First National (FXNC) Q2 2026 earnings summary

Executive summary

• Net income for Q2 2026 was $5.7 million, with basic EPS of $0.64, up from $0.56 year-over-year and $0.54 sequentially.

• Growth in average loan and deposit balances drove higher net interest income and margin, with net loans expanding for a second consecutive quarter.

• Regulatory approvals were received for the sale of North Carolina branches, expected to close in Q4 2026 as part of a branch optimization initiative.

Financial highlights

• Net interest income (FTE) for Q2 2026 was $20.1 million, up $1.3 million from Q1 2026.

• Return on average assets was 1.11%, up from 1.00% year-over-year and 0.98% sequentially.

• Return on average equity was 12.03%, compared to 11.85% year-over-year and 10.51% sequentially.

• Tax-equivalent net interest margin rose to 4.15% from 3.95% year-over-year and 3.99% sequentially.

• Noninterest income increased $194 thousand to $4.0 million sequentially; noninterest expense rose $455 thousand to $16.4 million.

Outlook and guidance

• The sale of two North Carolina branches is expected to close in October 2026, with a one-time gain anticipated in Q4 2026.

• Three additional branch consolidations and ATM reductions are planned by year-end, reducing total offices from 33 to 28.