First National Corporation Reports Record Third Quarter 2025 Earnings

First National Corporation, the bank holding company of First Bank, has released its earnings report for the third quarter of 2025. The company has achieved record earnings, reflecting strong financial performance and strategic growth initiatives.

Financial Highlights

For the quarter ended September 30, 2025, First National Corporation reported net income of $5.55 million, with basic and diluted earnings per share (EPS) of $0.62. This represents an 11% increase from the previous quarter and a 72% increase from the same period last year. The company's return on average assets (ROAA) improved to 1.09%, and return on average equity (ROAE) rose to 12.43%.

The net interest margin (NIM) on a fully taxable equivalent (FTE) basis was 3.84%, up from 3.43% a year ago. Net loans held for investment increased by 44.5% year-over-year to $1.419 billion, while total deposits grew by 44.4% to $1.810 billion.

Business and Operational Highlights

Despite higher-than-expected loan payoff volumes, First National has expanded its market presence by adding experienced bankers in Richmond, Roanoke, and Staunton. The company also reported improved asset quality, with non-performing assets (NPAs) declining to 0.28% of total assets.

Non-interest income increased by $611 thousand to $4.5 million, driven by higher ATM and check card income, fees for other customer services, and a bargain purchase gain from the Touchstone acquisition. Non-interest expense rose to $15.8 million, primarily due to increased salaries, employee benefits, and occupancy expenses.

Strategic Initiatives and Corporate Developments

First National has been active in managing its capital structure. During the third quarter, the company called $5 million in subordinated debt, which was redeemed on October 1, 2025. Additionally, $8 million in subordinated debt was called on October 2, 2025, to be redeemed on November 15, 2025. These actions are expected to improve profitability in future periods.

The company declared and paid cash dividends of $0.155 per common share, consistent with the previous quarter and up from $0.15 in the third quarter of 2024. Tangible book value per share increased to $18.26 from $17.40 in the previous quarter.

Management's Perspective

Scott Harvard, President and CEO of First National, expressed satisfaction with the company's performance, highlighting the successful integration of the Touchstone acquisition and the expansion into new markets. He noted that the balance sheet remains strong, with ample liquidity and capital to support future growth.

Future Outlook

While the company did not provide specific guidance for the next reporting period, the management's commentary suggests a focus on continued market expansion and maintaining strong financial health. The reduction in subordinated debt and strategic hiring are expected to contribute positively to future performance.

Original SEC Filing: FIRST NATIONAL CORP /VA/ [ FXNC ] - 8-K - Oct. 30, 2025