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:
March 31, 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 3/31/00
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
The following financial statements are provided at the page numbers
indicated.
Consolidated Statements of Condition as of
March 31, 2000 and December 31, 1999..................................3
Consolidated Statements of Income for
the Three Months Ended March 31, 2000 and 1999........................4
Consolidated Statements of Changes in
Stockholders Equity for the Three Months
Ended March 31, 2000 and 1999.........................................5
Consolidated Statements of Cash Flow for the
Three Months Ended March 31, 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......................................9-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................................12
Item 6. Exhibits and Reports on Form 8-K..................................12-13
Signature.....................................................................14
2
<PAGE>
<TABLE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
as of
March 31, 2000 and December 31, 1999
<CAPTION>
ASSETS
3/31/00 12/31/99
------- --------
<S> <C> <C>
Cash and due from banks $ 5,338,800 $ 8,011,673
Federal funds sold 12,000,000 6,616,000
Securities (fair value: 2000, $11,414,315 and
1999, $10,564,216) 11,604,219 10,727,548
Loans held for resale 176,316 0
Loans, net 79,230,677 74,526,925
Bank premises and equipment, net 2,765,810 2,591,033
Accrued interest receivable 567,147 534,911
Other real estate 165,095 183,218
Other assets 625,737 493,870
------------ ------------
Total assets $112,473,801 $103,685,178
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing demand deposits $ 16,055,795 $12,940,831
Savings and interest bearing demand deposits 32,463,412 30,002,843
Time deposits 53,471,305 50,398,868
------------ ------------
Total deposits $101,990,512 $93,342,542
Interest expense payable 163,821 147,164
Accounts payable and accrued expenses 350,063 348,075
Capital lease payable 216,411 218,036
Dividends Payable 0 184,180
------------ ------------
Total liabilities $102,720,807 $94,239,997
------------ ------------
STOCKHOLDERS' 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 7,750,987
7,770,987
Retained earnings (deficit) 70,579 (222,155)
Accumulated other comprehensive income (loss) (140,013) (130,092)
------------ ------------
Total stockholders' equity $ 9,752,994 $ 9,445,181
------------ ------------
Total liabilities and stockholders' equity $112,473,801 $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 Three Months
Ended March 31,
2000 1999
---- ----
<S> <C> <C>
Interest and dividend income:
Interest and fees on loans $1,876,065 $1,714,295
Interest on investment securities held for maturity:
Taxable 75,543 67,294
Nontaxable 9,418 0
Interest and dividends on securities available for sale:
Taxable 62,365 62,997
Nontaxable 5,591 992
Dividends 5,944 4,018
Interest on federal funds sold 130,231 89,584
---------- ----------
Total interest and dividend income $2,165,157 $1,939,180
---------- ----------
Interest expense:
Interest on deposits $ 908,889 $ 823,540
Interest on leases payable 4,350 4,474
---------- ----------
Total interest expense $ 913,239 $ 828,014
---------- ----------
Net interest income $1,251,918 $1,111,166
Provision for loan losses 73,400 60,000
---------- ----------
Net interest income after provision for loan losses $1,178,518 $1,051,166
---------- ----------
Other Income:
Service charges on deposit accounts $ 180,768 $ 180,737
Commissions and fees 11,653 5,861
Other 10,738 12,496
---------- ----------
Total other income $ 203,159 $ 199,094
---------- ----------
Other expenses:
Salaries and employee benefits $ 468,547 $ 459,181
Net occupancy expense of premises 56,956 54,823
Furniture and equipment 73,641 86,110
Legal and professional 18,215 18,047
Stationery and supplies 42,602 33,332
Postage 31,600 27,516
Marketing 17,079 14,097
Telephone 28,144 14,720
Directors' fees 29,175 25,100
ATM expenses 50,720 31,047
Other operating expenses 129,949 117,659
---------- ----------
Total other expenses $946,628 $ 881,632
---------- ----------
Income before income taxes $435,049 $ 368,628
Provision for income tax expense 142,316 132,140
---------- ----------
Net income $ 292,733 $ 236,488
========== ==========
Net income per share, basic and assuming dilution $ .14 $ .11
========== ==========
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
4
<PAGE>
<TABLE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 2000 and 1999
<CAPTION>
Accumulated
Retained Other Total
Common Capital Earnings Comprehensive Comprehensive Stockholders
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 236,488 $236,488 236,488
Other comprehensive income,
unrealized (loss) on
securities available for sale
(Net of Tax, $22,412) (43,507) (43,507) (43,507)
--------
Total comprehensive income $192,981
========
Issuance of common stock -
exercise of stock options
(500 shares)
500 2,000 2,500
Acquisition of common stock
(3,000 shares) (3,000) (18,752) ---- ---- (21,752)
---------- ---------- ----------- ---------- ----------
Balance, March 31, 1999 $2,060,686 $7,832,770 $ (913,079) $ (16,535) $8,963,842
========== ========== =========== ========== ==========
<CAPTION>
Accumulated
Retained Other Total
Common Capital Earnings Comprehensive Comprehensive Stockholders
Stock Surplus (Deficit) Loss Income Equity
----- ------- --------- ---- ------ ------
Balance, December 31, 1999 $2,046,441 $7,750,987 $(222,154) $(130,092) $9,445,182
Comprehensive income:
Net income 292,733 $292,733 292,733
Other comprehensive income,
unrealized (loss) on
securities available for sale
(Net of Tax, $5,111) (9,921) (9,921) (9,921)
--------
Total comprehensive income $282,812
========
Issuance of common stock -
exercise of stock options
(5000 shares)
5,000 20,000 ---- ---- 25,000
---------- ---------- ----------- ---------- ----------
Balance, March 31, 2000 $2,051,441 $7,770,987 $70,579 $(140,013) $9,752,994
========== ========== =========== ========== ==========
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
5
<PAGE>
<TABLE>
MARATHON FINANCIAL CORPORATION & SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOW
For the Three Months Ended March 31, 2000 and 1999
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $292,733 $236,488
Adjustments to reconcile net income
to net cash provided by operating activities:
Amortization 12,595 27,897
Depreciation 57,503 58,284
Net discount accretion on securities 2,397 (1,842)
Provision for loan loss 73,400 60,000
Loss on sale of other real estate 10,264 ----
Origination of loans available for sale (1,090,332) (2,320,809)
Proceeds from sale of loans available for sale 914,316 2,492,913
Changes in assets and liabilities:
(Increase) in other assets (139,351) (4,748)
(Increase) decrease in accrued interest receivable (32,237) 1,809
Increase in accounts payable and accrued expenses 1,988 45,685
Increase (decrease) in interest expense payable 16,657 (1,915)
---------- ----------
Net cash provided by operating activities $119,933 $593,762
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and principal
Payments on securities held to maturity ---- 650,000
Proceeds from maturities on securities available for sale 461 176,937
Purchase of securities available for sale (298,758) (427,570)
Purchase of securities held to maturity (595,803) ----
Net (increase) in loans (4,777,452) (6,461,610)
Purchase of bank premises and equipment (232,278) (48,497)
Proceeds from sale of other real estate 7,859 ----
---------- ----------
Net cash used in investing activities $(5,895,971) $(6,110,740)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits,
NOW accounts and savings accounts $ 5,575,533 $ 3,550,388
Net increase (decrease) in certificates of deposits 3,072,437 (387,841)
Principal payments on capital lease payable (1,625) (1,500)
Cash dividends paid (184,180) (165,055)
Proceeds from issuance of common stock 25,000 2,500
Purchase of common stock ---- (21,752)
---------- ----------
Net cash provided by financing activities $ 8,487,165 $ 2,976,740
---------- ----------
Increase (decrease) in cash and cash equivalents $2,711,127 $(2,540,238)
Beginning 14,627,673 12,814,428
---------- ----------
Ending $17,338,800 $10,274,190
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest $ 896,582 $ 829,929
========= =========
Income taxes $ 7,601 $ 19,516
========= =========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES
Unrealized (loss) on securities available for sale $ (15,032) $ (65,920)
========== ==========
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 March 31, 2000 and December 31, 1999, and the result of
operations and cash flows for the three months ended March 31, 2000 and
1999. The statements should be read in conjunction with the Notes to
Financial Statements included in the Corporation's Annual Report for
the year ended December 31, 1999.
2. The results of operations for the three month period ended March 31,
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 March 31, 2000
and December 31, 1999 are:
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
Held to Maturity Amortized Cost Amortized Cost
---------------- -------------- --------------
<S> <C> <C>
US government & federal agencies $5,283,421 $4,687,181
Obligations of state & political subdivisions 958,794 959,610
---------- ----------
$6,242,215 $5,646,791
========== ==========
<CAPTION>
Fair Value Fair Value
---------- ----------
US government & federal agencies $5,119,876 $4,541,063
Obligations of state & political subdivisions 932,435 942,396
---------- ----------
$6,052,311 $5,483,459
========== ==========
<CAPTION>
March 31, 2000 December 31, 1999
Available for Sale Amortized Cost Amortized Cost
------------------ -------------- --------------
US government & federal agencies $4,412,726 $4,115,468
Mortgage backed securities 14,687 15,042
Obligations of state & political subdivisions 566,310 567,007
Other Securities 580,350 580,350
---------- ----------
$5,574,073 $5,277,867
========== ==========
<CAPTION>
Fair Value Fair Value
---------- ----------
US government & federal agencies $4,226,546 $3,944,510
Mortgage backed securities 15,316 15,765
Obligations of state & Political 539,792 540,132
subdivisions 580,350 580,350
---------- ----------
Other Securities $5,362,004 $5,080,757
========== ==========
</TABLE>
7
<PAGE>
<TABLE>
4. The consolidated entity's loan portfolio is composed of the following:
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
<S> <C> <C>
Commercial $44,003,236 $40,374,011
Real estate-mortgage 14,285,892 14,353,721
Real estate-construction 10,729,688 9,759,118
Installment loans to individuals 11,013,999 10,809,485
----------- -----------
$80,032,815 $75,296,335
Less: allowance for loan losses 802,138 769,410
----------- -----------
Loans, net $79,230,677 $74,526,925
=========== ===========
The company had non-accrual loans, which were excluded from the
impaired loan disclosure under FASB 114, which amounted to $71,087 on
March 31, 2000 and $40,541 on December 31, 1999.
5. Reserve for Loan Losses:
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
Balance, beginning $ 769,410 $ 754,597
Provision charged to operating expense 73,400 260,000
Recoveries 8,487 27,505
Loan losses charged to the allowance (49,159) (272,692)
----------- -----------
Balance, ending $ 802,138 $769,410
=========== ===========
6. Earnings Per Share
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>
3/31/00 3/31/99
------- -------
Per Share Per Share
Shares Amount Shares Amount
------ ------ ------ ------
Basic earnings per share 2,050,764 $ .14 2,062,524 $ .11
======= ======
Effect of dilutive securities:
Stock options 20,379 43,958
--------- ------- --------- ------
Diluted earnings per share 2,071,143 $ .14 2,106,482 $ .11
========= ======= ========= ======
</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 $101.1 million, net loans of $77.9 million, total
deposits of $87.8 million and total stockholders' 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"), 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 three months ending March 31, 2000 increased
$8,788,623 or 8.5% since December 31, 1999. This increase in total
assets resulted from a $4,703,752 or 6.3% increase in loans, an
increase in federal funds sold of $5,384,000 or 81.4% and an increase
of $876,671 or 8.2% in securities. This equates to an increase in
earning assets of $11,140,740 or 12.1% in the three months ending March
31, 2000.
9
<PAGE>
Allowance for Loan Losses
-------------------------
The allowance for loan losses, as of March 31, 2000, was $802,138. This
is an increase of $32,728 or 4.3% since December 31, 1999. This gives
the bank a 1.00% allowance for loan losses to total loans. Management
has completed an analysis on the reserve and feels the reserve is
adequate.
Liabilities
-----------
Total deposits for the three months ending March 31, 2000, increased
$8,647,970 or 9.3% since December 31, 1999. Non-interest bearing
deposits increased by $3,114,964 or 24.1% and interest bearing deposits
increased by $5,533,006 or 6.9%. Non-interest bearing deposits
represented 15.7% of total deposits as of March 31, 2000, as compared
to 13.9% at 1999 year end. Savings and money market deposits were 31.8%
of total deposits at the 2000 first quarter mark, which was a slight
decrease from 32.1% on December 31, 1999.
Stockholders' Equity
--------------------
Total equity has increased by $307,813 or 3.3% since December 31, 1999.
The increase was due to the net of a first quarter profit of $292,733,
and an increase in unrealized losses on securities available for sale
of $9,920 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 $2,165,157 for the three months ending March
31, 2000, $225,977 or 11.7% higher than the three months ending March
31, 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 three months ending March 31, 2000 was
$913,239, $85,225 or 10.3% higher than the three months ending March
31, 1999. Interest on deposits increased by $85,349 or 10.4% over the
same period in 1999. This was the result of an overall increase in
deposits.
10
<PAGE>
Net Interest Income
-------------------
Net interest income for the three months ending March 31, 2000 was
$1,251,918, $140,752 or 12.7% higher than the three months ending March
31, 1999. This was the result of an increase in our earning assets. The
net interest margin declined slightly in the first quarter of 2000 to
5.12% from the average for 1999 of 5.21.
Other Income
------------
Total other income for the three months ending March 31, 2000 was
$203,159, $4,065 or 2.0% 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 three months ending March 31, 2000 were
$946,628, $64,996 or 7.4% higher than the three months ending March 31,
1999. Salary expense increased $9,366 or 2.0%, postage expense
increased $4,084 or 14.8%, furniture and equipment expense decreased by
$12,469 or 14.5%, ATM expense increased $19,673 or 63.4% and stationery
and supplies increased $9,270 or 27.8% over the same period in 1999.
Telephone costs were $28,144, an increase of 91.2%. The Bank
experienced a net recovery of $13,623 from overdrafts for the first
quarter. This compares to a $19,642 net chargeoff for the same period
of 1999. The net increase in other expenses is in part a result of
additional staffing to handle 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 67.25% for the first quarter of
1999 to 64.71% for the same period of 2000.
Net Income
----------
Net income for the three months ending March 31, 2000 was $292,733
compared to $236,488 in the same period in 1999. This is an increase of
$56,245 or 23.8% over the same period of 1999. The provision for income
taxes expense increased $10,176 from $132,140 in 1999 to $142,316 in
2000. The return on assets was 1.10% for the first three months of 2000
as compared to 1.09% for the year of 1999. For the first quarter of
2000 the return on equity was 12.23% up slightly from the 1999 annual
percent of 12.20%.
11
<PAGE>
Liquidity and Capital Resources
-------------------------------
The liquidity position in the past 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
March 31, 2000, the loan to deposit ratio was 78.47%.
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).
12
<PAGE>
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
constructed a permanent structure to house the branch office at
1014 South Main Street, Woodstock, Virginia, filed herein (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.
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 - N/A
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: March 31, 2000 /s/ Donald L. Unger
--------------------------------------
DONALD L. UNGER
PRINCIPAL EXECUTIVE OFFICER
DATE: March 31, 2000 /s/ Frederick A. Board
--------------------------------------
FREDERICK A. BOARD
PRINCIPAL FINANCIAL OFFICER
14
EXHIBIT 11
MARATHON FINANCIAL CORPORATION
Computation of Weighted Average Shares Outstanding and Earnings Per Share
Weighted Shares Outstanding End of Month
----------------------------------------
2000 1999
---- ----
January 2,049,409 2,063,605
February 2,051,441 2,063,365
March 2,051,441 2,060,602
--------- ---------
6,152,291 6,187,572
Divided by 3 months 3 months
-------- --------
Weighted Shares Outstanding 2,050,764 2,062,524
========= =========
Net Income $292,733 $236,488
======== ========
Net Income Per Share, Basic
And Assuming Dilution* $ .14 $ .11
===== =====
o See disclosure of computation at footnote #6 of financial statements
incorporated herein.
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 5,338,800
<INT-BEARING-DEPOSITS> 4,287
<FED-FUNDS-SOLD> 12,000,000
<TRADING-ASSETS> 0
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<INVESTMENTS-CARRYING> 6,242,215
<INVESTMENTS-MARKET> 6,052,311
<LOANS> 79,230,677
<ALLOWANCE> 802,138
<TOTAL-ASSETS> 112,473,801
<DEPOSITS> 101,990,512
<SHORT-TERM> 0
<LIABILITIES-OTHER> 513,884
<LONG-TERM> 216,411
0
0
<COMMON> 2,051,441
<OTHER-SE> 7,701,553
<TOTAL-LIABILITIES-AND-EQUITY> 112,473,801
<INTEREST-LOAN> 1,876,065
<INTEREST-INVEST> 158,861
<INTEREST-OTHER> 130,231
<INTEREST-TOTAL> 2,165,157
<INTEREST-DEPOSIT> 908,889
<INTEREST-EXPENSE> 913,239
<INTEREST-INCOME-NET> 1,251,918
<LOAN-LOSSES> 73,400
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 946,628
<INCOME-PRETAX> 435,049
<INCOME-PRE-EXTRAORDINARY> 435,049
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 292,733
<EPS-BASIC> .14
<EPS-DILUTED> .14
<YIELD-ACTUAL> 5.12
<LOANS-NON> 71,087
<LOANS-PAST> 909,320
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 769,410
<CHARGE-OFFS> 49,159
<RECOVERIES> 8,487
<ALLOWANCE-CLOSE> 802,138
<ALLOWANCE-DOMESTIC> 802,138
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
