First National (FXNC) Q1 2026 earnings summary

Executive summary

• Net income for Q1 2026 rose to $4.9 million ($0.54 per diluted share), up from $1.6 million ($0.18 per share) in Q1 2025, driven by higher net interest income, lower noninterest expenses, and the Touchstone acquisition integration.

• Return on average assets was 0.98% and return on average equity was 10.51% for Q1 2026, compared to 0.32% and 3.85% in Q1 2025.

• Loan production accelerated in March, supporting loan and deposit growth for the quarter.

• Asset quality improved, with non-performing assets declining to 0.21% of total assets.

• All budgeted metrics for earnings, deposits, loans, and asset quality were exceeded.

Financial highlights

• Net interest income increased by $1.2 million (7.0%) to $18.7 million year-over-year, with a 22-basis point rise in net interest margin to 3.99%.

• Total assets reached $2.076 billion, up $37.8 million (7.4% annualized) from December 31, 2025.

• Loans grew by $14.7 million (4.1% annualized) to $1.450 billion, and deposits increased by $37.7 million (8.4% annualized) to $1.837 billion since year-end.

• Noninterest income rose by $213 thousand (5.9%) year-over-year to $3.8 million, but fell $1.2 million sequentially due to a prior-period one-time loan recovery.

• Noninterest expenses fell by $2.4 million (12.8%) year-over-year to $16.0 million, with lower merger, data processing, and internet banking expenses; sequentially, expenses decreased $143 thousand.

Outlook and guidance

• Management expects continued operational streamlining, including the sale and consolidation of five banking offices in 2026, to enhance efficiency and resource allocation.

• Management anticipates late-quarter loan production will benefit future quarters and sees positive momentum for the year.

• The company remains focused on digital banking innovation and community support.