First National Corporation and The Bank of

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STRASBURG, Virginia and FINCASTLE, Virginia, June 22, 2021 (GLOBE NEWSWIRE) – At separate shareholder meetings on June 16, 2021, First National (NASDAQ: FXNC) (the “Company” or “First National”), the parent company of First Bank and The Bank of Fincastle (OTC: BFTL) (“Fincastle”) have obtained the necessary shareholder approval of each company to complete the previously announced merger of Fincastle with and into First Bank (the “Merger”). The parties expect the merger to take effect in the third quarter of 2021.

Based on financial information as of December 31, 2020, the combined company would have $ 1.2 billion in assets, $ 1.1 billion on deposits, and $ 868 million in loans.

ABOUT FIRST NATIONAL CORPORATION

First National Corporation (NASDAQ: FXNC) is the parent company and bank holding company of First Bank, a community bank that first began operations in Strasburg, Virginia in 1907. First Bank offers loan and deposit products and services through its website www.fbvirginia.com, its mobile banking platform, a network of ATMs throughout its market area, a loan production facility, a customer service center in a senior housing complex, and 14 bank branches throughout Shenandoah Valley, the central regions of Virginia and the city of Richmond. In addition to providing traditional banking services, First Bank operates an asset management division under the name First Bank Wealth Management. First Bank also owns First Bank Financial Services, Inc., which invests in companies that provide securities services and title insurance.

ABOUT THE BANK OF FINCASTLE

The Bank of Fincastle has been a leading financial services provider in the Roanoke area since 1875, offering a full range of banking, credit and investment products. Headquartered in Fincastle, Virginia, Bank of Fincastle has 6 full service branches, 13 ATM locations, a drive-through location from 7 a.m. to 7 p.m. and offers online deposit account opening, online real estate and consumer loan applications, Online banking, mobile banking and 24/7 telephone banking. The Bank of Fincastle is a member of the FDIC, Equal Housing Lender and Equal Opportunity Employer.

FORWARDING STATEMENTS

Certain information contained in this discussion may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements relate to our plans, goals, expectations and intentions, are not historical facts and are identified by words such as “believes”, “expects”, “expects”, “estimates”, “intends”, “plans” “, “Goals” and “Projects” and similar expressions. While the company believes that its expectations regarding the forward-looking statements are based on reliable assumptions based on its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the company will not differ materially future results, performance or accomplishments expressed or implied in such forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including the rapidly changing uncertainties associated with the COVID-19 pandemic and its possible negative impact on the economy, our employees and customers, and our financial performance. For details of other factors that could affect expectations, see the Risk Factors and other cautionary statements in the company’s Annual Report on Form 10-K for the year ended December 31, 2020 and other filings with the SEC.

In addition to the factors previously disclosed in the Company’s filings with the SEC, additional risks and uncertainties may include, but are not limited to: (1) the risk that the cost savings and any revenue synergies from the proposed merger will not be achieved or take longer than expected, (2) disruption due to the planned merger of customer, supplier, employee or other business partner relationships, (3) occurrence of an event, a change or other circumstances that could lead to termination of the Merger Agreement, (4) the possibility that the costs, fees, expenses and fees in connection with the proposed merger may be higher than expected, (5) the company’s ability to obtain the necessary regulatory approvals for the proposed merger, (6 ) Reputation risk and the reaction of the respective customers, suppliers, employees, etc. the other business partners of the parties to the proposed merger, (7) the failure to meet the closing conditions in the merger agreement, or an unexpected delay in completing the proposed merger, (8) the risks associated with the integration of Fincastle’s business into the business of the Company, including the risk that such integration will be significantly delayed or more expensive or more difficult than expected, (9) the outcome of legal proceedings that may be or have been initiated against the Company, First Bank or Fincastle, (10) the risk of a Expansion into new geographic or product markets, (11) the dilution due to the Company’s issuance of additional common shares as part of the proposed combination, and (12) general competitive, economic, political and market conditions. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the company’s reports (such as the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and the most recent reports on Form 8 -K) filed with the SEC and available on the SEC’s website (http://www.sec.gov). All subsequent written and oral forward-looking statements about the company, Fincastle or any person acting on their behalf are expressly restricted in their entirety by the preceding cautionary statements. Neither the company nor Fincastle undertakes any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date of the forward-looking statements.

Additional information about the merger and where to find it

First National has filed relevant documents with the SEC regarding the merger, including a registration statement on Form S-4 containing a joint proxy statement from First National and Fincastle and a prospectus from First National. Fincastle shareholders can obtain a free copy of First National’s and Fincastle’s joint proxy statement and First National’s prospectus and other First National filings on the SEC’s website (http://www.sec.gov). . Copies of the First National and Fincastle joint power of attorney and the First National prospectus and the filings with the SEC, which are incorporated by reference into the First National and Fincastle joint power of attorney and the First National prospectus, may also be obtained free of charge by You can submit an inquiry to Scott C. Harvard, First National Corporation, 112 West King Street, Strasburg, Virginia 22657, or by calling (540) 465-9121.

FINCASTLE SHAREHOLDERS HAVE URGENTLY PURSUANT TO THE JOINT STATEMENT BY FIRST NATIONAL AND FINCASTLE AND THE PROSPECTUS OF FIRST NATIONAL AND OTHER RELEVANT DOCUMENTS REFERRED TO BY THE SEC REGARDING THE TRANSACTION BACKGROUND.

This announcement does not constitute an offer to sell or a solicitation of an offer to buy, nor is there a sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful under the securities laws of such jurisdiction.

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