First National (NASDAQ: FXNC) Corp posts record third-quarter earnings

Posted by Patrick Bannon on Oct 23rd, 2026

What happened

First National Corporation (NASDAQ: FXNC) reported third-quarter 2026 net income of $6.9 million, or $0.76 a share, on October 23, 2026. Net interest income FTE was $21.3 million, up from $20.1 million in the second quarter, and management said improved yields and acquisition-accounting income drove the increase. Return on average assets rose to 1.32% from 1.09% a year earlier.

Nine-month net income was $17.5 million, or $1.94 a share, up from $12.2 million a year earlier. Total assets were $2.08 billion, loans net of allowance were $1.49 billion, and total deposits were $1.83 billion. Noninterest-bearing deposits were $520.1 million, or 28% of deposits, and net loan growth for the year was $67.3 million. The efficiency ratio improved to 63.21% from 67.97% a year earlier, and tangible book value per share increased to $19.94 from $18.26.

The company also said it closed and consolidated three banking offices and closed off-site ATMs in the quarter. In early October, it sold two North Carolina banking offices and expects a one-time gain in the fourth quarter of 2026. It declared and paid a quarterly dividend of $0.17 a share, the same as the second quarter and above $0.155 a year earlier.

Key numbers

Metric	Latest	Change	Source
Third-quarter net income	$6.9 million	from $5.55 million, +24.3%	Press release
Net interest income FTE	$21.3 million	from $18.39 million, +15.8%	Press release
Net interest margin FTE	4.38%	from 3.84%, +0.54 percentage points	Press release
Noninterest-bearing deposits	$520.1 million	from $511.48 million, +1.7%	Press release
Loans, net of allowance	$1.49 billion	from $1.42 billion, +4.7%	Press release

Why it matters

OptimistFi's case is that FXNC works if deposits stay sticky and a bigger balance sheet turns into earnings without outsized rate or credit risk. This filing strengthens that view because noninterest-bearing deposits were 28% of the total, net loan growth reached 4.7% for the year, and net interest margin FTE widened to 4.38% from 3.84% a year earlier. Quarterly net interest income FTE increased by $1.2 million from the second quarter.

Asset quality remained controlled, with nonperforming assets at 0.26% of total assets and no net provision for credit losses. The caveat is that $867,000 of net accretion income from acquisition accounting helped the margin, and the office-sale gain is still ahead. Nonperforming assets were $5.4 million, down from $5.7 million a year earlier.

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What's next

In early October, the company completed the sale of two North Carolina offices, and management expects to book a one-time gain in the fourth quarter of 2026. The branch changes should also help cut the number of banking offices from 33 to 28 by year end.

Stable deposit mix and a booked gain would support the case, while weaker margin expansion or softer deposit retention would weaken it.