First National Corp. Plans to Exit North Carolina Amidst Boom in Banking Expansion
First National Corp., a Virginia-based bank, is charting a singular course by planning to exit North Carolina at a time when other banking institutions are flocking to the state. The bank has already closed two loan production offices and announced plans to sell its only two branches in North Carolina. This decision comes as an anomaly in the banking industry, as many other banks are expanding aggressively in North Carolina and South Carolina, which are amongst the nation’s fastest-growing states.
First National Corp.’s Decision to Exit North Carolina
Established 118 years ago, First National Corp. entered the North Carolina market in October 2024, following its acquisition of Touchstone Bankshares, a banking institution valued at $661 million. The acquisition, which was primarily aimed at boosting First National’s presence in Richmond, Virginia, also included two North Carolina branches located in Roanoke Rapids and Louisburg.
The bank’s exit strategy from North Carolina forms part of a wider branch-optimization program, which also includes plans to consolidate three of its branches in Virginia. According to First National CEO Scott Harvard, this move will allow the organization to focus more intensely on its core markets. “By optimizing our delivery footprint, we can invest more effectively in technology, staff training, and community initiatives that directly benefit our customers and neighbors,” Harvard stated.
Banking Industry’s Interest in the Carolinas
First National’s decision to withdraw from North Carolina seems to be an exception in the banking industry. Banks across the nation, including megabanks and regional institutions, are showing a keen interest in expanding their presence in the Carolinas. Prominent players such as Fifth Third Bancorp, F.N.B. Corp., and City National Bank have already established their footprint in these states.
Zach Wasserman, CFO at Huntington Bancshares, recently revealed at the UBS Financial Services Conference that his company plans to open a branch in the Carolinas “virtually every two weeks” in 2026 and 2027. Even Virginia community banks, such as the $4.9 billion-asset Carter Bankshares and the $37.6 billion-asset Atlantic Union Bankshares, have expressed interest in the Carolinas, with the latter planning to open 10 new branches in Raleigh and Wilmington, North Carolina.
According to the latest Census Bureau statistics, North Carolina is the nation’s third-fastest-growing state, while South Carolina ranks first.
First National Corp.’s Focus on Virginia
Despite the trend, First National Corp. seems more intent on consolidating and expanding its presence within its home state of Virginia, particularly in the Richmond area. Over the recent months, the bank has added branches, lenders, and senior executives in Richmond, with company leaders expressing optimism about the market’s potential to drive significant expansion.
The Richmond market, like the Carolinas, is experiencing robust growth. The region’s population is projected to surpass 1.4 million by 2030, a significant increase of about 21% from the 2020 population estimate.
First National Corp has not disclosed the sales price for its North Carolina branches or the identity of the buyer. It also did not identify the specific branches in Virginia that it plans to consolidate. However, it assured that the employees at the branches being sold would be offered jobs, hence no layoffs are anticipated. The bank expects to book a one-time gain after the transaction closes in the second half of 2026.
First National’s decision to exit North Carolina is a strategic move that “reflects our ongoing commitment to operating as an efficient, forward-thinking community bank while maintaining the personal touch and local focus that define us,” says Harvard.
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