UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 (I.R.S. Employer
incorporation or organization) Identification Number)
100 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 July 31, 1996: 772,812
<PAGE>
FIRST NATIONAL CORPORATION
INDEX
Part 1. Financial Information
Item 1. Financial Statements Page No.
Consolidated Statements of Income 3
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 of
Results of Operations and Financial Condition 11
Part II. Other Information
Item 1 Legal Proceedings 13
Item 4. Submission of Matters to a vote of
Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signature 14
<PAGE>
<TABLE>
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
(Except Per Share Amounts)
<CAPTION>
Three Months Ended
June 30, 1996 June 30, 1995
<S> <C> <C>
Interest Income
Interest and Fees on Loans $2,096 $1,831
Interest on Federal Funds Sold 30 13
Interest on Deposits in Banks 5 0
Interest and Dividends on Investment Securities
Available for Sale
Taxable 327 384
Non Taxable 97 59
Held to Maturity
Taxable 60 169
------ ------
Total Interest Income $2,615 $2,456
Interest Expense
Interest on Savings Deposits and Interest
Bearing Demand Deposits $340 $387
Interest on Time Deposits of $100,000 or more 146 124
Interest on All Other Time Deposits 725 630
Interest on Federal Funds Purchased 0 8
Interest on Note Payable 23 50
------ ------
Total Interest Expense $1,234 $1,199
------ ------
Net Interest Income $1,381 $1,257
------ ------
Provision for Loan Losses 30 0
------ ------
Net Interest Income After Provisions
for Loan Losses $1,351 $1,257
Other Operating Income
Service Charges 118 122
Gains on Securities Available for Sale 1 99
Other Operating Income 84 82
------ ------
Total Non-interest Income $203 $303
Other Operating Expenses
Salaries and Employee Benefits 549 547
Occupancy Expense 52 53
Equipment Expense 127 118
Other Operating Expenses 338 367
------ ------
Total Operating Expenses $1,066 $1,085
Income Before Income taxes $488 $475
Income Taxes 139 109
------ ------
Net Income $349 $366
====== ======
Per Share Data
Net Income $0.45 $0.47
====== ======
Cash Dividends 0.15 0.13
====== ======
<FN>
The Accompanying Notes Are An Integral Part Of These Statements
</FN>
</TABLE>
3
<PAGE>
<TABLE>
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
(Except Per Share Amounts)
<CAPTION>
Six Months Ended
June 30, 1996 June 30, 1995
<S> <C> <C>
Interest Income
Interest and Fees on Loans $4,127 $3,575
Interest on Federal Funds Sold 43 25
Interest on Deposits in Banks 13 6
Interest and Dividends on Investment Securities
Available for Sale
Taxable 656 767
Non Taxable 196 122
Held to Maturity
Taxable 138 339
------ ------
Total Interest Income $5,173 $4,834
Interest Expense
Interest on Savings Deposits and Interest
Bearing Demand Deposits $789 $695
Interest on Time Deposits of $100,000 or more 292 260
Interest on All Other Time Deposits 1,339 1,243
Interest on Federal Funds Purchased 2 13
Interest on Note Payable 51 96
------ ------
Total Interest Expense $2,473 $2,307
------ ------
Net Interest Income $2,700 $2,527
------ ------
Provision for Loan Losses 60 0
------ ------
Net Interest Income After Provisions
for Loan Losses $2,640 $2,527
Other Operating Income
Service Charges 232 248
Trust Income 0 3
Gains (Losses) on Securities
Available for Sale 1 (31)
Other Operating Income 168 228
------ ------
Total Non-interest Income $401 $448
Other Operating Expenses
Salaries and Employee Benefits 1,104 1,069
Occupancy Expense 112 101
Equipment Expense 250 212
Other 629 701
------ ------
Total Operating Expenses $2,095 $2,083
Income Before Income taxes $946 $892
Income Taxes 270 272
------ ------
Net Income $676 $620
====== ======
Per Share Data
Net Income $0.88 $0.80
====== ======
Cash Dividends 0.30 0.26
====== ======
<FN>
The Accompanying Notes Are An Integral Part Of These Statements
</FN>
</TABLE>
4
<PAGE>
<TABLE>
FIRST NATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<CAPTION>
June 30, 1996 December 31, 1995
<S> <C> <C>
ASSETS
Cash and due from banks $3,049 $4,314
Federal Funds Sold 1,324 0
Investment Securities
Available for Sale 27,726 30,543
Held to Maturity 3,729 6,276
Loans Net of Unearned Discount 94,208 86,887
Less: Allowance for Loan Losses 952 901
------- -------
Net Loans 93,256 85,986
------- -------
Bank Premises and Equipment 2,901 3,089
Interest Receivable 833 840
Other Real Estate 979 804
Other Assets 917 669
-------- --------
Total Assets $134,714 $132,321
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand Deposits
Non-Interest Bearing $13,652 $12,946
Interest Bearing 17,104 16,715
Savings Deposits 32,219 29,153
Certificates of Deposit of
$100,000 and over 10,506 11,054
All Other Time Deposits 44,915 46,038
-------- --------
Total Deposits $118,396 $115,906
-------- --------
Federal Funds Purchased 0 382
Federal Home Loan Bank Advance 1,491 1,500
Accrued Expenses 808 625
-------- --------
Total Liabilities $120,695 $118,413
-------- --------
Stockholders' Equity
Common Stock, Par Value $5 per Share;
Authorized 2,000,000 Shares,
772,243 and 771,698 Shares
Issued and Outstanding $3,861 $3,859
Surplus 1,099 1,090
Unrealized Gain (Loss) on
Securities Available for Sale, Net (273) 71
Undivided Profits 9,332 8,888
-------- --------
Total Stockholders' Equity $14,019 $13,908
-------- --------
Total Liabilities and
Stockholders' Equity $134,714 $132,321
======== ========
<FN>
The Accompanying Notes Are An Integral Part of These Statements
</FN>
</TABLE>
5
<PAGE>
<TABLE>
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
<CAPTION>
SIX MONTHS ENDED
June 30, 1996 June 30, 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $676 $620
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 254 218
Provision for loan losses 60 0
Change in assets and liabilities:
(Increase) decrease in interest receivables 7 (17)
(Increase) decrease in other assets (251) 120
Increase in accrued expenses 183 231
------ ------
Net Cash Provided by Operating Activities $929 $967
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of securities-available for sale $1,001 $3,212
Proceeds from maturities and principal payments
on securities-available for sale 3,727 1,099
Purchases of securities-available for sale (2,269) (2,003)
Proceeds from maturities and principal payments
on securities-held to maturity 2,346 612
Purchases of securities-held to maturity 0 (253)
Proceeds on sale of bank premises and equipment 0 4
Purchases of bank premises and equipment (232) (734)
Net (increase) in loans (7,321) (4,950)
(Increase) in federal funds sold (1,324) (1,906)
------ ------
Net Cash (Used in) Investing Activities ($4,072) ($4,919)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits, NOW accounts,
and savings accounts 4,161 7,365
Net (decrease) in certificates of deposit (1,671) (2,909)
Net increase (decrease) in long-term borrowings (9) 0
Net proceeds from issuance of common stock 11 2
Cash dividends paid (232) (200)
Net increase (decrease) in federal funds purchased (382) 0
------ ------
Net Cash Provided by Financing Activities $1,878 $4,248
------ ------
Increase (Decrease) in Cash and Cash Equivalents ($1,265) $296
====== ======
CASH AND CASH EQUIVALENTS:
Beginning 4,314 3,028
------ ------
Ending $3,049 $3,324
====== ======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $724 $805
====== ======
Income Taxes $208 $315
====== ======
<FN>
The Accompanying Notes Are An Integral Part of These Statements
</FN>
</TABLE>
6
<PAGE>
<TABLE>
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS OF DOLLARS)
Six Months Ended June 30 1996 and 1995
<CAPTION>
Unrealized
Gain / Loss on
Securities
Common Available Retained
Stock Surplus For Sale Earnings Total
<S> <C> <C> <C> <C> <C>
Balances, December 31, 1994 $3,855 $1,076 ($831) $8,036 $12,136
Issuance of 75 shares of common stock
employee stock options 0 2 --- --- 2
Net Income --- --- --- 619 619
Unrealized Gain on Securities Available
for Sale --- --- 801 --- 801
Cash Dividends --- --- --- (200) (200)
------- ------- ------- ------- -------
Balances, June 30, 1995 $3,855 $1,078 ($30) $8,455 $13,358
======= ======= ======= ======= =======
Balances , December 31, 1995 $3,859 $1,090 $71 $8,888 $13,908
Issuance of 545 shares of common Stock
dividend reinvestment plan 2 9 --- --- 11
Net Income --- --- --- 676 676
Increase In Unrealized loss on securities
available for sale --- --- (344) --- (344)
Cash dividends --- --- --- (232) (232)
-------- -------- ------- ------- -------
Balances, June 30, 1996 $3,861 $1,099 ($273) $9,332 $14,019
======== ======== ======= ======= =======
<FN>
The Accompanying Notes Are An Integral Part of These Statements
</FN>
</TABLE>
7
<PAGE>
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, 1995. 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 month periods
ended June 30, 1996 and 1995, the company's financial position at June 30, 1996
and December 31, 1995, and the cash flows for the six month periods ended June
30, 1996 and 1995. These adjustments are of a normal recurring nature.
Note 2.Securities as of June 30, 1996 and December 31, 1995 are summarized
below:
<TABLE>
(000 Omitted)
<CAPTION>
June 30, 1996 December 31, 1995
Unrealized Unrealized
Book Market Gain (Loss) Book Market Gain (Loss)
<S> <C> <C> <C> <C> <C> <C>
Securities Available For Sale
U. S. Treasury Securities $0 $0 $0 $1,003 $1,007 $4
U. S. Agency Securities 20,447 20,092 (355) 21,449 21,505 56
Obligation of State and
Political Subdivisions 6,624 6,565 (59) 6,693 6,961 268
Other Securities 1,069 1,069 0 1,052 1,070 18
------- ------- ------ ------- ------- ------
Total Securities Available for Sale $28,140 $27,726 ($414) $30,197 $30,543 $346
======= ======= ====== ======= ======= ======
Securities Held to Maturity
U. S. Treasury Securities $0 $0 $0 $0 $0 $0
U. S. Agency Securities 3,729 3,702 ($27) 6,076 6,082 6
Obligation of State and Political
Subdivisions 0 0 0 0 0 0
Other Securities 0 0 0 0 0 0
------- ------ ------ ------- ------ -----
Total Securities Held to Maturity $3,729 $3,702 ($27) $6,076 $6,082 $6
======= ====== ====== ======= ====== =====
</TABLE>
8
<PAGE>
FIRST NATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3. The consolidated loan portfolio, stated at face amount, is composed of
the following:
<TABLE>
(000 Omitted)
<CAPTION>
June 30, 1996 December 31, 1995
<S> <C> <C>
Real estate loans:
Construction and land development $2,624 $3,990
Secured by farm land 880 898
Secured by 1-4 family residential 39,537 42,236
Other real estate loans 16,270 13,549
Loans to farmers (except those secured
by real estate) 628 574
Commercial and industrial loans
(except those secured by real estate) 11,243 5,843
Loans to individuals for personal expenditures 21,461 20,288
All other loans 3,122 1,172
------- -------
Total loans $95,765 $88,550
Less unearned income reflected in loans 1,557 1,663
------- -------
Loans, net of unearned income $94,208 $86,887
======= =======
<FN>
The Bank had loans in a nonaccrual category of $120,320 on December 31, 1995
and $57,000 on June 30, 1996.
</FN>
</TABLE>
Note 4. Allowance for Loan Losses
<TABLE>
Analysis of the Allowance for Loan Losses
For the Six Months Ended
(000 Omitted)
<CAPTION>
June 30, 1996 June 30, 1995
<S> <C> <C>
Balance at Beginning of Period $901 $1,155
Charge-Offs 23 36
Recoveries 14 23
------ ------
Net Charge-Offs 9 13
Provision for Loan Losses 60 0
------ ------
Balance at End of Period $952 $1,142
====== ======
</TABLE>
9
<PAGE>
FIRST NATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5. New Accounting Pronouncements
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of,"
establishes standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held and
used and for long-lived assets and certain identifiable intangibles to be
disposed of. This Statement requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The Statement is effective
for fiscal years beginning after December 15, 1995. The Statement did not have a
material impact on the Corporation.
Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage
Servicing Rights," amends SFAS No. 65, "Accounting for Certain Mortgage Banking
Activities," to require that a mortgage banking enterprise recognize as separate
assets rights to service mortgage loans for others, however those servicing
rights are acquired. A mortgage banking enterprise that acquires mortgage
servicing rights through either the purchase or origination of mortgage loans
and sells or securitizes those loans with servicing rights retained should
allocate the total cost of the mortgage loans to the mortgage servicing rights
and the loans (without the mortgage servicing rights) based on their relative
fair values if it is practicable to estimate those fair values. If it is not
practicable to estimate the fair values of the mortgage servicing rights and the
mortgage loans (without the mortgage servicing rights), the entire cost of
purchasing or originating the loans should be allocated to the mortgage
servicing rights.
The Statement did not have a material impact on the Corporation.
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" establishes financial accounting and reporting
standards for stock-based employee compensation plans. Those plans include all
arrangements by which employees receive shares of stock or other equity
instruments of the employer or the employer incurs liabilities to employees in
amounts based on the price of the employer's stock. Examples are stock purchase
plans, stock options, restricted stock, and stock appreciation rights. This
Statement also applies to transactions in which an entity issues its equity
instruments to acquire goods or services from nonemployees. Those transactions
must be accounted for based on the fair value of the consideration received or
the fair value of the equity instruments issued, whichever is more reliably
measurable.
This Statement defines a fair value based method of accounting for an
employee stock option or similar equity instrument and encourages all entities
to adopt that method of accounting for all of their employee stock compensation
plans. However, it also allows an entity to continue to measure compensation
cost for those plans using the intrinsic value based method of accounting
prescribed by APB Opinion 25, "Accounting for Stock Issued to Employees." The
fair value based method is preferable to the Opinion 25 method for purposes of
justifying a change in accounting principle under APB opinion 20, "Accounting
Changes." Entities electing to remain with the accounting of Opinion 25 must
make pro forma disclosures of net income and, if presented, earnings per share,
as if the fair value based method of accounting defined in this Statement had
been applied.
The Statement is effective for fiscal years beginning after December 15,
1995. The disclosures must include the pro forma effects of other awards granted
in fiscal years beginning after December 31, 1994. The Statement did not have a
material impact on the Corporation.
10
<PAGE>
FIRST NATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Net income for the first half of 1996 was $676 thousand compared to $620
thousand in the same period of 1995. There was an increase in interest expense
when the two periods are compared which was less than the increase in interest
income during this period which was the result of an increasing loan portfolio
which was funded by savings deposits and cash flows from the investment
portfolio. This resulted in an increase in net interest income dollars even
though the net interest margin was unchanged.
Total assets grew $2.4 million during the first six months of 1996. The loan
portfolio led the way by growing $7.3 million or 8.4% during this period. Both
other real estate and other assets grew during this quarter, by $175 thousand
and $248 thousand respectively. Federal funds sold increased $1.3 million.
Funding for these increases was provided, in large part, by the securities
portfolio which decreased $5.2 million. There was also an increase in total
deposits of $2.5 million which rounded out the funding mix.
Yields, Rates and Net Interest Margin
While interest rates have risen during the second quarter of 1996, the
decline in yield on the loan portfolio which moved down from 9.15% in 1995 to
8.80% in 1996 was the result of a management decision to accept lower yielding
loans in an attempt to expand the portfolio. This decline in loan yield combined
with a decline in yield on securities caused the yield on total earning assets
to decline from 8.42% in 1995 to 8.22% this year. Due to an increase in volume
in lower cost deposit products the cost of interest bearing liabilities held
relatively steady and only increased from 4.67% in 1995 to 4.69% in 1996. This
decline in yield on earning assets in conjunction with level costs on interest
bearing liabilities caused the interest rate spread to narrow from 3.49% in 1995
to 3.59% in 1996 and as a result the net interest margin also declined from
4.46% to 4.37%.
Future Operations
While the bank has opened a new branch office during each of the last two
years, there are no plans to continue in this manner. Management, instead, plans
to improve the support departments for the existing branch network by remodeling
the Strasburg office and by erecting a new building adjacent to the "main
office" building which will house all the operations departments of the bank
under one roof. Construction was started during the second quarter and should be
completed around the end of first quarter of 1997.
While the bank will continue to concentrate on the expansion and
diversification the loan portfolio, management is in the process of developing a
program to provide alternative financial products, mutual funds, bonds, common
stock and investment products other than bank deposits to both bank customers
and noncustomers.
11
<PAGE>
<TABLE>
FIRST NATIONAL CORPORATION
AVERAGE BALANCES, INCOME AND EXPENSE, YIELDS AND RATES
<CAPTION>
Six Months Ended June 30,
1996 1995
Annual Annual
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Balances at correspondent banks -
interest bearing $183,733 $13,859 15.09% $201,651 $6,059 6.01%
Securities:
Taxable 25,974,838 793,265 6.11% 33,354,611 1,105,425 6.63%
Tax-exempt (1) 6,744,814 297,585 8.82% 3,739,800 184,665 9.88%
----------- --------- ----- ----------- --------- -----
Total Securities 32,719,652 1,090,850 6.67% 37,094,411 1,290,090 6.96%
Loans (net of earned income):(2)
Taxable 93,423,660 4,103,417 8.78% 77,630,960 3,548,054 9.14%
Tax-exempt (1) 664,563 35,336 10.63% 804,528 40,926 10.17%
----------- --------- ----- ----------- --------- -----
Total Loans 94,088,223 4,138,753 8.80% 78,435,488 3,588,980 9.15%
Federal funds sold and
repurchase agreements 1,683,159 42,548 5.06% 918,624 25,328 5.51%
----------- --------- ----- ----------- --------- -----
Total earning assets 128,674,767 5,286,010 8.22% 116,650,174 4,910,457 8.42%
Less: allowance for Loan Losses (923,855) (1,138,817)
Total nonearning assets 5,521,707 7,640,322
------------ ------------
Total Assets $133,272,619 $123,151,679
============ ============
LIABILITIES AND SHAREHOLDER EQUITY
Interest bearing deposits:
Checking $9,834,647 $106,764 2.17% $8,919,277 $111,548 2.50%
Money market savings 7,658,747 129,194 3.37% 7,405,529 126,860 3.43%
Regular savings 29,574,115 681,983 4.61% 20,214,280 455,749 4.51%
Certificates of deposit:
Less than $100,000 45,401,444 1,209,495 5.33% 48,244,202 1,243,749 5.16%
$100,000 and more 10,637,776 292,336 5.50% 9,458,357 260,428 5.51%
----------- --------- ----- ---------- --------- -----
Total interest bearing deposits 103,106,729 2,419,772 4.69% 94,241,645 2,198,330 4.67%
Federal funds purchased 46,912 1,894 8.07% 3,371,871 108,342 6.43%
Long term borrowings 1,496,158 51,551 6.89% 0 0 N\A
----------- --------- ----- ---------- ---------- -----
Total interest bearing
liabilities 104,649,799 2,473,217 4.73% 97,613,516 2,306,672 4.73%
Noninterest bearing liabilities
Demand deposits 13,679,571 12,493,749
Other liabilities 1,124,187 952,728
----------- -----------
Total liabilities 119,453,557 111,059,993
Stockholders' equity 13,819,062 12,091,686
----------- -----------
Total liabilities and
stockholders' equity $133,272,619 $123,151,679
=========== ===========
Net Interest income $2,812,793 $2,603,785
========= =========
Interest rate spread 3.49% 3.69%
Interest expense as a percent of average
earning assets 3.84% 3.95%
Net interest margin 4.37% 4.46%
<FN>
(1) Income and yields are reported on a taxable-equivalent basis assuming
a federal tax rate of 34% in 1995 and 1996.
(2) Loans placed on a nonaccrual status are reflected in the balances.
</FN>
</TABLE>
12
<PAGE>
First National Corporation
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As of June 30, 1996 neither the corporation nor the bank was a party to
any legal proceedings.
Item 2. Not Applicable
Item 3. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the second
quarter of 1996.
Item 5. Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
2. Plan of acquisition, reorganization, arrangement, liquidation
or succession.
Not applicable
3 (i) Articles of Incorporation
(ii) Bylaws
There have been no amendments during the quarter.
4. Instruments defining the rights of security holders, including
indentures.
Not applicable
10. Material contracts
Not applicable
11. Statement re computation of per share earnings.
Not applicable
15. Letter re unaudited interim financial information.
Not applicable
13
<PAGE>
First National Corporation
PART II. OTHER INFORMATION
18. Letter re change in accounting principles.
Not applicable
19. Report furnished to security holders.
Not applicable
22. Published report regarding matters submitted to vote of security
holders.
Not applicable
23. Consent of experts and counsel.
Not applicable
24. Power of attorney
Not applicable
27. Financial Data Schedule
See second document in filing
99. Additional Exhibits
Not applicable
(b). Reports on form 8-K
None
SIGNATURES
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 14, 1996 Dana A. Froom
----------------- ---------------------------------
Dana A. Froom, Comptroller
(Principal Accounting Officer and
Duly Authorized Officer)
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,049
<INT-BEARING-DEPOSITS> 158
<FED-FUNDS-SOLD> 1,324
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 27,726
<INVESTMENTS-CARRYING> 3,729
<INVESTMENTS-MARKET> 3,702
<LOANS> 94,208
<ALLOWANCE> 952
<TOTAL-ASSETS> 134,714
<DEPOSITS> 118,396
<SHORT-TERM> 0
<LIABILITIES-OTHER> 808
<LONG-TERM> 1,491
0
0
<COMMON> 3,861
<OTHER-SE> 10,158
<TOTAL-LIABILITIES-AND-EQUITY> 134,714
<INTEREST-LOAN> 4,127
<INTEREST-INVEST> 990
<INTEREST-OTHER> 56
<INTEREST-TOTAL> 5,173
<INTEREST-DEPOSIT> 2,420
<INTEREST-EXPENSE> 2,473
<INTEREST-INCOME-NET> 2,700
<LOAN-LOSSES> 60
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 2,095
<INCOME-PRETAX> 946
<INCOME-PRE-EXTRAORDINARY> 946
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 676
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<ALLOWANCE-UNALLOCATED> 181
</TABLE>
