UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 33-14252
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FIRST NATIONAL BANKSHARES CORPORATION
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(Exact name of registrant as specified in its charter)
West Virginia 62-1306172
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
One Cedar Street, Ronceverte, West Virginia 24970
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(Address of principal executive offices) (Zip Code)
(304) 647-4500
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(Registrant's telephone number, including area code)
N/A
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(Former name, address and 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
The number of shares outstanding of the issuer's classes of common stock as of
March 31, 1998:
Common Stock, $5 par value -- 192,500 shares
THIS REPORT CONTAINS 27 PAGES
FIRST NATIONAL BANKSHARES CORPORATION
FORM 10-Q
For the Quarterly Period Ended March 31, 1998
INDEX
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
March 31, 1998 and December 31, 1997 3
Condensed Consolidated Statements of Income -
Three Months Ended March 31, 1998 and 1997 4
Condensed Consolidated Statements of Shareholders' Equity -
Three Months Ended March 31, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1998 and 1997 6-7
Condensed Consolidated Statement of Comprehensive Income
Three Months Ended March 31, 1998 and 1997 8
Notes to Condensed Consolidated Financial Statements 9-12
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 13 - 22
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 23
Item 2. Changes in Securities none
Item 3. Defaults upon Senior Securities none
Item 4. Submission of Matters to a Vote of Security Holders 23
Item 5. Other Information 23
Item 6. Exhibits and Reports on Form 8-K 23
SIGNATURES 24
2
PART I. FINANCIAL INFORMATION
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
March 31, Dec 31,
1998 1997
ASSETS (Unaudited) (1)
Cash and due from banks .................................... $ 2,108 $ 2,742
Federal funds sold ......................................... 4,320 3,159
Securities held to maturity (estimated fair value
$10,902 and $12,405, respectively) (Note 2) ........... 10,820 12,322
Securities available for sale (Note 2) ..................... 6,111 4,989
Loans, net of allowance of $640 and
$636, respectively (Notes 3 and 4) ................... 68,120 69,108
Bank premises and equipment ................................ 2,031 2,073
Accrued interest receivable ................................ 565 660
Other assets ............................................... 401 377
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Total assets ................................. $94,476 $95,430
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest bearing .............................. $ 9,895 $10,035
Interest bearing ................................. 67,424 68,301
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Total deposits ............................... 77,319 78,336
Repurchase Agreements ................................. 1,259 1,330
Long-term borrowings .................................. 5,497 5,500
Other liabilities ..................................... 937 939
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Total liabilities ............................ 85,012 86,105
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Commitments and Contingencies (Note 5)
Shareholders' equity
Common stock, $5.00 par value, authorized
500,000 shares, issued 192,500 shares ............ 963 963
Surplus ............................................... 1,000 1,000
Retained earnings ..................................... 7,498 7,362
Net Unrealized gain (loss) on securities .............. 3 0
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Total shareholders' equity ................... 9,464 9,325
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Total liabilities and shareholders' equity ... $94,476 $95,430
======= =======
(1) Extracted from December 31, 1997 audited financial statements.
See Notes to Condensed Consolidated Financial Statements
3
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In thousands of dollars, except per share data) Three Months Ended
March 31,
1998 1997
-------- -------
Interest Income
Interest and fees on loans .......................... $1,582 $1,301
Interest and dividends on securities:
Taxable ........................................ 196 244
Tax-exempt ..................................... 50 50
Interest on Federal funds sold ...................... 49 12
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Total interest income .......................... 1,877 1,607
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Interest Expense
Interest on deposits ................................ 724 625
Interest on Repurchase Agreements ................... 14 6
Interest on Fed Funds Purchased ..................... 0 4
Interest on Long-Term Borrowings .................... 90 6
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Total Interest Expense ......................... 828 641
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Net interest income ............................ 1,049 966
Provision for loan losses ................................ 15 0
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Net interest income after
provision for loan losses ...................... 1,034 966
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Non interest income
Service fees ........................................ 56 71
Trust Income ........................................ 25 7
Other income ........................................ 24 22
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Total non interest income ...................... 105 100
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Non interest expense
Salaries and employee benefits ...................... 410 426
Net occupancy expense ............................... 63 63
Equipment rental, depreciation and maintenance ...... 74 67
Data processing ..................................... 41 43
Advertising ......................................... 12 11
Professional & legal ................................ 24 28
Mailing & postage ................................... 18 18
Directors' fees & shareholder expenses .............. 35 32
Stationary & supplies ............................... 14 29
Other operating expenses ............................ 106 99
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Total non interest expense ....................... 797 816
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Income before income taxes ............................... 342 250
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Income tax expense .................................. 129 86
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Net income ..................................... $ 213 $ 164
====== ======
Basic earnings per common share (Note 6) ................. $ 1.11 $ 0.85
====== ======
Diluted earnings per common share (Note 6) ............... $ 1.10 $ 0.85
====== ======
Dividends per common share ............................... $ 0.40 $ 0.40
====== ======
See Notes to Condensed Consolidated Financial Statements
4
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands of dollars)
Unaudited
Three Months Ended
March 31,
1998 1997
Balance, beginning of period ..................... $ 9,325 $ 8,841
Net income .................................. 213 164
Cash dividends declared ..................... (77) (77)
Change in net unrealized (loss) on
securities available for sale .......... 3 (14)
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Balance, end of period ........................... $ 9,464 $ 8,914
======= =======
See Notes to Condensed Consolidated Financial Statements
5
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
Unaudited
Three Months Ended
March 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ............................................. $ 213 $ 164
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation ...................................... 66 56
Provision for loan losses ......................... 15 0
Deferred income taxes (benefit) ................... 4 8
Amortization of security premiums (accretion) of
security discounts, net ........................ (20) (19)
(Gain) loss on disposal of assets ................. 1 2
(Increase) Decrease accrued interest receivable ... 95 104
(Increase) Decrease in other assets ............... (24) (44)
Increase (Decrease) in other liabilities .......... (11) (208)
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Net cash provided by operating activities ......... 339 63
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and calls of securities held
to maturity ....................................... 1,500 1,500
Proceeds from maturities and calls of securities
available for sale ................................ 0 1,000
Purchases of securities held to maturity ............... 0 0
Purchases of securities available for sale ............. (1,093) (302)
Principal collected on (loans made to) customers, net .. 973 (6,747)
Purchases of bank premises and equipment ............... (24) (104)
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Net cash provided by (used in) investing activities 1,356 (4,653)
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CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand deposits, NOW
and savings accounts .............................. 179 (159)
Proceeds from sales of (payments for matured)
time deposits, net ................................ (1,196) 831
Net, increase (decrease) in Fed funds purchased ........ 0 0
Net increase (decrease) in Repurchase agreements ....... (71) 98
Proceeds from long-term borrowings ..................... 0 5,000
Repayments on long-term borrowings ..................... (3) 0
Dividends paid ......................................... (77) (77)
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Net cash provided by (used in) financing activities (1,168) 5,693
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Increase (decrease) in cash and cash equivalents .. 527 1,103
Cash and cash equivalents:
Beginning .............................................. $ 5,901 $ 5,239
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Ending ................................................. $ 6,428 $ 6,342
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(Continued)
6
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(In thousands of dollars)
Unaudited
Three Months Ended
March 31,
1998 1997
------ ----
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest paid to depositors ............................. $815 $699
==== ====
Income taxes ............................................ $195 $ 61
==== ====
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Dividends declared and unpaid ................................ $ 77 $ 77
==== ====
See Notes to Condensed Consolidated Financial Statements
7
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
(In thousands of dollars, except per share data) Three Months Ended
March 31,
1998 1997
----- -----
Net Income ........................................ $ 213 $ 164
Other comprehensive income, net of tax:
Unrealized gains/(losses) on securities:
Gain (loss) arising during the period 3 (14)
Reclassification adjustment ......... 0 0
Other comprehensive income .............. 0 0
----- -----
Comprehensive Income .............................. $ 216 $ 150
===== =====
See Notes to Condensed Consolidated Financial Statements
8
FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The accounting and reporting policies of First National Bankshares
Corporation and Subsidiary (the "Company") conform to generally
accepted accounting principles and to general policies within the
financial services industry. The preparation of financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
The condensed consolidated statements include the accounts of the
Company and its wholly-owned subsidiary, First National Bank. All
significant intercompany balances and transactions have been
eliminated. The information contained in the condensed
consolidated financial statements is unaudited except where
indicated. In the opinion of management, all adjustments for a
fair presentation of the results of the interim periods have been
made. All such adjustments were of a normal, recurring nature. The
results of operations for the three months ended March 31, 1998
are not necessarily indicative of the results to be expected for
the full year. The condensed consolidated financial statements and
notes included herein should be read in conjunction with the
Company's 1997 audited financial statements and Form 10-K.
For the period ended March 31, 1998, The Company was required to
adopt Statement of Financial Accounting Standard No. 130 (SFAS No.
130), "Reporting of Comprehensive Income." Comprehensive income
includes any change in equity of the Company during the period
resulting from transactions and other events and circumstances
from nonowner sources. A Statement of Comprehensive Income has
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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