First National (FXNC) Q2 2025 earnings summary

Executive summary

• Net income rose to $5.1 million ($0.56 per diluted share) for Q2 2025, up from $2.4 million ($0.39 per share) year-over-year, driven by higher net interest income and the Touchstone merger.

• Achieved record Q2 2025 earnings of $5.05M, with adjusted earnings of $5.1M, driven by net interest margin expansion and improved efficiency post-Touchstone acquisition.

• Earnings per share rose 211% sequentially and 44% year-over-year; return on average assets reached 1.00% and return on average equity 11.85%.

• The Touchstone Bankshares acquisition expanded the branch network and contributed to growth in assets, loans, and deposits.

• Merger-related costs totaled $2.0 million for the six months ended June 30, 2025.

Financial highlights

• Net income for the six months ended June 30, 2025 was $6.6 million ($0.74 per diluted share), up from $5.7 million ($0.90 per share) year-over-year.

• Net interest income for Q2 2025 was $18.5M, up $1.0M from Q1 2025, with earning asset yields rising to 5.35%.

• Noninterest income increased 7.7% sequentially to $3.9M, mainly from ATM, check card, and mortgage fees.

• Noninterest expenses increased by $4.5 million in Q2 and $13.0 million for the six months, mainly from higher salaries, operating costs, and merger expenses.

• Net loans held for investment were $1.428B, up 46.1% year-over-year; total deposits were $1.803B, up 42.5% year-over-year.

Outlook and guidance

• Management expects continued benefits from the Touchstone merger, including revenue synergies and cost savings, though integration costs and market conditions may impact results.

• The company remains focused on maintaining strong capital and liquidity positions to support growth and absorb potential losses.

• Management expects continued benefits from the Touchstone acquisition, focusing on disciplined deposit pricing and efficiency.

• Forward-looking statements caution on risks and uncertainties, referencing recent SEC filings for detailed risk factors.