<SUBMISSION>
<ACCESSION-NUMBER>0001002105-05-000009
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20050119
<ITEMS>2.02
<ITEMS>5.05
<ITEMS>9.01
<FILING-DATE>20050125
<DATE-OF-FILING-DATE-CHANGE>20050125
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>FIRST NATIONAL CORP /VA/
<CIK>0000719402
<ASSIGNED-SIC>6022
<IRS-NUMBER>541231965
<STATE-OF-INCORPORATION>VA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-23976
<FILM-NUMBER>05547728
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>100 WEST KING STREET
<CITY>STRASBURG
<STATE>VA
<ZIP>22657
<PHONE>7034659121
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>100 WEST KING STREET
<CITY>STRASBURG
<STATE>VA
<ZIP>22657
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form8kfnc.htm
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>FIRST NATIONAL CORPORATION</TITLE>
<META NAME="author" CONTENT="JAYOAK">
<META NAME="date" CONTENT="01/25/2005">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<P style="margin:0pt; font-family:Times New Roman; font-size:9pt; color:#FF0000" align=right><BR></P>
<hr size=6><BR>
<BR>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:12pt" align=center><B>UNITED STATES</B></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:12pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Washington, D.C. &nbsp;20549</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" align=center>___________</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:14pt" align=center><B>FORM 8-K</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CURRENT REPORT</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Date of Report (Date of earliest event reported): <B>January 19, 2005</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" align=center>___________</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; line-height:18pt; font-family:Times New Roman; font-size:16pt" align=center><B>FIRST NATIONAL CORPORATION</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Exact name of registrant as specified in its charter)</P>
<P style="margin:0pt; text-indent:72pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 align=center><TR><TD valign=top width=193><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Virginia</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(State or other jurisdiction</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>of incorporation)</P>
</TD><TD valign=top width=192 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>0-23976</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Commission File Number)</P>
</TD><TD valign=top width=192><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>54-1232965</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(IRS Employer</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Identification No.)</P>
</TD></TR>
<TR><TD valign=top width=193><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD valign=top width=192 colspan=2><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD><TD valign=top width=192><P style="margin:0pt; font-family:Times New Roman; font-size:11pt">&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=289 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>112 West King Street</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Strasburg, Virginia</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Address of principal executive offices)</P>
</TD><TD valign=top width=288 colspan=2><P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>22657</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Zip Code)</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Registrant&#146;s telephone number, including area code: <B>(540) 465-9121</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Not Applicable</B></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>(Former name or former address, if changed since last report)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:18pt; line-height:16pt; font-family:Wingdings; font-size:12pt">o</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:18pt; line-height:16pt; font-family:Wingdings; font-size:12pt">o</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:18pt; line-height:16pt; font-family:Wingdings; font-size:12pt">o</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; line-height:14pt; font-family:Wingdings; font-size:12pt"><FONT FACE="Times New Roman">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:18pt; line-height:16pt; font-family:Wingdings; font-size:12pt">o</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</P>
<P style="margin:0pt; padding-top:3pt; font-family:Times New Roman; font-size:12pt; border-top:3pt double #000000"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:9pt; color:#FF0000" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<P style="margin-top:0pt; margin-bottom:-16pt; line-height:16pt; font-family:Times New Roman; font-size:12pt"><B>Item 2.02</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Results of Operations and Financial Condition.</B></P>
<P style="margin:0pt; text-indent:-72pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">On January 21, 2005, the Registrant issued a press release reporting its financial results for the period ended December 31, 2004. &nbsp;A copy of the press release is being furnished as an exhibit to this report and is incorporated by reference into this Item 2.02.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; padding-left:72pt; text-indent:-72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Item 5.05</B></P>
<P style="margin:0pt; padding-left:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Amendments to the Registrant&#146;s Code of Ethics, or Waiver of a Provision of the Code of Ethics.</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">On January 19, 2005, the Registrant amended its Code of Ethics (and renamed it the Code of Conduct and Ethics). &nbsp;The amendments expand the scope of the code to incorporate existing conduct policies relating to the Registrant&#146;s primary operating subsidiary, First Bank, and to include the mechanics of the Registrant&#146;s whistle-blower procedures. &nbsp;While certain amendments relate to elements of the &#147;code of ethics&#148; definition under Securities and Exchange Commission regulations, the Registrant has not amended the substantive nature of those elements as they appeared in the Code of Conduct and Ethics prior to the amendments. &nbsp;A copy of the Code of Conduct and Ethics is being filed as an exhibit to this report and is incorporated by reference into this Item 5.05.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; line-height:16pt; font-family:Times New Roman; font-size:12pt"><B>Item 9.01</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Financial Statements and Exhibits.</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; text-indent:36pt; line-height:16pt; font-family:Times New Roman; font-size:12pt">(c)</P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Exhibits.</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:72pt; line-height:16pt; font-family:Times New Roman; font-size:12pt"><B><U>Exhibit No.</U></B></P>
<P style="margin:0pt; padding-left:72pt; text-indent:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Description</U></B></P>
<P style="margin:0pt; padding-left:72pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:180pt; text-indent:-108pt; line-height:16pt; font-family:Times New Roman; font-size:12pt">14.1</P>
<P style="margin:0pt; padding-left:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Code of Conduct and Ethics, as amended January 19, 2005</P>
<P style="margin:0pt; padding-left:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:72pt; line-height:16pt; font-family:Times New Roman; font-size:12pt">99.1</P>
<P style="margin:0pt; padding-left:72pt; text-indent:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Press Release dated January 21, 2005</P>
<BR>
<P style="margin-top:0pt; margin-bottom:12pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:12pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:9pt; color:#FF0000" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>SIGNATURES</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>FIRST NATIONAL CORPORATION </B></P>
<P style="margin:0pt; padding-left:144pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(Registrant)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:12pt">Date: &nbsp;January 24, 2005</P>
<P style="margin:0pt; padding-left:144pt; text-indent:36pt; line-height:16pt; font-family:Times New Roman; font-size:12pt">By:&nbsp;<U>/s/ M. Shane Bell&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>
<P style="margin:0pt; padding-left:144pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M. Shane Bell </P>
<P style="margin:0pt; padding-left:144pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Senior Vice President </P>
<P style="margin:0pt; padding-left:144pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and Chief Financial Officer</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<BR>
<P style="margin-top:0pt; margin-bottom:12pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:12pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:9pt; color:#FF0000" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>EXHIBIT INDEX</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; text-indent:18pt; line-height:16pt; font-family:Times New Roman; font-size:12pt"><U>Exhibit No.</U></P>
<P style="margin:0pt; text-indent:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><U>Description</U></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; text-indent:25.5pt; line-height:16pt; font-family:Times New Roman; font-size:12pt">14.1</P>
<P style="margin:0pt; text-indent:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Code of Conduct and Ethics, as amended January 19, 2005</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; text-indent:25.5pt; line-height:16pt; font-family:Times New Roman; font-size:12pt">99.1</P>
<P style="margin:0pt; text-indent:108pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Press Release dated January 21, 2005</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<BR>
<BR>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-14
<SEQUENCE>2
<FILENAME>ex14.htm
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>Exhibit 14.1</TITLE>
<META NAME="author" CONTENT="gayleh">
<META NAME="date" CONTENT="01/25/2005">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<BR>
<BR>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=right>Exhibit 14.1</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:16pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:24pt" align=center><img src="ex4002.gif" alt="[ex4002.gif]" align=middle height=67 width=56></P>
<P style="margin:0pt; line-height:26pt; font-family:Times New Roman; font-size:24pt" align=center>First National Corporation</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:24pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:24pt" align=center><BR></P>
<P style="margin:0pt; line-height:22pt; font-family:Times New Roman; font-size:20pt" align=center>Code of Conduct and Ethics</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">First National Corporation</P>
<P style="margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">Code of Conduct and Ethics</P>
<P style="margin:0pt; padding-left:324pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt" align=right>Page<B> </B>1 of 9</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Dear Fellow Employee:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">First National Corporation and its subsidiaries (&#147;Company&#148;) are committed to conducting business with integrity. &nbsp;At all times we will promote the best interests of our customers, shareholders and employees in an ethical and professional manner.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The Company operates under the following Code of Conduct and Ethics. &nbsp;You will also find a copy of the Code in your employee handbook. &nbsp;The Code is the cornerstone of our business. &nbsp;The success of our business depends on our ability to operate with honesty and trustworthiness. &nbsp;We must maintain the highest level of ethical standards.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Please take the time to read this material. &nbsp;The Code is broadly stated, and intends to provide a framework guiding you in exercising good judgment in all matters relating to the conduct of our business.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">I know you take seriously your role and responsibility as an employee of our Company. &nbsp;Please consider this Code carefully. &nbsp;I ask that you follow its guidance.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">FIRST NATIONAL CORPORATION</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Harry S. Smith</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">President &amp; CEO</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">First National Corporation</P>
<P style="margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">Code of Conduct and Ethics</P>
<P style="margin:0pt; padding-left:324pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt" align=right>Page<B> </B>2 of 9</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<BR>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B><U>Table of Contents</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Introduction &#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;.3</P>
<P style="margin:0pt; text-indent:258pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Standards &#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;4</P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;<I>Honest and Ethical Conduct</I></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>&nbsp;&nbsp;Full and Fair Disclosure</I></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>&nbsp;&nbsp;Compliance with Law</I></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>&nbsp;&nbsp;Reporting of Violations</I></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>&nbsp;&nbsp;Accountability</I></P>
<P style="margin:0pt; padding-left:81pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Investigations and Discipline &#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;.....8</P>
<P style="margin:0pt; padding-left:81pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Waivers and Amendments &#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;...9</P>
<P style="margin:0pt; padding-left:81pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Disclosures &#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;..9</P>
<P style="margin:0pt; padding-left:81pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Acknowledgements &#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;.9</P>
<P style="margin:0pt; padding-left:81pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; padding-left:81pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Certification &#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;10</P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">First National Corporation</P>
<P style="margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">Code of Conduct and Ethics</P>
<P style="margin:0pt; padding-left:324pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt" align=right>Page<B> </B>3 of 9</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<BR>
<P style="margin:0pt; padding-left:81pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>CODE OF CONDUCT AND ETHICS</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Introduction</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">First National
Corporation and its subsidiaries (&#147;Company&#148;) have always subscribed to the highest ethical
standards. &nbsp;Our employees, officers and members of our Board of Directors (&#147;Company Persons&#148;
 or individually, a &#147;Company Person&#148;) are expected to conduct business legally and ethically and
insist that our vendors and business associates do the same. &nbsp;This Code of Conduct and Ethics
 (the &#147;Code&#148;) embodies the Company&#146;s commitment to conduct our business in accordance
with applicable laws, rules and regulations and the highest ethical standards. &nbsp;All Company
Persons are expected to adhere to the principles, procedures and standards set forth in this Code.
&nbsp;Throughout the Code, the terms <I>&#147;Company,&#148; &#147;we,&#148; &#147;our,&#148;</I> and <I>&#147;us&#148;</I> are
 used to refer to the enterprise as a whole, to each person within it, and to any person who represents the Company or any part of the
First National Corporation organization.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Each Company Person will be held accountable for his adherence to the Code. &nbsp;Company Persons who violate the policies in the Code will be subject to disciplinary action, up to and including termination from the Company and, where appropriate, civil liability and criminal prosecution.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Company Persons who have questions regarding business conduct or possible violations should typically be directed to the Compliance Officer or an Executive Officer. &nbsp;In some instances it may be appropriate to contact the Company&#146;s President, who is the Administrator of this Code, or in connection with accounting or auditing matters, you should follow the procedures outlined in the section of the Code entitled &#147;Reporting Questionable Accounting or Auditing Matters.&#148; &nbsp;The Company strives for an environment where all concerns and complaints can be submitted by employees with the confidence they will be handled professionally and, to the extent possible, confidentially. &nbsp;The Company will not tolerate retaliation for reports made in good faith.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Each Company Person should also read and be familiar with the Company&#146;s Insider Trading Policy and guidelines for Conflicts of Interest. &nbsp;These policies and guidelines are separate documents from this Code and outline additional or critical expectations of each Company Person. &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Nothing in this Code, in any Company policies or procedures, or in other related communications (oral or written), creates or implies a contract of employment for a definite or indefinite term. &nbsp;The Company reserves the right to amend, alter or terminate this Code or the policies underlying it at any time for any reason.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">For purposes of Section 406 of the Sarbanes-Oxley Act and the rules promulgated thereunder, the Code shall also be our Code of Ethics for Executive and Senior Financial Officers.</P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">First National Corporation</P>
<P style="margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">Code of Conduct and Ethics</P>
<P style="margin:0pt; padding-left:324pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt" align=right>Page<B> </B>4 of 9</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Standards</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>Honest and Ethical Conduct Standard</I></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Confidential
Information</I>. &nbsp;In carrying out the Company&#146;s business, Company Persons often learn confidential
or proprietary information about the Company, its customers, prospective customers or other third parties.
&nbsp;Company Persons must maintain the confidentiality of all information so entrusted to them, except when
disclosure is authorized or legally mandated. &nbsp;Confidential or proprietary information includes, among
other things, any non-public information concerning the Company, including its businesses, financial
performance, pricing information, results or prospects, and any non-public information provided by a
 third party with the expectation that the information will be kept confidential and used solely for
the business purpose for which it was conveyed. &nbsp;Use or knowledge of confidential information
should be limited to only those Company Persons having a need to use such information for the sole purpose of carrying out the Company&#146;s business.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Conflicts of Interest. &nbsp;</I>This Code requires Company Persons to exercise honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interests between personal and professional relationships. &nbsp;Conflicts of interest are prohibited as a matter of Company policy. &nbsp;More detailed rules governing conflicts of interest are set forth in the Company&#146;s Conflict of Interest Policy for Directors and Executive Officers and the Employee Handbook.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Competition and Fair Dealing</I>. &nbsp;The Company has a history of succeeding through honest business competition. &nbsp;The Company seeks competitive advantages through superior performance, not through unethical or illegal business practices. &nbsp;Each Company Person should endeavor to respect the rights of and deal fairly with the Company&#146;s customers, vendors, competitors and employees. &nbsp;No Company Person should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any unfair dealing practices.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Protection and Proper Use of Company Assets</I>. &nbsp;All Company Persons should protect the Company&#146;s assets and ensure their efficient use. &nbsp;All Company assets should be used for legitimate Company business purposes only. &nbsp;Any suspected incident of fraud or theft should be immediately reported to an appropriate supervisor for investigation. &nbsp;The obligation of Company Persons to protect the Company&#146;s assets includes its confidential or proprietary information.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Equal Employment Opportunity and Harassment</I>. &nbsp;The Company is in compliance with all federal, state and local laws relating to equal employment opportunity to all qualified persons without regard to any impermissible criterion or circumstance. &nbsp;This policy applies to all terms and conditions of employment and in regard to any other matter that affects in any way the working environment of the employee. &nbsp;The Company does not tolerate or condone any type of discrimination prohibited by law, including harassment.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">First National Corporation</P>
<P style="margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">Code of Conduct and Ethics</P>
<P style="margin:0pt; padding-left:324pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt" align=right>Page<B> </B>5 of 9</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>Full and Fair Disclosure Standard</I></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Record Keeping</I>. &nbsp;The Company requires
 honest, accurate and prompt recording and reporting of information in order to make responsible business
 decisions and, as applicable, &nbsp;to provide full, fair, accurate, timely and understandable disclosure
 to the public. &nbsp;All of the Company&#146;s books, records, accounts and financial statements must be
 maintained in reasonable detail, must appropriately reflect the Company&#146;s transactions, and must
 conform both to applicable legal and accounting requirements and to the Company&#146;s system of internal
 controls. &nbsp;The accurate and timely reporting of our financial results and condition requires that all
financial information be recorded promptly and accurately, our systems are properly functioning for
recording and reporting that information, and those records and systems are subject to regular and thorough
evaluations. &nbsp;All information recorded or reported on behalf of the Company, whether for the Company&#146;s purposes
 or for use by third parties, must be done honestly and accurately. &nbsp;Providing false or misleading information in connection with any aspect of the Company&#146;s business or operations will not be tolerated.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Public Disclosure.</I> &nbsp;All disclosure in
reports and documents that the Company files with, or submits to, the Securities and Exchange
 Commission (&#147;SEC&#148;) and in other public communications made by the Company shall be full,
 fair, accurate, timely and understandable. &nbsp;All Company Persons who are involved in the
Company&#146;s disclosure process, including senior officers, are responsible for acting in
furtherance of this policy. &nbsp;In particular, these individuals are required to maintain
familiarity with the disclosure requirements applicable to the Company and are prohibited from
 knowingly misrepresenting, omitting, or causing others to misrepresent or omit material facts about the
Company to others, within or outside the Company, including the Company&#146;s independent auditors.
&nbsp;In addition, any Company Person who has a supervisory role in the Company&#146;s disclosure process
 has an obligation to perform his responsibilities diligently.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>Compliance with Law Standard</I></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Obeying the law, both in letter and in spirit, is one of the foundations on which the Company&#146;s ethical policies are built. &nbsp;All Company Persons must respect and comply with applicable governmental laws, rules and regulations (including insider-trading laws). &nbsp;It is the personal responsibility of each Company Person to adhere to the standards and restrictions imposed by those laws, rules and regulations. &nbsp;It is important that you seek advice from senior managers or other appropriate personnel if you have questions regarding the laws, rules and regulations that apply to the Company&#146;s business.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>Reporting of Violations Standard</I></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Company Persons should endeavor to identify and raise potential issues before they lead to problems and should ask about the application of the Code whenever in doubt. &nbsp;Any employee who becomes aware of any existing or potential violation of this Code should promptly notify the Compliance Officer or an Executive Officer. &nbsp;In connection with accounting or auditing matters, you should follow the procedures outlined in the </P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">First National Corporation</P>
<P style="margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">Code of Conduct and Ethics</P>
<P style="margin:0pt; padding-left:324pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt" align=right>Page<B> </B>6 of 9</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">following paragraph, &#147;Reporting Questionable Accounting or Auditing Matters.&#148; &nbsp;If any director or the Chief Executive Officer, Chief Financial Officer, or any person performing similar functions (the &#147;senior officers&#148;), becomes aware of any existing or potential violation of this Code, he or she should promptly notify the Chairman of the Audit Committee of the Board of Directors or the Company&#146;s legal counsel. &nbsp;The Company will take such disciplinary or preventive action as it deems appropriate to address any existing or potential violation of this Code brought to its attention.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Reporting Questionable Accounting or Auditing Matters.</i> &nbsp;
All Company Persons are responsible for reporting to the Company any
questionable situation regarding the Company&#146;s accounting or auditing matters, or a concern regarding fraudulent, negligent,
misleading or questionable accounting or auditing matters that come to their attention.  Any Company Person may report a complaint or
concern by either contacting the Compliance Officer or reporting the complaint or concern by calling the toll-free telephone hotline
and leaving a voice mail reporting the matter.  This phone call will be treated anonymously.  The toll-free number is listed in the
Company&#146;s internal phone directory and will also be made available by the Human Resources Department.  The toll-free hotline phone
number will be answered by the Company&#146;s internal audit firm.  The internal audit firm will promptly forward all information to the
Chairman of the Audit Committee of the Board of Directors. &nbsp;All complaints and concerns received by the Compliance Officer will
 also be promptly communicated to the Chairman of the Audit Committee.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">If a complaint regarding accounting or auditing matters is brought to the attention of the Chief Executive Officer, by either an employee or a third party outside of the confidential and anonymous submission process, that executive officer is required to report the complaint directly to the Chairman of the Audit Committee. &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The Audit Committee will respond to all allegations involving accounting or audit irregularities, unless the allegation is clearly without merit. &nbsp;All reports submitted by employees of the Company regarding questionable accounting or auditing matters will be treated, to the extent possible, as confidential.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Retaliation</I>. &nbsp;The Company will not tolerate retaliation against any person who in good faith submits a concern or complaint or participates in any investigation conducted pursuant to these procedures. &nbsp;Any suspected retaliation should be reported immediately to the Company&#146;s President. &nbsp;Such retaliation is considered serious misconduct and may result in disciplinary action, up to and including termination of the person engaging in any retaliatory action. &nbsp;Retaliation may also subject the person responsible to personal legal and financial liability, and in certain cases may be a criminal offense.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>Accountability Standard</I></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">This Code requires all Company Persons, including Executive and Senior Financial Officers, to maintain accountability for adherence to this Code. &nbsp;It is the responsibility of each Company Person to be familiar with this Code. &nbsp;The Audit Committee of the Board </P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">First National Corporation</P>
<P style="margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">Code of Conduct and Ethics</P>
<P style="margin:0pt; padding-left:324pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt" align=right>Page<B> </B>7 of 9</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">of Directors is expected to make every reasonable effort to ensure that each Company Person complies with the provisions of this Code.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Company Persons who violate this Code may be subject to discipline, up to and including, but not limited to, dismissal from employment. &nbsp;Any such action shall be reasonably designed to defer wrongdoing and to promote accountability for adherence to this Code.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Questions about any of the above standards should be addressed to the Compliance Officer or an Executive Officer.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Investigations and Discipline</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">The responsibility
for administering the Code, investigating alleged violations and determining corrective and disciplinary
action rests with various groups within the Company. &nbsp;The Audit Committee of the Board of Directors
is responsible for maintaining and updating the Code, subject to approval by the Board of Directors. &nbsp;
The Compliance Officer and the Executive Officers, and other relevant departments work together as
appropriate to promptly handle investigations and recommend corrective and disciplinary actions.
&nbsp;Depending on the circumstances, in some cases senior managers and other officers will be
involved to consider and determine the appropriate corrective or disciplinary action. &nbsp;The
Compliance Officer and Executive Officers will report Code violations and the corrective actions
taken to the Audit Committee of the Board of Directors. &nbsp;In some cases, the Audit Committee
or the full Board of Directors will be responsible to conduct the investigation and determine the actions to be taken. &nbsp;As
appropriate, outside consultants may participate in investigations.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Company Persons who violate the Code will be subject to disciplinary action up to and including termination. &nbsp;Violations of the Code are not the only basis for disciplinary action. &nbsp;The Company has additional guidelines and procedures governing conduct, and violations of those guidelines and procedures may also result in corrective or disciplinary action.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Protection for Persons Reporting Questionable Behavior.</I> &nbsp;Our commitment to promoting the highest ethical standards includes a responsibility to foster an environment that allows Company Persons to report violations <I>without the fear of retaliation or retribution</I>. &nbsp;You will not be disciplined, lose your job, or be retaliated against in any manner for asking questions or voicing concerns about our legal or ethical obligations, as long as you are acting in good faith. &nbsp;&#147;Good faith&#148; does not mean that you have to be right &#150; but it does mean that you believe that you are providing truthful information. &nbsp;It is important that you bring your question or concern to the Company&#146;s attention through one of the available channels.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Company Persons must never be discouraged from using any available channel within the organization. &nbsp;Even simple questioning of a person reporting a violation can lead to unintentional retaliation, as it may make that person feel that he or she did something </P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">First National Corporation</P>
<P style="margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">Code of Conduct and Ethics</P>
<P style="margin:0pt; padding-left:324pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt" align=right>Page<B> </B>8 of 9</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">wrong by choosing one method over another. &nbsp;Any person reporting a violation under this Code must be able to choose whichever method they are most comfortable with to communicate their concern to the Company.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Any Company Person who retaliates against another Company Person for reporting known or suspected violations of our legal or ethical obligations will be in violation of the Code and subject to disciplinary action, up to and including termination. &nbsp;Retaliation may also be a violation of the law and, as such, could subject both the individual offender and the Company to legal liability.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Waivers and Amendments</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">It may be appropriate for a provision of the Code to be waived in a particular circumstance. &nbsp;Any employee seeking a waiver should speak to his department head, who will likely need to involve other persons in consideration of the waiver request. &nbsp;Any waiver of the Code, other than for an executive officer (including any senior officer who is otherwise not an executive officer), must be approved by the Company&#146;s President.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Any waiver of the Code for an executive officer (including any senior officer who is otherwise not an executive officer) or any director of the Company must be made only by the Board of Directors or the Audit Committee and will be publicly disclosed in accordance with the applicable requirements of the SEC.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Amendments that apply to any of the Standards included in this Code will be publicly disclosed in accordance with the applicable requirements of the SEC.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Disclosures</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=justify>The Company will make a copy of this Code publicly available through the Company&#146;s internet site or as an exhibit to its Annual Report on Form 10-K.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=justify><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><U>Acknowledgements</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-14pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">________________________</P>
<P style="margin:0pt; text-indent:216pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Harry S. Smith</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">President &amp; CEO</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">________________________</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">M. Shane Bell</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Senior Vice President &amp; CFO</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">First National Corporation</P>
<P style="margin:0pt; padding-left:324pt; padding-bottom:3pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt; border-bottom:0.5pt solid #000000">Code of Conduct and Ethics</P>
<P style="margin:0pt; padding-left:324pt; text-indent:-324pt; line-height:10pt; font-family:Arial; font-size:8pt" align=right>Page<B> </B>9 of 9</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B><U>CERTIFICATION</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">I hereby acknowledge that I have read the Company&#146;s Code of Conduct and Ethics, have become familiar with its contents and will comply with its terms. &nbsp;As part of my review of the Code, I have received, reviewed and understand the Insider Trading Policy and the Employee Handbook that provides guidance for Conflicts of Interest. &nbsp;I agree to comply with the policies and procedures described therein for so long as I remain employed by the Company or in possession of material, non-public information gathered while at the Company.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Except to the extent set forth below after the signature block, I am not aware of any violation or potential violation of the Code.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">_________________________</P>
<P style="margin:0pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Name (please print)</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">_________________________</P>
<P style="margin:0pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Signature</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">_________________________</P>
<P style="margin:0pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Date</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Please describe any violations, potential violations or comments relating to the Code below:</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________</P>
<BR>
<BR>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>ex99.htm
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>Exhibit 99</TITLE>
<META NAME="author" CONTENT="Michele Rundstrom">
<META NAME="date" CONTENT="01/25/2005">
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<A NAME="sequence2"></A><P style="margin:0pt; font-family:Times New Roman; font-size:9pt; color:#FF0000" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right><B>Exhibit 99.1</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>FIRST NATIONAL CORPORATION</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Earnings Release</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>Fourth Quarter and Year Ended December 31,&nbsp;2004</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>January 21, 2005</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; font-size:12pt; border-bottom:1.5pt solid #000000"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">First National Corporation (OTCBB: FXNC) reported net income of $4.2&nbsp;million or $2.88 per basic and diluted share for the year ended December 31, 2004. &nbsp;This is a 27.4% increase over the $3.3 million net income for the year ended December 31, 2003 and a 29.1% increase over the $2.23 per basic and diluted share for the year ended&nbsp;December 31, 2003. &nbsp;The annualized return on average equity and average assets were 17.01% and 1.12%, respectively, for the&nbsp;year ended December 31, 2004, compared to 14.37% and 1.05%, respectively, for the&nbsp;year ended December 31, 2003.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">For the&nbsp;quarter ended December 31, 2004, net income was $1.2 million or $0.85 per basic and diluted share. &nbsp;This is a 37.1% increase over the $900 thousand net income and a 39.3% increase over the $0.61 per basic and diluted share for the three months ended December 31, 2003.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Net interest income</I> increased 21.2% from $11.0 million for the year ended&nbsp;December 31, 2003 to&nbsp;$13.3 million for the same period in 2004.&nbsp;&nbsp;The increase was directly related to&nbsp;a 21.1%&nbsp;increase in interest earning assets over the same period. &nbsp;The net interest margin increased&nbsp;to 3.84% for the year&nbsp;ended December 31, 2004 compared to 3.83% for the same period in 2003.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Noninterest income</I> increased 22.2% to $4.4 million for the year ended December 31, 2004 compared to $3.6 million for the same period in 2003. &nbsp;Service charges increased 14.7% to $2.7 million for the year&nbsp;ended December 31, 2004 compared to $2.3 million for 2003. &nbsp;This increase was attributable to growth in the number of noninterest-bearing demand deposits and related overdraft fees. &nbsp;Fees for other customer services increased 40.5% to $1.1 million for the year ended December 31, 2004 compared to $769 thousand for the same period in 2003.&nbsp;&nbsp;Transaction fees such as Visa check card, brokerage, and ATM fees&nbsp;contributed to this increase. &nbsp;Net gains on sale of premises and equipment totaled $387 thousand for the year ended December 31, 2004. &nbsp;The majority of this gain was comprised of a property sale in April 2004.</P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:9pt; color:#FF0000" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>(in thousands)</I></B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Noninterest income (unaudited)</B></P>
</TD><TD style="background-color:#EFEFEF" valign=top width=192 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Year Ended</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>12/31/04 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/03</B></P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Service charges</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;2,664&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;&nbsp;2,323&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Fees for other customer services</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>1,081&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>769&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Gains on sale of securities</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>-&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>69&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Gains (losses) on sale of premises and equipment</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>387&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>(49)</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Gains on sale of loans</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>172&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>372&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Other</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>127&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>141&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;Noninterest income</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;&nbsp;4,431&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;3,625&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>(in thousands</I></B><I>)</I></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Noninterest Income (unaudited</B>)</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=192 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Quarter Ended</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>12/31/04 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/03</B></P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Service charges</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;654&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;623&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Fees for other customer services</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>310&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>183&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Gains on sale of securities</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>-</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;53&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(Losses) on sale of premises and equipment</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>(48)</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>(50)</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Gains on sale of loans</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>38&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>22&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Other</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>75&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>130&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;Noninterest income</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;1,029&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;961&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Noninterest expense</I> increased 18.7% to $10.8 million for the year ended December 31, 2004 compared to $9.1 million for the same period in 2003. &nbsp;Salaries and employee benefits increased over the comparable period in 2003 as a result of salary increases and hiring additional employees to support business growth. Occupancy and equipment costs increased over the comparable period in 2003 as a result of retail branch expansions in Shenandoah County and the City of Winchester. &nbsp;Other expenses increased due to operating costs related to business growth.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>(in thousands)</I></B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Noninterest Expense (unaudited)</B></P>
</TD><TD style="background-color:#EFEFEF" valign=top width=192 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Year Ended</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>&nbsp;12/31/04 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/03</B></P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Salaries and employee benefits</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;5,224&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;4,538&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Occupancy</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>714&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>518&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Equipment</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>888&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>771&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Advertising</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>380&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>340&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Stationery and supplies</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>367&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>324&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Telecommunications</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>235&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>217&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Legal and professional fees</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>395&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>216&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Other</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>2,580&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>2,161&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;Noninterest expense</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;10,783&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;9,085&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:9pt; color:#FF0000" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>(in thousands</I>)</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Noninterest Expense (unaudited)</B></P>
</TD><TD style="background-color:#EFEFEF" valign=top width=192 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Quarter Ended</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>&nbsp;&nbsp;12/31/04 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/03</B></P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Salaries and employee benefits</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;1,352&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;1,107&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Occupancy</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>171&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>141&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Equipment</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>237&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>198&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Advertising</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>87&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>91&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Stationery and supplies</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>86&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>77&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Telecommunications</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>44&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>64&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Legal and professional fees</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>68&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>76&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Other</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>654&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>639&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;Noninterest expense</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;2,699&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;2,393&nbsp;</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Total assets</I>
increased 18.9% to $408.6 million at December 31, 2004 from $343.6 million at December 31, 2003. &nbsp;The
majority of the asset growth occurred in the loan portfolio. &nbsp;Loans, net of the allowance for loan
losses, increased 30.4% from $245.6 million at December 31, 2003 to $320.2 million at December 31, 2004.
 &nbsp;The allowance for loan losses totaled $2.9 million or 0.89% of total loans at December 31, 2004
compared to $2.5 million or 1.03% of total loans at December 31, 2003. &nbsp;Net charge-offs were $480
 thousand for the year ended December 31, 2004 compared to $320 thousand for the comparable period of
2003. &nbsp;The loan loss provision was $810 thousand for the year ended December 31, 2004 and $705
thousand for the comparable period of 2003. &nbsp;The allowance for loan losses has increased over the
last year, which is primarily attributable to the growth in the loan portfolio. &nbsp;The overall quality of the loan portfolio has improved, which is reflective in the ratio of allowance for loan
 losses to total loans at December 31, 2004.</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Total deposits</I> increased 15.5% or $43.1 million to $320.9 million at December 31, 2004 from $277.8 million at December 31, 2003. &nbsp;Noninterest-bearing demand deposits increased $12.9 million or 23.1% to $68.9 million at December 31, 2004 from $56.0 million at December 31, 2003, which contributed to 30.0% of the growth in total deposits. &nbsp;Other borrowings totaled $45.2 million at December 31, 2004 compared to $36.6 million at December 31, 2003.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>Shareholders&#146; equity</I> totaled $26.1 million at December 31, 2004, an increase of 11.1% over the December 31, 2003 balance of $23.5 million. &nbsp;The book value of the Corporation was $17.85 per share and the total common shares outstanding were 1,462,062 at December 31, 2004. &nbsp;Cash dividends paid during the year ended December 31, 2004 and 2003 were $0.82 per share and $0.77 per share, respectively.</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:9pt; color:#FF0000" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Selected Financial Information:</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>(in thousands, except per share data)</I></B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Selected Ratios (unaudited)</B></P>
</TD><TD style="background-color:#EFEFEF" valign=top width=192 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Year Ended </B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>&nbsp;12/31/04 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/03</B></P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Book value per share</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;17.85&nbsp;</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;16.08&nbsp;</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Dividends per share</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.82&nbsp;</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.77&nbsp;</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Return on average equity</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>17.01%</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>14.37%</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Return on average assets</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>1.12%</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>1.05%</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Net interest margin</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>3.84%</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>3.83%</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>(in thousands</I>)</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Balance Sheets (unaudited)</B></P>
</TD><TD style="background-color:#EFEFEF" valign=top width=192 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center>&nbsp;</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>&nbsp;&nbsp;12/31/04 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/03</B></P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Securities available for sale, at fair value</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp; &nbsp;&nbsp;63,366</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;70,895</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Loans held for sale</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>190</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>118</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Loans, net</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>320,197</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>245,591</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Total assets</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>408,577</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>343,557</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Deposits</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>320,945</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>277,828</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Other borrowings</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>45,240</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>36,555</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Company obligated mandatorily</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;redeemable capital securities</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=right><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>8,000</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman; font-size:12pt" align=right><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>3,000</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Shareholders&#146; equity</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>26,100</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>23,503</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>(<I>in thousands, except per share data</I>)</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Statements of Income (unaudited)</B></P>
</TD><TD style="background-color:#EFEFEF" valign=top width=192 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Year Ended</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;&nbsp;&nbsp;12/31/04 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/03</B></P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Interest and dividend income</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;20,520</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;17,738</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Interest expense</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>7,220</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>6,769</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Provision for loan losses</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>810</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>705</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Noninterest income</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>4,431</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>3,625</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Noninterest expense</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>10,783</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>9,085</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Provision for income taxes</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>1,932</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>1,503</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Net income</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,206</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,301</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Earnings per share, basic and diluted</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.88</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B><I>(in thousands, except per share data</I>)</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Statements of Income (unaudited)</B></P>
</TD><TD style="background-color:#EFEFEF" valign=top width=192 colspan=2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=center><B>Quarter Ended</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/04 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12/31/03</B></P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Interest and dividend income</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;$ &nbsp;&nbsp;&nbsp;5,552</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;4,489</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Interest expense</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>1,972</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>1,572</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Provision for loan losses</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>142</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>187</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Noninterest income</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>1,029</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>961</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Noninterest expense</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>2,699</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>2,393</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Provision for income taxes</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>534</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>398</P>
</TD></TR>
<TR><TD valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Net income</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;1,234</P>
</TD><TD valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;900</P>
</TD></TR>
<TR><TD style="background-color:#EFEFEF" valign=top width=367.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Earnings per share, basic and diluted</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.85</P>
</TD><TD style="background-color:#EFEFEF" valign=top width=96><P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt" align=right>$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.61</P>
</TD></TR>
</TABLE>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>
<P style="page-break-before:always; margin:0pt; font-family:Times New Roman; font-size:9pt; color:#FF0000" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Certain information in this discussion may include forward looking statements that are subject to risks and uncertainties. &nbsp;These forward looking statements include statements regarding our profitability, liquidity, allowance for loan losses, interest rate sensitivity, market risk, growth strategy, and financial and other goals. &nbsp;The words &#147;believes,&#148; &#147;expects,&#148; &#147;may,&#148; &#147;will,&#148; &#147;should,&#148; &#147;projects,&#148; &#147;contemplates,&#148; &#147;anticipates,&#148; &#147;forecasts,&#148; &#147;intends,&#148; or other similar words or terms are intended to identify forward looking statements.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">These forward looking statements are subject to significant uncertainties because they are based upon or are affected by certain factors. &nbsp;We have identified factors in our December 31, 2003 Annual Report on Form 10-KSB, which can be accessed from our website at <FONT COLOR=#0000FF><U>www.firstbank-va.com</U></FONT>.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Because of these uncertainties, our actual future results may be materially different from the results indicated by these forward looking statements. &nbsp;In addition, our past results of operations do not necessarily indicate our future results.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">First National Corporation, headquartered in Strasburg, Virginia, is the financial holding company of First Bank. &nbsp;First Bank operates nine retail bank branches in the Northern Shenandoah Valley Region of Virginia, including Shenandoah County, Warren County, Frederick County and the City of Winchester. &nbsp;First Bank also owns First Bank Financial Services, Inc., which invests in partnerships that provide investment services and title insurance.</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; line-height:16pt; font-family:Times New Roman; font-size:12pt">Contact:</P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">First National Corporation</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">M. Shane Bell</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">Senior Vice President &amp; CFO</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">sbell@firstbank-va.com</P>
<P style="margin:0pt; padding-left:36pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">(540) 465-9121</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<BR>
<BR>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>4
<FILENAME>ex4002.gif
<TEXT>
begin 644 ex4002.gif
M1TE&.#EA.`!#`/<`````````,P``9@``F0``S```_P`S```S,P`S9@`SF0`S
MS``S_P!F``!F,P!F9@!FF0!FS`!F_P"9``"9,P"99@"9F0"9S`"9_P#,``#,
M,P#,9@#,F0#,S`#,_P#_``#_,P#_9@#_F0#_S`#__S,``#,`,S,`9C,`F3,`
MS#,`_S,S`#,S,S,S9C,SF3,SS#,S_S-F`#-F,S-F9C-FF3-FS#-F_S.9`#.9
M,S.99C.9F3.9S#.9_S/,`#/,,S/,9C/,F3/,S#/,_S/_`#/_,S/_9C/_F3/_
MS#/__V8``&8`,V8`9F8`F68`S&8`_V8S`&8S,V8S9F8SF68SS&8S_V9F`&9F
M,V9F9F9FF69FS&9F_V:9`&:9,V:99F:9F6:9S&:9_V;,`&;,,V;,9F;,F6;,
MS&;,_V;_`&;_,V;_9F;_F6;_S&;__YD``)D`,YD`9ID`F9D`S)D`_YDS`)DS
M,YDS9IDSF9DSS)DS_YEF`)EF,YEF9IEFF9EFS)EF_YF9`)F9,YF99IF9F9F9
MS)F9_YG,`)G,,YG,9IG,F9G,S)G,_YG_`)G_,YG_9IG_F9G_S)G__\P``,P`
M,\P`9LP`F<P`S,P`_\PS`,PS,\PS9LPSF<PSS,PS_\QF`,QF,\QF9LQFF<QF
MS,QF_\R9`,R9,\R99LR9F<R9S,R9_\S,`,S,,\S,9LS,F<S,S,S,_\S_`,S_
M,\S_9LS_F<S_S,S___\``/\`,_\`9O\`F?\`S/\`__\S`/\S,_\S9O\SF?\S
MS/\S__]F`/]F,_]F9O]FF?]FS/]F__^9`/^9,_^99O^9F?^9S/^9___,`/_,
M,__,9O_,F?_,S/_,____`/__,___9O__F?__S/___P```!`0$"`@(#`P,$!`
M0%!04&!@8'!P<("`@)"0D*"@H+"PL,#`P-#0T.#@X/#P\/___P``````````
M````````````````````````````````````````````````````````````
M`````````````````````"P`````.`!#```(_P"O7;MV[=JU:]>N7;MV[=JU
M:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;N&#ATZ
M=.C07;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;LFZQJZ:]>N7;MV[=JU
M:]>N7;MV[=JU:]>N7;N&#ATZ=.BN7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=JU
M:]>N70OTQ`JK:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;N&#ATZ=.C07;MV[=JU
M:]>N7;MV[=JU:]>N7;MV[=JU:]>NL8+QATJ@:]>N7;MV[=JU:]>N7;MV[=JU
M:]>N7;MV#ATZ=.BN7?^[=NW:M6O7KEV[A@[=M6O7KEV[=NW:M6O76%FA\N>/
ME4#7H'/--==<<\TUUUQSS3777'/--==<<\TUZ%QS#3KHH'/--==<<\TUUUQS
M#3KHH(/.-==<<\TUUUQSS35[P(#''W_\00455K!RS3777'/--==<<\TUUUQS
MS3777'/--=>@<\TUZ%QSS3777'/--=>@<PTZZ*!SS3777'/--:M8`4@@5/SQ
MQQ]__/'''WY8P8H5@41SS3777'/--==<<\TUUUQSS37H7',-.M>@<\TUUUQS
MS377H'/-->B@@\XUUUQSS3DK^$$%-BK\\<<??_SQQQ];`*""'U0@<LTUUUS_
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M7'/--==<<\TUUUQSS3777'/--==<<TT@5/SQQQ]4J%#%'W_\$<,??U2A`A4Q
M4*%"%53\D4<5?_SQ!Q4`B?'GSQ\_*UA=NW8-W;5KUZY=NW;MVK5KUZZ=NW;-
M"I4_?_Y4P:;BSY\_>52H6$&ERI\\5?Y4J:("!I4_?_Y4`:"BRI\_?U2P0G?M
MVK5KUZY=NW;MVK5KUZY=N_]VA<J?/W]6````X,^?/U2J_/GSIPJ5&%6H5/F3
MIXJ**G_^J````$"5/W_^J&"%[MJU:]>N7;MV[=JU:]>N70M$Y<^?/RJP80,`
M`,`*%57^5%$!````$B0`````XT^5*BI4``````"`*G_^_%G!ZMJU:]>N7;MV
M[=JU:]>NL5+QY\\?%0``8`,``("*/W]4`""1I$V;-FW:)$%"`EN5/U6P`0``
M`````%7^_/%CY=JU:]>N7;MV[=JU:]>N6?'SYT\5;-BP`0```"K\484*`"31
M1AMMM-%&&VVTT48220!`Q1]5````````````?_SQ!Q6!7'/--==<@\XUUUQS
MS37_@5#QQQ]5`(`--M@`@`T`?U1A``EMM-%&&VVTT48;;;311AMM((&-"G^H
M`````````#8J_/'''U6P<LTUUUQSS3777'.--2O\\<<?*F"##38``(!-%7^H
M0$(;;;311AM(L,$&$FPDT48;;;21!#95_*$"````@`TVV%3QQQ]4!'+--=>@
M@\XUUUQS32!4_/%'%=A@@PTVV&"CPA]5`)!$&VVTT0825@1B12"!/)%$&VVT
MT08)`/Q1!0``````-MBH4,4??ZQ@S3777'/--==<<\T*?_SQAPK88`,```!@
M\T<5`"#11AMMM,&&%==<<\TUZ`0"0!MMM-%&&R2H\(<*_P!@@PTVV&!3Q1]_
M4!'(-==<@\XUZ%RS"A5__%$%``!@`P```*SP!PPDM-%&&VVPL0(KZ%QSS377
M!`)`&VVTT48;20!0114``(`--M@`H,(??_Q112O77'/-->A<<X4??_RA`C;8
M8`,```!0D0<`2+311AM)6,'*-==<<\TUZ`0"0!MMM-%&&VV0H,(?*@"`#3;8
M````%7_\004KUUR#SC77L%+%'W_\@0TVV&`#```J;%$%`&VTT48;2`3"RC77
M7'/--=<$`D`;;;311AMM(`%`'E0````VV```0!5__$%%.-=<<\TUUY1#Q1]_
M5($--M@`````*ORA`A)MM-%&&_]MD+`"*]=<<\TUZ`0"0!MMM-%&&VVT`4`5
M6V"##38``````'_\X8<5UZ"#SC77!$+%'W]4@0TVV&"##395^`%`$FVTT48;
M;0"D#1(KT:Y=NW8M$(`V;=JT:=.F#0D8>51@`P```#9L?_[\J<(*';IKUP)1
M^?-'!0``````P):G"H`D;=JT:=.F31LDLJY=NX8N$(`V;=JT:=.F31(`?U8`
M``````!L5?[\H<+J&KIKUZSX^?,'````````4/$G!HDV;=JT:=.F31LDK:Y=
MNW8M$(`V;=JT:=.F#1(`6Z@`````````5?[\H<+JVK5KUZK\^?,'````````
M4/%'!8G_-FW:M&G3IDT;)*RN7;N&+A"`-FW:M&G3IDT;`'FJ`````````%3^
M_*$2Z-HU=-96_/E3!0``;````%CQ1T62-FW:M&G3IDT;)+*N7;MV+1"`-FW:
MM&G3IDT;;%6H`````````"O^_*$BSC777--*%7_\\0<`````````4)&'`4BT
MT48;;;311AMM(,'*-==<@TX@`+311AMMM-%&&TF04,46`&"##0```*#"'W_X
M(<XUUUQS315__%$%`````````%2Q!0!)M-%&&VVTT48;;2#1RC777'--(`"T
MT48;;;311AMMD`!#'@!@@PTV``"@PA]_4!$(.M>@<TT5?_Q1_P4`````````
M4/&'`4BTT48;;;311AMM(,'*-==<@TX@`+311AMMM-%&&VV04,4?`&"##0``
M`+#"'W]0$<@UUZ!SC15^_%$%`-@``````%21!P!)M-%&&VVTT48;;2`ARS77
MH'--(`"TT48;;;311AMM`$!%%0!@@PTV``"@PA]_4,'*-==<<\T5?OSQ!S8`
M``````!0\8<!2;311AMMM-%&&VT@P<HUUUQS32``M-%&&VVTT48;;6!3Q1\`
M8(,-````L,(??U#!RC7HH(-.(%3\\0<`````````K/#'"B2TT48;;;311AMM
M(-'*-==<<TT@`+311AMMM-%&&VU@4_\%%0``@`TV``!`Q1]_4,'*-=>@<PXK
M5/SQAPH```````"H\`<5)+311AMMM-%&&VT@P<HUUUQS32``M-%&&VVTT48;
M26#S1Q788`,`-@``4,4??U1QS37H7',-*U3\\0<5`````````/!'%0"TT48;
M;;311AMM("'+-==<<TT@`+311AMMM-%&&TFH4$45V&`#`````%#%'WY8<<TU
MUUR##BM5_/%'%=@```````!`1178)-%&&VVTT48;;23!RC777'--(`"TT48;
M;;311ALDP/"'"@```````*CPQQ]4!'+--==<<\TY5OP!D#]_5```````@"I_
M5)!HTZ9-FS;_;=JL@';MVK5KI0"T:=.F39LV20!4R0,``````+!1^?.'BJ!K
MUZY=NW8M$)4_?U0````````5?ZH`:-.F39LV;=I4B7;MVK5KLP`D:=.F39LV
M20!LJ0(``````+!5^?.GBCETUZZANW:-%94_?ZH`````````5?X`0-*F39LV
M;$BPNG;MVK5KUP*1:-.F39LV`)S\40$``````%3\^>/'RK5KUZZANW;MFI4_
M?ZJH````````*OY4`9"D39LV5EA=NW;MVK5KUZX%>M*F39LD`+;\`0``````
M`*C\^4-%T+5KU]"A0X?N6B`J?_Y0`0````!L`/[\`9"D31LD5@)U_PG$)="5
M0%P"!9(!H$T;`#CQAPH``````-@`\,<??ZQ@S3777',-.NB@@PXK5?SQQQ\`
M````````H,(?5`"01!MMD$`""2200`()))!``@DDD)`$$@;\404V``````#9
MJ/#''U0$<LTUZ*"##CKHH'/--8%0\<<?5`````#88(--%7^H0$(2;;311AMM
MM-%&&VVTT48;;;2!!`!5_*$"`-@``````/SQQQ]4L'+-->B@@PXZZ*"#SC6L
MJ/#''W\`@`T`V&"#C0I__&$`"6VTT48;;;311AMMM-%&&VTD@0T5?U0!`#8`
M`````"K\\4<55EQS#3KHH(,..NB@@PXZZ/\$XL<??U2!#38``````"O\D8<!
M)+311AMMM-%&&VVTT48;26!3Q1]5`````-A@`P``?_SQ!Q6L7',-.NB@@PXZ
MZ*!SS37HL*+"'W_\H0(```"`#0``4/''%BH`D$0;;;311AMMM-$&"0!0\4<5
M``"`#3;88`-`%7_\X8<5Z%QSS37HH(,..NB@@PXZUUP3"!5__%$%````````
M``!0Q1]_J```"4DDT48;22`!@`%5_%$%````````V&"CPA]__%$%*^A<<\TU
MUZ"##CKHH(/.-==<TTH5?_SQ1Q788(,-`````(`*?_Q1A0K8`$`"-@`8H,(?
M?U2!#0````````#_J/#''W]0$<@UUUQSS37HH(,..NB@@PXZUUQS#2LJ_/''
M'U5@`P`````````J5/'''W]0H4(55?SQQQ\J`(`-`````````%3QQQ]46''-
M-==<<\TUUZ"##CKHH(/.-==<<\TU@5#QQQ]_J`````````````"@0A5_5+$"
M%7_\H0(V`````````(`-`%7\\0=`_E1A=>W:M6OHT*%#APX=.G3HKJ&[AN[:
M-2M4_OSY0P4;````````````-A5_J@``````-@``````H*+*GS]^5K"Z=NW:
M-73HT*%#APX=.G37KEU#=^W:M6M6J/SY\Z<*``````````!`E3]__OQ1_X$-
M&P``````4/'GSY\_*EA=NX;N&CITZ-"A0X<.'3ITUZY=NX8.';IKUJQ0^?/G
MSQ\J````P*:BRI\_?_[\^5-%!38`V%14^?/GSY\5K*Y=NW8-'3ITZ-"A0X<.
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MZ*"##CKHH(,..NB@@PXZZ*"#SC777'/--:P`L@(55/CQAQ]_^/&''U100845
M@K!R#3KHH(,..NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKHH(,..NB@@PXZ
MZ*"##CKHH',-*X&`8X455EAA!2"!L,+*-==<@PXZZ*"##CKHH(,..NB@@PXZ
MZ*"##CKHH(,..NB@@P[,.NB@@PXZZ*"##CKHH(,..NB@@PXZZ%QSS377G(,.
M.NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKHH(,.
M.NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKHH(,.
M.NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKHH(,.
I.NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKHH(,..NB@@PXZZ`0$`#L_
`
end

</TEXT>
</DOCUMENT>
</SUBMISSION>
