First National Corp. in Strasburg, Va., will redeem about $14.6 million of preferred stock that was originally issued through the Troubled Asset Relief Program.
The $695 million-asset holding company for First Bank will use existing cash and $5 million from a recent debt sale to fund the redemption, according to a news release Tuesday. First National expects the redemption to produce a yearly benefit of $1.1 million to net income.
The 14,595 shares to be redeemed were originally issued in March 2009 as part of Tarp's Capital Purchase Program, First National's chief financial officer, Shane Bell, said in an emailed statement. The Treasury Department sold those shares to private investors in August 2012.
First National's debt sale was conducted on Friday, when it sold 6.75% subordinated notes due October 2025. The notes were sold in a private placement.