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 March 31, 1999
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)
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 April 30, 1999: 789,692
<PAGE>
FIRST NATIONAL CORPORATION
INDEX
Part 1. Financial Information
Item 1. Financial Statements Page No.
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Changes in Stockholders' Equity 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
Part II. Other Information
Item 1 Legal Proceedings 14
Item 4. Submission of Matters to a vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
Signature 16
<PAGE>
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
(Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1999 March 31, 1998
<S> <C> <C>
Interest Income
Interest and Fees on Loans $2,772 $2,567
Interest on Federal Funds Sold 48 4
Interest on Deposits in Banks 6 6
Interest and Dividends on Investment Securities
Available for Sale
Taxable 633 499
Non Taxable 90 89
Held to Maturity
Taxable -- 19
Non Taxable -- --
------ ------
Total Interest Income 3,549 3,183
Interest Expense
Interest on Savings Deposits and Interest
Bearing Demand Deposits 725 756
Interest on Time Deposits of $100,000 or more 156 162
Interest on All Other Time Deposits 657 555
Interest on Federal Funds Purchased -- 16
Interest on Long-term Debt 258 116
------ ------
Total Interest Expense 1,796 1,605
------ ------
Net Interest Income 1,753 1,578
------ ------
Provision for Loan Losses 123 69
------ ------
Net Interest Income After Provisions
for Loan Losses 1,630 1,509
Other Operating Income
Service Charges 151 142
Profits on Securities Available for Sale -- 12
Other Operating Income 128 124
------ ------
Total Operating Income 279 278
Other Operating Expenses
Salaries and Employee Benefits 633 662
Occupancy Expense 76 65
Equipment Expense 126 123
Other 424 401
------ ------
Total Operating Expenses 1,259 1,251
Income Before Income taxes 650 536
Income Taxes 201 162
------ ------
Net Income $ 449 $ 374
====== ======
Per Share Data
Earnings Per Common Share, basic $ 0.57 $ 0.48
====== ======
Earnings Per Common Share, diluted $ 0.57 $ 0.48
====== ======
Cash Dividends 0.260 0.215
====== ======
</TABLE>
The Accompanying Notes Are An Integral Part Of These Statements
<PAGE>
FIRST NATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
<S> <C> <C>
ASSETS
Cash and due from banks $ 3,466 $ 5,026
Federal Funds Sold 2,308 2,859
Investment Securities
Available for Sale 57,476 48,244
Held to Maturity -- 19
Loans Net of Unearned Discount 130,347 129,597
Less: Allowance for Loan Losses 1,164 1,226
-------- --------
Net Loans 129,183 128,371
Bank Premises and Equipment 4,285 4,318
Interest Receivable 1,139 1,151
Other Real Estate 343 343
Other Assets 997 805
-------- --------
Total Assets $199,197 $191,136
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand Deposits
Non-Interest Bearing $ 18,574 $ 19,555
Interest Bearing 18,124 16,865
Savings Deposits 62,916 58,126
Certificates of Deposit of
$100,000 and over 12,753 11,263
All Other Time Deposits 49,340 49,199
-------- --------
Total Deposits $161,707 $155,008
Federal Home Loan Bank Advance 18,691 17,710
Accrued Expenses 1,197 817
-------- --------
Total Liabilities $181,595 $173,535
-------- --------
Stockholders' Equity
Common Stock, Par Value $5 per Share;
Authorized 2,000,000 Shares, 789,692
Shares Issued and Outstanding $ 3,949 $ 3,945
Surplus 1,437 1,417
Accumulated Other Comprehensive Income 80 347
Undivided Profits 12,136 11,892
-------- --------
Total Stockholders' Equity $ 17,602 $ 17,601
-------- --------
Total Liabilities and Stockholders' Equity $199,197 $191,136
======== ========
</TABLE>
The Accompanying Notes Are An Integral Part of These Statements
<PAGE>
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
March 31, 1999 March 31, 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 449 $ 374
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 106 118
Provision for loan losses 123 69
Change in assets and liabilities
(Increase) in interest receivables 12 145
(Increase) in other assets (145) (402)
Increase in accrued expenses 517 647
-------- --------
Net Cash Provided by Operating Activities $ 1,062 $ 951
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of securities-available for sale $ -- $ 2,409
Proceeds from maturities and principal payments on
securities-available for sale 2,808 5,826
Purchases of securities-available for sale (12,492) (12,435)
Proceeds from maturities and principal
payments on securities-held to maturity 19 673
Purchases of bank premises and equipment (72) (80)
Net (increase) in loans (935) (5,564)
(Increase) in federal funds sold 551 (3,463)
-------- --------
Net Cash (Used in) Investing Activities $(10,121) ($12,634)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits, NOW accounts,
and savings accounts 5,069 1,861
Net increase (decrease) in certificates of deposit 1,630 (320)
Net increase (decrease) in long-term borrowings 981 11,294
Net proceeds from issuance of common stock 24 0
Cash dividends paid (205) (167)
Net (decrease) in federal funds purchased -- (1,416)
-------- --------
Net Cash Provided by Financing Activities $ 7,499 $ 11,252
-------- --------
Increase (Decrease) in Cash and Cash Equivalents $ (1,560) $ 431
CASH AND CASH EQUIVALENTS:
Beginning 5,026 3,623
-------- --------
Ending $ 3,466 $ 3,192
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $ 1,762 $ 1,308
======== ========
Income Taxes $ 0 $ 0
======== ========
</TABLE>
The Accompanying Notes Are An Integral Part of These Statements
<PAGE>
FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS OF DOLLARS)
Three Months Ended March 31, 1999 and 1998
<TABLE>
<CAPTION>
Accumulated
Other
Common Capital Comprehensive Retained Comprehensive
Stock Surplus Income Earnings Income Total
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1997 $3,888 $1,187 $335 $10,772 $16,182
Comprehensive income:
Net income 374 374 374
Other comprehensive income net of tax:
Unrealized loss on securities
Available for sale (25) (25)
Reclassification adjustment 12 12
------
Other comprehensive income, net of tax (13) (13)
-------
Total comprehensive income 361
=======
Issuance of authorized common stock
dividend reinvestment plan
Cash dividends declared (167) (167)
------- ------- ----- ------- --------
Balances, March 31, 1998 $3,888 $1,187 $332 $10,979 $16,376
====== ====== ==== ======= =======
Balances, December 31, 1998 3,945 $1,417 $347 $11,892 $17,601
Comprehensive income:
Net Income 449 449 449
Other comprehensive income,
net of tax:
Unrealized loss on securities
available for sale (267) (267)
Reclassification adjustment
for gains realized in net income 0 0
-----
Total comprehensive income, net of tax (267) (267)
--------
Total comprehensive income 182
=========
Issuance of authorized common stock
Dividend reinvestment plan 4 20 24
Cash dividends declared (205) (205)
------ ------ ---- ------- --------
Balances, March 31, 1998 $3,949 $1,437 $ 80 $12,136 $17,602
====== ====== ==== ======= ========
</TABLE>
The Accompanying Notes Are An Integral Part of These Statements
<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, 1998. In the opinion
of the company's management, the financial statements reflect all adjustments
necessary to present fairly the results of operations for the three month
periods ended March 31, 1999 and 1998 the company's financial position at March
31, 1999 and December 31, 1998, and the cash flows for the three month periods
ended March 31, 1999 and 1998. These adjustments are of a normal recurring
nature.
Note 2. Securities as of March 31, 1999 and December 31, 1998 are summarized
below:
<TABLE>
<CAPTION>
(000 Omitted)
March 31, 1999 December 31, 1998
-------------- -----------------
Unrealized Unrealized
Cost Market Gain (Loss) Cost Market Gain (Loss)
------- ------ ----------- ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C>
Securities Available For Sale
U. S. Treasury Securities $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
U. S. Agency Securities 48,157 47,986 ($ 171) 39,966 40,140 $ 174
Obligation of State and Political
Subdivisions 7,964 8,226 $ 262 6,559 6,884 $ 325
Corporate Securities 4 34 $ 30 4 31 $ 27
Other Securities 1,351 1,351 $ 0 1,188 1,188 $ 0
- ------------------------------------ ------- ------- ------- ------- ------- -------
Total Securities Available for Sale $57,476 $57,597 $ 121 $47,717 $48,243 $ 526
Securities Held to Maturity
U. S. Agency Securities 0 0 $ 0 19 19 $ 0
------- ------- ------- ------- ------- -------
</TABLE>
<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>
<CAPTION>
(000 Omitted)
March 31, 1999 December 31, 1998
<S> <C> <C>
Real estate loans:
Construction and land development $ 6,610 $ 5,415
Secured by farm land 848 851
Secured by 1-4 family residential 50,276 47,965
Other real estate loans 19,561 21,381
Loans to farmers (except those secured by real estate) 474 585
Commercial and industrial loans
(except those secured by real estate) 24,034 25,632
Loans to individuals for personal expenditures 27,702 27,376
All other loans 925 513
-------- --------
Total loans $130,430 $129,718
Less unearned income reflected in loans 83 121
-------- ----------
Loans, net of unearned income $130,347 $129,597
======== ==========
</TABLE>
The Bank had loans in a Nonaccrual category of $42,385 on December 31, 1998
and $ 16,000 on March 31, 1999.
Note 4. Allowance for Loan Losses
Analysis of the Allowance for Loan Losses
For the Three Months Ended
(000 Omitted)
March 31, 1999 March 31, 1998
Balance at Beginning of Period $1,226 $1,112
Charge-Offs 196 44
Recoveries 11 2
-------- -------
Net Charge-Offs 185 42
Provision for Loan Losses 123 69
-------- --------
Balance at End of Period $1,164 $1,140
======== ======
<PAGE>
FIRST NATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5. New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement 133,
"Accounting for Derivative Instruments and Hedging Activities," which is
required to be adopted in years beginning after June 15, 1999. The Statement
permits early adoption as of the beginning of any fiscal quarter after its
issuance. The Corporation has not determined whether to adopt the new statement
early. The Statement will require the Corporation to recognize all derivatives
on the balance sheet at fair value. Derivatives that are not hedges must be
adjusted to fair value through income. If the derivative is a hedge, depending
on the nature of the hedge, changes in the fair value of derivatives will either
be offset against the change in fair value of the hedged assets, liabilities, or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
Because the Corporation does not use derivatives, management does not anticipate
that the adoption of the new Statement will have any effect on the Corporation's
earnings or financial position.
In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities," which requires the costs of start-up activities and organization
costs to be expensed as incurred. This SOP is not expected to have a material
impact on the Company's financial statements.
<PAGE>
FIRST NATIONAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Net income for the first quarter of 1999 was $449 thousand compared to $374
thousand in the first quarter of 1998. This represents an increase of 20.0%
which is attributable to an increase in net interest income during the first
quarter of 1999. Interest and fees on loans, the largest component of interest
income, increased $366 thousand during the period, while interest on deposits,
the largest component of interest expense, increased $191 thousand resulting in
an increase in net interest income of $175 thousand. Management increased the
provision to the allowance for loan losses by $54 thousand as a result of growth
in the loan portfolio. Total other noninterest expenses increased $8 thousand,
slightly faster than total other noninterest income which increased $1 thousand.
Yields, Rates and Net Interest Margin
Interest rates on loans have remained relatively stable during 1999 and in
comparison with the first quarter of 1998, the yield on the loan portfolio
declined from 8.88% in 1998 to 8.56% in 1999. At the same time the cost of
interest bearing deposits decreased from 4.84% in the first quarter of 1998 to
4.45% in the same period of 1999. While the yield on earning assets declined 46
basis points from 8.23% in 1998 to 7.77% in 1999, the cost of interest bearing
liabilities decreased 31 basis points from 4.90% in 1998 to 4.59% in 1999 . This
resulted in a decrease in the bank's interest rate spread from 3.33% in 1998 to
3.18% in 1999 . Interest expense as a percentage of average earning assets
decreased from 4.09% in 1998 to 3.88% in 1999. The bank's net interest margin
decreased from 4.14% in 1998 to 3.89% in 1999.
Future Operations
During June of this year (1999), First Bank plans to open a second full
service branch in Woodstock, Virginia which will enhance the banks position in
this growing market in the center of the Shenandoah Valley. A banking office
will be leased at the north Woodstock Shopping Center. This is an attractive
site and will soon become home to the Shenandoah County Administrative Offices
Year 2000 Information
In 1997, First Bank, a subsidiary of First National Corporation, initiated
a review and assessment of all hardware and software to confirm that it would
function properly in the Year 2000. A Year 2000 project team was formed
utilizing representatives from all areas of the Bank. Based on this assessment,
the Bank's mainframe hardware and banking software were upgraded and tested.
According to the test results, and accompanied by a letter of certification from
the Bank's software provider, our core processing system has been termed Year
2000 compliant. For certain other systems, the Bank has determined that it will
have to replace or modify certain pieces of hardware and/or software so that the
systems will properly function in the year 2000. Systems for which the Bank
relies on third party vendors, these vendors have been contacted and have
indicated that the hardware and/or software will be Year 2000 compliant.
<PAGE>
The Bank has also contacted all significant loan and deposit customers to
determine the extent to which the Bank is vulnerable to those third parties'
failure to remedy their own Year 2000 issue. The Bank believes that exposure
from customers who may not be Year 2000 compliant is minimal.
The Bank plans to complete the majority of the Year 2000 project by June 30,
1999. To date, the Bank has expensed $132,280 related to the assessment and
replacement of issues related to the Year 2000. An additional $77,919 has been
contracted for projects to be completed by June 30, 1999. Remaining
expenditures, if any, are not expected to have a material effect on the Bank's
consolidated financial statements.
The Bank continues to assess its risk from other environmental factors over
which it has little direct control, such as electrical power supply, and voice
and data transmission. Based on its current assessments and remediation plans,
which are based in part on certain representations of third-party servers, the
Bank does not expect that it will experience a significant disruption of its
operations as a result of the change to the new millennium. Although the Bank
has no reason to conclude that a failure will occur, the most reasonably likely
worst case Year 2000 scenario would entail a disruption or failure of the Bank's
power suppliers' or voice and data transmission suppliers' capability to provide
data transmission services to the Main Office, where the main computer and
switchboard are located, or one of our Branch locations. If such a failure were
to occur, the Bank would implement a contingency plan. While it is impossible to
quantify the impact of such a scenario, the most reasonably likely worst-case
scenario would entail diminishment of service levels, some customer
inconvenience, and additional, as yet understood, cost associated with the
implementation of the contingency plan.
For the systems and facilities that it has determined to be most critical, the
Bank completed development of business contingency plans in March, 1999. These
plans are expected to be adopted by the Board of Directors of First Bank in
April, with testing of the plan an ongoing priority for the rest of 1999. These
plans will conform to recently issued guidelines from the FFIEC on business
contingency planning for Year 2000 readiness. Contingency plans will include,
among other actions, manual workarounds and identification of resource
requirements and alternative solutions for resuming critical business processes
in the event of a year 2000 related failure. While the Bank will have
contingency plans in place to address a temporary disruption in these services,
there can be no assurance that any disruption or failure will be only temporary,
that the Bank's contingency plans will function as anticipated, or that the
results of operations, financial condition, or liquidity of the Bank will not be
adversely affected in the event of a prolonged disruption or failure.
Additionally, there can be no assurance that the FFIEC or other federal
regulators will not issue new regulatory requirements that require additional
work by the Bank and, if issued, the new regulatory requirements will not
increase the cost or delay the completion of the Bank's Year 2000 project. The
costs of the project and the date on which the Bank's plans to complete the Year
2000 modifications are based on management's best estimates, which were derived
utilizing numerous assumptions of future events including the continued
availability of certain resources, third party modification plans and other
factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those plans. Specific
factors that might cause such material differences include, but are not limited
to, the availability of personnel trained in this area, the ability of third
party vendors to correct their software and hardware, the ability of significant
customers to remedy their Year 2000 issues, and similar uncertainties.
<PAGE>
FIRST NATIONAL CORPORATION
AVERAGE BALANCES, INCOME AND EXPENSE, YIELDS AND RATES
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------
1999 1998
Annual Annual
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate(3) Balance Expense Rate(3)
--------- ------- ------ -------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Balances at correspondent banks-interest bearing $ 245,738 $ 6,484 10.55% $ 398,561 $ 5,910 5.93%
Securities:
Taxable 44,257,866 632,550 5.72% 33,724,641 517,507 6.14%
Tax-exempt (1) 7,047,827 136,912 7.77% 6,521,469 135,056 8.28%
----------- ------- ----- ----------- ------- -----
Total Securities 51,305,693 769,462 6.00% 40,246,110 652,563 6.49%
Loans (net of earned income): (2)
Taxable 129,402,662 2,769,565 8.56% 115,556,924 2,563,362 8.87%
Tax-exempt (1) 111,475 3,342 11.99% 173,423 5,097 11.76%
------------ ---------- ------ ------------ ---------- ------
Total Loans 129,514,137 2,568,459 8.56% 115,730,347 2,568,459 8.88%
Fed funds sold and repurchase
agreements 4,025,256 48,438 4.78% 749,889 4,147 2.21%
------------ ---------- ----- ----------- ---------- ----
Total earning assets 185,117,824 3,597,292 7.77% 157,124,907 3,231,079 8.23%
Less: allowance for Loan Losses (1,254,022) (1,133,756)
Total nonearning assets 10,349,476 9,584,889
------------ -------------
Total Assets $194,213,278 $165,576,040
============ ============
LIABILITIES AND SHAREHOLDER EQUITY
Interest bearing deposits:
Checking $10,537,969 $42,582 1.62% $9,331,681 $51,615 2.22%
Money market savings 6,387,631 48,003 3.01% 6,848,577 52,527 3.36%
Regular savings 60,273,968 635,662 4.22% 38,013,418 652,669 5.01%
Certificates of deposit:
Less than $100,000 49,544,628 656,728 5.30% 43,986,481 554,617 5.25%
$100,000 and more 11,458,861 155,583 5.43% 12,125,661 162,273 5.47%
---------- ------- ----- ------------- ---------- -----
Total interest bearing deposits 138,203,057 1,538,558 4.45% 110,305,818 1,473,701 4.84%
Fed funds purchased -- -- -- 1,071,367 15,760 5.88%
Long term borrowings 18,270,301 257,509 5.64% 8,154,929 115,817 5.68%
---------- ------- ----- ------------- ---------- ------
Total interest bearing liabilities 156,473,358 1,796,067 4.59% 130,998,787 1,605,278 4.90%
Noninterest bearing liabilities
Demand deposits 18,547,760 16,330,343
Other liabilities 1,485,784 1,967,707
------------ -------------
Total liabilities 176,506,902 149,296,837
Stockholders' equity 17,706,376 16,729,203
------------ -------------
Total liabilities and stockholders' equity $194,213,278 $165,576,040
============ ============
Net Interest income 1,801,225 1,625,801
========= =========
Interest rate spread 3.18% 3.33%
Interest expense as a percent of average
earning assets 3.88% 4.09%
Net interest margin 3.89% 4.14%
</TABLE>
(1) Income and yields are reported on a taxable-equivalent basis assuming a
federal tax rate of 34% in 1998 and 1999.
(2) Loans placed on a nonaccrual status are reflected in the balances.
(3) Annualized
<PAGE>
First National Corporation
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of March 31, 1999 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
First National Corporation's annual meeting of shareholders
was held on Tuesday, April 6, 1999 in Warren County, Virginia. Information
relating to the solicitation of proxies required by this item is incorporated by
reference from the Corporation's proxy statement dated February 19, 1999 for the
Corporation's Annual Meeting of Shareholders held April 6, 1999, filed with the
Commission on March 16, 1999.
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
<PAGE>
First National Corporation
PART II. OTHER INFORMATION
11. Statement re computation of per share earnings.
Not applicable
15. Letter re unaudited interim financial information.
Not applicable
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
Filed electronically as a separate document.
99. Additional Exhibits
Not applicable
(b). Reports on form 8-K
None
<PAGE>
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 May 13, 1999 /s/ Stephen C. Pettit
---------------------- ---------------------------------
Stephen C. Pettit, Comptroller
(Principal Accounting Officer and
Duly Authorized Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 3,289
<INT-BEARING-DEPOSITS> 177
<FED-FUNDS-SOLD> 2,308
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 57,476
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 130,347
<ALLOWANCE> 1,164
<TOTAL-ASSETS> 199,197
<DEPOSITS> 161,707
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,197
<LONG-TERM> 18,691
0
0
<COMMON> 3,949
<OTHER-SE> 13,653
<TOTAL-LIABILITIES-AND-EQUITY> 199,197
<INTEREST-LOAN> 2,772
<INTEREST-INVEST> 723
<INTEREST-OTHER> 54
<INTEREST-TOTAL> 3,549
<INTEREST-DEPOSIT> 1,538
<INTEREST-EXPENSE> 1,796
<INTEREST-INCOME-NET> 1,753
<LOAN-LOSSES> 123
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,259
<INCOME-PRETAX> 650
<INCOME-PRE-EXTRAORDINARY> 650
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 449
<EPS-PRIMARY> 0.57
<EPS-DILUTED> 0.57
<YIELD-ACTUAL> 3.89
<LOANS-NON> 16
<LOANS-PAST> 481
<LOANS-TROUBLED> 16
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,121
<CHARGE-OFFS> 196
<RECOVERIES> 11
<ALLOWANCE-CLOSE> 1,164
<ALLOWANCE-DOMESTIC> 1,164
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
