UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-23976
FIRST NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-1232965
(State or other jurisdiction of incorporation or organization) ( Employer Identification Number)
112 West King Street, Strasburg, Virginia 22657
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (540) 465-9121
NONE
(Former name, former address and former fiscal year, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 Months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
Indicate the number of shares of each of the issuer's classes of common stock, as of the latest practicable date:
Class: Common stock, $5.00 par value
Outstanding as of August 7, 2002: 790,031
FIRST NATIONAL CORPORATION
INDEX
Part I. Financial Information | |
Item 1.Financial Statements | Page No |
Consolidated Statements of Income | 3,4 |
Consolidated Balance Sheets | 5 |
Consolidated Statements of Cash Flows | 6 |
Consolidated Statements of Changes in Stockholders' Equity | 7 |
Notes to Consolidated Financial Statements | 8 |
Item 2. Management's Discussion and Analysis or Plan of Operation | 10 |
Part II. Other Information | |
Item 1. Legal Proceedings | 14 |
Item 2. Changes in Securities | 14 |
Item 3. Defaults Upon Senior Securities | 14 |
Item 4. Submission of Matters to a Vote of Security Holders | 14 |
Item 5 Other Information | 15 |
Item 6. Exhibits and Reports on Form 8-K | 15 |
Signature | 16 |
FIRST NATIONAL CORPORATION
(In Thousands of Dollars)
(Unaudited)
Three Months Ended | |||
June 30, 2002 | June 30, 2001 | ||
Interest Income | |||
Interest and Fees on Loans | $3,533 | $3,677 | |
Interest on Federal Funds Sold | 26 | 30 | |
Interest on Deposits in Banks | 7 | 21 | |
Interest and Dividends on Investment Securities | |||
Available for Sale: | |||
Taxable | 547 | 503 | |
Non Taxable | 77 | 82 | |
Total Interest Income | 4,190 | 4,313 | |
Interest Expense | |||
Interest on Savings Deposits and Interest | |||
Bearing Demand Deposits | 446 | 585 | |
Interest on Time Deposits of $100,000 or more | 305 | 288 | |
Interest on All Other Time Deposits | 751 | 789 | |
Interest on Federal Funds Purchased | 0 | 1 | |
Interest on Long-term Debt | 410 | 448 | |
Total Interest Expense | 1,912 | 2,111 | |
Net Interest Income | 2,278 | 2,202 | |
Provision for Loan Losses | 90 | 90 | |
Net Interest Income After Provision | |||
For Loan Losses | 2,188 | 2,112 | |
Other Operating Income | |||
Service Charges | 250 | 213 | |
Gains (Losses) on Securities Available for Sale | 44 | (4) | |
Other Operating Income | 218 | 154 | |
Total Operating Income | 512 | 363 | |
Other Operating Expenses: | |||
Salaries and Employee Benefits | 815 | 781 | |
Occupancy Expense | 121 | 93 | |
Equipment Expense | 146 | 132 | |
Other | 626 | 545 | |
Total Operating Expenses | 1,708 | 1,551 | |
Income Before Income taxes | 992 | 924 | |
Income Taxes | 316 | 281 | |
Net Income | $676 | $643 | |
Per Share Data | |||
Earnings Per Common Share, basic and diluted | $0.85 | $0.81 | |
Cash Dividends | $0.34 | $0.32 |
The Accompanying Notes Are An Integral Part Of These Statements
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
(Except Per Share Amounts)
(Unaudited)
Six Months Ended | |||
June 30, 2002 | June 30, 2001 | ||
Interest Income | |||
Interest and Fees on Loans | $7,032 | $7,372 | |
Interest on Federal Funds Sold | 62 | 132 | |
Interest on Deposits in Banks | 14 | 42 | |
Interest and Dividends on Investment Securities | |||
Available for Sale: | |||
Taxable | 1,007 | 1,059 | |
Non Taxable | 154 | 164 | |
Total Interest Income | 8,269 | 8,769 | |
Interest Expense | |||
Interest on Savings Deposits and Interest | |||
Bearing Demand Deposits | 801 | 1,424 | |
Interest on Time Deposits of $100,000 or more | 617 | 592 | |
Interest on All Other Time Deposits | 1,518 | 1,566 | |
Interest on Federal Funds Purchased | 0 | 1 | |
Interest on Long-term Debt | 840 | 962 | |
Total Interest Expense | 3,776 | 4,545 | |
Net Interest Income | 4,493 | 4,224 | |
Provision for Loan Losses | 180 | 180 | |
Net Interest Income After Provision | |||
For Loan Losses | 4,313 | 4,044 | |
Other Operating Income | |||
Service Charges | 491 | 449 | |
Gains (Losses) on Securities Available for Sale | 114 | (4) | |
Other Operating Income | 427 | 294 | |
Total Operating Income | 1,032 | 739 | |
Other Operating Expenses: | |||
Salaries and Employee Benefits | 1,609 | 1,529 | |
Occupancy Expense | 235 | 187 | |
Equipment Expense | 280 | 245 | |
Other | 1,205 | 1,004 | |
Total Operating Expenses | 3,329 | 2,965 | |
Income Before Income taxes | 2,016 | 1,818 | |
Income Taxes | 638 | 569 | |
Net Income | $1,378 | $1,249 | |
Per Share Data | |||
Earnings Per Common Share, basic and diluted | $1.74 | $1.58 | |
Cash Dividends | $0.68 | $0.64 |
The Accompanying Notes Are An Integral Part Of These Statements
FIRST NATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
(Unaudited)
June 30, 2002 | December 31, 2001 | |
ASSETS | ||
Cash and due from banks | $11,890 | $6,754 |
Federal Funds Sold | 5,599 | 5,384 |
Securities Available for Sale | 51,565 | 43,355 |
Loans Net of Unearned Discount | 196,082 | 187,626 |
Less: Allowance for Loan Losses | 2,040 | 1,976 |
Net Loans | 194,042 | 185,650 |
Bank Premises and Equipment | 6,246 | 5,260 |
Interest Receivable | 1,369 | 1,299 |
Other Assets | 1,857 | 1,652 |
Total Assets | $272,568 | $249,354 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Deposits: | ||
Demand Deposits | ||
Non-Interest Bearing | $29,551 | $26,911 |
Interest Bearing | 45,408 | 20,835 |
Savings Deposits | 50,131 | 59,831 |
Certificates of Deposit of $100,000 and over | 29,961 | 29,250 |
All Other Time Deposits | 66,082 | 60,652 |
Total Deposits | $221,133 | $197,479 |
Long-term debt | 26,629 | 28,705 |
Accrued Expenses and other liabilities | 1,941 | 1,570 |
Total Liabilities | $249,703 | $227,754 |
Stockholders' Equity | ||
Common Stock, Par Value $5 per Share; | ||
Authorized 2,000,000 Shares, 790,031 | ||
Shares Issued and Outstanding | $3,950 | $3,950 |
Surplus | 1,465 | 1,465 |
Accumulated Other Comprehensive Income | 839 | 415 |
Retained Earnings | 16,611 | 15,770 |
Total Stockholders' Equity | $22,865 | $21,600 |
Total Liabilities and Stockholders' Equity | $272,568 | $249,354 |
The Accompanying Notes Are An Integral Part Of These Statements
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
(Unaudited)
Six Months Ended | |||
June 30, 2002 | June 30, 2001 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net Income | $1,378 | $1,249 | |
Adjustments to reconcile net income to net | |||
Cash provided by operating activities: | |||
Depreciation and amortization | 205 | 184 | |
Provision for loan losses | 180 | 180 | |
(Gains) Losses on Securities Available for Sale Change in assets and liabilities | (114) | 4 | |
(Increase) decrease in interest receivable | (70) | 122 | |
(Increase) decrease in other assets | (205) | 196 | |
Increase in accrued expenses | 153 | 386 | |
Net Cash Provided by Operating Activities | $1,527 | $2,321 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Proceeds from sale of securities-available for sale | $5,352 | $0 | |
Proceeds from maturities, calls, and principal payments on securities- AFS | 4,768 | 4,220 | |
Purchase of securities available for sale Purchases of bank premises and equipment | (17,574) (1,191) | 0 (1,150) | |
Net (increase) in loans | (8,572) | (12,801) | |
(Increase) decrease in federal funds sold | (215) | 5,315 | |
Net Cash (Used in) Investing Activities | ($17,432) | ($4,416) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Net increase in demand deposits, NOW accounts, | |||
And savings accounts | $17,748 | $1,185 | |
Net increase in certificates of deposit | 5,906 | 5,189 | |
Net (decrease) in long-term borrowings | (2,076) | (4,758) | |
Net (increase) in federal funds purchased | 1,974 | ||
Cash dividends paid | (537) | (505) | |
Net Cash Provided by Financing Activities | $21,041 | $3,085 | |
Increase in Cash and Cash Equivalents | $5,136 | $990 | |
CASH AND CASH EQUIVALENTS: | |||
Beginning | 6,754 | 6,307 | |
Ending | $11,890 | $7,297 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||
Cash payments for: | |||
Interest | $3,800 | $4,401 | |
Income Taxes | $578 | $552 |
The Accompanying Notes Are An Integral Part Of These Statements
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands Of Dollars)
Six Months Ended June 30, 2002 and 2001
(Unaudited)
Accumulated | ||||||
Other | ||||||
Common | Comprehensive | Retained | Comprehensive | |||
Stock | Surplus | Income (Loss) | Earnings | Income | Total | |
Balances, December 31, 2000 | $ 3,950 | $ 1,465 | $ (287) | $ 14,201 | $ 19,329 | |
Comprehensive income: | ||||||
Net income | 1,249 | $ 1,249 | 1,249 | |||
Other comprehensive income net of tax, | ||||||
unrealized gains arising during the period | ||||||
(net of tax $283) | 549 | |||||
Reclassification adjustment (net of tax, $1) | 3 | |||||
Other comprehensive income (net of tax, $284) | 552 | 552 | 552 | |||
Total comprehensive income | ||||||
Cash dividends declared | (505) | |||||
Balances, June 30, 2001 | $ 3,950 | $ 1,465 | $ 265 | $ 14,945 | $ 20,625 | |
Balances, December 31, 2001 | $ 3,950 | $ 1,465 | $ 415 | $ 15,770 | $ 21,600 | |
Comprehensive income: | ||||||
Net income | 1,378 | $ 1,378 | 1,378 | |||
Other comprehensive income net of tax, | ||||||
gains arising during the period (net of tax | 499 | |||||
Reclassification adjustment (net of tax, $39) | (75) | |||||
Other comprehensive income (net of tax, $218) | 424 | 424 | 424 | |||
Total comprehensive income | $ 1,802 | |||||
Cash dividends declared | (537) | |||||
Balances, June 30, 2002 | $ 3,950 | $ 1,465 | $ 839 | $ 16,611 | $ 22,865 |
The Accompanying Notes Are An Integral Part Of These Statements | ||||||||
FIRST NATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Interim Financial Statements
The accompanying consolidated financial statements of First National Corporation and its subsidiaries have not been audited by independent accountants, except for the balance sheet at December 31, 2001. In the opinion of the company's management, the financial statements reflect all adjustments necessary to present fairly the results of operations for the six months period ended June 30, 2002 and 2001, the company's financial position at June 30, 2002 and December 31, 2001, and the cash flows for the six month periods ended June 30, 2002 and 2001. These adjustments are of a normal recurring nature.
The operating results for the six-month and three month period ended June 30, 2002 are not indicative of the results that may be expected for the year ended December 31, 2002.
Note 2. Securities as of June 30, 2002 and December 31, 2001 are summarized below:
(000 Omitted)
June 30, 2002 | December 31, 2001 | |||||
Unrealized | Unrealized | |||||
Cost | Market | Gain (Loss) | Cost | Market | Gain (Loss) | |
Securities Available For Sale | ||||||
Obligations of US Government | ||||||
Corporations and Agencies | 41,425 | 42,462 | 1,037 | 33,367 | 33,929 | 562 |
Obligation of State and Political | ||||||
Subdivisions | 6,450 | 6,620 | 170 | 6,715 | 6,726 | 11 |
Corporate Securities | 3 | 68 | 65 | 3 | 60 | 57 |
Other Securities | 2,415 | 2,415 | 0 | 2,640 | 2,640 | 0 |
Total Securities Available for Sale | $50,293 | $51,565 | $1,272 | $42,725 | $43,355 | $630 |
FIRST NATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(000 Omitted) |
June 30, 2002 | December 31, 2001 | |
Real estate loans: | ||
Construction and land development | $8,400 | 9,648 |
Secured by farm land | 1,535 | 2,094 |
Secured by 1-4 family residential | 34,190 | 36,884 |
Other real estate loans | 65,818 | 57,761 |
Loans to farmers (except those secured by real estate) | 768 | 565 |
Commercial and industrial loans | ||
(except those secured by real estate) | 44,843 | 41,536 |
Loans to individuals for personal expenditures | 36,228 | 35,248 |
All other loans | 4,300 | 3,893 |
Total loans | $196,082 | $187,629 |
Less unearned income reflected in loans | 0 | 3 |
Loans, net of unearned income | $196,082 | $187,626 |
The bank had loans in a Nonaccrual category of $94,063 on December 31, 2001 and $109,076 on June 30, 2002.
Note 4. Allowance for Loan Losses
Analysis of the Allowance for Loan Losses
(000 Omitted) For the Six Months Ended |
June 30, 2002 | June 30, 2001 | |
Balance at Beginning of Period | $1,976 | $1,703 |
Charge-Offs | (130) | (122) |
Recoveries | 14 | 23 |
Net Charge-Offs | (116) | (99) |
Provision for Loan Losses | 180 | 180 |
Balance at End of Period | $2,040 | $1,784 |
FIRST NATIONAL CORPORATION
Item 2.
Critical Accounting Policies
GENERAL.
The company's financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). The financial information contained within our statements is, to a significant extent, financial information that is based on measures of the financial effects of transactions and events that have already occurred. A variety of factors could affect the ultimate value that is obtained either when earning income, recognizing an expense, recovering an asset or relieving a liability. We use historical loss factors as one factor in determining the inherent loss that may be present in our loan portfolio. Actual losses could differ significantly from the historical factors that we use. In addition, GAAP itself may change from one previously acceptable method to another method. Although the economics of our transactions would be the same, the timing of events that would impact our transactions could change.
ALLOWANCE FOR LOAN LOSSES.
The allowance for loan losses is an estimate of the losses that may be sustained in our loan portfolio. The allowance is based on two basic principles of accounting: (I) Statement of Financial Accounting Standards (SFAS) No. 5 "Accounting for Contingencies," which requires that losses be accrued when they are probable of occurring and estimable and (II) SFAS No. 114, "Accounting by Creditors for Impairment of a Loan," which requires that losses be accrued based on the differences between the value of collateral, present value of future cash flows or values that are observable in the secondary market and the loan balance. The use of these values is inherently subjective and our actual losses could be greater or lesser than the estimates.
The allowance for loan losses is established as losses are estimated to have occurred through a provision for loan losses charged to earnings. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.
The allowance for loan losses is evaluated on a regular basis by management and is based upon management's periodic review of the collectibility of the loans in light of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.
Our allowance for loan losses consists of as many pools as practical. The allowance for these pools takes into consideration the following elements when determining losses: documentation exceptions, effects of changes in concentrations of credit, levels and trends in delinquencies, nonaccruals and charge-offs, trends in volume and terms of loans, effects of changes in lending policies, experience of the lending management and staff, industry conditions and national and local economic trends and conditions. All loans are assigned an internal risk rating. Classified loans are segregated as special mention, substandard, doubtful and loss. Unclassified loans are also segregated into homogeneous pools.
Overview
Net income for the first half of 2002 was $1.38 million compared to $1.25 million in the first half of 2001. This represents an increase of 10% and is attributable to an increase of $269 thousand or 6.4% in "net interest income'' and an increase of $293 thousand or 39.6% in ''total operating income" while ''non-interest expense" increased $364 thousand or 12.3% over the prior year. Interest and fees on loans, the largest component of interest income, decreased $340 thousand during the period, and interest on other time deposits, the largest component of interest expense, decreased $48 thousand resulting in an increase in net interest income of $269 thousand. The provision to the allowance for loan losses was the same as the previous period at $90 thousand.
Non-interest income increased $293 thousand to $1.03 million as of June 30, 2002 compared to the same period in 2001. This was attributable to increased service charge income on deposit accounts, increased brokerage fees, and gains on the sale of securities in 2002. Non-interest expense totaled $3.33 million at June 30, 2002 compared to $2.97 million at June 30, 2001. This was primarily attributable to the bank's increased investment in premises and equipment.
During the first half of the year, the yield on the loan portfolio declined from 8.78% in 2001 to 7.48% in 2002. At the same time the cost of interest bearing deposits decreased from 4.61% in the first half of 2001 to 3.34% in the same period of 2002. While the yield on earning assets decreased 134 basis points from 8.22% in 2001 to 6.88% in 2002, the cost of interest bearing liabilities decreased 115 basis points from 4.87% in 2001 to 3.72% in 2002. This resulted in a decrease in the bank's interest rate spread from 3.35% in 2001 to 3.16% in 2002. Interest expense as a percentage of average earning assets decreased from 4.25% in 2001 to 3.11% in 2002. The bank's net interest margin decreased from 3.97% in 2001 to 3.77% in 2002.
A loan is considered impaired when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Impairment is measured on a loan by loan basis for commercial and construction loans by either the present value of expected future cash flows discounted at the loan's effective interest rate, the loan's obtainable market price, or the fair value of the collateral if the loan is collateral dependent.
Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Corporation does not separately identify individual consumer and residential loans for impairment disclosures.
Non-performing assets consist of the following:
1564:1568:
(In Thousands of Dollars) |
June 30, 2002 | June 30, 2001 | December 31, 2001 | ||||
Non-accrual loans | 109 | 56 | 94 | |||
Impaired loans | 37 | 33 | 81 | |||
Total non-performing assets: | 146 | 89 | 175 | |||
Loans past due 90 days and | 491 | 439 | 894 | |||
still accruing: | ||||||
Total non-performing assets and | ||||||
loans past due 90 days and | ||||||
still accruing: | 637 | 528 | 1,069 | |||
As a percentage of total loans | 0.33% | 0.30% | 0.58% | |||
As a percentage of total assets | 0.23% | 0.22% | 0.43% |
FIRST NATIONAL CORPORATION
AVERAGE BALANCES, INCOME AND EXPENSE, YIELDS AND RATES
Six Months Ended | |||||||||
2002 | 2001 | ||||||||
Annual | Annual | ||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||
Balance | Expense | Rate(3) | Balance | Expense | Rate(3) | ||||
ASSETS | |||||||||
Balances at correspondent banks - interest bearing | $1,451,886 | $14,255 | 1.96% | $1,181,863 | $42,487 | 7.19% | |||
Securities: | |||||||||
Taxable | 39,458,502 | 1,007,195 | 5.11% | 33,692,686 | 985,605 | 5.85% | |||
Tax-exempt (1) | 6,450,206 | 233,689 | 7.25% | 6,827,360 | 248,482 | 7.28% | |||
Total Securities | 45,908,708 | 1,240,884 | 5.41% | 40,520,046 | 1,234,087 | 6.09% | |||
Loans (net of earned income): (2) | |||||||||
Taxable | 187,345,296 | 7,005,289 | 7.48% | 167,249,199 | 7,343,811 | 8.78% | |||
Tax-exempt (1) | 1,001,532 | 39,505 | 7.89% | 943,792 | 42,653 | 9.04% | |||
Total Loans | 188,346,828 | 7,044,794 | 7.48% | 168,192,991 | 7,386,464 | 8.78% | |||
Fed funds sold and repurchase agreements | 7,369,762 | 61,676 | 1.67% | 4,209,057 | 131,911 | 6.27% | |||
Total earning assets | 243,077,184 | 8,361,609 | 6.88% | 214,103,957 | 8,794,949 | 8.22% | |||
Less: allowance for Loan Losses | (2,029,623) | (1,765,929) | |||||||
Total nonearning assets | 14,720,079 | 17,945,293 | |||||||
Total Assets | $255,767,640 | $230,283,321 | |||||||
LIABILITIES AND SHAREHOLDER EQUITY | |||||||||
Interest bearing deposits: | |||||||||
Checking | $22,712,593 | $188,848 | 1.66% | $12,056,726 | $76,526 | 1.27% | |||
Money market savings | 7,542,973 | 63,184 | 1.68% | 6,138,054 | 84,074 | 2.74% | |||
Regular savings | 56,944,073 | 554,021 | 1.95% | 63,327,141 | 1,267,079 | 4.00% | |||
Certificates of deposit: | |||||||||
Less than $100,000 | 60,166,577 | 1,512,521 | 5.03% | 54,158,037 | 1,562,449 | 5.77% | |||
$100,000 and more | 28,424,084 | 617,025 | 4.34% | 19,817,179 | 592,372 | 5.98% | |||
Total interest bearing deposits | 175,790,300 | 2,935,599 | 3.34% | 155,497,137 | 3,582,500 | 4.61% | |||
Fed funds purchased | 3,254 | 35 | 2.15% | 99,698 | 1,437 | 2.88% | |||
Long term borrowings | 27,365,402 | 840,129 | 6.14% | 30,957,009 | 961,524 | 6.21% | |||
Total interest bearing liabilities | 203,158,956 | 3,775,763 | 3.72% | 186,553,844 | 4,545,461 | 4.87% | |||
Noninterest bearing liabilities | |||||||||
Demand deposits | 28,401,837 | 21,823,986 | |||||||
Other liabilities | 1,980,354 | 1,894,701 | |||||||
Total liabilities | 233,541,147 | 210,272,531 | |||||||
Stockholders' equity | 22,226,493 | 20,010,790 | |||||||
Total liabilities and stockholders' equity | $255,767,640 | $230,283,321 | |||||||
Net Interest income | $4,585,846 | 4,249,488 | |||||||
Interest rate spread | 3.16% | 3.35% | |||||||
Interest expense as a percent of average earning assets | 3.11% | 4.25% | |||||||
Net interest margin | 3.77% | 3.97% |
(1) Income and yields are reported on a taxable-equivalent basis assuming a federal tax rate of 34% in 2001 and 2002.
(2) Loans placed on a nonaccrual status are reflected in the balances.
(3) Annualized
FIRST NATIONAL CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As of June 30, 2002 neither the Corporation nor the Bank was a party to any legal proceedings other than routine litigation that is incidental to its business.
Item 2. Not Applicable
Item 3. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
a) The Bank held its annual shareholders meeting on April 5, 2002.
b) The following Directors were elected:
Douglas C. Arthur | Charles E. Maddox Jr. |
Noel M. Borden | John K. Marlow |
Byron A. Brill | Henry L. Shirkey |
Elizabeth H. Cottrell | Alson H. Smith, Jr. |
James A. Davis | Harry S. Smith |
Christopher E. French | James R. Wilkins, III |
W. Allen Nicholls |
c) The following matters were voted on during the annual shareholders meeting:
Votes were cast in the election of Directors as follows:
FOR | AGAINST | ABSTAIN | |
Douglas C. Arthur | 643,882 | 11,118 | 12,876 |
Noel M. Borden | 643,882 | 11,118 | 12,876 |
Byron A. Brill | 643,716 | 11,284 | 12,876 |
Elizabeth H. Cottrell | 642,463 | 12,537 | 12,876 |
James A. Davis | 650,937 | 4,063 | 12,876 |
Christopher E. French | 643,898 | 11,102 | 12,876 |
Charles E. Maddox, Jr. | 641,975 | 13,205 | 12,876 |
John K. Marlow | 643,296 | 11,704 | 12,876 |
W. Allen Nicholls | 643,296 | 11,704 | 12,876 |
Henry L. Shirkey | 630,937 | 24,063 | 12,876 |
Alson H. Smith,Jr. | 643,898 | 11,102 | 12,876 |
Harry S. Smith | 643,898 | 11,102 | 12,876 |
James R. Wilkins, III | 655,000 | 0 | 12,876 |
FIRST NATIONAL CORPORATION
d) Not Applicable.
Item 5. Not Applicable
Item 6. Exhibits and Reports on Form 8-K
Exhibits
See attached Exhibit Index
(b) Reports on Form 8-K
None.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
First National Corporation
(Registrant)
Date: August 12, 2002 /S/
Stephen C. Pettit, Controller
(Chief Financial Officer and Duly Authorized Officer)
EXHIBIT INDEX
Exhibit No. | Description | |
99.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 | |
99.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | |