First National Corporation (FXNC): History, Ownership, Mission, How It Works & Makes Money

When you look at a community bank like First National Corporation (FXNC), are you seeing a quiet regional player, or a strategic growth engine that just hit record earnings? The numbers from the 2025 fiscal year tell a compelling story, with the company reporting a third-quarter net income of $5.55 million and managing total assets of $2.031 billion as of September 30, 2025, largely driven by the successful integration of its Touchstone Bankshares acquisition. This isn't just a local bank; it's a financial entity actively leveraging M&A to expand its footprint and boost its return on average equity to 12.43%, so understanding its history, ownership, and core business model is defintely crucial to mapping its near-term trajectory.

First National Corporation (FXNC) History

You want to understand the foundation of First National Corporation, and the quick takeaway is that this is a bank holding company with roots stretching back over a century as a community bank in Virginia. The company's trajectory is a slow, steady climb of regional expansion, punctuated by a major, recent acquisition that vaulted its asset base past the $2 billion mark in 2025.

Given Company's Founding Timeline

First National Corporation (FXNC) is the parent company of First Bank, and its story starts with the bank's founding as a local institution focused squarely on the Shenandoah Valley community. This long history is a key differentiator, and it's defintely why their customer base remains so loyal.

Year established

The company's subsidiary, First Bank, was originally established in 1907.

Original location

The bank's original location was Strasburg, Virginia, where the company remains headquartered today. It first opened as Peoples National Bank of Strasburg.

Founding team members

As a community bank founded in the early 20th century, the initial founders were a group of local organizers; their names are not commonly cited in public records, but the bank's early focus was on serving the Strasburg community.

Initial capital/funding

The initial capital from the 1907 founding is not publicly detailed, but the bank has demonstrated its ability to raise capital over time, including an unattributed funding round of $1.7 million in May 2012.

Given Company's Evolution Milestones

The company's evolution shows a clear pattern: a commitment to the local community, followed by strategic name changes for broader prestige, and finally, aggressive regional expansion through acquisition.

Given Company's Transformative Moments

The most transformative period for First National Corporation has been the recent strategic push for scale, which fundamentally changed the company's size and market reach. Honestly, this is the change that matters most for investors today.

The acquisition of Touchstone Bankshares, Inc., completed on October 1, 2024, was a game-changer. It immediately expanded the combined entity to 33 branch offices across Virginia and North Carolina. Here's the quick math on the impact:

• Total assets grew to approximately $2.1 billion immediately following the merger.
• Total deposits grew to about $1.8 billion.
• Net loans held for investment rose to roughly $1.5 billion.

This expansion is already paying off: the company reported Q2 2025 earnings of $5.05 million, with basic and diluted earnings per common share of $0.56. Plus, the Board of Directors declared an increased quarterly cash dividend of $0.17 per share in November 2025, which marks the tenth consecutive year of an annual cash dividend payout increase. This growth in scale and financial performance is what you should focus on when Exploring First National Corporation (FXNC) Investor Profile: Who's Buying and Why?

First National Corporation (FXNC) Ownership Structure

The ownership structure of First National Corporation (FXNC) is a straightforward mix, characteristic of a smaller, publicly-traded regional bank, with a significant portion of shares held by institutional investors but still nearly half in the hands of the public.

This balance means that while large funds like BlackRock, Inc. and The Vanguard Group, Inc. influence the stock price and governance, individual and retail investors still hold a substantial stake in the company.

First National Corporation's Current Status

First National Corporation is a publicly traded bank holding company, meaning its stock is bought and sold on a major exchange under the ticker symbol FXNC. Specifically, it trades on the NASDAQ Capital Market. This public status requires the company to maintain high transparency, filing quarterly and annual reports with the Securities and Exchange Commission (SEC), which is a huge plus for you as an investor or analyst.

As of November 2025, the company has a market capitalization of approximately $215.77 million. This size puts it squarely in the regional bank category, where local market knowledge is a core competitive advantage. For a deeper dive into what drives this value, check out the Mission Statement, Vision, & Core Values of First National Corporation (FXNC).

First National Corporation's Ownership Breakdown

The company's ownership is split into three main categories: institutions, insiders, and the general public. Institutional investors hold the largest block, but the retail float is defintely a key factor in trading liquidity.

Here's the quick math on who controls the shares, based on data from November 2025:

When insiders own over 10% of the stock, like the 10.89% here, it's a good signal. It shows the people running the business have real skin in the game, which tends to lead to more careful, long-term decision-making. The CEO, Scott C. Harvard, for example, directly owns 0.71% of the company's shares.

First National Corporation's Leadership

The company is steered by an experienced leadership team, many of whom have long tenures in Virginia banking, which is crucial for a regional institution. The average tenure for the Board of Directors is a seasoned 10.0 years, indicating a stable and knowledgeable governance structure.

The executive team, which executes the strategy, is led by:

• Scott C. Harvard, President and Chief Executive Officer (CEO): Appointed in May 2011, he has over 14 years of tenure, providing consistent leadership. His total yearly compensation is $1.29 million.
• Brad Schwartz, Executive VP and Chief Financial Officer (CFO): He joined the team effective March 31, 2025, bringing over four decades of Virginia banking and merger experience, a key asset for future strategic growth.
• Dennis Dysart, Senior EVP and Chief Operating Officer (COO): He oversees the company's day-to-day operations and efficiency.

The board is chaired by Elizabeth Cottrell, the Independent Chair of the Board, ensuring a separation of power from the CEO, Scott C. Harvard. This structure helps maintain strong corporate governance, a critical factor for any publicly-held bank.

First National Corporation (FXNC) Mission and Values

First National Corporation's (FXNC) purpose extends beyond its $5.1 million in Q2 2025 adjusted earnings, focusing instead on a four-part mission to create holistic value for all stakeholders, not just shareholders. This is a community bank with a long-term view, so they defintely prioritize stability over short-term spikes.

First National Corporation's Core Purpose

The company's cultural DNA, channeled through its subsidiary First Bank, is built on a commitment to local markets, which is what separates a community bank from a national behemoth. This focus is mapped across customers, employees, shareholders, and the communities where its 303 employees live and work. Here's the quick math: a stable local economy is the best long-term growth strategy for a regional bank.

Official Mission Statement

First National Corporation's mission is a clear declaration of its responsibilities, defining the purpose of its operations with the overarching theme: 'There's satisfaction and gratification in making a difference.'

• Help customers achieve financial security through enduring, trust-based relationships.
• Build a diverse workforce where employees can learn, grow, and prosper.
• Create sustainable, long-term value for our shareholders.
• Improve the quality of life in the communities we serve.

Vision Statement

The vision statement sets the long-term aspiration, aiming to be a leader by consistently delivering value across the entire ecosystem. This is how they plan to justify their conservative growth model, which saw a Q4 2025 quarterly dividend increase to $0.17 per share.

• Be an industry leader in creating value for our customers, employees, shareholders, and communities.
• Deliver an exceptional customer experience with an inclusive, recognized, and rewarded workforce.

First National Corporation Core Values

The company's core values translate its mission into daily actions, guiding how the team interacts with clients and each other. They're essentially the operating principles for every transaction, from a small business loan to a wealth management decision.

• Integrity and Honor: Maintain the highest ethical standards and assume accountability.
• Excellence and Passion: Commit to consistently delivering a superior experience.
• Collaboration and Teamwork: Lead by example to become better and stronger together.
• Diversity and Inclusion: Incorporate varied perspectives into the strategic plan.
• Progress through Innovation: Focus on forward-thinking solutions.

This commitment to community is concrete; the subsidiary First Bank supports organizations like United Way, Habitat for Humanity, Big Brothers Big Sisters, and the Shenandoah Community Clinic. You can read more about this foundational structure at Mission Statement, Vision, & Core Values of First National Corporation (FXNC).

First National Corporation (FXNC) How It Works

First National Corporation operates as a community bank holding company, primarily through its subsidiary First Bank, which generates income by taking deposits and using those funds to originate loans, creating a spread known as the net interest margin (NIM).

This model is simple: you lend money at a higher rate than you pay for deposits, and in Q3 2025, First National Corporation's net interest margin (FTE) was a strong 3.84%, up from 3.43% a year ago, showing good profitability on its core lending business.

First National Corporation's Product/Service Portfolio

First National Corporation's Operational Framework

The company creates value by efficiently gathering deposits from local customers and redeploying that capital into loans within its regional footprint, primarily across the Shenandoah Valley, Roanoke Valley, and the Richmond MSA. This is a relationship-driven model, not a transactional one.

• Deposit Aggregation: Total deposits grew to $1.810 billion in Q3 2025, a 44.4% year-over-year increase, largely driven by the recent Touchstone Bankshares acquisition.
• Loan Origination: Net loans held for investment surged to $1.419 billion in Q3 2025, a 44.5% increase year-over-year, showing strong demand and successful integration of new markets.
• Branch and Digital Network: Operations are supported by 33 bank branch offices, three loan production offices, and a robust digital banking platform for consumer and business mobile banking.
• Efficiency Focus: Post-merger, the company has focused on operational integration, including a conversion to one core banking system in Q1 2025, which is expected to improve profitability by driving down non-interest expenses over time.

Here's the quick math: generating a high NIM on a growing loan portfolio, like the 3.84% seen in Q3, is the engine that drives earnings per share (EPS), which analysts anticipate will hit around $2.25 for the full year 2025. If you're interested in the specifics on how this translates to shareholder value, you should be checking out Breaking Down First National Corporation (FXNC) Financial Health: Key Insights for Investors.

First National Corporation's Strategic Advantages

First National Corporation's competitive edge comes down to two things: deep local ties and smart, targeted growth that scales its community banking model.

• Community-Focused Differentiation: The company maintains a solid local presence and long-standing community ties across its primary market areas, allowing it to build customer relationships that are defintely stronger and stickier than those of larger, national banks.
• Strategic Scale via M&A: The operational merger with Touchstone Bankshares, completed in Q1 2025, significantly expanded the company's total assets to over $2.033 billion and its market reach into new, growing regions like Richmond and south-central Virginia.
• Asset Quality and Capital Health: Despite rapid growth, asset quality remains strong, with non-performing assets (NPAs) declining to just 0.28% of total assets in Q3 2025, which is a key measure of prudent lending.

The combination of a relationship-based model and a bigger, more efficient platform post-acquisition is the clear path to consistent EPS growth.

First National Corporation (FXNC) How It Makes Money

First National Corporation, the holding company for First Bank, primarily makes money the way any community bank does: by borrowing at a low rate (deposits) and lending at a higher rate (loans)-this spread is called net interest income. Plus, they earn a smaller but growing amount from fees for services like checking and wealth management.

First National Corporation's Revenue Breakdown

Looking at the third quarter of 2025 (Q3 2025) results, the core banking model is clearly the engine, with interest income dominating the revenue mix. Here's the quick math on their $22.8 million in total quarterly revenue.

Net Interest Income, which is the profit from lending money, accounted for over four-fifths of the total revenue in Q3 2025, rising to $18.3 million. That's a huge jump from the prior year, largely due to the acquisition of Touchstone Bankshares, Inc. and a favorable interest rate environment.

Noninterest Income, which includes fees, rose to $4.5 million in Q3 2025. This stream is defintely a focus for diversification and growth, driven by higher ATM and check card fees, as well as fees for other customer services.

Business Economics

The company's economic fundamentals are tied to its ability to manage the cost of its deposits against the yield on its loans. The Touchstone acquisition in late 2024 was a game-changer, significantly expanding their asset base and market presence in Virginia and northern North Carolina. The key is maintaining a strong net interest margin (NIM) while keeping credit risk low.

• Net Interest Margin (NIM): For Q3 2025, the NIM (fully taxable equivalent) was 3.84%, a solid improvement from 3.43% a year ago. This tells you they are successfully charging more for loans than they are paying for deposits.
• Loan Pricing Strategy: With a 44.5% year-over-year increase in net loans held for investment, totaling $1.419 billion, the strategy is clearly focused on aggressive, but disciplined, loan growth. They are actively expanding their production teams in new markets like Richmond, Roanoke, and Staunton.
• Deposit Cost Management: The company's total deposits grew by 44.4% year-over-year to $1.810 billion, a direct benefit of the acquisition. Keeping a high percentage of non-interest bearing deposits is critical to controlling the cost of funds.

They are a community bank, so their pricing is competitive but also highly localized, balancing a need for higher loan yields with the need to attract and retain sticky, low-cost deposits. You can read more about the principles driving their strategy in their Mission Statement, Vision, & Core Values of First National Corporation (FXNC).

First National Corporation's Financial Performance

The Q3 2025 results show a company that is successfully integrating its acquisition and seeing a significant payoff in profitability and asset quality. This is a strong performance, but you need to watch those non-interest expenses.

• Net Income: Net income hit a record $5.55 million for Q3 2025, which is a massive 72% increase from the same quarter last year.
• Earnings Per Share (EPS): Basic and diluted EPS were $0.62 in Q3 2025, also up 72% year-over-year.
• Return Metrics: Return on Average Assets (ROAA) improved to 1.09%, and Return on Average Equity (ROAE) rose to 12.43%. These are healthy figures for a regional bank, showing efficient use of capital.
• Asset Quality: Non-performing assets (NPAs) as a percentage of total assets declined to a very low 0.28%, a clear sign of improved credit quality. The allowance for credit losses to NPA coverage also increased to 253%.
• Tangible Book Value: This key metric for banks grew to $18.26 per share, up from $17.40 in the prior quarter, which is a great indicator of shareholder value creation.

Here's the quick math: A 72% jump in net income is not sustainable without another major acquisition, but it shows the power of the recent deal. What this estimate hides is the one-time nature of some acquisition-related gains and the rising non-interest expenses (up to $15.8 million) from higher salaries and employee benefits. Management is already addressing this by planning to close non-branch leased facilities to reduce costs.

First National Corporation (FXNC) Market Position & Future Outlook

First National Corporation is post-merger, focused on realizing scale and efficiency gains, which is why its future outlook is strong, with analysts forecasting a full-year 2025 EPS of approximately $2.22. The company is positioned as a resilient, community-focused regional bank in Virginia, expanding its footprint into higher-growth markets like Richmond, Roanoke, and Staunton following the Touchstone acquisition.

You're seeing a community bank with a $217.75 million market capitalization that is aggressively balancing local service with strategic expansion to drive profitability, as evidenced by its Q3 2025 net income of $5.55 million.

Competitive Landscape

The Virginia banking market is fragmented, dominated by national giants like Bank of America and Truist Financial Corporation, but the real competition for First National Corporation is among the mid-sized regional players. First National Corporation's strategy is to leverage its deep local ties and expanded branch network of thirty-three locations to compete effectively. Here's a quick look at how the key regional competitors stack up:

Here's the quick math: Atlantic Union Bank has a much larger deposit base in the Richmond market, but First National Corporation's strength lies in its Shenandoah and Roanoke Valley roots, plus the expanded reach from the Touchstone acquisition.

Opportunities & Challenges

As an investor or strategist, you need to map the near-term landscape. The bank's successful integration of Touchstone Bankshares, Inc. is the biggest factor for 2025, but external pressures still matter.

The dividend increase of 9.7% to $0.17 per share, declared in November 2025, defintely signals management's confidence in future earnings and capital strength.

Industry Position

First National Corporation is a well-capitalized community bank, a niche that values strong, personal relationships over sheer scale. [cite: 13 in step 1, 9]

• Maintain a conservative balance sheet, with a debt-to-equity ratio of 0.18 as of November 2025.
• Focus on relationship banking, which helps retain core deposits, totaling $1.810 billion in Q3 2025.
• Operating through two main segments: Community Banking (loans and deposits) and Wealth Management (trustee, estate, and investment services).
• The post-merger entity operates thirty-three bank branch office locations across key Virginia regions, providing a crucial physical presence.

If you want a deeper dive into the bank's core philosophy, you should review its Mission Statement, Vision, & Core Values of First National Corporation (FXNC).