First National FXNC

First National Corporation is a bank holding company that owns all of the stock of its primary operating subsidiary, First Bank, a commercial bank chartered under Virginia law. The company's primary source of revenue is net interest income earned by the Bank, which is the difference between interest income and interest expense. Additional revenue comes from noninterest income, primarily derived from service charges on deposits, fee income from wealth management services, and ATM and check card fees. The Bank offers loan, deposit, and wealth management products and services. Loan products include consumer loans, residential mortgages, home equity loans, and commercial loans. Deposit products include checking accounts, treasury management solutions, savings accounts, money market accounts, certificates of deposit, and individual retirement accounts. Wealth management services include estate planning, investment management of assets, trustee under an agreement, trustee under a will, individual retirement accounts, and estate settlement.

First National Corporation operates through the following segments: First Bank and its subsidiaries, which include First Bank Financial Services, Inc., Shen-Valley Land Holdings, LLC, McKenney Group, LLC, First National (VA) Statutory Trust II, and First National (VA) Statutory Trust III. These subsidiaries support the Bank's core banking activities through specialized financial services and investment vehicles.

• First Bank: The Bank provides traditional banking services including lending, deposit taking, and wealth management to individuals, businesses, and institutional clients across Virginia and parts of North Carolina. It operates through 33 bank branch offices, one loan production office, and a customer service center in a retirement community. The Bank delivers services via its mobile banking platform, website at www.fbvirginia.com, and a network of ATMs throughout its market area.
• First Bank Financial Services, Inc.: This subsidiary owns an interest in an entity that provides title insurance services. It supports the Bank's lending operations by facilitating real estate transaction services. The entity contributes to noninterest income through fee-based services related to mortgage lending.
• Shen-Valley Land Holdings, LLC: This entity was formed to hold other real estate owned and future office sites. It manages real estate assets acquired through foreclosure or other means. The subsidiary supports the Bank's balance sheet management and long-term facility planning.
• McKenney Group, LLC: This subsidiary owns an interest in a now inactive entity that previously provided insurance services. Although the underlying entity is inactive, the LLC remains as a holding structure. It does not currently contribute to revenue or operations.
• First National (VA) Statutory Trust II and First National (VA) Statutory Trust III (collectively, the Trusts): These trusts were formed for the purpose of issuing redeemable capital securities, commonly known as trust preferred securities. They are not included in the Company’s consolidated financial statements as they qualify as variable interest entities under accounting guidance. The Trusts do not engage in operational activities but serve a financing function.

First National Corporation operates in a highly competitive financial services industry, facing competition from large national and regional banks, credit unions, community banks, consumer finance companies, mortgage companies, marketplace lenders, financial technology firms, mutual funds, and life insurance companies. The Bank's competitive advantages include long-term customer relationships, a commitment to excellent customer service, dedicated and loyal employees, and active involvement in the communities it serves. These strengths help the Bank maintain its market position despite industry pressures.

First National Corporation serves individuals, small and medium-sized businesses, non-profit organizations, and local governmental entities within its market area. The Bank's customers are located along the Interstate 81, Interstate 66, and Interstate 64 corridors in the Shenandoah Valley, the Roanoke Valley, and the south-central region of Virginia, including the Richmond MSA and northern North Carolina. The Bank does not rely on any single or few customers, as the loss of any one customer would not have a material adverse effect on its business.