<SUBMISSION>
<ACCESSION-NUMBER>0001002105-05-000201
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20051021
<ITEMS>2.02
<ITEMS>9.01
<FILING-DATE>20051021
<DATE-OF-FILING-DATE-CHANGE>20051021
<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>051148864
</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>fncform8k.htm
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>First National Corporation</TITLE>
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<BR>
<BR>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:11pt" align=center><B>UNITED STATES</B></P>
<P style="margin:0pt; line-height:16pt; font-family:Times New Roman; font-size:11pt" align=center><B>SECURITIES AND EXCHANGE COMMISSION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" 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:11pt" align=center><B>FORM 8-K</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:11pt" align=center><B>CURRENT REPORT</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" 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:11pt"><BR></P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=center>Date of Report (Date of earliest event reported): <B>October 21, 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:11pt" 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:11pt" 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:11pt" 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:11pt" 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:11pt" align=center><B>112 West King Street</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" 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:11pt" 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:11pt" align=center><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" 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:11pt" 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:11pt"><BR></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">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:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:18pt; line-height:16pt; font-family:wingdings; font-size:11pt">o</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">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:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:18pt; line-height:16pt; font-family:wingdings; font-size:11pt">o</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">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:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:18pt; line-height:16pt; font-family:wingdings; font-size:11pt">o</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; padding-left:18pt; line-height:16pt; font-family:wingdings; font-size:11pt">o</P>
<P style="margin:0pt; padding-left:18pt; text-indent:18pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</P>
<BR>
<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>
<BR>
<BR>
<P style="page-break-before:always; margin-top:0pt; margin-bottom:-16pt; line-height:16pt; font-family:Times New Roman; font-size:11pt"><B>Item 2.02</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:11pt"><B>Results of Operations and Financial Condition.</B></P>
<P style="margin:0pt; text-indent:-72pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">On October 21, 2005, the Registrant issued a press release reporting its financial results for the period ended September 30, 2005. &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:11pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; line-height:16pt; font-family:Times New Roman; font-size:11pt"><B>Item 9.01</B></P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:11pt"><B>Financial Statements and Exhibits.</B></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; text-indent:36pt; line-height:16pt; font-family:Times New Roman; font-size:11pt">(c)</P>
<P style="margin:0pt; text-indent:72pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">Exhibits. &nbsp;The following exhibit is being furnished pursuant to Item 2.02 above. &nbsp;</P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; text-indent:72pt; line-height:16pt; font-family:Times New Roman; font-size:11pt"><B><U>Exhibit No.</U></B></P>
<P style="margin:0pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:11pt"><B><U>Description</U></B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; text-indent:90pt; line-height:16pt; font-family:Times New Roman; font-size:11pt">99.1</P>
<P style="margin:0pt; text-indent:180pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">Press Release dated October 21, 2005</P>
<BR>
<P style="margin-top:0pt; margin-bottom:11pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:11pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<BR>
<BR>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:12pt" align=center>- 2 -</P>
<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>
<BR>
<BR>
<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" align=center><B>SIGNATURES</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; text-indent:36pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">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:11pt"><BR></P>
<P style="margin:0pt; padding-left:189pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; padding-left:189pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">FIRST NATIONAL CORPORATION </P>
<P style="margin:0pt; padding-left:189pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">(Registrant)</P>
<P style="margin:0pt; padding-left:189pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-13pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Date: &nbsp;October 21, 2005</P>
<P style="margin:0pt; text-indent:189pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">By: <U>&nbsp;/s/ M. Shane Bell</U></P>
<P style="margin:0pt; padding-left:216pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">M. Shane Bell </P>
<P style="margin:0pt; padding-left:216pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">Executive Vice President </P>
<P style="margin:0pt; padding-left:216pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">and Chief Financial Officer</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<BR>
<P style="margin-top:0pt; margin-bottom:11pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:11pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<BR>
<BR>
<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>
<BR>
<BR>
<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" align=center><B>EXHIBIT INDEX</B></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" 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:11pt"><U>Exhibit No.</U></P>
<P style="margin:0pt; text-indent:108pt; line-height:14pt; font-family:Times New Roman; font-size:11pt"><U>Description</U></P>
<P style="margin:0pt; text-indent:18pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-16pt; text-indent:36pt; line-height:16pt; font-family:Times New Roman; font-size:11pt">99.1</P>
<P style="margin:0pt; text-indent:108pt; line-height:14pt; font-family:Times New Roman; font-size:11pt">Press Release dated October 21, 2005</P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<P style="margin-top:5pt; margin-bottom:5pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<BR>
<BR>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>ex99.htm
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>Exhibit 99.1</TITLE>
</HEAD>
<BODY style="line-height:12pt; font-size:10pt; color:#000000">
<P style="margin-top:4.6pt; margin-bottom:4.6pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right><B>EXHIBIT 99.1</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt">&nbsp;&nbsp;&nbsp;</P>
<P style="margin-top:0pt; margin-bottom:-26pt; line-height:26pt; font-family:Times New Roman; font-size:24pt">&nbsp;&nbsp;<img src="fncform8k002.gif" alt="[fncform8k002.gif]" align=top></P>
<BR><BR>
<P style="margin:0pt; text-indent:216pt; line-height:14pt; font-family:Times New Roman; font-size:24pt"><SMALL><SMALL>&nbsp;</SMALL></SMALL></P>
<P style="margin:0pt; line-height:20pt; ffont-family:Times New Roman; font-size:18pt">F<SMALL>IRST<BIG> N<SMALL>ATIONAL</SMALL></P>
<P style="margin:0pt; line-height:20pt; ffont-family:Times New Roman; font-size:18pt">C<SMALL>ORPORATION</SMALL></P>
<P style="margin:0pt; font-family:Times New Roman; font-size:12pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-13pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"><I>Contact: &nbsp;</I>M. Shane Bell, EVP/CFO</P>
<P style="margin:0pt; text-indent:495pt; font-family:Times New Roman; font-size:11pt"><BR></P>
<P style="margin-top:0pt; margin-bottom:-13pt; line-height:13pt; font-family:Times New Roman; font-size:11pt; color:#0000FF">sbell@firstbank-va.com</P>
<P style="margin:0pt; line-height:13pt; font-family:Times New Roman; font-size:11pt" align=right><B>News Release</B></P>
<P style="margin-top:0pt; margin-bottom:-10pt; line-height:13pt; font-family:Times New Roman; font-size:11pt">(540) 465-9121</P>
<P style="margin:0pt; padding-bottom:3pt; line-height:13pt; font-family:Times New Roman; font-size:11pt"align=right>October 21, 2005</P>
<P style="margin:0pt; padding-bottom:3pt; font-family:Times New Roman; font-size:11pt; 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:13pt; font-family:Times New Roman; font-size:11pt" align=center><B>FIRST NATIONAL CORPORATION ANNOUNCES 60% INCREASE IN THIRD QUARTER EARNINGS</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:11pt" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman">FOR IMMEDIATE RELEASE (Strasburg, Virginia) --- First National Corporation (OTCBB: FXNC) reported third quarter earnings of $1.6 million or $0.55 per basic and diluted share. &nbsp;This is a 60.1% increase compared to earnings of $1.0 million or $0.35 per basic and diluted share for the third quarter of 2004. &nbsp;This was a result of growth in the loan portfolio and significant improvements in the net interest margin and operating efficiency. &nbsp;Return on assets was 1.41% compared to 1.05% in 2004 and return on equity was 22.71% compared to 16.14% the same quarter a year ago.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">Net interest income increased 25.2% to $4.3 million for the third quarter of 2005 compared to $3.4 million for the third quarter of 2004. &nbsp;This increase was primarily attributable to an 18.6% increase in average interest-earning assets and a 19 basis point increase in the net interest margin to 4.04% for the third quarter of 2005, compared to 3.85% for the same period of 2004. &nbsp;Increasing interest rates over the last twelve months combined with an asset sensitive balance sheet had a positive impact on the net interest margin when comparing the periods.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">Noninterest income increased 22.8% to $1.3 million for the third quarter of 2005 compared to $1.0 million for the same period in 2004. &nbsp;Fees for other customer services increased to $405 thousand for the third quarter of 2005, compared to $279 thousand for the same period in 2004. &nbsp;This was a result of an increase in ATM and check card fees and the addition of the Trust and Asset Management Department in 2005. &nbsp;Noninterest expense increased 9.5% to $3.0 million for the third quarter of 2005 compared to $2.7 million for the same period in 2004. &nbsp;&nbsp;Salaries and employee benefits increased 19.8% over the comparable period in 2004 as a result of salary increases and the addition of the trust department.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">Asset quality improved in the third quarter of 2005. &nbsp;Nonperforming assets decreased in the third quarter and nonaccrual loans remained at a relatively low level. &nbsp;Net charge-offs were $15 thousand for the third quarter of 2005, compared to $107 thousand for the comparable period of 2004. &nbsp;These improvements resulted in a lower loan loss provision of $169 thousand for the third quarter of 2005 compared to $220 thousand for the same period in 2004. &nbsp;The allowance for loan losses totaled $3.4 million or 0.92% of total loans at September 30, 2005, compared to $2.9 million or 0.94% of total loans at September 30, 2004. &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">For the nine months ended September 30, 2005, net income was $4.0 million or $1.35 per basic and diluted share. This is a 33.2% increase over the $3.0 million in net income or $1.02 per basic and diluted share for the same period in 2004. &nbsp;Return on assets was 1.22% compared to 1.08% in 2004 and return on equity was 19.44% compared to 16.30% in 2004.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">Net interest income increased 22.1% to $11.9 million for the nine months ended&nbsp;September 30, 2005 from $9.7 million for the same period in 2004.&nbsp;&nbsp;The increase was primarily attributable to&nbsp;an 18.7%&nbsp;increase in average interest-earning assets over the same period. &nbsp;The net interest margin increased 11 basis points to 3.94% for the nine months ended September 30, 2005, compared to 3.83% for the same period in 2004.</P>
<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">Noninterest income decreased slightly to $3.3 million for the nine months ended September 30, 2005, compared to $3.4 million for the same period in 2004. &nbsp;This decrease was a result of the sale of property in 2004 which generated a gain of $454 thousand. &nbsp;This decrease was offset by an increase in fees for other customer services. &nbsp;Noninterest expense increased 8.0% to $8.7 million for the nine months ended September 30, 2005, compared to $8.1 million for the same period in 2004. &nbsp;This was a result of an increase in salaries and employee benefits. &nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">&nbsp;</P>
<P style="margin:0pt; font-family:Times New Roman">The Company notes to investors that past results of operations do not necessarily indicate future results. &nbsp;Certain factors that affect the Company&#146;s operations and business environment are subject to uncertainties that could in turn affect future results. &nbsp;These factors are identified in the Quarterly Report on Form 10-Q for the period ended June 30, 2005, which can be accessed from the Company&#146;s website at <FONT COLOR=#0000FF><U>www.firstbank-va.com</U></FONT>.</P>
<P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman">First National Corporation, headquartered in Strasburg, Virginia, is the financial holding company of First Bank. First Bank is a full service community bank offering traditional banking, trust and investment services from 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>

<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:11pt"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0 border=0><TR><TD valign=top width=331.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman"><B>QUARTERLY PERFORMANCE SUMMARY</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman"><B>First National Corporation (OTCBB: FXNC)</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman"><I>(in thousands, except share and per share data)</I></P>
</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2>&nbsp;</TD><TD valign=top width=186.8 colspan=2><P style="margin:0pt; font-family:Times New Roman" align=center><B>For the Three Months Ended</B></P>
</TD><TD valign=top colspan=2><P style="margin:0pt; font-family:Times New Roman" align=center><B>For the Nine Months Ended</B></P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman"><B>INCOME STATEMENT</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2005</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2004</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2005</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2004</B></P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Interest and dividend income</P>
</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Interest and fees on loans</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 6,158 </P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;4,623</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 16,870</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ 12,950 </P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Interest on federal funds sold</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>5</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>6</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>14</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>10</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Interest on deposits in banks</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>20</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>10</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>55</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>20</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Interest and dividends on securities available for sale:</P>
</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Taxable interest</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>523</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>486</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>1,545</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>1,630</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Nontaxable interest</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>100</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>97</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>308</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>293</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Dividends</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>30</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>31</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;104</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>65</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Total interest and dividend income</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 6,836</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;5,253</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 18,896</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ 14,968</P>
</TD></TR>
<TR><TD valign=top width=331.2>&nbsp;</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Interest expense</P>
</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Interest on deposits</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 1,891</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;1,224</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 4,972</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;3,617</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Interest on federal funds purchased</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>28</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>8</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>94</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>33</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">&nbsp;&nbsp;Interest on company obligated mandatorily redeemable capital securities</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>129</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>88</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>356</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman"><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=right>162</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Interest on other borrowings</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;504</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>512</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;1,608</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;1,436</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Total interest expense</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 2,552 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;1,832</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 7,030</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;5,248 </P>
</TD></TR>
<TR><TD valign=top width=331.2>&nbsp;</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Net interest income</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 4,284 </P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;3,421</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 11,866</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;9,720</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Provision for loan losses</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;169</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>220</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;580</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>668</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Net interest income after provision for loan losses</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 4,115</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;3,201</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 11,286</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;9,052</P>
</TD></TR>
<TR><TD valign=top width=331.2>&nbsp;</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Noninterest income</P>
</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Service charges</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;&nbsp;676</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;688</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 1,922</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;2,010 </P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Fees for other customer services</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>405</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>279</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>1,035</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>771</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Gains (losses) on sale of premises and equipment</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>1</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>--</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>(10)</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>435</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Gains on sale of loans</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>112</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>37</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>223</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>134</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Gains on sale of securities</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>--</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>--</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>18</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>--</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Other</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>73</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>28</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>99</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>52</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Total noninterest income</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 1,267</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;1,032</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 3,287</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;3,402 </P>
</TD></TR>
<TR><TD valign=top width=331.2>&nbsp;</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Noninterest expense</P>
</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Salaries and employee benefits</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 1,602 </P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;1,337</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 4,713</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;3,872 </P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Occupancy</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>178</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>186</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>535</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>543</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Equipment</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>258</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>223</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>705</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>651</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Advertising</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>83</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>93</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>228</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>293</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Stationery and supplies</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>114</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>99</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>304</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>281</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Other</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;759</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>795</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;2,247</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;2,444</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Total noninterest expense</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 2,994 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;2,733</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 8,732</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;8,084 </P>
</TD></TR>
<TR><TD valign=top width=331.2>&nbsp;</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Income before income taxes</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 2,388 </P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;1,500</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 5,841</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;4,370 </P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Provision for income taxes</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;777</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>494</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;1,883</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;1,398</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Net income</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ 1,611 </P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;1,006</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 3,958</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;2,972 </P>
</TD></TR>
<TR><TD valign=top width=331.2>&nbsp;</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman"><B>SHARE AND PER SHARE DATA </B><SUP>(1)</SUP></P>
</TD><TD valign=top width=90.8>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD><TD valign=top width=89.2>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Net income, basic and diluted</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;0.55</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ 0.35</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;1.35</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ 1.02</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Shares outstanding at period end</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>2,922,860</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>2,924,124</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>2,922,860</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>2,924,124</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Weighted average shares, basic and diluted</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>2,922,860</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>2,924,124</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>2,923,587</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>2,924,124</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Book value at period end</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;9.82</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ 8.68 </P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;9.82</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ 8.68</P>
</TD></TR>
<TR><TD valign=top width=331.2><P style="margin:0pt; font-family:Times New Roman">Cash dividends</P>
</TD><TD valign=top width=90.8><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;0.11</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ 0.10</P>
</TD><TD valign=top width=89.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;0.33</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ 0.30</P>
</TD></TR>
</TABLE>

<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"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=top width=335><P style="margin:0pt; line-height:14pt; font-family:Times New Roman"><B>QUARTERLY PERFORMANCE SUMMARY</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman"><B>First National Corporation (OTCBB: FXNC)</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman"><I>(in thousands, except share and per share data)</I></P>
</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD valign=top width=188.2 colspan=2><P style="margin:0pt; font-family:Times New Roman" align=center><B>For the Three Months Ended</B></P>
</TD><TD valign=top width=188.933 colspan=2><P style="margin:0pt; font-family:Times New Roman" align=center><B>For the Nine Months Ended</B></P>
</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2005</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2004</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2005</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2004</B></P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman"><B>KEY PERFORMANCE RATIOS </B></P>
</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Return on average assets</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>1.41%</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>1.05%</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>1.22%</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>1.08%</P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Return on average equity</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>22.71%</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>16.14%</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>19.44%</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>16.30%</P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Net interest margin</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>4.04%</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>3.85%</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>3.94%</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>3.83%</P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Efficiency ratio <SUP>(2)</SUP></P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>53.23%</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>60.46%</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>56.87%</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>60.67%</P>
</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman"><B>ASSET QUALITY</B></P>
</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Loan charge-offs</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;&nbsp;70</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>$ 127</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>$ 247</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;389</P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Loan recoveries</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>55</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>20</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>166</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>54</P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Net charge-offs</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>15</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>107</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>81</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>335</P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Nonaccrual loans</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>266</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>183</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>266</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>183</P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Nonperforming assets</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>304</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>536</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>304</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>536</P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Repossessed assets</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>38</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>83</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>38</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>83</P>
</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman"><B>AVERAGE BALANCES</B></P>
</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Total assets</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 451,985</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;&nbsp;382,414</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;&nbsp;434,174</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>$ 367,220</P>
</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Total shareholders&#146; equity</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>28,141</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>24,799</P>
</TD><TD valign=top width=92.933><P style="margin:0pt; font-family:Times New Roman" align=right>27,221</P>
</TD><TD valign=top width=96><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;24,361</P>
</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2005</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2004</B></P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman"><B>CAPITAL RATIOS</B></P>
</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Tier 1 Capital</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 36,684</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;32,895</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Total Capital</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>40,058</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>35,775</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Total Capital to Risk Weighted Assets</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>10.75%</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>11.37%</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Tier 1 Capital to Risk Weighted Assets</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>9.85%</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>10.46%</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Leverage Ratio</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>8.12%</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>8.60%</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman"><B>BALANCE SHEET</B></P>
</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Cash and due from banks</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 12,322</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>$ 6,896 </P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Interest-bearing deposits in banks</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>685</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>951</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Federal funds sold</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>2,321</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>7,461</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Securities available for sale, at fair value</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>62,584</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>58,034</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Loans, net of allowance for loan losses</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>361,758</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>303,263</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Premises and equipment, net</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>13,168</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>11,728</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Interest receivable</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>1,515</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>1,226</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Other assets</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;3,856</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;3,709</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Total assets</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 458,209 </P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>$ 393,268 </P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Noninterest-bearing demand deposits</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 85,053 </P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;74,166</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Savings and interest-bearing demand deposits</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>147,625</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>127,544</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Time deposits</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;139,673 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;110,915</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Total deposits</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 372,351 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>$ 312,625 </P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Other borrowings</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 47,227</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;45,245</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Company obligated mandatorily redeemable capital securities</P>
</TD><TD valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>8,248</P>
</TD><TD valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>8,248</P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">Accrued expenses and other liabilities</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;1,677 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;1,760 </P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Total liabilities</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=96.2><P style="margin:0pt; font-family:Times New Roman" align=right>$ 429,503 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=92><P style="margin:0pt; font-family:Times New Roman" align=right>$ 367,878 </P>
</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
<TR><TD valign=top width=335>&nbsp;</TD><TD valign=top width=96.2>&nbsp;</TD><TD valign=top width=92>&nbsp;</TD><TD valign=top width=92.933>&nbsp;</TD><TD valign=top width=96>&nbsp;</TD></TR>
</TABLE>

<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"><BR></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD valign=top width=391.2><P style="margin:0pt; line-height:14pt; font-family:Times New Roman"><B>QUARTERLY PERFORMANCE SUMMARY</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman"><B>First National Corporation (OTCBB: FXNC)</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman"><I>(in thousands, except share and per share data)</I></P>
</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2005</B></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=center><BR></P>
<P style="margin:0pt; font-family:Times New Roman" align=center><B>9/30/2004</B></P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman"><B>BALANCE SHEET <I>(</I></B><I>continued</I><B><I>)</I></B></P>
</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Common stock</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;3,653</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>$ 3,655</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Surplus</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>1,465</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>1,465</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Retained earnings</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>23,655</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>19,775</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Accumulated other comprehensive income (loss), net</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;(67)</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;495</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Total shareholders&#146; equity</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>$ 28,706</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>$ 25,390</P>
</TD></TR>
<TR><TD valign=top width=391.2>&nbsp;</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Total liabilities and shareholders&#146; equity</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;458,209</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;393,268 </P>
</TD></TR>
<TR><TD valign=top width=391.2>&nbsp;</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman"><B>LOAN DATA</B></P>
</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Mortgage loans on real estate:</P>
</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Construction</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>$ 42,289 </P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>$ 37,425</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Secured by farm land</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>2,195</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>2,309</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Secured by 1-4 family residential</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>98,580</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>91,238</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">&nbsp;&nbsp;Other real estate loans</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>143,871</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>104,157</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Loans to farmers (except those secured by real estate)</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>1,911</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>389</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Times New Roman">Commercial and industrial loans (except those secured by real estate)</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>40,851</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>36,612</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Consumer installment loans</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>30,058</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>31,893</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Deposit overdrafts</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>280</P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>259</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">All other loans</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;5,097</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;1,861</P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman"><B>&nbsp;&nbsp;</B>Total loans</P>
</TD><TD valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;365,132 </P>
</TD><TD valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;306,143 </P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Allowance for loan losses</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;3,374 </P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>&nbsp;&nbsp;&nbsp;2,880 </P>
</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; font-family:Times New Roman">Loans, net</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=108><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;361,758 </P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=90><P style="margin:0pt; font-family:Times New Roman" align=right>$ &nbsp;&nbsp;303,263 </P>
</TD></TR>
<TR><TD valign=top width=391.2>&nbsp;</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2>&nbsp;</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt">(1) Share and per share data for prior periods have been restated to give retroactive effect of the Company&#146;s two-for-one stock split declared March 18, 2005. &nbsp;The stock split was payable on April 29, 2005 to shareholders of record March 30, 2005.</P>
</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2>&nbsp;</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</TD></TR>
<TR><TD valign=top width=391.2><P style="margin:0pt; line-height:10pt; font-family:Times New Roman; font-size:8pt">(2) The efficiency ratio is computed by dividing noninterest expense by the sum of net interest income on a tax equivalent basis and noninterest income excluding securities gains and losses. &nbsp;This is a non-GAAP financial measure that we believe provides investors with important information regarding operational efficiency. &nbsp;Such information is not in accordance with generally accepted accounting principles (GAAP) and should not be construed as such. &nbsp;Net interest income on a tax equivalent basis was $4,358 and $3,488 for the three
 months ended September 30, 2005 and 2004, respectively and $12,086 and $9,923 for the nine months ended September 30, 2005 and 2003, respectively. &nbsp;Noninterest income excluding securities gains and losses was $1,268 and $1,032 for the three months ended September 30, 2005 and 2004, respectively and $3,269 and $3,402 for the nine months ended Septemb
er 30, 2005 and 2004, respectively. &nbsp;Management believes such financial information is meaningful to the reader in understanding operational performance, but cautions that such information not be viewed as a substitute for GAAP. </P>
</TD><TD valign=top width=108>&nbsp;</TD><TD valign=top width=90>&nbsp;</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; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>FIRST NATIONAL CORPORATION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Consolidated Average Balances, Yields and Rates</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Three Months Ended September 30, 2005 and 2004</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>(dollars in thousands)</I></P>
<TABLE style="font-size:10pt" cellspacing=0 border=0>
<TR><td>&nbsp;</td>
<TD valign=top colspan=7><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Three months ended September 30,</P>
</TD></TR>
<TR><TD valign=top width=187.867>&nbsp;</TD><TD valign=top width=174.133 colspan=4><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>2005</P>
</TD><TD valign=top width=179.867 colspan=3><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>2004</P>
</TD></TR>
<TR><TD valign=top width=187.867>&nbsp;</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Interest</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Interest</P>
</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; font-family:CG Times; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">ASSETS</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Average</P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Balance</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Income/</P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Expense</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Yield/</P>
<P style="margin:0pt; font-family:CG Times; font-size:9pt" align=center>Rate (3)</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Average</P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Balance</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Income/</P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Expense</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Yield/</P>
<P style="margin:0pt; font-family:CG Times; font-size:9pt" align=center>Rate (3)</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Balances at correspondent</P>
</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;banks &#150; interest-bearing</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ 690 </P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;20</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>11.33%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;1,385</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;9</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2.65%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Securities:</P>
</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Taxable</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>54,246</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>553</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.04%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>49,837</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>517</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.13%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Tax-exempt (1)</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>9,545</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>151</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;6.30%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>8,951</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>147</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;6.53%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Total securities</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>63,791</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>704</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.38%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>58,788</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>664</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>4.50%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; font-family:CG Times; font-size:9pt">Loans: (2)</P>
</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Taxable</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>359,057</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6,114</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6.76%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>295,477</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>4,588</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6.18%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Tax-exempt (1)</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3,436</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;67</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;7.73%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3,341</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;53</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;6.26%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Total loans</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>362,493</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6,181</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6.76%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>298,818</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>4,641</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6.18%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Federal funds sold</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>662</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>5</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.89%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,722</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>7</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1.50%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;Total earning assets</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>427,636</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6,910</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;6.41%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>360,713</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>5,321</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>5.87%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Less: allowance for loan losses</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>(3,307)</P>
</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>(2,844)</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Total nonearning assets</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;27,656</P>
</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;24,545</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;&nbsp;Total assets</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">$ &nbsp;&nbsp;451,985</P>
</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;382,414</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867>&nbsp;</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=308 colspan=4><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Interest-bearing deposits:</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Checking</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;64,158</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;318</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1.97%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;&nbsp;67,833</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ 227</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1.33%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Money market savings</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>13,277</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>47</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1.39%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>11,451</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>24</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;0.82%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Savings</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>70,116</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>399</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.26%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>46,816</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>102</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>0.86%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Certificates of deposit:</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;&nbsp;Less than $100,000</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>76,983</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>627</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3.23%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>70,610</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>553</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;3.12%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;&nbsp;Greater than $100,000</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>55,558</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;500</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;3.57%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;39,821</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>318</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3.18%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Total interest-bearing deposits</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>280,092</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,891</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2.68%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>236,531</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,224</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.06%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Federal funds purchased</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2,474</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>28</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.47%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,914</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>8</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1.65%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Company obligated mandatorily</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;redeemable capital securities</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>8,248</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>129</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6.19%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>8,248</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>89</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.28%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Other borrowings</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>49,979</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;504</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.01%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;42,595</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>512</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.78%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Total interest-bearing liabilities</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>340,793</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2,552</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.97%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>289,288</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,833</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.52%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Noninterest-bearing liabilities</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Demand deposits</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>81,122</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>66,784</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Other liabilities</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1,928</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,543</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Total liabilities</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>423,843</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>357,615</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Shareholders&#146; equity</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>28,142</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;24,799</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;&nbsp;Total liabilities and</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;&nbsp;&nbsp;shareholders&#146; equity</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;&nbsp;451,985</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;382,414</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Net interest income</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;&nbsp;4,358</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;3,488</P>
</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Interest rate spread</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;3.44%</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3.35%</P>
</TD></TR>
<TR><TD valign=top width=254 colspan=3><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Interest expense as a percent of</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;average earning assets</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.37%</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2.02%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Net interest margin</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>4.04%</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3.85%</P>
</TD></TR>
<TR><TD valign=top width=187.867>&nbsp;</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
</TABLE>
<BR>
<P style="margin-top:8pt; margin-bottom:2pt; font-family:CG Times; font-size:8pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">(1) Income and yields are reported on a taxable-equivalent basis assuming a federal tax rate of 34%.<FONT FACE="Book Antiqua"> The tax-equivalent adjustment was $74 thousand and $67 thousand for 2005 and 2004, respectively.</FONT></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">(2) Loans placed on nonaccrual status are reflected in the balances.</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">(3) Annualized</P>


<HR style="padding-top:7.2pt; padding-bottom:7.2pt" noshade size=1.333>

<P style="page-break-before:always; margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>FIRST NATIONAL CORPORATION</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Consolidated Average Balances, Yields and Rates</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><B>Nine Months Ended September 30, 2005 and 2004</B></P>
<P style="margin:0pt; line-height:14pt; font-family:Times New Roman; font-size:12pt"><I>(dollars in thousands)</I></P>
<TABLE style="font-size:10pt" cellspacing=0><TR><td>&nbsp;</td>
<TD valign=top colspan=7><P style="margin:0pt; font-family:CG Times; font-size:9pt" align=justify><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Nine months ended September 30,</P>
</TD></TR>
<TR><TD valign=top width=187.867>&nbsp;</TD><TD valign=top width=174.133 colspan=4><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>2005</P>
</TD><TD valign=top width=179.867 colspan=3><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>2004</P>
</TD></TR>
<TR><TD valign=top width=187.867>&nbsp;</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Interest</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Interest</P>
</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; font-family:CG Times; font-size:9pt" align=right><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">ASSETS</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Average</P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Balance</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Income/</P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Expense</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Yield/</P>
<P style="margin:0pt; font-family:CG Times; font-size:9pt" align=center>Rate (3)</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Average</P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Balance</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Income/</P>
<P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Expense</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=center>Yield/</P>
<P style="margin:0pt; font-family:CG Times; font-size:9pt" align=center>Rate (3)</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Balances at correspondent</P>
</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;banks &#150; interest-bearing</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ 777 </P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;55</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>9.52%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;1,222</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;20</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2.14%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Securities:</P>
</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Taxable</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>53,918</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,649</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.09%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>55,632</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,695</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.07%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Tax-exempt (1)</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>9,673</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>466</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;6.44%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>9,060</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>443</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;6.54%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Total securities</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>63,591</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2,115</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.45%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>64,692</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2,138</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>4.42%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; font-family:CG Times; font-size:9pt">Loans: (2)</P>
</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Taxable</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>342,129</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>16,750</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6.55%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>275,497</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>12,847</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6.23%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Tax-exempt (1)</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3,552</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>181</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;6.83%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3,309</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>155</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;6.25%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;Total loans</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>345,681</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>16,931</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6.55%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>278,806</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>13,002</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>6.23%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Federal funds sold</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>559</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;14</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;3.32%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,164</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;11</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1.20%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;Total earning assets</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>410,608</P>
</TD><TD valign=top width=60 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>19,115</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;6.22%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>345,884</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>15,171</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>5.86%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Less: allowance for loan losses</P>
</TD><TD valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>(3,139)</P>
</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>(2,698)</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">Total nonearning assets</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;26,705</P>
</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;24,034</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">&nbsp;&nbsp;&nbsp;Total assets</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=60.133><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt">$ &nbsp;&nbsp;434,174</P>
</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;367,220</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867>&nbsp;</TD><TD valign=top width=60.133>&nbsp;</TD><TD valign=top width=60 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=308 colspan=4><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Interest-bearing deposits:</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Checking</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;63,119</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;844</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1.79%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;&nbsp;64,813</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ 606 </P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1.25%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Money market savings</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>13,210</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>124</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1.25%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>10,847</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>55</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>0.67%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Savings</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>65,019</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>944</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1.94%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>44,796</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>250</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>0.75%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Certificates of deposit:</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;&nbsp;Less than $100,000</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>75,343</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,781</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3.16%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>71,604</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,749</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;3.26%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;&nbsp;Greater than $100,000</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>50,108</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;1,279</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;3.41%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;38,805</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>957</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3.30%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Total interest-bearing deposits</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>266,799</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>4,972</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2.49%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>230,865</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3,617</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.09%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Federal funds purchased</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3,525</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>93</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;3.56%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2,771</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>33</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1.59%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Company obligated mandatorily</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;redeemable capital securities</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>8,248</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>356</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>5.77%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>5,087</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>162</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.27%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Other borrowings</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>50,450</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;1,608</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.26%</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;39,803</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,436</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;4.82%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Total interest-bearing liabilities</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>329,022</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>7,029</P>
</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.86%</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>278,526</P>
</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>5,248</P>
</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.52%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Noninterest-bearing liabilities</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Demand deposits</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>75,980</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>62,571</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;Other liabilities</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;1,951</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>1,762</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Total liabilities</P>
</TD><TD valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>406,953</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>342,859</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Shareholders&#146; equity</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>27,221</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:0.5pt solid #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;&nbsp;24,361</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;&nbsp;Total liabilities and</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;&nbsp;&nbsp;shareholders&#146; equity</P>
</TD><TD style="border-bottom:2pt double #000000" valign=top width=66.133 colspan=2><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;&nbsp;434,174</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;367,220</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Net interest income</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;&nbsp;12,086</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD style="border-bottom:2pt double #000000" valign=top width=60><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>$ &nbsp;9,923</P>
</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Interest rate spread</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;3.36%</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3.34%</P>
</TD></TR>
<TR><TD valign=top width=254 colspan=3><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Interest expense as a percent of</P>
</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>&nbsp;average earning assets</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>&nbsp;2.29%</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>2.03%</P>
</TD></TR>
<TR><TD valign=top width=187.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=justify>Net interest margin</P>
</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3.94%</P>
</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867><P style="margin:0pt; line-height:11pt; font-family:CG Times; font-size:9pt" align=right>3.83%</P>
</TD></TR>
<TR><TD valign=top width=187.867>&nbsp;</TD><TD valign=top width=66.133 colspan=2>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=54>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=60>&nbsp;</TD><TD valign=top width=59.867>&nbsp;</TD></TR>
</TABLE>
<BR>
<P style="margin-top:8pt; margin-bottom:2pt; font-family:CG Times; font-size:8pt"><BR></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">(1) Income and yields are reported on a taxable-equivalent basis assuming a federal tax rate of 34%.<FONT FACE="Book Antiqua"> The tax-equivalent adjustment was $220 thousand and $203 thousand for 2005 and 2004, respectively.</FONT></P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">(2) Loans placed on nonaccrual status are reflected in the balances.</P>
<P style="margin:0pt; line-height:11pt; font-family:Times New Roman; font-size:9pt">(3) Annualized</P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>3
<FILENAME>fncform8k002.gif
<TEXT>
begin 644 fncform8k002.gif
M1TE&.#EA(``F`/<`````````,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`````(``F```(_P#17;MV[=JU:]>N7;MV[=JU
M:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=HU=->N7;MV[=JU:ZNJR+IV[=JU
M:]>N7;MV[=JU:]>N7;MV[=JU:]>N7;MV[=HU5E7^Z+EV[=JU:]>N7;MV[=JU
M:]>N7;MV[=JU:]>N7;L&35`@/W_^%*+"2M"U:]>N7;MV[=JU:]>N7;MV[=JU
M:]?0H;M&Q8^*/W]&_:E"Q4^@:]>N7;MV[=JU:]>N7;MV[=JU:]?0L0I4)=6?
M*G\*_:GR9Q051-&N7;MV[=JU:]>N7;MV[=JU:ZRV_/E3)4^A/']&5?GSI\J?
M/U0`L;IV[=JU:]>N7?^[=NW:M2YX1E'Y4ZC*'RI5ME#Y\V?+GS]_"E4Y=.W:
MM6OH7'/--==<8X4HA:P`P"A_5%'%'UODL<4?5%3QQQ\`/)$*'H%<<\TUUUQS
MS377`.('(```````5?RQ`@DE(%$"`%7\L0(```"@`B!^((+.->A<<\TUB/CQ
MAPH```!`%5N0T$8;;;@121M)J/"'"@`````5?U#!"CKH7',-.E3\404```"@
MPA\DM-%&&VRPP48;D22APA\`8`,`-G_\`<@UUUQS32!__`$`````\`<`;;31
M1AZML()("6U(DH0*56`#```J`$)%*]=<<TT>A50!````4%%%$I&T\<0LUUS_
M<XT*;432!@E_J`````#\\0<@UUS#RA]_``````#\84`;;;01R#777'--"6VT
MX48;*U`!````J)!*%=>@$X@??P`````J_$&")&VT@40@UUPCRPIM1-)&&RIL
M`0````#PQQ^L7`/('U4`````,%211!MM1-+&'-=<<TT);;311B0E_`$`````
M\,<?@5RC1R%.````-E6HT$8D;;C1QA/77!.-`9&XT48;252A`@```/"''ZM<
M8T4J*P````!_J-!&&VVT$<D<UUQS30EMM-%&)$E0H0(```!0A1^E7`/('U0`
M````?ZS01AN1M-'&$]=<(\L*;432AB1(5+$"````_U#%'X&@`\@?*P````!;
MJ-!&&VZT$<D<UUQS#0EMM-%&&TE4H0(```"PA1^L7!.('U4`````55"11"1M
MM-'&$]=<T\H*;;C11B0D;*$"````\(<?K%S#BA]_`````"O\04(;;432QAS7
M7',-"6VT$8D;)/P!`````$#*%M%<8TT5A9`````&_%%"&VVX$8D5UUQSS0J1
MM-%&&RIL`0```#A1R!\`N7;MVI\_50```)`'1ILV;9"4NG;M6B`DD=P@V?($
M````>?X$NG;MFB`_?P```*#B#X!(20[-DM6*U:PN2-H`&`4````#HZB8NX;N
MVK4JHU0```#@3PPDD9`D(?^!A`22)$A*;%$!``"`*G^X7+MV[=HU0'_^````
M`$`J%4DBM6G31E*;-B6H_`$``("*/WY87;N&[MJU:U0*50$``,"*/RI*1&H3
MJ4T;$E7^`````$">0E6N7;N&#MVU:X+\_%$!````%:FJJ"!1@H2*+7\`````
M0(4J*JVN74.'[MJU:]<`_?FC`@````"J_/FSHM"?)P````"@0A655=>N7;MV
M[=JU:]?05?GS1P4``````*`"2`4``````'CR1TN@:]?0H8,..M=<<\TUUUQ3
MQ1]_5&$``"14\<<H?U`!```J5)'*'X!<<\TUUUR#SC777'/--==<<PT@5*0R
MRA^Y?Z3R1R%_`)+*'Z,40D4@UUQSS3777',-.NB@@PXZZ%QSS36L5*'%'W_\
M\<<H?_SQAQ]_Z#'+-==<<\TUUUQS#3KHH(,..NB@<\TUUUS#"B!__/''%G_X
ML44@K%QSS3777'/--==<@PXZZ*"##CKHH(,..NB@@PXZU[3""C2S1'/--==<
M<\TUUUQSS3777',-.NB@@PXZZ*"##CKHH(,..NB@@PXZZ*"##CKHH(,..NB@
*@PXZZ*"#3D``.S\_
`
end
</TEXT>
</DOCUMENT>
</SUBMISSION>
