UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                 ACT OF 1934

          For the quarterly period ended June 30, 2002
                     -------------------------------

                                    or

[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                 ACT OF 1934

          For the transition period from           to
                   ---------------------------------------


                        Commission File Number: 33-14252

                      FIRST NATIONAL BANKSHARES CORPORATION
              (Exact name of registrant as specified in its charter)

West Virginia                                                   62-1306172
---------------------                                      -------------------
(State or other jurisdiction                               (I.R.S. Employer
 of incorporation)                                         Identification No.)


One Cedar Street, Ronceverte, West Virginia                        24970
---------------------------------------------                   -----------
(Address of principal executive offices)                         (Zip Code)

           (304) 647-4500
(Registrant's telephone number, including area code)

                                       N/A
(Former name, former address and former fiscal year, if changed since last
 report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes      X         No
    -----------       ----------

The number of shares outstanding of the issuer's classes of common stock as of
August 1, 2002:

                  Common Stock, $1 par value -- 981,780 shares











                          THIS REPORT CONTAINS 23 PAGES


<PAGE>


                                        18



                      FIRST NATIONAL BANKSHARES CORPORATION

                                    FORM 10-Q
                       For the Quarter Ended June 30, 2002

                                      INDEX


<TABLE>
<CAPTION>
<S>                                                                                                                 <C>

                                                                                                                   Page
PART I.   FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Condensed Consolidated Balance Sheets -
                 June 30, 2002 and December 31, 2001                                                                 3

              Condensed Consolidated Statements of Income -
                Three Months Ended June 30, 2002 and 2001 and
                Six Months Ended June 30, 2002 and 2001                                                              4

              Condensed Consolidated Statements of Shareholders' Equity -
                Three Months Ended June 30, 2002 and 2001 and
                Six Months Ended June 30, 2002 and 2001                                                              5

              Condensed Consolidated Statements of Cash Flows -
                Six Months Ended June 30, 2002 and 2001                                                              6

              Notes to Condensed Consolidated Financial Statements                                                7-10

     Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                                                          11-17

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                            18


PART II.  OTHER INFORMATION

     Item 1. Legal Proceedings                                                                                      19

     Item 2. Changes in Securities                                                                                none

     Item 3. Defaults upon Senior Securities                                                                      none

     Item 4. Submission of Matters to a Vote of Security Holders                                                    19

     Item 5. Other Information                                                                                      19

     Item 6.  Exhibits and Reports on Form 8-K                                                                      19

     SIGNATURES                                                                                                     20

</TABLE>

<PAGE>


                          PART I. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS

                      FIRST NATIONAL BANKSHARES CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 (in thousands of dollars, except per share data)

<TABLE>
<CAPTION>

<S>                                                                                                <C>             <C>
                                                                                              June 30,        Dec. 31,
                                                                                                2002          2001 (1)
                                                                                         ---------------- ---------------
                                         ASSETS

Cash and due from banks                                                                   $        2,632  $        3,570
Interest-bearing deposits with other banks                                                           114           2,139
Federal funds sold                                                                                 1,307              13
Securities available for sale                                                                     21,601          11,161
Securities held to maturity (estimated fair value
   of $5,124 and $7,291, respectively)                                                             5,017           7,166
Loans, less allowance for loan losses of $1,003 and
   $837, respectively                                                                            107,009         102,801
Premises and equipment, net                                                                        2,873           2,456
Accrued interest receivable                                                                          769             711
Other real estate owned, net of valuation allowance
   of $262,000 at June 30, 2002                                                                      534             796
Other assets                                                                                         741             506
                                                                                         ---------------- ---------------
      Total assets                                                                        $      142,597  $      131,319
                                                                                         ================ ===============

                          LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
   Noninterest-bearing                                                                    $       16,107  $       15,536
   Interest-bearing                                                                              110,275          99,084
                                                                                         ---------------- ---------------
      Total deposits                                                                             126,382         114,620

Short-term borrowings                                                                              2,887           3,401
Other liabilities                                                                                    882           1,034
Long-term borrowings                                                                                 434             442
                                                                                         ---------------- ---------------
      Total liabilities                                                                          130,585         119,497
                                                                                         ---------------- ---------------

Shareholders' equity
Common stock, $1.00 par value, authorized
   10,000,000 shares, issued 981,780 shares, respectively                                            982             982
Capital surplus                                                                                    1,188           1,188
Retained earnings                                                                                  9,763           9,640
Accumulated other comprehensive income                                                                79              12
                                                                                         ---------------- ---------------
      Total shareholders' equity                                                                  12,012          11,822
                                                                                         ---------------- ---------------
      Total liabilities and shareholders' equity                                          $      142,597  $      131,319
                                                                                         ================ ===============



(1) Extracted from December 31, 2001 audited financial statements.

            See Notes to Condensed Consolidated Financial Statements

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                      FIRST NATIONAL BANKSHARES CORPORATION
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
            THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                 (In thousands of dollars, except per share data)

<S>                                                                       <C>         <C>           <C>           <C>

                                                                       Three Months Ended          Six Months Ended
                                                                            June 30,                   June 30,
                                                                        2002         2001          2002         2001
                                                                    ------------ ------------  ------------ -------------
Interest income
   Interest and fees on loans                                       $     1,910  $     1,983   $     3,846  $      3,970
   Interest and dividends on securities:
      Taxable                                                               205          270           355           507
      Tax-exempt                                                             44           39            88            78
   Interest on Federal funds sold and interest-bearing deposits              26           94            45           126
                                                                      ------------  ------------ ------------- ----------
         Total interest income                                            2,185        2,386         4,334         4,681
                                                                      ------------ ------------  ------------ -------------
Interest expense
   Deposits                                                                 738        1,029         1,480         2,056
   Short-term borrowings                                                     14          109            31           186
   Long-term borrowings                                                       7            7            13            14
                                                                    ------------  ------------ -------------   ----------
         Total interest expense                                             759        1,145         1,524         2,256
                                                                    ------------ ------------  ------------ -------------
         Net interest income                                              1,426        1,241         2,810         2,425

Provision for loan losses                                                   104           40           209            70
         Net interest income after provision for loan losses              1,322        1,201         2,601         2,355
                                                                    ------------ ------------  ------------ -------------
Noninterest income
   Service fees                                                             118          122           225           203
   Secondary market loan fees                                                91           36           154            46
   Securities gains                                                           3            -             3             -
   Other income                                                              32           26            52            50
                                                                    ------------  ------------ -------------   ----------
         Total noninterest income                                           244          184           434           299
                                                                    ------------ ------------  ------------ -------------
Noninterest expense
   Salaries and employee benefits                                           559          446         1,119           877
   Net occupancy expense                                                     83           76           167           145
   Equipment rental, depreciation and maintenance                           107           88           210           154
   Data processing                                                           90           71           185           144
   Advertising                                                               25           21            63            46
   Professional and legal                                                    32           43            65            69
   Mailing and postage                                                       29           21            57            42
   Directors' fees and shareholder expenses                                  30           27            68            58
   Stationery and supplies                                                   34           25            75            56
   Loss on foreclosed real estate                                           262            -           262             -
   Other operating expenses                                                 121          118           241           235
                                                                    ------------  ------------ ------------    ----------
         Total noninterest expense                                         1,372         936         2,512         1,826
                                                                    ------------ ------------  ------------ -------------
Income before income taxes                                                  194          449           523           828
Income tax expense                                                           50          144           154           265
                                                                    ------------ ------------  ------------ -------------
Net income                                                          $       144   $      305     $     369    $      563
                                                                    ============ ============  ============ =============

Basic earnings per common share                                     $      0.15  $      0.31   $      0.38   $      0.58
                                                                    ============ ============  ============ =============
Diluted earnings per common share                                   $      0.15  $      0.31   $      0.37   $      0.57
                                                                    ============ ============  ============ =============

            See Notes to Condensed Consolidated Financial Statements

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                      FIRST NATIONAL BANKSHARES CORPORATION
            CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
            THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
                  (In thousands of dollars, except per share data)

<S>                                                                       <C>         <C>           <C>           <C>

                                                                      Three Months Ended           Six Months Ended
                                                                           June 30,                    June 30,
                                                                        2002         2001           2002         2001
                                                                   --------------------------  --------------------------
                                                                   $    11,884  $    11,161    $    11,822  $    10,986
Balance, beginning of period
Comprehensive income

   Net income                                                              144          305            369          563
   Other comprehensive income, net of deferred
      income taxes of $65 and $6 for the three- month periods,
      respectively and $43 and $34 for the six- month periods,
      respectively:

         Net unrealized gains on securities                                102            8             67           51
                                                                   --------------------------  --------------------------

      Total comprehensive income                                           246          313            436          614
                                                                   --------------------------  --------------------------
Cash dividends declared
                                                                          (118)        (117)          (246)        (243)
Issued 2,500 shares of common stock pursuant to
   exercise of stock options                                                 -           40              -           40
                                                                   --------------------------  --------------------------
Balance, end of period                                             $    12,012  $    11,397    $    12,012  $    11,397
                                                                   ==========================  ==========================



</TABLE>






























            See Notes to Condensed Consolidated Financial Statements


<PAGE>
<TABLE>
<CAPTION>


                      FIRST NATIONAL BANKSHARES CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            SIX MONTHS ENDED JUNE 30,
                           (In thousands of dollars)
<S>                                                                                             <C>             <C>


CASH FLOWS FROM OPERATING ACTIVITIES                                                           2002             2001
                                                                                         ---------------- ---------------
Net income                                                                               $          369   $         563
Adjustments to reconcile net income to net cash provided by (used in) operating
  activities:
Depreciation and amortization                                                                       161             119
Loss on disposal of premises and equipment                                                            3               1
Security gains on premium calls of securities held to maturity                                       (3)              -
Provision for loan losses                                                                           209              70
Increase in valuation allowance on other real estate owned                                          262               -
Deferred income tax benefit                                                                        (152)            (23)
Net amortization (accretion) of security premiums and discounts                                      20             (82)
(Increase) decrease in accrued interest receivable                                                  (58)            145
(Increase) decrease in other assets                                                                (127)             24
(Decrease) increase in other liabilities                                                             (5)            243
                                                                                         ---------------- ---------------
Net cash provided by operating activities                                                           679           1,060
                                                                                         ---------------- ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities and calls of securities held to maturity                                 3,043         103,815
Proceeds from maturities and calls of securities available for sale                               6,263          12,000
Purchases of securities held to maturity                                                           (881)       (105,038)
Purchases of securities available for sale                                                      (16,623)        (13,665)
Net increase in loans                                                                            (4,417)         (5,841)
Purchases of premises and equipment                                                                (580)           (218)
Proceeds from sale of bank premises and equipment                                                     -               5
Lease payments collected on other real estate owned                                                   -              10
                                                                                         ---------------- ---------------
Net cash used in investing activities                                                           (13,195)         (8,932)
                                                                                         ---------------- ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand deposits, NOW and savings accounts                             10,901           6,987
Net increase in time deposits                                                                       861           3,041
Proceeds from sale of common stock pursuant to stock option exercise                                  -              40
Net (decrease) increase in short-term borrowings                                                   (514)          2,569
Principal payments on long-term borrowings                                                           (8)             (8)
Dividends paid                                                                                     (393)           (408)
                                                                                         ---------------- ---------------
Net cash provided by financing activities                                                        10,847          12,221
                                                                                         ---------------- ---------------
                                                                                                 (1,669)
(Decrease) increase in cash and cash equivalents                                                                  4,349
Cash and cash equivalents:
Beginning                                                                                         5,722           2,053
                                                                                         ---------------- ---------------

Ending                                                                                   $        4,053   $       6,402
                                                                                         ================ ===============

</TABLE>

            See Notes to Condensed Consolidated Financial Statements


<PAGE>


              FIRST NATIONAL BANKSHARES CORPORATION AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note 1.   Basis of Presentation
          The  accounting and reporting  policies of First  National  Bankshares
          Corporation, (the "Company" or "First National"), and its wholly owned
          subsidiaries,  First National Bank and FNB Insurance,  LLC, conform to
          accounting  principles  generally accepted in the United States and to
          general  policies  within  the  financial   services   industry.   The
          preparation of such financial  statements  requires management to make
          estimates and assumptions  that affect the reported  amounts of assets
          and liabilities and disclosure of contingent assets and liabilities at
          the date of the  financial  statements  and the  reported  amounts  of
          revenues and expenses  during the  reporting  period.  Actual  results
          could differ from those estimates.

          The  condensed  consolidated  statements  include the  accounts of the
          Company and its wholly owned subsidiaries, First National Bank and FNB
          Insurance, LLC. All significant intercompany balances and transactions
          have been  eliminated.  The  information  contained  in the  condensed
          consolidated  financial  statements  is  unaudited.  In the opinion of
          management,  all adjustments for a fair presentation of the results of
          the interim  periods have been made.  All such  adjustments  were of a
          normal, recurring nature. The results of operations for the six months
          ended June 30, 2002 are not  necessarily  indicative of the results to
          be expected for the full year.  The condensed  consolidated  financial
          statements  and notes  included  herein should be read in  conjunction
          with the Company's 2001 audited financial statements and Form 10-K.


Note 2.   Securities
The amortized cost, unrealized gains, unrealized losses and estimated fair
values of securities at June 30, 2002 and December 31, 2001 are summarized as
follows (in thousands):
<TABLE>
<CAPTION>

<S>                                                         <C>             <C>               <C>               <C>
                                                                               June 30, 2002
                                                                                                             Estimated
                                                        Amortized        Unrealized        Unrealized          Fair
                                                          Cost             Gains             Losses            Value
                                                    ---------------- ----------------- ----------------- ----------------
Available for Sale
  Taxable:
   U.S. Government agencies and corporations        $        20,946  $            130  $             -   $        21,076
   Federal Reserve Bank stock                                    57                 -                -                57
   Federal Home Loan Bank stock                                 444                 -                -               444
   Other equities                                                22                 -                -                22
                                                    ---------------- ----------------- ----------------- ----------------
      Total taxable                                          21,469               130                -            21,599
   Tax-exempt:
   Federal Reserve Bank stock                                     2                -                 -                 2
                                                    ---------------- ----------------- ----------------- ----------------
      Total Securities Available for Sale           $        21,471  $            130   $            -   $        21,601
                                                    ================ ================= ================= ================


</TABLE>


<PAGE>
<TABLE>
<CAPTION>


              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

<S>                                                   <C>             <C>                 <C>             <C>
                                                                               June 30, 2002
                                                                                                             Estimated
                                                        Amortized        Unrealized        Unrealized          Fair
                                                          Cost             Gains             Losses            Value
                                                    ---------------- ----------------- ----------------- ----------------
Held to maturity:
  Taxable:
   U.S. Government agencies and corporations        $         1,000  $             31  $             -   $         1,031
   State and political subdivisions                             455                19                -               474
                                                    ---------------- ----------------- ----------------- ----------------
      Total taxable                                           1,455                50                -             1,505
   Tax-exempt:
   State and political subdivisions                           3,562                76                19            3,619
                                                    ---------------- ----------------- ----------------- ----------------
      Total securities held to maturity             $         5,017  $            126  $             19  $         5,124
                                                    ================ ================= ================= ================

                                                                             December 31, 2001
                                                                                                             Estimated
                                                        Amortized        Unrealized       Unrealized           Fair
                                                          Cost             Gains            Losses             Value
                                                    ---------------- ----------------- ----------------  ----------------
Available for Sale
  Taxable:
   U.S. Government agencies and corporations        $        10,414  $             62  $            42   $        10,434
   Federal Reserve Bank stock                                    57                 -                -                57
   Federal Home Loan Bank stock                                 646                 -                -               646
   Other equities                                                22                 -                -                22
                                                    ---------------- ----------------- ----------------  ----------------
      Total taxable                                          11,139                62               42            11,159

   Tax-exempt:
   Federal Reserve Bank stock                                     2                 -                -                 2
                                                    ---------------- ----------------- ----------------  ----------------

      Total Securities Available for Sale           $        11,141  $             62  $            42   $        11,161
                                                    ================ ================= ================  ================

Held to maturity:
  Taxable:
   U.S. Government agencies and corporations        $         2,985  $             42  $             -   $         3,027
   State and political subdivisions                             470                14                -               484
                                                    ---------------- ----------------- ----------------  ----------------
      Total taxable                                           3,455                56                -             3,511

   Tax-exempt:
   State and political subdivisions                           3,711                70                1             3,780
                                                    ---------------- ----------------- ----------------  ----------------

      Total securities held to maturity             $         7,166  $            126  $             1   $         7,291
                                                    ================ ================= ================  ================


</TABLE>


<TABLE>
<CAPTION>



              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The maturities, amortized cost and estimated fair values of the Company's
securities at June 30, 2002 are summarized as follows (in thousands):
<S>                                                        <C>                <C>              <C>              <C>
                                                                Held to Maturity               Available for Sale
                                                                         Estimated                           Estimated
                                                        Amortized           Fair           Amortized           Fair
                                                          Cost             Value             Cost              Value
                                                    ---------------- ----------------- ----------------  ----------------
Due within 1 year                                   $           370  $            377  $         4,383   $         4,402
Due after 1 but within 5 years                                3,076             3,174           16,563            16,674
Due after 5 but within 10 years                                 487               473                -                 -
Due after 10 years                                            1,084             1,100                -                 -
Equity securities                                                 -                -               525               525
                                                    ---------------- ----------------- ----------------  ----------------
                                                    $         5,017  $          5,124  $        21,471   $        21,601
                                                    ================ ================= ================  ================

          The  Company's  Federal  Reserve Bank stock and Federal Home Loan Bank
          stock are equity securities that are included in securities  available
          for  sale  in  the  accompanying   condensed   consolidated  financial
          statements.  Such  securities do not have a stated  maturity date, and
          are  carried  at  cost,  since  they  may  only  be  sold  back to the
          respective issuer or another member at par value.
</TABLE>

<TABLE>
<CAPTION>

Note 3.   Loans
Total loans are summarized as follows (in thousands):
<S>                                                                                          <C>               <C>

                                                                                         June 30,            Dec. 31,
                                                                                           2002                2001
                                                                                   ------------------  ------------------
Commercial, financial and agricultural                                              $         46,377    $         42,541
Real estate - construction                                                                       947               1,163
Real estate - mortgage                                                                        44,110              44,399
Installment loans to individuals                                                              14,374              13,236
Other                                                                                          2,204               2,299
                                                                                   ------------------  ------------------
   Total loans                                                                               108,012             103,638
Less allowance for loan losses                                                                 1,003                 837
                                                                                   ------------------  ------------------
   Loans, net                                                                       $        107,009    $        102,801
                                                                                   ==================  ==================
</TABLE>
<TABLE>
<CAPTION>

Note 4.   Allowance for Credit Losses
An analysis of the allowance for loan losses is presented below (in thousands)
for the six-month periods ended June 30, 2002 and 2001:
<S>                                                                     <C>                <C>                <C>

                                                                                                             Dec. 31,
                                                                       2002                2001                2001
                                                               ------------------  ------------------  ------------------
Balance, beginning of period                                    $            837    $            619    $            619

   Loans charged off                                                          54                  17                  56
   Recoveries                                                                 11                   9                  17
                                                               ------------------  ------------------  ------------------
      Net losses                                                              43                   8                  39
                                                               ------------------  ------------------  ------------------

   Provision for loan losses                                                 209                  70                 257
                                                               ------------------  ------------------  ------------------

Balance, end of period                                          $          1,003    $            681    $            837
                                                               ==================  ==================  ==================


</TABLE>



              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

          The Company's total recorded  investment in impaired loans at June 30,
          2002 approximated $208,000, for which the related allowance for credit
          losses  determined in accordance  with generally  accepted  accounting
          principles  in the United  States  approximated  $8,000.  All impaired
          loans at June 30, 2002 were collateral dependent, and accordingly, the
          fair value of the loan's collateral was used to measure the impairment
          of each loan.

Note 5.   Commitments and Contingencies
          In the ordinary course of business,  the Company's  subsidiary bank is
          party to financial  instruments  with  off-balance  sheet risk.  These
          financial   instruments   include   standby   letters  of  credit  and
          commitments to extend credit. The unused portions of existing lines of
          credit at June 30, 2002 and  December 31,  2001,  and the  contractual
          amount of commitments to lend are as follows, in thousands of dollars:

                                                      June 30,      Dec. 31,
                                                      2002          2001
                                                    ------------- --------------
          Total loan commitments                    $   14,858    $      15,372
                                                    ============= ==============

          Management is not aware of any commitments or  contingencies  that may
          reasonably  be  expected  to have a material  impact on  liquidity  or
          capital  resources.  The Company  continues  to be involved in various
          legal actions and contractual  matters arising in the normal course of
          business.

Note 6.   Earnings per share
          Diluted earnings per share amounts assume the conversion,  exercise or
          issuance of all potential  common stock  instruments.  For purposes of
          computing   basic   earnings  per  share,   weighted   average  shares
          outstanding  were 981,780 and 974,940 for the quarters  ended June 30,
          2002 and 2001 and 981,780  and  973,113 for the six months  ended June
          30, 2002 and 2001. The dilutive  effect of stock options  approximated
          3,121 shares and 5,928 shares for the quarters ended June 30, 2002 and
          2001 and 3,121  shares and 6,646  shares for the six months ended June
          30, 2002 and 2001.

Note 7.  Other Real Estate Owned
          On July 20,  2002,  the Company  entered into an agreement to sell the
          commercial  property  it held as other real  estate  owned on June 30,
          2002. The property,  which has a carrying amount of $796,000, was sold
          for $534,000,  net of selling  expenses.  As a result of the sale, the
          Company charged earnings for $262,000 in the second quarter of 2002 in
          order to establish a valuation  allowance  against the carrying amount
          of the asset and to reduce  the  asset to its  revised  estimated  net
          realizable  value.  The net  impact on  earnings  after  income  taxes
          approximated  $160,000.   Pending  various  pre-closing   proceedings,
          including the buyer securing third party financing, the transaction is
          expected to close in August 2002.

























                                     ITEM 2.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          The  following is a discussion  and  analysis  focused on  significant
          changes in the financial  condition and results of operations of First
          National Bankshares  Corporation (the "Company" or "Bankshares"),  and
          its wholly owned subsidiaries,  First National Bank and FNB Insurance,
          LLC, for the periods indicated. This discussion and analysis should be
          read in  conjunction  with the Company's 2001  consolidated  financial
          statements and notes included in its Annual Report to Shareholders and
          Form 10-K.

          The  Private  Securities  Litigation  Act of 1995  indicates  that the
          disclosure of  forward-looking  information is desirable for investors
          and  encourages  such  disclosure  by  providing  a  safe  harbor  for
          forward-looking  statements by corporate  management.  This  Quarterly
          Report on Form 10-Q contains  forward-looking  statements that involve
          risk and  uncertainty.  In order to comply  with the terms of the safe
          harbor,  the  corporation  notes that a variety of factors could cause
          the Company's actual results and experience to differ  materially from
          the  anticipated  results  or other  expectations  expressed  in those
          forward-looking statements.

EARNINGS SUMMARY
          The Company reported net income of $144,000 for the three months ended
          June 30, 2002 compared to net income of $305,000 for the quarter ended
          June 30, 2001,  a decrease of 52.8%.  For the  six-month  period ended
          June 30, 2002, the Company's net income of $369,000 decreased $194,000
          from the $563,000  reported for the same period of 2001, a decrease of
          34.4%. An increase in net interest  income and noninterest  income was
          mitigated by an increase in the provision for loan losses, a charge to
          earnings  due to the  write-down  of other  real  estate  owned to its
          estimated net realizable  value,  and higher operating costs following
          the opening of a de novo branch in Covington, Virginia.

          Basic  earnings per common share was $0.15 the quarter  ended June 30,
          2002 compared with $0.31 in 2001. For the six-month  period ended June
          30, 2002,  basic earnings per common share totaled $0.38 compared with
          $0.58 for the same period of 2001. An analysis of the major components
          of the  statement  of  income  and  expense  on a per  share  basis is
          presented  below for the three  month  and for the  six-month  periods
          ended June 30, 2002 and 2001.
<TABLE>
<CAPTION>

<S>                                        <C>            <C>           <C>           <C>           <C>           <C>

                                              Three Months Ended                          Six Months Ended
                                                   June 30,                                   June 30,
                                  ---------------------------------------------------------------------------------------
                                                                  Increase                                   Increase
                                       2002           2001       (Decrease)        2002          2001       (Decrease)
                                  ---------------------------------------------------------------------------------------


Interest income                   $        2.23 $         2.44$        (0.21)$         4.41 $        4.80 $       (0.39)
Interest expense                           0.77           1.17         (0.40)          1.55          2.31         (0.76)
                                  ---------------------------------------------------------------------------------------
   Net interest income                     1.46           1.27          0.19           2.86          2.49          0.37
Provision for loan losses                  0.11           0.04          0.07           0.21          0.07          0.14
                                  ---------------------------------------------------------------------------------------
   Net interest income after
      provision for loan losses            1.35           1.23          0.12           2.65          2.42          0.23
                                  ---------------------------------------------------------------------------------------
Noninterest income                         0.25           0.19          0.06           0.44          0.30          0.14
Noninterest expense                        1.40           0.96          0.44           2.56          1.87          0.69
                                  ---------------------------------------------------------------------------------------
   Income before income taxes              0.20           0.46         (0.26)          0.53          0.85         (0.32)
Income tax expense                         0.05           0.15         (0.10)          0.15          0.27         (0.12)
                                  ---------------------------------------------------------------------------------------
   Net income                     $        0.15   $       0.31   $     (0.16)     $    0.38      $   0.58  $      (0.20)
                                  =======================================================================================
</TABLE>

          The Company's annualized return on average assets (ROA) for the second
          quarter of 2002 was 0.41%  compared to 0.98% for the second quarter of
          2001.  This  compares with an ROA of 0.53% and 0.90% for the six-month
          periods ended June 30, 2002 and 2001, respectively.  Annualized return
          on average  shareholders' equity (ROE) was 4.8% for the second quarter
          of 2002 compared to 10.8% in the second quarter of 2001, while year to
          date  ROE  was  6.2%  and  10.0%  as  of  June  30,   2002  and  2001,
          respectively.

NET INTEREST INCOME
          The most  significant  component of the  Company's net earnings is net
          interest income, which represents the excess of interest income earned
          on earning assets over the interest expense paid for sources of funds.
          Net interest  income is affected by changes in volume  resulting  from
          growth and changes in the balance sheet's  composition,  as well as by
          fluctuations  in market  interest  rates and maturities of sources and
          uses of funds.

          For purposes of this discussion, net interest income is presented on a
          fully  tax-equivalent  basis  to  enhance  the  comparability  of  the
          performance  of tax-exempt to fully taxable  earning  assets.  For the
          six-month  periods  ended June 30, 2002 and 2001,  the  tax-equivalent
          adjustment was $45,000 and $40,000, respectively.

          For the six months ended June 30,  2002,  the  Company's  net interest
          income  outperformed the prior year's net interest income by $390,000,
          which equates to a 15.8% improvement.  As shown in Table II, growth in
          the  Company's   interest-bearing   assets  and   liabilities   had  a
          significant  impact on net interest income.  Volume variances from the
          prior year  equated to a net  improvement  in net  interest  income of
          $443,000, or 18.0% of prior year's net interest income. The difference
          in net interest income due to a change in interest rates was marginal,
          negatively impacting net interest income by $53,000.

          The Company's net yield on  interest-earning  assets improved to 4.36%
          in  2002  as  compared  to  2001's  4.14%,   nearly  a  quarter  point
          difference.  Despite a decline in the interest rate  environment,  the
          Company  achieved  a higher net  interest  margin due to the growth in
          loans,  the  Company's  highest  yielding  asset,  relative  to  other
          interest-bearing  assets.  At June 30, 2002,  average loans  comprised
          80.8% of total  interest-earning  assets  compared  to  2001's  76.6%.
          Improving or even  maintaining  the Company's net interest margin will
          be a  challenge  for the  remainder  of the year.  Slower  loan demand
          coupled with continued  deposit growth will likely result in growth of
          lower-yielding  assets, such as overnight  investments and securities,
          therefore decreasing the net interest margin. In addition, the Company
          faces a fair  amount  of  prepayment  risk in its loan and  securities
          portfolio  due to the lower  interest  rate  environment.  In order to
          combat this trend,  the Company will likely be less  aggressive on its
          deposit pricing with the exception of the Covington market.

          Further  analysis of the Company's yields on  interest-earning  assets
          and interest-bearing liabilities and changes in net interest income as
          a result of changes in average volume and interest rates are presented
          in Tables I and II.

PROVISION FOR LOAN LOSSES
          The provision for loan losses represents charges to earnings necessary
          to  maintain  an  adequate   allowance   for  probable   loan  losses.
          Management's  determination of the appropriate  level of the allowance
          is based upon an ongoing analysis of credit quality and loss potential
          in the loan  portfolio,  actual loan loss  experience  relative to the
          size  and  characteristics  of  the  loan  portfolio,  change  in  the
          composition  and risk  characteristics  of the loan  portfolio and the
          anticipated  influence of national and local economic conditions.  The
          adequacy of the  allowance  for loan losses is reviewed  quarterly and
          adjustments are made as considered necessary.

          During the second quarter of 2002, the Bank made a $104,000  provision
          for loan losses compared to $40,000 during the second quarter of 2001.
          For the six months  ended June 30,  2002 and 2001,  respectively,  the
          provision  for loan losses was $209,000 and  $70,000.  For  additional
          discussion of these factors and the related  allowance for loan losses
          account,  refer to the Loan and Related Risk Elements  section of this
          discussion.

NONINTEREST INCOME
          Noninterest  income  includes  revenues  from all  sources  other than
          interest  income and yield related loan fees. For the second  quarter,
          noninterest  income increased $60,000 over the second quarter of 2001,
          a 32.6%  increase.  Similarly,  noninterest  income for the  six-month
          period ended June 30, 2002 totaled  $434,000,  an increase of $135,000
          or 45.2% from the $299,000 recorded during the same period of 2001. As
          a percentage  of average  assets,  annualized  noninterest  income was
          0.62% and 0.48% for the  six-month  periods  ended  June 31,  2002 and
          2001, respectively.

          The  improvement  in the quarter and year to date  noninterest  income
          totals is attributed to the Company's secondary market loan program. A
          favorable  interest rate  environment  coupled with the  allocation of
          additional  resources  to the  program  relative  to the  prior  year,
          consisting   principally  of  two  full-time  staff   responsible  for
          marketing the program has led to a $55,000 and $108,000 improvement in
          the quarter and year-to-date totals, respectively.  Given that leading
          economists  are not  projecting a significant  rise in interest  rates
          over the next twelve months,  management expects to further capitalize
          on its secondary market loan activity for the balance of the year.

NONINTEREST EXPENSE
          Noninterest  expense  includes  overhead costs that are not related to
          interest expense or to losses from loans or securities. As of June 30,
          2002,  the  Company's  noninterest  expense  totaled  $2,512,000,   an
          increase  of  $686,000,  or  37.6%,  over  total  noninterest  expense
          incurred   for  the  six   months   ended   June   30,   2001.   On  a
          quarter-to-quarter  basis,  other  noninterest  expense  increased  to
          $436,000,  or 46.6%,  for the second  quarter of 2002.  Expressed as a
          percentage of average assets,  annualized noninterest expense was 3.6%
          and  2.9%  for  the  six  months   ended  June  30,   2002  and  2001,
          respectively.




================================================================================

                                     TABLE I
                            AVERAGE BALANCE SHEET AND
                          NET INTEREST INCOME ANALYSIS
                            (In thousands of dollars)

<TABLE>
<CAPTION>

<S>                                                             <C>      <C>      <C>         <C>        <C>      <C>
                                                               Six Months Ended                 Six Months Ended
                                                                 June 30, 2002                    June 30, 2001
                                                           Average     Interest Yield/      Average     Interest Yield/
                                                           Balance       (1)     Rate       Balance       (1)     Rate
                                                        -------------------------------- ----------------------------------
INTEREST EARNING ASSETS
    Loans, net of unearned income                       $    105,903     $ 3,846  7.26%  $     91,294    $3,970       8.70%
    Securities:
        Taxable                                               16,962         355  4.19%        18,595       507       5.45%
        Tax-exempt  (1)                                        3,745         133  7.12%         3,267       118       7.23%
                                                        -------------------------------- ----------------------------------
              Total securities                                20,707         488  4.72%        21,862       625       5.72%
                                                        -------------------------------- ----------------------------------
   Federal funds sold and interest-bearing deposits            4,435          45  2.03%         5,969       126       4.22%
                                                        -------------------------------- -----------------------------------
              Total interest earning assets                  131,045       4,379  6.68%       119,125      4,721      7.93%
                                                        -------------------------------- -----------------------------------
NONINTEREST EARNING ASSETS
    Cash and due from banks                                    3,925                            2,625
    Bank premises and equipment                                2,771                            1,575
    Other assets                                               2,184                            2,357
    Allowance for loan losses                                  (918)                            (651)
                                                        -------------                    -------------
             Total assets                               $    139,007                     $    125,031
                                                        =============                    =============

INTEREST-BEARING LIABILITIES

    Demand deposits                                     $     17,962          64  0.71%  $     15,017        139      1.85%
    Savings deposits                                          53,937         706  2.62%        39,243        809      4.12%
    Certificates of deposit                                   34,427         710  4.12%        38,937      1,108      5.69%
                                                        ------------ ------------------   ------------  ----------  --------
            Total interest-bearing deposits                  106,326       1,480  2.78%        93,197      2,056      4.41%
                                                        -------------------------------- --------------  ---------  ---------
    Short-term borrowings                                      3,811          31  1.63%         7,152        187      5.23%
    Long-term borrowings                                         437          13  5.95%           454         13      5.73%
                                                        ------------- ------------------  ------------ ----------- ---------
            Total other interest-bearing liabilities           4,248          44  2.07%         7,606        200      5.26%
                                                        -------------------------------- -------------- ---------- ---------
            Total interest-bearing liabilities               110,574       1,524  2.76%       100,803      2,256      4.48%
                                                        -------------------------------- --------------- ---------- ---------

NONINTEREST-BEARING LIABILITIES
    AND SHAREHOLDERS' EQUITY
    Demand deposits                                           15,503                           11,883
    Other liabilities                                            972                            1,043
    Shareholders' equity                                      11,958                           11,302
                                                        -------------                    -------------
           Total liabilities and shareholders'          $    139,007                     $    125,031
                                equity                  =============                    =============


NET INTEREST EARNINGS                                                 $    2,855                        $ 2,465
                                                                     ============                      ============

NET YIELD ON INTEREST EARNING ASSETS                                              4.36%                              4.14%
                                                                                ========                           ========


(1) - Calculated on a fully tax-equivalent basis using the rate of 34% for 2002
and 2001.
(2) - For purposes of these computations, nonaccrual loans are included in the
amounts of average loans outstanding. Included in interest are loan fees of
$72,000 and $49,000 for 2002 and 2001, respectively.

================================================================================

================================================================================
</TABLE>
<TABLE>
<CAPTION>


                                    TABLE II

                     CHANGES IN INTEREST INCOME AND EXPENSE
               DUE TO CHANGES IN AVERAGE VOLUME AND INTEREST RATES
                             (In thousands of dollars)

<S>                                                                                <C>           <C>             <C>

                                                                                        Six Months Ended
                                                                               June 30, 2002 versus June 30, 2001
                                                                                       Increase (Decrease)
                                                                                       Due to Changes In :
                                                                             Volume (1)         Rate (1)        Total
                                                                         ----------------- ----------------  ------------
INTEREST EARNING ASSETS
    Loans                                                                $           584    $        (708)         (124)
    Securities:
        Taxable                                                                      (42)            (110)         (152)
        Tax-exempt (2)                                                                17               (2)           15
                                                                         ----------------- ----------------  ------------
              Total securities                                                       (25)            (112)         (137)
                                                                         ----------------- ----------------  ------------
    Federal funds sold and interest-bearing deposits                                 (27)             (54)          (81)
Total interest earning assets                                                        532             (874)         (342)
                                                                         ----------------- ----------------  ------------

INTEREST-BEARING LIABILITIES
    Demand deposits                                                                   23              (98)          (75)
    Savings deposits                                                                 247             (350)         (103)
    Certificates of deposit                                                         (118)            (280)         (398)
    Short-term borrowings                                                            (63)             (93)         (156)
    Long-term borrowings                                                               -                -            -
                                                                         ----------------- ----------------  ------------
            Total interest-bearing liabilities                                        89             (821)         (732)
                                                                         ----------------- ----------------  ------------

NET INTEREST EARNINGS                                                    $           443    $         (53)          390
                                                                         ================= ================  ============

(1) - The change in interest due to both rate and volume has been allocated
between the factors in proportion to the relationship of the absolute dollar
amounts of the change in each. (2) - Calculated on a fully tax-equivalent basis
using the rate of 34%.
</TABLE>

================================================================================

          The  increase in both the quarter and year to date  expenses  from the
          prior  year  is due in  part  to the  incremental  operating  expenses
          associated with the new Covington  branch.  Nearly  all-major  expense
          line items reported in the Consolidated Statements of Income in Item 1
          are up from the prior year due to the de novo branch. Direct operating
          expenses attributed to the new location totaled $135,000 and $244,000,
          respectively  for the  quarter  and six months  ended  June 30,  2002.
          Salaries  and  employee  benefits  account  for  the  majority  of the
          incremental expenses (51.6%),  which is derived from the six full-time
          staff  employed  by the  branch.  A portion of the  expenses  incurred
          during the first six months are  nonrecurring  and  therefore  are not
          necessarily indicative of the future ongoing expense of the branch.

          As  more  fully  discussed  in  Note 7 of the  Consolidated  Financial
          Statements  included  in Item  1,  the  Company  has  entered  into an
          agreement to sell the property held as other real estate owned at June
          30, 2002, which has a carrying amount of $796,000.  As a result of the
          pending  sale,  the Company  charged  earnings for $262,000  ($160,000
          after  tax) in the second  quarter to reduce the asset to its  revised
          net realizable value.

INCOME TAXES
          The  Company's  income tax expense,  which  includes  both federal and
          state income taxes,  totaled  $154,000 for the six-month  period ended
          June 30,  2002  compared  to  $265,000  for same  period of 2001.  The
          effective tax rate  approximated  25.8% and 32.1% for the three-months
          ended  June 30,  2002 and 2001 and 29.4% and 32.0% for the  six-months
          ended June 30, 2002 and 2001. The reduction in the effective tax rates
         for 2002 is due to the company's increase in tax exempt income relative
          to its decrease in income before taxes.

CHANGES IN FINANCIAL CONDITION
          The  Company's  total  assets  were  $142,597,000  at June  30,  2002,
          compared  to  $131,319,000  at  December  31,  2001,  representing  an
          increase  of   $11,278,000   or  8.6%.   Average   total  assets  were
          $139,007,000  during the six month period ended June 30, 2002. Details
          concerning  changes in the  Company's  major  balance  sheet items and
          changes in financial condition follow.

Securities and Federal Funds Sold
          At  June  30,  2002,  the  Company's   securities   position   totaled
          $26,618,000,  an increase of $8,291,000 or 45.2%. During the first six
          months of 2002,  the  incremental  deposit  growth  has  outpaced  the
          incremental  loan  growth by  nearly 3 to 1. As a  result,  additional
          funds were available for investing in the security portfolio, relative
          to other  interest-bearing  assets. The ratio of securities designated
          as  Available  for  Sale  ("AFS")  versus  Held  to  Maturity  ("HTM")
          continues to shift towards AFS. With this designation, the Company can
          more  adequately  meet its liquidity  demands,  should the need arise.
          Future  designations  of HTM will likely be limited to the purchase of
          small blocks of municipal  securities.  A more detailed  discussion of
          the  securities  portfolio  may be  found  in Note 2 of the  condensed
          consolidated financial statements found in Item I.

          It is  the  Bank's  philosophy  to  minimize  its  involvement  in the
          overnight  funds  market,  however  due  to  liquidity  reasons  (i.e.
          fluctuations in loan and deposit  balances),  the bank may buy or sell
          funds on an overnight basis. On average, its position in the overnight
          market   in  2002   has  been   $4,435,000   (this   figure   includes
          interest-bearing  deposits with other banks) compared to $5,969,000 in
          the prior year.

Loan Portfolio and Asset Quality
          At June 30, 2002,  gross loans  totaled  $108,012,000,  an increase of
          4.2% from  December 31, 2001,  while on average,  gross loans  totaled
          $105,903,000  during the first six months of 2002.  Over the first six
          months of 2002,  loan demand has been  markedly  slower as compared to
          the prior year.  Based upon the current  annualized  growth rate, loan
          growth  in 2002 is  approximately  one-half  of  2001's  growth  rate.
          Although interest rates are at their lowest in recent history, current
          economic  conditions  and  uncertainty  have curbed loan demand.  Loan
          growth has been buoyed in part by the continued migration of customers
          from  competitors  due  to  operating  style  differences  highlighted
          following their entry into the primary market area (Greenbrier County,
          WV) via acquisition, although this impact has been less of a factor in
          2002 than in 2001. Additionally,  loan growth has been supplemented in
          part by loans  originated  by the Covington  branch.  Of the Company's
          $4,374,000  growth  in loans  during  the  first  six  months of 2002,
          Covington  contributed  $3,600,000 or 82.3% of the growth.  Management
          expects the current  trend in loan growth to continue  for the balance
          of the year with the majority of the growth  coming from the Covington
          market  as new  relationships  are  forged  and  its  market  position
          matures. See Note 3 of the condensed consolidated financial statements
          for further information on the loan portfolio.

          The allowance for loan losses was $1,003,000 at June 30, 2002 compared
          to $837,000 at December 31, 2001.  Expressed as a percentage of loans,
          the allowance for loan losses was 0.93% and 0.81% at June 30, 2002 and
          December  31, 2001,  respectively.  The  allowance  for loan losses is
          maintained at a level  considered  adequate to provide for losses that
          can be reasonably estimated. On a quarterly basis, management performs
          a  comprehensive  evaluation  of the  adequacy of the  allowance  that
          encompasses  evaluating  problem  credits and their potential loss, if
          any.  In  addition,   management   considers   historical   loan  loss
          experience,   new  loan  volume,  portfolio  composition,   levels  of
          nonperforming and past due loans and current and anticipated  economic
          conditions  in  evaluating  the  adequacy  of the  allowance  for loan
          losses.  In  management's  opinion,  the  allowance for loan losses is
          adequate to absorb the current  estimated risk of loss in the existing
          portfolio.   See  Note  4  of  the  condensed  consolidated  financial
          statements for an analysis of the activity in the Company's  allowance
          for loan  losses for the  six-month  periods  ended June 30,  2002 and
          2001,  and for the year  ended  December  31,  2001.  A summary of the
          Company's past due loans and  nonperforming  assets is provided in the
          following table:
<TABLE>
<CAPTION>

               SUMMARY OF PAST DUE LOANS AND NONPERFORMING ASSETS
                            (in thousands of dollars)
<S>                                                             <C>          <C>             <C>

                                                            June 30,       June 30,        Dec. 31,
                                                              2002           2001            2001
                                                        --------------- -------------- ---------------
Loans past due 90 or more days still accruing           $          -    $        -      $          -
                                                        =============== ============== ===============

Nonperforming assets:

   Nonaccrual loans                                     $         242   $      333      $       294

   Other real estate owned                                        534        1,003              796
                                                        --------------- -------------- ---------------
      Total nonperforming assets                        $         776   $    1,336      $     1,090
                                                        =============== ============== ===============
      Nonperforming assets as a % of total assets                0.54%        1.04%            0.83%
                                                        =============== ============== ===============
See further discussion of the Company's nonaccrual loans at Note 4 of the
Consolidated Financial Statements included in Item 1.
</TABLE>
<TABLE>
<CAPTION>

Deposits and Other Funding Sources
Total deposits at June 30, 2002 increased $11,762,000 or 10.3% from December 31,
2001. On average, deposits totaled $121,829,000 during the six months ended June
30, 2002, which is a 6.3% increase over the 2001 year-end deposit balance. The
following table summarizes the quarter-end and average deposit mix for June 30,
2002 as compared to December 31, 2001:

<S>                                                                <C>          <C>             <C>           <C>
                                                                              Avg. YTD             % Increase
                                                                               Balance         Since Dec. 31, 2001
                                                                                          -----------------------------
                                                              June 30,        June 30,        June 30,      Avg. YTD
                                                                2002            2002            2002         Balance
                                                          ---------------   ------------- -------------------------------
Demand deposits                                           $       34,870  $       33,465       11.4%          6.9%
Savings                                                           56,673          53,937       14.9%          9.3%
Certificates of deposit                                           34,839          34,427        2.5%          1.3%
                                                          --------------- ---------------
   Total deposits                                         $      126,382  $      121,829       10.3%          6.3%
                                                          =============== ===============
</TABLE>

          The opening of the Covington  branch had a  significant  impact on the
          Company's deposit growth. This location was responsible for $6,517,000
          or 55.4% of the total  growth  experienced  in the first six months of
          2002.  The  deposit  mix  at  the  new  location  is  similar  to  the
          consolidated  mix shown in the above  table.  Deposit  growth from the
          Company's other  locations has slowed  following a rapid increase over
          an  18-month  period.   Competition  for  deposits  remains  acute  in
          Greenbrier County,  West Virginia where the majority of the growth was
          previously  experienced.  Overall,  Management  remains confident that
          further  penetration  into the  Covington  market will augment  slower
          deposit growth in the Company's other markets.

          Over the past year and  coinciding  with the fall in  interest  rates,
          there  has  been  a  distinct   trend  for  depositor   preference  in
          short-term,  liquid deposits,  which yield a competitive  return. This
          preference  has led to  significant  growth in the  Company's  savings
          balance  relative to other deposit  products.  As  illustrated  above,
          savings  deposits have grown 14.9% since December 31, 2001. This trend
          is likely to continue should interest rates remain at their low levels
          and should equity markets continue to be highly volatile.

          The Company's use of short-term borrowings during the six-months ended
          June 30, 2002 consisted entirely of repurchase agreements entered into
          with various  customers and on average did not materially  differ from
          the December 31, 2001 balance.

LIQUIDITY
          Liquidity  is a  measure  of  the  Company's  ability  to  ensure  the
          availability  of adequate funds to meet loan  commitments  and deposit
          withdrawals,  as well as to provide  for other  Company  transactional
          requirements.  Liquidity is provided  primarily  by funds  invested in
          cash and due  from  banks,  Federal  funds  sold and  interest-bearing
          deposits,  which totaled $4,053,000 at June 30, 2002 versus $5,722,000
          at December 31, 2001. The Company's  liquidity is further  enhanced by
          the  availability  of $4,753,000  (amortized  cost) in debt securities
          maturing  within  the  succeeding  one year.  Also,  the  Company  has
          classified  additional debt securities with an estimated fair value at
          June 30, 2002 of  $16,674,000  as  available  for sale in the event of
          unforeseen   need  for  liquidity.   Additionally,   the  Company  has
          approximately  $48,000,000  in available  lines of credit with various
          correspondent banks should the need arise.

          Management's Asset/Liability Committee (ALCO) meets on a regular basis
          to review the Company's  sources and uses of funds for the  succeeding
          (30), (60) and (90) day time frames.  In addition,  projected  balance
          sheets for the  succeeding  (12) month  time  frame are  prepared  and
          reviewed  in  order  to  ensure  that   liquidity  is  within   policy
          guidelines,   and  if  not,  appropriate  strategies  are  formulated,
          implemented and measured for effectiveness in order to bring liquidity
          risk within acceptable levels as defined by policy.  Management is not
          aware of any trends,  commitments,  events or uncertainties  that have
          resulted in or are reasonably likely to result in a material change in
          the Company's liquidity.

CAPITAL RESOURCES
          Maintenance of a strong capital  position is a continuing  goal of the
          Company.  Through  management  of its capital  resources,  the Company
          seeks to provide an attractive  financial  return to its  shareholders
          while  retaining  sufficient  capital to support future growth.  Total
          shareholders'  equity at June 30,  2002 was  $12,012,000  compared  to
          $11,822,000  at  December  31,  2001,  an  increase  of  $190,000.   A
          reconciliation   of  the   increase  is  reported  in  the   Condensed
          Consolidated  Statement of  Shareholders'  Equity  included in Item I.
          Average  total  shareholders'  equity  expressed  as a  percentage  of
          average total assets was approximately  8.6% at June 30, 2002 compared
          to  December  31,  2001's  level  of  9.0%.  Cash  dividends  totaling
          $246,000,  or $0.25 per share were  declared  during the first half of
          2002,  which is the same dividend rate declared in 2001.  These payout
          levels  represented  approximately  66.7% and  43.2% of the  Company's
          year-to-date  earnings for the  six-month  periods ended June 30, 2002
          and 2001, respectively.  The company has a dividend policy whereby the
          dividend payout level may not exceed 40% of the company's annual net
          income. Accordingly, future declarations may be limited to the amounts
          that would be available under the policy directive.

          The Company has experienced  rapid growth over the past two years, and
          accordingly,  the  Company's  leverage  ratio  (equity to assets)  has
          decreased.  Although the Company  continues to report  capital  ratios
          well above minimum  guidelines as discussed in the following  section,
          it has become  prudent for the Company to manage the  dividend  growth
          rate in order to preserve capital for future internal asset growth and
          to build a capital  position that will allow the Company to react in a
          timely  manner to external  growth  opportunities  should they present
          themselves. Therefore, future dividend declarations are expected to be
          maintained at the same level as the prior year.

REGULATORY RESTRICTIONS ON CAPITAL AND DIVIDENDS
          The primary  source of funds for the dividends  paid by First National
          Bankshares Corporation is dividends received from its subsidiary bank.
          Dividends paid by the subsidiary  bank are subject to  restrictions by
          banking regulations.  The most restrictive provision requires approval
          by the regulatory agency if dividends  declared in any year exceed the
          year's net income,  as defined,  plus the net retained  profits of the
          two  preceding   years.   Management  does  not  anticipate  any  such
          restrictions on its dividends in 2002.

          Quantitative  measures  established  by regulation  to ensure  capital
          adequacy  require the subsidiary bank to maintain  minimum amounts and
          ratios (set forth in the table  below) of total and Tier I capital (as
          defined in the regulations) to risk-weighted assets (as defined),  and
          of  Tier  capital  (as  defined)  to  average   assets  (as  defined).
          Management  believes,  as of June 30, 2002,  that the subsidiary  bank
          meets all capital  adequacy  requirements  to which it is subject,  as
          evidenced by the following table:

                                 RISK-BASED CAPITAL RATIOS
                                        June 30, 2002

                                        Actual      Minimum
                                                  Requirement
                                      --------------------------

Tier 1 risk-based capital ratio         11.02%       4.00%
Total risk-based capital ratio          12.02%       8.00%
Leverage ratio                           7.78%       3.00%

Improved operating results and a consistent dividend program, coupled with an
effective management of credit and interest rate risk will be the key elements
towards the Company continuing to maintain its present strong capital position
in the future.


<PAGE>


                                     ITEM 3.
                          QUANTITATIVE AND QUALITATTIVE
                          DISCLOSURES ABOUT MARKET RISK

          The following table  represents the results of the Company's  interest
          sensitivity  simulation  analysis as of June 30, 2002 and December 31,
          2001. Key  assumptions in the preparation of the table include changes
          in market  conditions  including  interest  rates,  loan volumes,  and
          pricing; deposit sensitivity; customer preferences; and capital plans.
          To attempt to quantify the  potential  change in net interest  income,
          given a change in interest rates,  various interest rate scenarios are
          applied to projected balances, maturities and repricing opportunities.
          The  resulting  change in net  interest  income  reflects the level of
          sensitivity  that net  interest  income has in  relation  to  changing
          interest rates.

                           Annualized Hypothetical %
                          Change in Net Interest Income
                                June 30, Dec. 31,
Interest rate scenario             2002     2001
                      ----------------- -----------------

Up 300 basis points              -14.7      -12.9
Up 100 basis points               -5.3       -4.8
Down 100 basis points              7.1        4.8
Down 300 basis points             13.7        9.8

As reported above, a sharp increase or decrease in interest rates would have a
significant impact on the Company's earnings. Modest changes in the interest
rate environment would not have as dramatic an impact.

<PAGE>


                           PART II. OTHER INFORMATION

     Item 1. Legal Proceedings
          Various legal proceedings are presently pending in which the Bank is a
          named party. These proceedings involve routine litigation incidental
          to the Bank's business. In Management's opinion, based upon advice of
          counsel, the resolution of such proceedings will not have a material
          impact on the Bank's financial position.

     Item 2 - Changes in Securities
          None

     Item 3 - Defaults upon Senior Securities
          None

     Item. 4. Submission of Matters to a Vote of Security Holders
          The annual meeting of shareholders of First National Bankshares
          Corporation was held on April 25, 2002. A total of 744,720 shares, or
          75.9% of outstanding shares, were voted with 719,825 represented by
          proxy and 24,895 represented in person. At this meeting, the following
          business was transacted:

          a) The following nominees were elected to serve as Company
          directors for a three-year term expiring in the year 2005.
                                                     For     Withheld
                                                  ----------------------
Nominees selected by the Board of Directors
   Michael G. Campbell                             744,720       -
   Richard E. Ford                                 739,370     5,350
   Ronald. B. Snyder                               740,120     4,600
Nominees from the Floor
   None



<PAGE>


              b)  The 1996 First National Bankshares Corporation Incentive Stock
                  Option Plan was amended so as to increase the number of shares
                  issuable under the plan from 48,125 to 98,125 with 637,313
                  shares voting for this amendment, 60,241 shares voting against
                  the amendment, 9,850 shares abstaining and 37,316 nonvoters.

              c)  Ernst & Young LLP of Charleston, WV was approved by the
                  shareholders as the Company's independent auditing firm with
                  716,416 shares voting for the appointment, 21,047 shares
                  voting against the motion and 7,257 shares abstaining.

              d)  No other matters were voted upon by the shareholders at this
                  meeting.

     Item 5. Other Information


<PAGE>

 Item 6.  Exhibits and Reports on Form 8-K
      a)      All exhibits included with this filing follow the signature
              page.
                Exhibit 11, Computation of Per Share Earnings, is
                filed herewith.
                Exhibit 99.1, Certification of Chief Executive Officer
                pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
                Exhibit 99.2, Certification of Chief Financial Officer
                pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
      b).     The Company did not file any Form 8-K, Current Reports during the
              quarter ended June 30, 2002.





<PAGE>


                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                      FIRST NATIONAL BANKSHARES CORPORATION




                                                                              By
                                 /s/L. Thomas Bulla
                                 -----------------------------------------------
                                                                 L. Thomas Bulla
                                           President and Chief Executive Officer



                                                                              By
                                 /s/Charles A. Henthorn
                                 -----------------------------------------------
                                                             Charles A. Henthorn
                                             Secretary/Treasurer, First National
                                                          Bankshares Corporation
                                    Chief Operating Officer, First National Bank



                                                                              By
                                /s/Matthew L. Burns
                                ------------------------------------------------
                                                                Matthew L. Burns
                                    Chief Financial Officer, First National Bank





Date: August 14, 2002




<PAGE>


                                   EXHIBIT 11
                        COMPUTATION OF PER SHARE EARNINGS



Earnings Per Share

     Basic Earnings per Share is calculated based upon the Company's net income
     after income taxes, divided by the weighted average number of shares
     outstanding during the fiscal period.

     Diluted Earnings Per Share is calculated based upon the Company's net
     income after income taxes, divided by the weighted average number of shares
     outstanding during the period plus the conversion, exercise or issuance of
     all potential common stock instruments unless the effect is to increase the
     income per common share from continuing operations.















































                                  EXHIBIT 99.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of First National Bankshares Corporation
("First National") on Form 10-Q for the period ending June 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, L. Thomas Bulla, President and Chief Executive Officer of First National,
certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906
of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13 (a) or 15 (d)
of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of First National.



                                                                              By
                                 /s/L. Thomas Bulla
                                 -----------------------------------------------
                                                                 L. Thomas Bulla
                                           President and Chief Executive Officer



Date: August 14, 2002

































                                  EXHIBIT 99.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of First National Bankshares Corporation
("First National") on Form 10-Q for the period ending June 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Matthew L. Burns, Chief Financial Officer of First National, certify,
pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13 (a) or 15 (d)
of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of First National.



                                                                              By
                                            /s/Matthew L. Burns
                                            ------------------------------------
                                                                Matthew L. Burns
                                    Chief Financial Officer, First National Bank




Date: August 14, 2002