UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 10-QSB
Quarterly Report Pursuant of Section 13 or 15(d)
of the Securities Exchange Act of 1934
--------------------------
For the quarterly period ended:
June 30, 2000
Commission File No. 0-18868
MARATHON FINANCIAL CORPORATION
------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1560968
-------------------------------- -------------------
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
4095 Valley Pike, Winchester, Virginia 22602
------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (540) 869-6600
Indicate by check mark whether the registrant (1) has filed all documents and
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 outstanding of each of the issuer's classes of
common stock as of the latest practicable date:
Class Number of Shares Outstanding at
----- ---------------- --------------
Common Stock 2,051,441 8/10/00
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
The following financial statements are provided at the page numbers
indicated.
<S> <C>
Consolidated Statements of Condition as of
June 30, 2000 and December 31, 1999.........................................3
Consolidated Statements of Income for
the Quarter and the Six Months Ended June 30, 2000 and 1999................4
Consolidated Statements of Changes in
Shareholders Equity for the Six Months
Ended June 30, 2000 and 1999................................................5
Consolidated Statements of Cash Flow for the
Six Months Ended June 30, 2000 and 1999.....................................6
Notes to Consolidated Financial Statements..................................7-9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................................9-13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................................12
Item 6. Exhibits and Reports on Form 8-K..........................................12-13
Signature....................................................................14
Exhibit 11............................................................................15
Exhibit 27............................................................................16
</TABLE>
2
<PAGE>
<TABLE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
as of
June 30, 2000 and December 31, 1999
<CAPTION>
ASSETS
6/30/00 12/31/99
------- --------
<S> <C> <C>
Cash and due from banks $6,372,742 $8,011,673
Federal funds sold 10,394,000 6,616,000
Securities (fair value: 2000, $12,282,537 and
1999, $10,564,216) 12,461,352 10,727,548
Loans held for resale 438,084 0
Loans, net 82,175,233 74,526,925
Bank premises and equipment, net 2,849,786 2,591,033
Accrued interest receivable 607,407 534,911
Other real estate 165,095 183,218
Other assets 586,061 493,870
------------- -------------
Total assets $ 116,049,760 $ 103,685,178
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest bearing demand deposits $ 18,103,893 $ 12,940,831
Savings and interest bearing demand deposits 33,494,923 30,002,843
Time deposits 53,746,633 50,398,868
------------- -------------
Total deposits $105,345,449 $ 93,342,542
Interest expense payable 161,062 147,164
Accounts payable and accrued expenses 217,638 348,075
Capital lease payable 214,754 218,036
Dividends Payable 0 184,180
------------- -------------
Total liabilities $105,938,903 $ 94,239,997
------------- -------------
SHAREHOLDERS' EQUITY
Preferred stock, Series A, 5% non-cumulative, no par
value: 1,000,000 shares authorized and unissued $ 0 $ 0
Common stock, $1 par value; 20,000,000 shares
authorized; 2000, 2,051,441 and 1999, 2,046,441 shares
issued and outstanding 2,051,441 2,046,441
Capital surplus 7,770,987 7,750,987
Retained earnings (deficit) 423,591 (222,155)
Accumulated other comprehensive income (loss) (135,162) (130,092)
------------- -------------
Total shareholders' equity $ 10,110,857 $ 9,445,181
------------- -------------
Total liabilities and shareholders' equity $ 116,049,760 $ 103,685,178
============= =============
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
3
<PAGE>
<TABLE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
For the Six Months For the Quarter
Ended June 30, Ended June 30,
2000 1999 2000 1999
---- ---- ---- ----
Interest and dividend income:
<S> <C> <C> <C> <C>
Interest and fees on loans $3,879,540 $ 3,536,894 $2,003,475 $ 1,822,599
Interest on investment securities:
Taxable 156,442 125,392 80,899 58,098
Non-taxable 19,432 152 10,015 152
Interest and dividends on securities available for sale:
Taxable 127,411 124,003 65,045 61,180
Non-taxable 11,013 6,052 5,422 4,886
Dividends taxable 19,120 15,368 13,176 11,350
Interest on federal funds sold 303,468 170,525 173,237 80,941
----------- ----------- ---------- ----------
Total interest and dividend income $4,516,426 $ 3,978,386 $2,351,269 $2,039,206
----------- ----------- ---------- ----------
Interest expense:
Interest on deposits $ 1,881,795 $ 1,653,344 $ 972,906 $ 829,804
Interest on capital lease obligations 8,667 9,013 4,317 4,539
----------- ----------- ---------- ----------
Total interest expense $ 1,890,462 $ 1,662,357 $ 977,223 $ 834,343
----------- ----------- ---------- ----------
Net interest income $ 2,625,964 $ 2,316,029 $1,374,046 $1,204,863
Provision for loan losses 143,400 115,000 70,000 55,000
----------- ----------- ---------- ----------
Net interest income after provision for loan losses $ 2,482,564 $ 2,201,029 $1,304,046 $1,149,863
----------- ----------- ---------- ----------
Other income:
Service charges on deposit accounts $ 384,066 $ 372,901 $ 203,298 $ 192,164
Commissions and fees 18,512 13,993 6,859 8,132
Other 25,780 27,723 15,042 15,227
----------- ----------- ---------- ----------
Total other income $ 428,358 $ 414,617 $ 225,199 $ 215,523
----------- ----------- ---------- ----------
Other expenses:
Salaries and employee benefits $945,825 $ 922,794 $477,279 $ 463,613
Net occupancy expense of premises 111,963 109,224 55,007 54,401
Furniture and equipment 157,059 186,065 83,419 99,955
Legal and professional 67,601 36,707 49,386 18,660
Stationery and supplies 94,616 79,140 52,014 45,808
Postage 65,928 55,864 34,328 28,348
Marketing 39,100 38,902 22,020 24,805
Directors' fees 63,300 44,600 34,125 19,500
ATM expenses 99,490 76,344 48,770 45,297
Overdraft charge-offs 1,986 58,544 11,637 38,902
Other operating expenses 299,096 242,658 131,351 129,921
----------- ----------- ---------- ----------
Total other expenses $ 1,945,964 $ 1,850,842 $ 999,336 $ 969,210
----------- ----------- ---------- ----------
Income before income taxes $ 964,958 $ 764,804 $ 529,909 $ 396,176
Provision for income tax 319,213 266,255 176,897 134,115
----------- ----------- ---------- ----------
Net income $ 645,745 $ 498,549 $ 353,012 $ 262,061
=========== =========== ========== ==========
Earnings per share, basic $ .31 $ .24 $ .17 $ .13
=========== =========== ========== ==========
Earnings per share, assuming dilution $ .31 $ .24 $ .17 $ .13
=========== =========== ========== ==========
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
4
<PAGE>
<TABLE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the Six Months Ended June 30, 2000 and 1999
<CAPTION>
Accumulated
Retained Other Total
Common Capital Earnings Comprehensive Comprehensive Shareholders
Stock Surplus (Deficit) Income/(Loss) Income Equity
----- ------- --------- ------------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 $2,063,186 $7,849,522 $(1,149,567) $ 26,972 $8,790,113
Comprehensive income:
Net income 498,549 $498,549 498,549
Other comprehensive income,
unrealized (loss) on
securities available for sale
(net of tax $55,126) (107,008) (107,008) (107,008)
--------
Total comprehensive income $391,541
========
Issuance of common stock -
exercise of stock options
(500 shares) 500 2,000 2,500
Acquisition of common stock
(8,500 shares) (8,500) (51,758) (60,258)
---------- ---------- ------------ --------- ----------
Balance, June 30, 1999 $2,055,186 $7,799,764 $ (651,018) $ (80,036) $9,123,896
========== ========== ============= ========= ==========
Accumulated
Retained Other Total
Common Capital Earnings Comprehensive Comprehensive Shareholders
Stock Surplus (Deficit) Income/(Loss) Income Equity
----- ------- --------- ------------- ------ ------
Balance, December 31, 1999 $2,046,441 $7,750,987 $(222,154) $ (130,092) $9,445,182
Comprehensive income:
Net income 645,745 $645,745 645,745
Other comprehensive income,
unrealized (loss) on
securities available for sale (5,070) (5,070) (5,070)
(net of tax $2,612)
Total comprehensive income $ 640,675
=========
Issuance of common stock -
exercise of stock options
(5,000 shares) 5,000 20,000 ---- 25,000
---------- ---------- ------------- --------- -----------
Balance, June 30, 2000 $2,051,441 $7,770,987 $ 423,591 $(135,162) $10,110,857
========== ========== ============= ========= ===========
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
5
<PAGE>
<TABLE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOW
For the Six Months Ended June 30, 2000 and 1999
<CAPTION>
2000 1999
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $645,745 $498,549
Adjustments to reconcile net income
To net cash provided by operating activities:
Amortization 25,411 30,557
Depreciation 118,685 116,567
Net discount accretion on securities 4,709 (6,459)
Provision for loan loss 143,400 55,000
Deferred tax (benefit) --- (31,067)
Origination of loans available for sale (2,136,272) (4,090,833)
Proceeds from sale of loans available for sale 1,698,488 4,750,608
Loss on sale of other real estate 10,264 --
Changes in assets and liabilities:
(Increase) in other assets (114,989) (30,239)
(Increase) in accrued interest receivable (72,497) (26,831)
(Decrease) in accounts payable and accrued expenses (130,437) (21,627)
Increase in interest expense payable 13,898 3,441
(Increase) in other real estate ---- (165,095)
------------ -----------
Net cash provided by operating activities $206,405 $1,082,571
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities on securities held to maturity $ ---- $ 1,102,889
Proceeds from maturities on securities available for sale 50,812 216,983
Purchase of securities available for sale (810,526) (666,920)
Purchase of securities held to maturity (986,481) (150,000)
Net (increase) in loans (7,792,008) (7,536,124)
Purchase of bank premises and equipment (377,437) (49,809)
Proceeds from sale of other real estate 7,859 ----
------------ -----------
Net cash used in investing activities $(9,907,781) $(7,082,981)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits,
NOW accounts and savings accounts $ 8,655,142 $ 6,056,575
Net increase in certificates of deposits 3,347,765 4,514,729
Principal payments on capital lease payable (3,282) (3,030)
Cash dividends paid (184,180) 0
Proceeds from issuance of common stock 25,000 2,500
Purchase of common stock ---- (60,258)
------------ -----------
Net cash provided by financing activities $11,840,445 $10,510,516
------------ -----------
Increase in cash and cash equivalents $ 2,139,069 $4,510,106
Beginning 14,627,673 12,814,428
------------ -----------
Ending $ 16,766,742 $17,324,534
============ ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $1,876,564 $ 1,658,916
============ ===========
Income taxes $ 362,820 $ 82,516
============ ===========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
Unrealized (loss) on securities available for sale $ (7,682) $ (162,134)
============ ===========
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
6
<PAGE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position
as of June 30, 2000 and December 31, 1999, and the result of operations
and cash flows for the six months ended June 30, 2000 and 1999. The
statements should be read in conjunction with the Notes to Financial
Statements included in the Company's Annual Report for the year ended
December 31, 1999.
2. The results of operations for the six month period ended June 30, 2000
and 1999 are not necessarily indicative of the results to be expected
for the full year.
3. Securities held to maturity and available for sale as of June 30, 2000
and December 31, 1999 are:
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
Held to Maturity Amortized Cost Amortized Cost
---------------- -------------- --------------
<S> <C> <C>
US government & federal agencies $5,283,963 $4,687,181
Obligations of state and political subdivisions 1,348,529 959,610
---------- ----------
$6,632,492 $5,646,791
========== ==========
Fair Value Fair Value
---------- ----------
US government & federal agencies $5,127,876 $4,541,063
Obligations of state and political subdivisions 1,325,982 942,396
---------- ----------
$6,453,858 $5,483,459
========== ==========
<CAPTION>
June 30, 2000 December 31, 1999
Available for Sale Amortized Cost Amortized Cost
------------------ -------------- --------------
US government & federal agencies $4,411,414 $4,115,468
Mortgage-backed securities 14,228 15,042
Obligations of state & political subdivisions 777,479 567,007
Other 830,350 580,350
---------- ----------
$6,033,471 $5,277,867
========== ==========
<CAPTION>
Fair Value Fair Value
---------- ----------
US government & federal agencies $4,229,486 $3,944,510
Mortgage-backed securities 14,703 15,765
Obligations of state & political subdivisions 754,321 540,132
Other 830,350 580,350
---------- ----------
$5,828,860 $5,080,757
========== ==========
</TABLE>
7
<PAGE>
4. The consolidated entity's loan portfolio is composed of the following:
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
------------- -----------------
<S> <C> <C>
Commercial $46,790,956 $40,374,011
Real estate-mortgage 14,076,910 14,353,721
Real estate-construction 10,971,843 9,759,118
Installment loans to individuals 11,170,707 10,809,485
----------- -----------
$83,010,416 $75,296,335
Less: allowance for loan losses 835,183 769,410
----------- -----------
Loans, net $82,175,233 $74,526,925
=========== ===========
The company had non-accrual loans, which were excluded from the
impaired loan disclosure under FASB 114, which amounted to $244,042 on
June 30, 2000 and $40,541 on December 31, 1999.
5. Reserve for Loan Losses:
<CAPTION>
June 30, 1999 December 31, 1999
------------- -----------------
Balance, beginning $769,410 $754,597
Provision charged to operating expense 143,400 260,000
Recoveries 53,762 27,505
Loan losses charged to the allowance (131,389) (272,692)
--------- ---------
Balance, ending $835,183 $769,410
========= =========
6. Weighted average shares outstanding computation
The following shows the weighted average number of shares used in
computing basic earnings per share and the effect on weighted average
number of shares of diluted potential common stock.
<CAPTION>
6/30/00 6/30/99
------- -------
Per Share Per Share
Shares Amount Shares Amount
------ ------ ------ ------
Basic earnings per share 2,051,102 $ .31 2,060,097 $ .24
====== ======
Effect of dilutive securities:
Stock options 16,076 38,167
--------- ------ --------- ------
Diluted earnings per share 2,067,178 $ .31 2,098,264 $ .24
========= ====== ========= ======
</TABLE>
7. New Accounting Pronouncements
In June 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities ", which was originally
required to be adopted in years beginning after June 15, 1999.
Statement No. 137, issued in June 1999, subsequently amended the
effective date of Statement No. 133 to years beginning after June 15,
2000. Statement No. 133 permits early adoption as of the beginning of
any fiscal quarter after its issuance. The Bank has not determined
whether to adopt the new statement early. This Statement will require
the Bank to recognize all derivatives on the balance sheet at fair
value. Because the Bank does not currently employ such derivative
instruments and does not intend to do so in the future, management does
not anticipate that the adoption of the new Statement will have any
effect on the Bank's earnings or financial position.
8
<PAGE>
8. Proposed Merger
Rockingham Heritage Bank (NASDAQ Small Cap: RKNG) and the
Corporation have approved a definitive merger of equals
agreement. This transaction is subject to the approval of
regulatory authorities and shareholders of both MFC and RKNG.
Under the terms of the merger agreement, the existing holding
company of Marathon Financial Corporation will be utilized,
changing its name to Premier Community Bankshares, Inc.
(Premier). Marathon and Rockingham will operate as separate
banks. Rockingham Heritage shareholders will receive 1.58 shares
of Premier common stock for each share of Rockingham Heritage
common stock. The transaction will be a tax-free exchange of
shares and be accounted for as a pooling-of-interest. It is
anticipated that the merger will become effective in the third
quarter of 2000. As of December 31, 1999, RKNG had assets of
$101.1million, net loans of $77.9 million, total deposits of
$87.8 million and total shareholders' equity of $11.6 million.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
-------
Marathon Financial Corporation ("the Corporation") is a bank holding
company that was incorporated under the laws of the Commonwealth of
Virginia in June 1989. The Corporation owns all of the outstanding
stock of its sole subsidiary, The Marathon Bank ("the Bank"), which was
incorporated in August 1987 and acquired by the Corporation in October
1990, in accordance with the Plan of Exchange approved by the
shareholders of the Bank in June 1990. The Corporation is headquartered
in Frederick County, Virginia. The Corporation is a holding company for
the Bank and is not directly engaged in the operation of any other
business.
The Bank is engaged in the business of offering banking services to the
general public. It offers checking accounts, savings and time deposits,
and commercial, real estate, personal, home improvement, automobile and
other installment and term loans. It also offers travelers checks, safe
deposit, collection, notary public and other customary bank services
(with the exception of trust services) to its customers. The three
principal types of loans made by the Bank are: (1) commercial and
industrial loans; (2) real estate loans; and (3) loans to individuals
for household, family and other consumer expenditures.
Total Assets
Total assets for the first six months ending June 30, 2000 increased
$12,364,582 or 11.9% since December 31, 1999. This increase in total
assets resulted from a $7,648,308 or 10.3% increase in net loans, an
increase in federal funds sold of $3,778,000 or 57.1% and an increase
of $1,733,804 or 16.2% in securities. This equates to an increase in
earning assets of $13,598,196 or 14.8% in the six months ending June
30, 2000.
9
<PAGE>
Allowance for Loan Losses
-------------------------
The allowance for loan losses, as of June 30, 2000, was $835,183. This
is an increase of $65,773 or 8.5% since December 31, 1999. This gives
the bank a 1.00% allowance for loan losses to total loans. Management
has analyzed the reserve for loan losses and feels the reserve is
adequate.
Liabilities
-----------
Total deposits for the six months ending June 30, 2000, increased by
$12,002,907 or 12.9% since December 31, 1999. Non-interest bearing
deposits increased by $5,163,062 or 39.9% and interest bearing deposits
increased by $6,839,845 or 8.5%. Non-interest bearing deposits
represented 17.2% of total deposits as of June 30, 2000, as compared to
13.9% at December 31, 1999. Savings and money market deposits were
31.8% of total deposits at the end of the second quarter, which was a
slight decrease from 32.1% as of December 31, 1999.
Shareholders' Equity
--------------------
Total equity has increased by $665,676 or 7.0% since December 31, 1999.
The increase was due to a first half profit of $645,745 and an increase
in unrealized losses on securities available for sale of $5,070 net of
tax. An additional $25,000 of capital was raised through the exercise
of stock options equating to 5000 additional shares of common stock.
The primary capital to assets ratio is 8.8%.
Interest Income
---------------
Interest income totaled $4,516,426 for the six months ending June 30,
2000, $538,040 or 13.5% higher than the six months ending June 30,
1999. This is a direct result of the increase in earning assets, which
increased the interest and fee income.
Interest Expense
----------------
Total interest expense for the six months ending June 30, 2000 was
$1,890,462, $228,105 or 13.7% higher than the six months ending June
30, 1999. Interest on deposits increased by $228,451 or 13.8% over the
same period in 1999. This was the result of an overall increase in
deposits. Interest on capital leases for the quarter was $8,667, $346
or 3.8% less than the same period in 1999.
Net Interest Income
-------------------
Net interest income for the six months ending June 30, 2000 was
$2,625,964, $309,935 or 13.4% higher than the six months ending June
30, 1999. This was the result of an increase in our earning assets. The
net interest margin held steady in the first half of 2000 at 5.22%. The
average for 1999 was 5.20%.
10
<PAGE>
Other Income
------------
Total other income for the six months ending June 30, 2000 was
$428,358, $13,741 or 3.3% higher than the same period in 1999. This is
a result of an increase in the demand deposit accounts, which has
increased our service charge income.
Other Expenses
--------------
Total other expenses for the six months ending June 30, 2000 were
$1,945,964, $95,122 or 5.1% higher than the six months ending June 30,
1999. Salary expense increased $23,031 or 2.5%, postage expense
increased $10,064 or 18.0%, furniture and equipment expense decreased
by $29,006 or 15.6%, ATM expense increased $23,146 or 30.3% and
stationery and supplies increased $15,476 or 19.6% over the same period
in 1999. Directors' fees increased $18,700 or 41.9%. This increase is
due to an increased number of meetings regarding the pending merger.
Legal and professional costs were $67,601, an increase of 84.2%. This
increase was due to the pending merger. The Bank experienced a net
recovery of $1,986 from overdrafts for the first half. This compares to
a $58,544 net chargeoff for the same period of 1999. The net increase
in other expenses is in part a result of handling the growth of the
bank and the costs involved in processing an increased number of
accounts and transactions. In spite of rising costs in certain
categories, The Bank's efficiency ratio improved from 67.7% for the
first half of 1999 to 63.4% for the same period of 2000.
Net Income
----------
Net income for the six months ending June 30, 2000 was $645,745
compared to $498,549 in the same period in 1999. This is an increase of
$147,196 or 29.5% over the same period of 1999. The provision for
income tax increased $52,958 from $266,255 in 1999 to $319,213 in 2000.
The return on assets was 1.18% for the first six months of 2000 as
compared to 1.09% for the year of 1999. For the first half of 2000 the
return on equity was 13.31% up from the 1999 annual percent of 12.20%.
Liquidity and Capital Resources
-------------------------------
The liquidity position of the bank has been consistently less than its
peers because of a high loan to deposit ratio. This was a result of
management maximizing earning assets to increase the net income in
order to eliminate the negative balance in retained earnings. The
deficit has now been eliminated and management has allowed the loan to
deposit ratio to decline to a level that is closer to its peers. As of
June 30, 2000, the loan to deposit ratio was 78.79%.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Change in Securities.
None
Item 3. Defaults upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
2. Plan of acquisition, reorganization, arrangement,
liquidation or succession - N/A
3. (i) Articles of Incorporation. Incorporated by reference as
Exhibit 3(i) to the Corporation's Registration Statement on
Form S-1 filed on August 26, 1992 (File No. 33-51366).
(ii) By-laws. Incorporated by reference as Exhibit 3(ii) to
the Corporation's Registration Statement on Form S-1 filed
on August 26, 1992 (File No. 33-51366).
4. Instruments defining the rights of security holders,
including indentures - N/A
10. Material Contracts.
Exhibit 10.1 401(k) Plan of Marathon Financial Corporation,
incorporated herein by reference as Exhibit 10.1 to the
Corporation's Registration Statement on Form S-1 filed on
August 26, 1992 (File No. 33-51366).
Exhibit 10.2 Employment Agreement between The Marathon Bank
and Donald L. Unger, incorporated herein by reference as
Exhibit 10.2 to the Corporation's Registration Statement on
Form S-1 filed on August 26, 1992 (File No. 33-51366).
Exhibit 10.3 Lease between The Marathon Bank and Post Office
Plaza, L.C. for the branch office at 300 Warren Avenue,
Front Royal, Virginia, incorporated herein by reference as
Exhibit 10.3 to the Corporation's Registration Statement on
Form S-1 filed July 16, 1996 (File No. 333-08995).
Exhibit 10.4 Lease between The Marathon Bank and the Lessor,
James Butcher for the branch office at 1041 Berryville
Avenue, Winchester, Virginia, incorporated herein by
reference to the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1995 (File No. 0-18868).
Exhibit 10.5 Lease between The Marathon Bank and Lessors,
Keith R. Lantz and Mary G. Lantz for land upon which the
bank has placed a double-wide modular unit to house the
branch office at 1014 South Main Street, Woodstock,
Virginia, incorporated herein by reference to the
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997 (File No. 0-18868).
Exhibit 10.6 1996 Long-Term Incentive Plan incorporated
herein by reference as to the Corporation's Proxy Statement
for 1997 Annual Meeting of Stockholders filed April 7, 1997.
12
<PAGE>
11. Statement re computation of per share earnings
15. Letter re unaudited interim financial information - N/A
18. Letter re change in accounting principles - N/A
19. Report furnished to security holders - N/A
22. Published report regarding matters submitted to vote of
security holders - N/A
23. Consents of experts and counsel - N/A
24. Power of attorney - N/A
27. Financial Data Schedule
99. Additional Exhibits - None
(b) Reports on Form 8-K - None
13
<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.
MARATHON FINANCIAL CORPORATION
DATE: June 30, 2000 /s/ Donald L. Unger
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DONALD L. UNGER
PRINCIPAL EXECUTIVE OFFICER
DATE: June 30, 2000 /s/ Frederick A. Board
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FREDERICK A. BOARD
PRINCIPAL FINANCIAL OFFICER
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