8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

___________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 8, 2019

___________

FIRST NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Virginia (State or other jurisdiction of incorporation)	0-23976 (Commission File Number)		54-1232965 (IRS Employer Identification No.)
112 West King Street Strasburg, Virginia (Address of principal executive offices)		22657 (Zip Code)

Registrant’s telephone number, including area code: (540) 465-9121

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

□Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

□Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

□Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

□Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

      Emerging growth company  □   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  □

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $1.25 per share	FXNC	NASDAQ Stock Market

Item 5.07Submission of Matters to a Vote of Security Holders.

An Annual Meeting of Shareholders of First National Corporation (the “Company”) was held on May 8, 2019 for the purpose of considering and acting upon the following matters:

(1) The election of eight directors to serve for a term of one year;

(2) The ratification of the appointment of Yount, Hyde & Barbour, P.C. as the Company’s independent registered public accounting firm for the year ending December 31, 2019;

(3) The approval of a non-binding advisory resolution approving the compensation of the Company’s named executive officers;

(4) The approval of a non-binding advisory recommendation of the frequency of future votes on the Company’s executive compensation program.

The final voting results for each proposal, including the votes for and against, and any withheld, abstained, or broker non-votes, are described below.

Proposal 1 – Election of Directors

The Company’s shareholders elected all eight nominees for director. For each nominee, the votes cast for and against, as well as withheld and broker non-votes, were as follows:

Director Nominee	For	Withheld	Broker Non-Votes
Jason C. Aikens	2,401,961	201,934	1,555,405
Emily M. Beck	2,401,963	201,932	1,555,405
Boyce E. Brannock	2,401,961	201,934	1,555,405
Elizabeth H. Cottrell	2,401,903	201,992	1,555,405
W. Michael Funk	2,401,961	201,934	1,555,405
Scott C. Harvard	2,401,961	201,934	1,555,405
Gerald F. Smith, Jr.	2,401,901	201,994	1,555,405
James R. Wilkins, III	2,401,901	201,994	1,555,405

Proposal 2 – Ratification of Appointment of Independent Registered Public Accounting Firm

The Company’s shareholders approved the ratification of the Audit Committee’s selection of Yount, Hyde & Barbour, P.C. as the Company’s independent registered public accounting firm for the year ending December 31, 2019. The votes cast for and against this proposal, as well as the votes abstained, were as follows:

For	Against	Abstain
4,027,325	4,140	127,835

Proposal 3 – Non-Binding Vote on Executive Compensation

The Company’s shareholders approved the advisory vote on the compensation of the Company’s executive officers named in the proxy statement for the 2019 Annual Meeting of Shareholders. The votes cast for and against this proposal, as well as votes abstained and broker non-votes, were as follows:

For	Against	Abstain	Broker Non-Votes
2,340,495	230,841	32,559	1,555,405

Proposal 4 – Non-Binding Vote on Frequency of Shareholder Approval of Executive Compensation Program

The Company’s shareholders approved a three-year voting cycle on the advisory vote on the Company’s executive compensation program. The votes cast for one, two, or three years, as well as votes abstained and broker non-votes, were as follows:

1 Year	2 Years	3 Years	Abstain	Broker Non-Votes
887,190	24,731	1,676,263	15,711	1,555,405

In accordance with the voting results for this proposal, the Company’s Board of Directors has determined that future shareholder advisory votes on executive compensation will be held every three years.

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Item 7.01Regulation FD Disclosure.

During the course of the Annual Meeting of Shareholders on May 8, 2019, management of the Company presented financial and other information to those present. A copy of the presentation is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 7.01.

The information provided pursuant to this Item 7.01 is to be considered “furnished” pursuant to Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, nor shall it be deemed incorporated by reference into any of the Company’s reports or filings under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such report or filing. The filing of this Current Report shall not be deemed an admission as to the materiality of any information in the Current Report that is required to be disclosed solely by reason of Regulation FD.

A cautionary note about forward-looking statements: This Current Report may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can include statements about estimated cost savings, plans and objectives for future operations and expectations about the Company’s financial and business performance as well as economic and market conditions. They often can be identified by the use of words like “expect,” “may,” “could,” “intend,” “project,” “estimate,” “believe” or “anticipate.” By their nature, forward-looking statements are based on assumptions and are subject to risks, uncertainties, and other factors. You are cautioned that actual results may differ materially from those contained in the forward-looking statement.

Any forward-looking statements are intended to speak only as of the date of this Current Report, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the forward-looking statement is made or to reflect the occurrence of unanticipated events.

Item 8.01             Other Events.

On May 8, 2019, the Board of Directors of First National Corporation declared a quarterly dividend of $0.09 per common share, which is payable on June 14, 2019 to shareholders of record as of May 31, 2019.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits. 

Exhibit No.	Description
99.1	Annual meeting presentation

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRST NATIONAL CORPORATION
	(Registrant)
Date:  May 9, 2019	By:	/s/ M. Shane Bell
		M. Shane Bell
		Executive Vice President and Chief Financial Officer

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EX-99.1

Exhibit 99.1

 1    Investor PresentationMay 2019  Photography courtesy of Nasdaq, Inc. 

 Forward-Looking Statements  The Company makes forward-looking statements in this presentation that are subject to risks and uncertainties. These forward-looking statements may include statements regarding profitability, liquidity, adequacy of capital, the allowance for loan losses, interest rate sensitivity, market risk, growth strategy, and financial and other goals. The words, “believes,” “expects,” “may,” “will,” “should,” “projects,” “contemplates,” “anticipates,” “forecasts,” “intends,” or other similar words or terms are intended to identify forward-looking statements. These forward-looking statements are subject to significant uncertainties. Because of these uncertainties, actual future results may be materially different from the results indicated by these forward-looking statements. In addition, past results of operations do not necessarily indicate future results. The following presentation should be read in conjunction with the consolidated financial statements and related notes included in Part II, Item 8, and Item 1A. Risk Factors of the Company’s Form 10-K for the year ended December 31, 2018.  2 

 Company Overview   3  Community banking since 1907FXNC listed on Nasdaq Corporate offices in Strasburg and WinchesterOperating primarily in 4 Virginia MSAs on the I-81, I-66 and I-64 corridors14 branches, 1 loan production office$775 million in assetsPersonal banking, business banking, and wealth management servicesStrategy to grow total assets to > $1 billion by serving small businesses and individuals          

 Why Invest in FXNC?  Management team with track record of building value  Delivering personal service and the latest technology  Diversified markets in attractive Virginia MSAs  Low-cost customer deposit relationships  4 

 Q1 2019 and Full Year 2018 Highlights  Q1 2019 Highlights (1)Return on equity of 13.47%, return on assets of 1.21% Net interest income increased $352 thousand, or 5%, to $6.9 million Net interest margin increased 18 basis points to 3.97%Nonperforming assets to total assets remained low at 0.25%2018 HighlightsRecord year of net income totaling $10.1 millionPre-provision pre-tax earnings increased 27%Return on equity of 16.36%Efficiency ratio improved to 63.05%  5  (1) Compared to the first quarter of 2018. Quarterly financial information is unaudited. 

 FXNC Nasdaq Listed on April 18, 2019  6  Bank Holding Company Enters National Market  STRASBURG, VA, April 18, 2019 (The Northern Virginia Daily) – This morning, First National Corporation will be available on the Nasdaq Capital Market exchange. Last year, First National Corporation netted a record $10.1 million, according to a news release.  First Bank Now Trading on NasdaqWINCHESTER, VA, April 18, 2019 (The Winchester Star) – When the stock market opens today, Strasburg-based First Bank will be one of a few companies headquartered in the Northern Shenandoah Valley trading on the Nasdaq Stock Market.   Photography courtesy of Nasdaq, Inc. 

 First National Outperformed Major Indices   Source: S&P Market Intelligence, total return as of December 31, 2018.  7       

 Strategies to Build Shareholder Value  Deploy Cash and Securities into Loans   Serve Vibrant Virginia Markets  Maintain Low-Cost Deposit Portfolio  Attract and Retain Talented Employees  Accelerate Growth with Acquisitions and Team Lifts    8  Grow Assets Without Adding Significant Overhead 

 Grow Assets Without Adding Significant Overhead   9  * Acquired six bank branches in April 2015.  *  * 

 Deploy Cash and Securities Into Loans  Source: S&P Market Intelligence. Peer median based on banks in Virginia with assets $500 million to $1 billion as of December 31, 2018.* Acquired six branches in April 2015.  10  * 

 Serve Vibrant Virginia Markets   Virginia’s 2.9% unemployment rate is lower than the nation   1: Source: Virginia Employment Commission, April 20182: Source: Virginia Economic Development Partnership3: Source: S&P Market Intelligence includes Frederick, Shenandoah, Warren, Rockingham, Buckingham and Prince Edward Counties; Cities of Winchester, Staunton and Waynesboro; and all bank deposits within 3 miles of the Patterson Avenue (Richmond) First Bank office.  Diverse economies with large regional medical centers and higher education, including Virginia Commonwealth University, University of Richmond, Shenandoah University and Mary Baldwin University  Projected Population Growth: 2010 – 2020 1  Virginia is headquarters to 37 Fortune 1000 firms 2  Virginia ranked 5th “Best States for Business” ranking by Forbes  More than $9 billion deposits within First Bank’s branch footprint 3  11  Population Growth by MSA:Winchester 20%Richmond 13%Harrisonburg 12%Staunton-Waynesboro 8%         

 Accelerate Growth with Acquisitions and Team Lifts  Acquisition Opportunities in Virginia  Branch Acquisition Success  Six branches acquired in 2015 including $186 million in deposits  Hired Regional President and a market executive to deploy deposits into loans in Staunton - Waynesboro market area  Opened Loan Production Office and hired a market executive in Harrisonburg  22 thousand deposit accounts with 0.19% cost of deposits at closing  1 Source: S&P Market Intelligence as of December 31, 2018.  12  Hired a Banking Team and opened a full-service branch in the Richmond market with two seasoned bank executives 

 Maintain Low Cost Deposit Portfolio  13  1 Peer median based on banks in Virginia with assets $500 million to $1 billion as of December 31, 2018.Deposit portfolio composition based on December 31, 2018.  1 

 Deposits Have Been a Source of Strength  14  1 Peer median based on banks in Virginia with assets $500 million to $1 billion as of December 31, 2018. Quarterly financial information is unaudited.  1 

 Attract and Retain Talented Employees  15 

 Tangible Book Value Per Share and Earnings Per Share  TBVPS  Diluted EPS  16  * Acquired six branches in April 2015.  * 

 Performance Metrics  Return on Assets  Return on Equity  Efficiency Ratio  * Acquired six branches in April 2015.   Net Interest Margin  *  *  *  *  17 

 Diversified Revenue  18  Dollars in millions. Noninterest income composition based on December 31, 2018. 

 Loan Portfolio and Improved Yield  19  1 Peer median based on banks in Virginia with assets $500 million to $1 billion as of December 31, 2018.Loan portfolio composition based on December 31, 2018.   1 

 Asset Quality  1 Peer median ratio was based on banks in Virginia with assets $500 million to $1 billion.  20  1 

 Capital Position  Total Risk Based Capital  Tangible Common Equity  Leverage  Total risk based capital and leverage ratios are First Bank. Tangible common equity ratio is First National Corporation.* Acquired six branches in April 2015.   *  *  *  21 

 Appendix  22 

 Financial Performance  (dollars in thousands)  At or for the year ended,            except per share data  12/31/2014  12/31/2015  12/31/2016  12/31/2017  12/31/2018                  Balance Sheet              Assets  $518,165   $692,321   $716,000   $739,110   $752,969     Loans, net   371,692    433,475    480,746    516,875    537,847     Deposits   444,338    627,116    645,570    664,980    670,566     Tangible common equity   44,884    43,607    50,582    57,212    66,202                   Balance Sheet Ratios              Loans / Deposits  85.16%  70.00%  75.29%  78.53%  80.95%    TCE / TA  8.66%  6.32%  7.08%  7.75%  8.85%    Leverage ratio 1  12.90%  8.12%  8.48%  8.46%  9.26%    Total capital ratio 1  19.14%  13.86%  13.47%  13.12%  13.62%                  Performance              Net income 2  $6,493   $1,542   $5,907   $6,448   $10,135     Diluted EPS  $1.32   $0.31   $1.20   $1.30   $2.04     ROAA  1.45%  0.41%  0.84%  0.89%  1.34%    ROAE  13.49%  4.58%  12.00%  11.57%  16.36%    Net interest margin  3.86%  3.52%  3.61%  3.77%  3.93%    Efficiency ratio  73.96%  80.92%  71.05%  66.42%  63.05%                  Asset Quality              NPAs / Assets  1.91%  0.94%  0.25%  0.17%  0.42%    NCOs / Avg loans  0.02%  0.27%  0.04%  0.02%  0.17%    Reserves / Loans  1.77%  1.26%  1.09%  1.02%  0.92%    23  1 First Bank capital ratios.2 Net income available to common shareholders.  

 Peer Comparison  24  Source: S&P Market Intelligence. Peers defined as banks in Virginia with assets $500 million and $1 billion as of 12/31/18. Ratios are for parent companies, if applicable, except capital ratios, which are for the parent’s bank subsidiary. Data is as of and for the quarter ended December 31, 2018.  Return on Assets  Return on Equity  Efficiency Ratio  Net Interest Margin  Loans / Deposits  Cash & Securities / Deposits  NPAs / Assets  Reserves / Loans   Peer 0.89% FXNC 1.21%    Peer 9.07% FXNC 14.2%   Peer 72.7% FXNC 63.0%   Peer 3.85% FXNC 4.05%   Peer 89.1% FXNC 81.0%   Peer 17.3% FXNC 25.9%   Peer 1.27% FXNC 0.42%   Peer 0.91% FXNC 0.92%    Median of peer group    FXNC    1 standard deviation from the mean  1-4 Family / Loans  CRE & Multi / Loans  C&I / Loans  Non-interest bearing / Deposits  Savings & MMDA / Deposits  Time / Deposits  Total Risk-Based Capital  Leverage Ratio   Peer 36.7% FXNC 39.3%    Peer 41.5% FXNC 41.5%   Peer 7.8% FXNC 7.8%   Peer 22.8% FXNC 27.1%   Peer 46.7% FXNC 43.6%   Peer 26.3% FXNC 17.8%   Peer 14.2% First Bank 13.6%   Peer 10.1% First Bank 9.3% 

 Stock Profile  Source: S&P Market Intelligence, data as of April 23, 2019.  Ticker symbol  FXNC  Exchange  Nasdaq  Market price   $22.20  Common shares outstanding  4,963,487  Market capitalization  $110.2 million  Insider ownership  10.9%  Institutional ownership  11.7%  Quarterly cash dividend   $0.09, dividend yield 1.62%  Average volume (LTM)  1,753  Diluted EPS (LTM)  $2.04  Tangible book value per share   $13.97  25 

 Scott Harvard, President and CEO(540) 465-6121sharvard@fbvirginia.comShane Bell, Executive VP and CFO(540) 465-6130sbell@fbvirginia.com