Note 27 - Parent Company Only Financial Statements

12 Months Ended

Dec. 31, 2025

Note 27. Parent Company Only Financial Statements

FIRST NATIONAL CORPORATION

(Parent Company Only)

Balance Sheets

December 31, 2025 and 2024

(in thousands)

	*2025*			*2024*
Assets
Cash	$	13,754		$	29,130
Investment in subsidiaries, at cost, plus undistributed net income		188,394			161,653
Other assets		2,639			7,586
Total assets	$	204,787		$	198,369
Liabilities and Shareholders’ Equity
Subordinated debt	$	8,312		$	21,175
Junior subordinated debt		9,279			9,279
Other liabilities		1,000			1,385
Total liabilities	$	18,591		$	31,839
Preferred stock	$	—		$	—
Common stock		11,282			11,218
Surplus		78,216			77,058
Retained earnings		108,937			96,947
Accumulated other comprehensive (loss), net		(12,239	)		(18,693	)
Total shareholders’ equity	$	186,196		$	166,530
Total liabilities and shareholders’ equity	$	204,787		$	198,369

FIRST NATIONAL CORPORATION

(Parent Company Only)

Statements of Income

Years Ended December 31, 2025 and 2024

(in thousands)

	*2025*			*2024*
Income
Dividends from subsidiary	$	—		$	18,000
Other operating income		80			40
Total income	$	80		$	18,040
Expense
Interest expense	$	1,954		$	873
Supplies		8			83
Legal and professional fees		454			340
Data processing		61			107
Management fee-subsidiary		365			368
Other expense		110			122
Total expense	$	2,952		$	1,893
(Loss) income before allocated tax benefits and undistributed income of subsidiary	$	(2,872	)	$	16,147
Allocated income tax benefit		603			389
(Loss) income before equity in undistributed income of subsidiary	$	(2,269	)	$	16,536
Equity in undistributed income (loss) of subsidiary		19,972			(9,570	)
Net income	$	17,703		$	6,966

FIRST NATIONAL CORPORATION

(Parent Company Only)

Statements of Cash Flows

Years Ended December 31, 2025 and 2024

(in thousands)

	*2025*			*2024*
Cash Flows from Operating Activities
Net income	$	17,703		$	6,966
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed (income) loss of subsidiary		(19,972	)		9,570
Stock-based compensation		1,184			635
Amortization of debt issuance costs		637			2
Gain on redemption of subordinated debt		(80	)		—
Gain on sale of investment		—			(40	)
Decrease (increase) in other assets		4,400			(85	)
(Decrease) increase in other liabilities		(153	)		296
Net cash provided by operating activities	$	3,719		$	17,344
Cash Flows from Investing Activities
Net cash paid in acquisition of Touchstone Bank	$	—		$	(10	)
Proceeds from sale of investment		—			368
Net cash provided by investing activities	$	—		$	358
Cash Flows from Financing Activities
Cash dividends paid on common stock, net of reinvestment	$	(5,520	)	$	(4,038	)
Redemption of subordinated debt		(13,420	)		—
Repurchase of common stock		(155	)		(106	)
Net cash (used in) financing activities	$	(19,095	)	$	(4,144	)
(Decrease) increase in cash and cash equivalents	$	(15,376	)	$	13,558
Cash and Cash Equivalents
Beginning		29,130			15,572
Ending	$	13,754		$	29,130

FIRST NATIONAL CORP /VA/ 10-K