FXNC · First National Corporation

First National Corporation’s Q1 2026 results reflect a marked improvement in profitability and balance sheet momentum following the Touchstone Bank acquisition. Net income of $4.9 million and diluted EPS of $0.54 represent substantial year-over-year growth—driven by higher net interest income ($18.8M), improved net interest margin (3.99% FTE), and disciplined expense management (noninterest expense down $143K q/q). Management attributed the rebound to accelerated loan production in March—offsetting weak activity earlier in the quarter—and robust deposit inflows, particularly in low-cost demand, money market, and savings accounts, which lifted noninterest-bearing deposits to $524.3M (29% of total deposits). Asset quality strengthened meaningfully: NPAs fell to $4.4M (0.21% of total assets; 0.30% of loans), with zero OREO and no 90+ day accruing loans. The $450K provision for credit losses was less than half the prior quarter’s $951K, consistent with lower net charge-offs ($542K vs. $651K q/q) and stable allowance coverage (331% of NPAs). While noninterest income declined $1.2M q/q—largely due to absence of a $895K one-time loan recovery—the adjusted operating noninterest income remained resilient at $3.8M. Capital ratios remained strong across all measures, with tangible book value per share rising to $19.11. CEO Scott C. Harvard emphasized that late-quarter loan growth positions the company for continued momentum, though no explicit forward guidance was provided beyond commentary on sustained balance sheet strength and execution progress.