.2 million to $1.44 billion, while total deposits decreased by $4.2 million to $1.80 billion. The Company’s nonperforming assets as a percentage of total loans improved to 0.32% from 0.50% in 2024, indicating better asset quality management. The allowance for credit losses on loans was $14.7 million, representing 1.02% of total loans, down from 1.12% the previous year.

Looking ahead, the Company anticipates continued focus on optimizing its branch network, with plans to consolidate three Virginia banking offices into nearby locations, reducing the total number of branches from 33 to 28. This strategic move aims to enhance operational efficiency and allocate resources to growing markets. The Company remains committed to maintaining strong capital ratios, with a common equity Tier 1 capital ratio of 12.59% as of December 31, 2025, well above the regulatory minimum requirements. Overall, First National Corporation's outlook remains positive, supported by its strategic initiatives and improved financial performance.

About FIRST NATIONAL CORP /VA/

First National Corporation is a Virginia-based bank holding company that owns First Bank, which provides a range of banking services including loans, deposits, and wealth management. Serving small and medium-sized businesses and individuals in Virginia and North Carolina, it offers consumer, mortgage, and commercial loans, along with deposit and investment products. The company emphasizes community banking, customer relationships, and competitive service in its core markets.

This description was generated via AI from an annual report. Updated 8 months ago.

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