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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10-KSB



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|x | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------

For the fiscal year ended December 31, 2002



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

For the transition period
from                    to

Commission File Number: 33-64520



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BANK BUILDING CORPORATION

(Name of small business issuer in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Virginia                                                       |  | 54-174800                           
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|1300 Kings Mountain Road Martinsville, VA                      |  | 24112                               
|(Address of principal executive offices)                       |  | (Zip Code)                          



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Issuers telephone number: (276) 656-1776

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: None

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. ̈

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ̈No  x

Check if
there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. x

Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x

The issuers revenues for the fiscal year ended December 31,
2002 were $4,127,000.

As of March 27, 2003, there were issued and outstanding 398,244 shares of the issuers common stock. These shares are not
believed to have any current market value.

Transitional Small Business Disclosure Format:    Yes ̈No  x

Portions of the 2002 Annual Report to Shareholders, which is attached hereto as Exhibit 13, are incorporated by reference in Part II of this report.



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BANK BUILDING CORPORATION

2002 ANNUAL REPORT ON FORM 10-KSB

TABLE OF CONTENTS



|                                                                                                                         |  |     
|------------------------------------------------------------------------------------------------------------------------ |  | ----
|                                                                                                                         |  | PAGE
|PART I                                                                                                                   |  | 3   
|                                                                                                                         | 
|ITEM 1. DESCRIPTION OF BUSINESS.                                                                                         |  | 3   
|ITEM 2. DESCRIPTION OF PROPERTY.                                                                                         |  | 4   
|ITEM 3. LEGAL PROCEEDINGS.                                                                                               |  | 5   
|ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                                                             |  | 5   
|                                                                                                                         | 
|PART II                                                                                                                  |  | 6   
|                                                                                                                         | 
|ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.                                                        |  | 6   
|ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.                                                       |  | 6   
|ITEM 7. FINANCIAL STATEMENTS.                                                                                            |  | 11  
|ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.                            |  | 11  
|ITEM 8A. CONTROLS AND PROCEDURES.                                                                                        |  | 11  
|ITEM 8B. OTHER INFORMATION.                                                                                              |  | 12  
|                                                                                                                         | 
|PART III                                                                                                                 |  | 12  
|                                                                                                                         | 
|ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT. |  | 12  
|ITEM 10. EXECUTIVE COMPENSATION.                                                                                         |  | 14  
|ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.                 |  | 15  
|ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                                                                 |  | 16  
|ITEM 13. EXHIBITS.                                                                                                       |  | 16  
|ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.                                                                         |  | 16  



2



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PART I

FORWARDLOOKING STATEMENTS

This report contains statements concerning the Corporations expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements may constitute
forward-looking statements as defined by federal securities laws. In some cases, readers can identify the forward-looking statements by the use of words such as may,  will, should, could,
expect, plan, intend, anticipate, believe, estimate, predict, potential or continue or the negative or other variations of these words, or
other comparable words or phrases. These statements may address issues that involve estimates and assumptions made by management, risks and uncertainties, and actual results could differ materially from historical results or those anticipated by
such statements. Factors that could have a material adverse effect on the Corporations operations and future prospects include, but are not limited to: desired business strategies, general economic conditions, interest rates, developments in
local and national markets, and other matters, which, by their nature, are subject to significant uncertainties. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are
cautioned not to place undue reliance on such statements, which speak only as of the date of this report.

ITEM 1. DESCRIPTION OF BUSINESS.

Bank Building Corporation was incorporated under Virginia law in 1988. The Corporation is
located at 1300 Kings Mountain Road, Martinsville, Virginia 24112.

The primary purpose of Bank Building Corporation (the Corporation) is to acquire and
develop property for lease as bank offices to the Participating Banks. As of March 27, 2003, the Participating Banks consisted of Blue Ridge Bank, National Association, Floyd, Virginia; Central National Bank, Lynchburg, Virginia; Community
National Bank, South Boston, Virginia; First National Bank, Rocky Mount, Virginia; First National Exchange Bank, Roanoke, Virginia; Mountain National Bank, Galax, Virginia; Patrick Henry National Bank, Bassett, Virginia; Patriot Bank, National
Association, Fredericksburg, Virginia; Peoples National Bank, Danville, Virginia; and Shenandoah National Bank, Staunton, Virginia. The Corporation also acquires funds for site acquisition and development from banks that are not Participating Banks.

The selection of sites and construction of the offices are performed by the Participating Banks that will lease the site to insure the needs of the bank
are met. Should the Corporation decide to participate in the particular project, the site is titled in the name of the Corporation, and all loans in connection with the site are made to the Corporation. There are, however, no commitments on the part
of any Participating Bank to present prospective office properties to the Corporation, nor are there any commitments on the part of the Corporation to accept any prospective office properties offered by any of the Participating Banks.

The acquisition and development of property are presently financed through loans from various sources. While such financing sources cannot be specifically identified,
from time to time other Participating Banks make loans in connection with the acquisition of a site for another Participating Bank; however, a bank leasing a particular office will not provide any acquisition or development loans for that office.
Funds for purchase and development may be acquired from banks outside the group of Participating Banks. It is anticipated the Corporation will be able to finance the acquisition of branch sites internally at some point in the future.

Following construction of a bank branch, the property is leased to the bank under a triple net operating lease. The leasing bank is responsible for all property taxes,
insurance and maintenance costs on that office. It is anticipated that the lease payments and other costs approximate the cost which would have been experienced by the bank had the office been developed by the bank or leased from a third party. The
lease payments cover all acquisition and loan costs and other costs associated with the site (just as though the bank had acquired the site itself) plus a small additional fee to cover the accounting and processing costs.

In order to obtain the most desirable branch locations it is often necessary to acquire more property than will be required for an individual office. Currently, banking
regulations restrict the ability of banks to acquire such property if it is not used for banking purposes. The Corporation is not subject to such restrictions and can acquire the most desirable property and either sell any excess property or develop
it for subsequent sale or lease to other parties.



3



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Regardless of the amount of property purchased by the Corporation, the lease with a Participating Bank includes only the
portion of the property utilized for the branch. The allocation of costs between the branch site and other property is based on the relative size and market value of each segment. Any property other than that used for the branch will be developed,
leased or sold by the Corporation. Any buildings or other developments on this property will be compatible with the design of the bank office and consistent with the conduct of the business of banking.

Both interest and depreciation expenses are incurred on each office as well as other, minimal operating costs. These expenses will result in net operating losses during
the initial years of each project although adequate cash flow from rental payments is expected to be available to meet all cash needs. During the initial lease term, all leases will be structured for the adjustments to the monthly lease payments to
track adjustments in the payments required by the underlying mortgage. After the initial period of the lease, terms will be renegotiated. Such terms could provide for lease payments in excess of or less than payments required by the underlying
mortgage and operating expenses. Additionally, a lessee Participating Bank may determine not to renew its lease on a particular branch. Under these circumstances, such branch could be sold or leased to another tenant. Such sale or lease could be
profitable, although there can be no assurance that this will occur.

While it is anticipated that renewed leases with a particular Participating Bank will
produce sufficient rental payments to cover mortgage payments and other costs, there can be no assurance that this will, in fact, be accomplished. Failure to obtain renewal lease payments sufficient to cover these costs may result in a forced sale
or foreclosure of the particular branch at a loss.

The Corporation does not have any paid employees or directors. All of its accounting, other
professional services, record keeping and other operational needs will be met by other organizations on a fee-for-service basis. It is contemplated that such fees will be based on time expended plus reimbursable expenses. It is anticipated that such
costs and expenses will be covered by the lease payments from the lease of the bank branches. At the present time, Bank Services of Virginia, Inc. provides these services. Bank Services also currently provides various bookkeeping and related
services for the Participating Banks.

ITEM 2. DESCRIPTION OF PROPERTY.

As of December 31, 2002, the Corporation owned the following offices, which are
leased to the following Participating Banks under triple net operating leases:



|                        |  |                                              
|----------------------- |  | ---------------------------------------------
|Leasing Bank            |  | Address                                      
|                        | 
|Blue Ridge Bank, N. A.  |  | 105 King Street, Blacksburg, VA 24060        
|                        | 
|Blue Ridge Bank, N. A.  |  | 325 Spring Street, Wytheville, VA 24382      
|                        | 
|Blue Ridge Bank, N. A.  |  | 370 Arbor Drive, Christiansburg, VA 24073    
|                        | 
|Central National Bank   |  | 3008 Waterlick Road, Lynchburg, VA 24502     
|                        | 
|Central National Bank   |  | 2018 Tate Springs Road, Lynchburg, VA 24501  
|                        | 
|Central National Bank   |  | 1728 Graves Mill Road, Lynchburg, VA 24502   
|                        | 
|Community National Bank |  | 1002 Virginia Avenue, Clarksville, VA 23927  
|                        | 
|Community National Bank |  | 749 East 2ndStreet, Chase City, VA 23924     
|                        | 
|Community National Bank |  | 222 Main Street, South Boston, VA 24592      
|                        | 
|Community National Bank |  | 300 Dabney Drive Ext., Henderson, NC 27536   
|                        | 
|Community National Bank |  | 205 South Bickett Street, Louisburg, NC 27549
|                        | 
|Community National Bank |  | 823 North Main Street, Roxboro, NC 27573     
|                        | 
|Community National Bank |  | 302 E. Atlantic Street, South Hill, VA 23970 
|                        | 
|Community National Bank |  | 4251 North Roxboro Road, Durham, NC 27704    
|                        | 
|First National Bank     |  | 550 Blue Ridge Avenue, Bedford, VA 24523     
|                        | 
|First National Bank     |  | 135 Scruggs Road, Moneta, VA 24121           
|                        | 
|First National Bank     |  | 9440 Franklin Street, Ferrum, VA 24088       
|                        | 
|First National Bank     |  | 301 Carbon City Road, Morganton, NC 28655    
|                        | 
|First National Bank     |  | 821 4thStreet Drive, SW, Hickory, NC 28602   



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|                             |  |                                                    
|---------------------------- |  | ---------------------------------------------------
|                             | 
|First National Bank          |  | 704 Oak Street, Forest City, NC 28043              
|                             | 
|First National Exchange Bank |  | 3132 Electric Road, Roanoke, VA 24018              
|                             | 
|First National Exchange Bank |  | 8334 Mneta Road, Bedford, VA 24523                 
|                             | 
|First National Exchange Bank |  | 2728 Lee Highway South, Troutville, VA 24175       
|                             | 
|First National Exchange Bank |  | 4143 Franklin Road, SW, Roanoke, VA 24014          
|                             | 
|First National Exchange Bank |  | 721 Blue Ridge Blvd., Roanoke, VA 24523            
|                             | 
|Mountain National Bank       |  | 507 Willow Street, Mt. Airy, NC 27030              
|                             | 
|Mountain National Bank       |  | 345 North Bridge Street, Jonesville, NC 28642      
|                             | 
|Mountain National Bank       |  | 1606 Curtis Bridge Road, Wilkesboro, NC 28697      
|                             | 
|Patrick Henry National Bank  |  | 630 Fagg Drive, Eden, NC 27288                     
|                             | 
|Patrick Henry National Bank  |  | 900 Washington Street, Eden, NC 27288              
|                             | 
|Patrick Henry National Bank  |  | 100 Turner Drive, Reidsville, NC 27320             
|                             | 
|Patrick Henry National Bank  |  | 305 South Main Street, Reidsville, NC 27320        
|                             | 
|Patrick Henry National Bank  |  | 4004 West Wendover Avenue, Greensboro, NC 27407    
|                             | 
|Patrick Henry National Bank  |  | 5715 High Point Road, Greensboro, NC 27407         
|                             | 
|Patriot Bank, N.A.           |  | 40 White Oak Road, Fredericksburg, VA 22405        
|                             | 
|Patriot Bank, N.A.           |  | 55 Worth Avenue, Stafford, VA 22554                
|                             | 
|Patriot Bank, N.A.           |  | 8402 Sudley Road, Manassas, VA 20109               
|                             | 
|Peoples National Bank        |  | 903 South Main Street, Danville, VA 24541          
|                             | 
|Peoples National Bank        |  | 5406 U. S. Highway 29 North, Danville, VA 24527    
|                             | 
|Peoples National Bank        |  | 697 Country Club Drive, Fayetteville, NC 28301     
|                             | 
|Peoples National Bank        |  | 2803 Ward Boulevard, Wilson, NC 27893              
|                             | 
|Peoples National Bank        |  | 123 Rowan Street, Fayetteville, NC 28301           
|                             | 
|Peoples National Bank        |  | 1001 South Horner Road, Sanford, NC 27330          
|                             | 
|Peoples National Bank        |  | 2100 West Arlington Boulevard, Greenville, NC 27834
|                             | 
|Shenandoah National Bank     |  | 75 North Mason Street, Harrisonburg, VA 22802      
|                             | 
|Shenandoah National Bank     |  | 2782 Stuarts Draft Highway, Stuarts Draft, VA 24477

The leasing bank is responsible for all property taxes, insurance and maintenance costs on each leased office. The
Corporation incurs interest and depreciation expenses related to each office as well as other, minimal operating costs.

In addition to the bank offices,
as of December 31, 2002, the Corporation also owned the following properties which it leases to third parties:



|                                 |  |               
|-------------------------------- |  | --------------
|Description                      |  | Location      
|                                 | 
|Golden Corral Restaurant         |  | Raleigh, NC   
|                                 | 
|West Lake Corner Shopping Center |  | Moneta, VA    
|                                 | 
|Blackstone Shopping Center       |  | Blackstone, VA
|                                 | 
|Executive Park Office Center     |  | Roanoke, VA   

As of December 31, 2002, management considered all of the Corporations properties to be in good
condition, and maintained adequate insurance on each of these properties.

ITEM 3. LEGAL PROCEEDINGS.

As of March 27, 2003, there were no material pending legal proceedings to which the
Corporation was a party or to which the property of the Corporation was subject.

ITEM 4. SUBMIS
SION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The 2002 Annual Meeting of Shareholders of the Corporation was held on
December 30, 2002. A total of 220,030 shares, amounting to 55.25% of the Corporations outstanding common stock, were represented at the meeting either in person or by proxy.



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At the Annual Meeting, the shareholders voted to fix the number of directors of the Corporation at 6, by the votes
indicated below.



|                             |  |         |  |         |  |         |  |                
|---------------------------- |  | ------- |  | ------- |  | ------- |  | ---------------
|                             |  | For     |  | Against |  | Abstain |  | Broker Non-Vote
|Fix Number of Directors at 6 |  | 219,539 |  | 245     |  | 246     |  |               

Additionally, the following persons were elected to serve as Directors of the Corporation, to serve until the 2003
Annual Meeting, having received the following votes:



|                         |  |         |  |         
|------------------------ |  | ------- |  | --------
|Name                     |  | For     |  | Withheld
|Worth Harris Carter, Jr. |  | 219,736 |  | 294     
|Robert W. Conner         |  | 219,736 |  | 294     
|William G. Davis         |  | 219,523 |  | 507     
|Charles E. Hall          |  | 219,736 |  | 294     
|Haller G. Prillaman      |  | 219,736 |  | 294     
|R.E. Williams            |  | 219,736 |  | 294     

No other matters were voted on during the meeting.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Corporation is authorized to issue 400,000
shares of common stock, with no par value. On February 28, 1995, the Corporation distributed 398,244 shares of its common stock to approximately 3,000 shareholders for no consideration. As of March 27, 2003, the Corporation had
approximately 2,800 shareholders of record and 398,244 shares outstanding.

The Corporation is not aware of any brokerage firms making a market in the
Corporations common stock or any securities professionals following the Corporation, and no public trading market for the stock has developed. Management believes that the consideration for any shares of stock that may have been traded in
recent years has been minimal.

The Corporation has not paid dividends since its incorporation and no dividends are anticipated in the foreseeable future.

ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

The following discussion should be read in
conjunction with our Description of Business and our audited financial statements and accompanying notes included elsewhere in this report.



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Overview

The primary
purpose of the Corporation is to acquire and develop property for lease as bank offices to the Participating Banks. As of December 31, 2002, the Participating Banks consisted of: Blue Ridge Bank, National Association, Floyd, Virginia; Central
National Bank, Lynchburg, Virginia; Community National Bank, South Boston, Virginia; First National Bank, Rocky Mount, Virginia; First National Exchange Bank, Roanoke, Virginia; Mountain National Bank, Galax, Virginia; Patrick Henry National Bank,
Bassett, Virginia; Patriot Bank, National Association, Fredericksburg, Virginia; Peoples National Bank, Danville, Virginia; and Shenandoah National Bank, Staunton, Virginia.

The selection of sites and construction of the offices are performed by the particular Participating Bank that will lease the particular site to insure the needs of that bank are met. There are, however, no
commitments on the part of any Participating Bank to present prospective office properties to the Corporation, nor are there any commitments on the part of the Corporation to accept any prospective office properties offered by any of the
Participating Banks. The acquisition and development of property is financed through loans from various sources. From time to time, Participating Banks make loans in connection with the acquisition of a site for another Participating Bank. The
Corporation does not, however, seek loans for the acquisition of a given site from the particular Participating Bank that intends to lease that site. The Corporation also acquires funds for site acquisition and development from banks that are not
Participating Banks.

The initial lease terms for a bank office are set to cover all carrying costs of the particular site plus a small amount for the
accounting and record keeping costs of the Corporation. Subsequent lease terms are negotiated between the Participating Bank and the Corporation based on the conditions in the relevant market at that time.

Regardless of the amount of property purchased by the Corporation, the lease with the Participating Bank includes only the portion of the property utilized for the
branch. The allocation of costs between the branch site and other property is based on the relative size and market value of each segment. Any property other than that used for the branch will be developed, leased or sold by the Corporation. Any
buildings or other developments on this property will be compatible with the design of the bank office and consistent with the conduct of the business of banking.

Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Critical accounting policies are defined as those that require management to make estimates, judgments and assumptions, giving due consideration to materiality, in certain circumstances that affect amounts reported in the
financial statements, and potentially result in materially different results under different conditions and assumptions. The Corporation considers the following accounting policies to be critical policies which involve various estimation
processes: accounting for the acquisition and classification of real estate assets, and accounting for the disposition of real estate assets.

Acquisition and Classification of Real Estate Assets

Substantially all of the Corporations properties are acquired from the
Participating Banks at carrying value. Each acquisition from the Participating Banks is evaluated under SFAS No. 98, Accounting for Leases; Sale-Leaseback Transactions Involving Real Estate; Sales-Type Leases of Real Estate; Definition of
the Lease Term; Initial Direct Costs of Direct Financing Lease, to determine whether the transfer qualifies as an accounting sale from and leaseback to the Participating Bank. Once Management determines that sale leaseback accounting is
appropriate, directly owned and leased assets are classified as real estate held and leased under the operating method, or as net investment in at the inception of a lease, for financial reporting purposes. This classification is based on several
criteria, including, but not limited to, estimates of the remaining economic life of the leased assets and the calculation of the present value of future minimum rents. The classification criteria are intended to indicate whether the risks and
rewards of ownership are retained by the lessor or substantially transferred to the lessee.



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Dispositions and Impairment of Real Estate

Gains and losses on disposition of real estate are recognized upon sale of the underlying project in accordance with Statement of Financial Accounting Standards No. 66, Accounting for Sales of Real
Estate. The Corporation evaluates each real estate sale transaction to determine if it qualifies for gain recognition under the full accrual method. If the transaction does not meet the criteria for the full accrual method of profit
recognition based on the Corporations assessment, the Corporation accounts for a sale based on an appropriate deferral method determined by the nature and extent of the buyers investment and the Corporations continuing involvement.

FASB Statement No. 144 Accounting for Impairment of Disposal of Long-Lived Assets,  requires that long-lived assets held and used by an
entity be reviewed for impairment, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. This Statement also specifies criteria for reclassification and measurement for long-lived assets
held for sale.

Properties

The Corporation did not
acquire additional properties during 2002. As of December 31, 2002, the Corporation owned 46 offices that were leased to various Participating Banks under triple net operating leases. The leasing bank is responsible for all property taxes,
insurance and maintenance costs on each leased office. The Corporation incurs interest and depreciation expenses related to each office as well as other, minimal operating costs.

The Corporation also owns the Westlake Corner Shopping Center near Smith Mountain Lake. This center consists of 50,000 square feet of space on 29 acres. The anchor tenants for the center are Food Lion, Revco, and
Family Dollar Store. First National Bank, Rocky Mount, Virginia opened an office on a 10 acre tract of this property, on June 5, 1998. The Corporation also owns a Golden Coral Restaurant in Raleigh, NC.

The Corporation also owns Blackstone Properties LLC, a wholly owned subsidiary. Blackstone Properties owns two properties: a shopping center in southside Virginia and
Executive Office Park, an office complex located in Roanoke, Virginia. The shopping center maintains various retail tenants. Executive Office Park is an office complex consisting of six separate buildings containing approximately 54,000 square feet
of space divided into 28 suites.

Long-term mortgages payable by the Corporation as of December 31, 2002 and 2001 consisted of the following:



|                                                                                                                                                                                                                        |  |      |           |      |   |          
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --------- | ---- | - | ---------
|                                                                                                                                                                                                                        |  | 2002 |           | 2001
|Mortgage loan secured by real estate (Lake Shopping Center) and related leases. Monthly payments are $19,403, including principal and interest at 8.25% at December 31, 2002, with the final
payment due in 2012.       |  | $    | 1,493,957 |      | $ | 1,598,798
|                                                                                                                                                                                                                        |  |     
|Mortgage loan secured by real estate (Lake Shopping Center) and related leases. Monthly payments are $8,418, including principal and interest at 7.00% at December 31, 2002, with the final
payment in 2011.            |  |      | 664,082   |      |   | 716,598  
|                                                                                                                                                                                                                        |  |     
|Mortgage loan secured by real estate (Blackstone Shopping Center) and related leases. Monthly payments are $20,394, including principal and interest at 8.50% at December 31, 2002, with the
final payment due in 2018. |  |      | 2,099,012 |      |   | 2,162,368
|                                                                                                                                                                                                                        |  |     
|Mortgage loan secured by real estate (Golden Corral Restaurant) and related lease. Monthly payments are $16,302, including principal and interest at 6.0% at December 31, 2002, with the
final payment due in 2004.     |  |      | 1,597,103 |      |   | 1,693,726



8



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|                                                                                                                                                                                                                                                                                                                                                  |  |   |            |   |  |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | - | ---------- | - |  | - | ---------- | -
|Balance Forward                                                                                                                                                                                                                                                                                                                                   |  | $ | 4,257,051  |   |  | $ | 4,477,764  |  
|                                                                                                                                                                                                                                                                                                                                                  |  |  
|Mortgage loan secured by real estate (office park) and related leases. Monthly payments are $17,444, including principal and interest at 7.00%, with the final payment due in 2006.                                                                                                                                                               |  |   | 2,187,184  |   |  |   | 2,241,336  |  
|                                                                                                                                                                                                                                                                                                                                                  |  |  
|Mortgage loans secured by real estate (branch bank facilities) and related leases. Monthly payments at December 31, 2002 are $212,379, including aggregate principal and interest, with the
final payments due from 2009 to 2017. Interest rates range from 5.50% to 8.75% at December 31, 2002, and are subject to adjustments at various times. |  |   | 25,838,301 |   |  |   | 26,280,057 |  
|                                                                                                                                                                                                                                                                                                                                                  |  |   |            |   |  |   |            |  
|                                                                                                                                                                                                                                                                                                                                                  |  |   | 33,879,639 |   |  |   | 34,692,883 |  
|Less current portion                                                                                                                                                                                                                                                                                                                              |  |   | (868,125   | ) |  |   | (804,047   | )
|                                                                                                                                                                                                                                                                                                                                                  |  |   |            |   |  |   |            |  
|                                                                                                                                                                                                                                                                                                                                                  |  | $ | 33,011,514 |   |  | $ | 33,888,836 |  
|                                                                                                                                                                                                                                                                                                                                                  |  |   |            |   |  |   |            |  

Operating Results

Net Income.    The Corporation generated net income in 2002 of $233,982, or $0.59 per share, compared to net income in 2001 of $151,724 or $0.38 per share, and a net loss in 2000 of $34,765. Lease income, which
has historically been the Corporations principal source of revenue, was $3,946,580 in 2002, an increase of 15% from lease income in 2001 of $3,427,608. In comparison, lease income was $3,427,608 in 2001 and $2,102,807 in 2000, an increase of
$1,324,801, or 63%. The increase in income for both years is primarily attributable to an increase in lease income, due to the purchase of 15 additional properties in 2001. Lease income accounted for 96% of total income in 2002, 94% in 2001 and 98%
in 2000. The Corporation expects lease income, and therefore net income, to rise in 2003.

The Corporation realized gains on the sales of excess properties
of $131,317 in 2002 and $154,852 in 2001, respectively, and none in 2000.

Operating Expenses.    Operating expenses for 2002
were $3,751,609 compared to $3,412,735 for 2001. This increase of $338,874, or 10%, is primarily due to increases in both interest expense and depreciation expense, which are the Corporations principal operating expenses. In comparison,
operating expenses increased from year end 2000 to 2001 by $1,223,743, or 56%. All expenses with the exception of professional fees increased. Increases for both years in operating expenses are the result of purchasing additional property in 2001.

Interest expense rose to $2,714,012 in 2002 from $2,496,172 in 2001, an increase of $217,840 or 9%. In comparison, interest expense rose $870,034, or 54%
between 2000 and 2001. The change in both years is principally due to total outstanding debt, which increased for fifteen additional bank offices in 2001.

Depreciation expense rose to $674,584 in 2002 from $551,346 in 2001, for an increase of $123,238 or 22%. From year end 2000 to 2001, depreciation expense rose $137,480, or 33%. The change from 2001 to 2002 is principally due to the
acquisition of property in 2001.

Operating expenses, other than depreciation and interest expense, consist largely of amortization, real estate taxes and
insurance, repairs and the cost of corporate functions including legal and accounting fees. These expenses fell to $363,013 in 2002 from $365,217 in 2001 for a decrease of $2,204 or 0.6%. All of these other expenses increased in 2002 with the
exception of taxes and insurance which decreased. From year end 2000 to year end 2001, operating expenses rose $216,299, or 1.45%. This was due to the acquisition of additional property in that year.

The effective income tax rate was 37.7% in 2002 compared to 37.6% in 2001. The increase was due to increased income. There was no income tax liability in 2000 due to the
recognition of tax loss carryforwards from previous years.



9



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Analysis of Financial Condition, Liquidity and Capital Resources

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of business operations. The Corporations main source of
liquidity is lease income. Lease income received from these banks was $2,601,275 in 2002, $2,222,122 in 2001, and $1,281,466 in 2000. Cash outflows consist of payments for operating expenses, interest expense, income taxes, and mortgage borrowings.
The Corporations cash flow from operations was $957,658 for 2002, $595,197 for 2001 and $322,321 for 2000.

The following table summarizes the
Corporations cost of properties acquired during the years ended December 31, 2002 and 2001, and the lease income derived from those properties on an annual basis:



|                     |  |      |   |      |   |          
|-------------------- |  | ---- | - | ---- | - | ---------
|                     |  | 2002 |   | 2001
|Cost of Property     |  | $    |  |      | $ | 8,358,000
|Annual Rental Income |  | $    |  |      | $ | 741,179  

As of December 31, 2002, the Corporations other sources of liquidity consist of $82,790 in cash and
potential sales proceeds from real estate having an aggregate book value of approximately $34,381,002. Management believes that its cash flow from operations and these other potential sources of cash will be sufficient to finance current and
projected operations.

The Corporation has not paid dividends to its shareholders.

Off-Balance Sheet Arrangements

The Corporation does not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

The following paragraphs outline
several accounting pronouncements that will become effective in future years.

SFAS Statement No. 145

In April 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard SFAS No. 145, Rescission of FASB
Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections. The rescission of SFAS No. 4, Reporting Gains and Losses from Extinguishments, and SFAS No. 64, Extinguishments of
Debt Made to Satisfy Sinking Fund Requirements, which amended SFAS No. 4 will affect income statement classification of gains and losses from extinguishments of debt. SFAS No. 4, requires that gains and losses from extinguishments of
debt be classified as an extraordinary item, if material. Under SFAS No. 145, extinguishment of debt is now considered a risk management strategy by the reporting enterprise and the FASB does not believe it should be considered extraordinary
under the criteria in APB Opinion No. 30, Reporting the Results of Operations-Reporting the Effects of Disposal of a Segment of a Business, and Extraodinary, Unusual and Infrequently Occurring Events and Transactions, unless the
debt extinguishments meets the unusual in nature and infrequency of occurrence criteria in APB Opinion No. 30. SFAS No. 145 will be effective for fiscal years beginning after May 15, 2002.

SFAS Statement No. 146

In June 2002, the FASB issued SFAS
No. 146, Accounting for Costs Associated with Exit or Disposal Activities, SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullified Emerging Issues Task Force
Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit and Activity (including Certain Costs Incurred in a Restructuring). SFAS No. 146 requires that a liability for a cost
associated with an exit or disposal activity be recognized when the liability is incurred. A fundamental conclusion reached by the FASB in this statement is that an entitys commitment to a plan, by itself, does not create a present obligation
to others that meets the definition of a liability. SFAS No. 146 also establishes that fair value is the objective for initial measurement of the liability. The provisions of this statement are effective for exit or disposal activities that are
initiated after December 31, 2002, with early adoption encouraged.



10



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FIN Interpretation No. 46

In January 2003, the FASB issued Interpretation (FIN) No. 46, Consolidation of Variable Interest Entities and in December 2003, a revised interpretation was issued (FIN No. 46( R)). In general, a variable
interest entity (VIE) is a corporation, partnership, trust, or any other legal structure used for business purposes that either does not have equity investors with voting rights nor has equity investors providing sufficient financial
resources for the entity to support its activities. FIN No. 46 requires a VIE to be consolidated by a company if that company is designated as the primary beneficiary. Generally, the interpretation applies to VIEs created after January 31,
2003, and for all financial statements issued after December 15, 2003, for VIEs in which an enterprise held a variable interest that it acquired before February 1, 2003.

FASB Statement No. 150

In May 2003, the FASB issued Statement No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity. Statement No. 150 clarifies the definition of a liability as currently defined in FASB Concepts Statement No. 6, Elements of Financial Statements, as well
as other planned revisions. This statement requires a financial instrument that embodies an obligation of an issuer to be classified as a liability. In addition, the statement provides for the initial and subsequent measurement of these financial
instruments and disclosure requirements. Generally Statement No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and for all other matters, for the first interim period beginning after June 15,
2003.

FASB Statement No. 149

In April 2003, the FASB
issued Statement No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. Statement No. 149 amends Statement No. 133 for decisions made as part of the FASBs Derivatives Implementation
Group process, other FASB projects dealing with financial instruments, and in connection with implementation issues raised in relation to the application of the definition of a derivative. This statement clarifies that mortgage loan commitments
relating to the origination of mortgage loans held for sale should be accounted for as derivative instruments by the issuer of the loan commitment. This statement is generally effective for contracts entered into or modified after June 30,
2003, and for hedging relationships designated after June 30, 2003.

ITEM 7. FINANCIAL STATEMENTS.

The report of the independent registered public accounting firm and audited financial
statements of the Corporation and accompanying notes required by this Item are included in the Corporations Annual Report, which is attached hereto as Exhibit 13 and is incorporated herein by reference.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 8A. CONTROLS AND PROCEDURES.

The Corporation maintains a system of disclosure controls and procedures that is
designed to ensure that material information is accumulated and communicated to management, including the Corporations president (who is currently the Corporations principal executive officer and principal financial officer), as
appropriate to allow timely decisions regarding required disclosure. As required, during the preparation of this report, management, with the participation of the Corporations president, evaluated the effectiveness of the design and operation
of the Corporations disclosure controls and



11



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procedures. Based on this evaluation, the Corporations president concluded that the Corporations
disclosure controls and procedures were not operating effectively as of the end of the period covered by this report because several reports the Corporation was required to file under the Securities Exchange Act of 1934, as amended (Exchange
Act), had not been filed in a timely manner and others had not been filed. In connection with this evaluation, during the fourth quarter of 2005, the Corporation has implemented significant changes to the Corporations reporting processes
to ensure that relevant information is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC so that the Corporations future periodic and other reports required by the Exchange Act
will be filed on time and accurately.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance
that the Corporations disclosure controls and procedures will detect or uncover every situation involving the failure of persons within the Corporation to disclose material information otherwise required to be set forth in the
Corporations periodic reports.

The Corporations management is also responsible for establishing and maintaining adequate internal control over
financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. There were no changes
in the Corporations internal control over financial reporting during the fourth quarter of 2002 that materially affected, or were reasonably likely to materially affect, the Corporations internal control over financial reporting.
However, as noted above, during the fourth quarter of 2005, the Corporation implemented significant changes to the Corporations reporting processes to ensure that relevant information is recorded, processed, summarized, and reported within the
time periods specified in the rules and forms of the SEC so that the Corporations periodic and other reports required by the Exchange Act will be filed on time and accurately.

ITEM 8B. OTHER INFORMATION.

None.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

The following information is provided as of March 31, 2003.

Directors



|                              |  |                |  |                                                                                    
|----------------------------- |  | -------------- |  | -----------------------------------------------------------------------------------
|Name (Age)                    |  | Director Since |  | Principal Occupation During Past Five Years                                        
|                              |  |               
|Worth Harris Carter, Jr. (65) |  | 1988           |  | Chairman of the Board and President                                                
|                              |  |               
|                              |  |                |  | Worth Harris Carter, Jr. is also a director and officer of the following companies:
|                              |  |               
|                              |  |                |  | Chairman of the Board of First National Bank since 1976, President since 1986;     
|                              |  |               
|                              |  |                |  | Chairman of the Board and President of First National Exchange Bank since 1998;    
|                              |  |               
|                              |  |                |  | Chairman of the Board and President of Patrick Henry National Bank since 1977;     
|                              |  |               
|                              |  |                |  | Chairman of the Board of Peoples National Bank since 1976, President since 1981;   



12



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|                          |  |      |  |                                                                                                                                                                                                                                                                                                                                                                                                  
|------------------------- |  | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |  |      |  | Chairman of the Board of Blue Ridge Bank since 1982;                                                                                                                                                                                                                                                                                                                                             
|                          |  |     
|                          |  |      |  | Chairman of the Board and President of Community National Bank since 1985;                                                                                                                                                                                                                                                                                                                       
|                          |  |     
|                          |  |      |  | Chairman of the Board and President of Central National Bank since 1996;                                                                                                                                                                                                                                                                                                                         
|                          |  |     
|                          |  |      |  | Chairman of the Board and President of Mountain National Bank since 1996;                                                                                                                                                                                                                                                                                                                        
|                          |  |     
|                          |  |      |  | Chairman of the Board and President of Shenandoah National Bank since 1996;                                                                                                                                                                                                                                                                                                                      
|                          |  |     
|                          |  |      |  | Chairman of the Board and President of Patriot Bank since 1996;                                                                                                                                                                                                                                                                                                                                  
|                          |  |     
|                          |  |      |  | Chairman of the Board and President of Mortgage Company of Virginia since 1984;                                                                                                                                                                                                                                                                                                                  
|                          |  |     
|                          |  |      |  | Chairman of the Board and President of Bank Services of Virginia, Inc. since 1984;                                                                                                                                                                                                                                                                                                               
|                          |  |     
|                          |  |      |  | Manager of Blackstone, LLC since 1998.                                                                                                                                                                                                                                                                                                                                                           
|                          |  |     
|Conner, Robert W. (63)    |  | 1995 |  | Robert W. Conner is and has been Clerk of the Circuit Court of Halifax County for more than five years. He has been a Director of Community National Bank, South Boston, Virginia since 1985.
He has served on the Boards of Directors of both Bank Services of Virginia and Mortgage Company of Virginia.                                                                                       
|                          |  |     
|Davis, William G. (61)    |  | 1995 |  | William G. Davis is and has been an Attorney at law in the firm of Davis, Davis, Davis & Rice, Rocky Mount, Virginia for more than five years. He has been a Director of First National
Bank, Rocky Mount, Virginia since 1974. He has served on the Boards of Directors of both Bank Services of Virginia and Mortgage Company of Virginia. (Mr. Davis passed away in 2004.)                    
|                          |  |     
|Hall, Charles E. (61)     |  | 1995 |  | Charles E. Hall is and has been a Farmer for more than five years. He has served on the Board of Directors for Blue Ridge Bank, N.A., Floyd, Virginia since 1978. He has served on the Boards
of Directors of both Bank Services of Virginia and Mortgage Company of Virginia.                                                                                                                   
|                          |  |     
|Prillaman, Haller G. (69) |  | 1995 |  | Haller G. Prillaman has been President of Prillaman Brothers, Inc., Martinsville, VA for more than five years. He has been a Director for Patrick Henry National Bank, Bassett, Virginia, since
1976 and has been a Director of Mountain National Bank, Galax, Virginia, since 1996. He has served on the Boards of Directors of both Bank Services of Virginia and Mortgage Company of Virginia.



13



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|                     |  |      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-------------------- |  | ---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |  |     
|Williams, R. E. (68) |  | 1995 |  | R. E. Williams is retired. Previously he was President of Dry Fork Milling Company, Inc., Danville, Virginia for more than five years. He has also served as a Director of Central National
Bank, Lynchburg, Virginia, since 1996 and of Patriot Bank, National Association since 1996. He has served on the Boards of Directors of both Bank Services of Virginia and Mortgage Company of Virginia. He has served on the Boards of Directors of both
Bank Services of Virginia and Mortgage Company of Virginia.

Executive Officers

Mr. Carter, who is discussed above, is the Corporations only executive officer.

There are no family
relationships between any director or executive officer of the Corporation; nor is the Board of Directors aware of any involvement in legal proceedings that would be material to an evaluation of the ability or integrity of any director or executive
officer.

Code of Ethics

The Corporation has
not adopted a Code of Ethics for its directors, executives and employees, primarily because management of the Corporation believes and understands that our officers and directors adhere to and follow ethical standards without the necessity of a
written policy. The Corporations Board of Directors will revisit this issue in the future to determine if adoption of a code of ethics is appropriate. In the meantime, the Corporations management requires and promotes honest and ethical
conduct, full and fair disclosure in its reports to the SEC, and compliance with applicable governmental laws and regulations.

Section 16(a)
Beneficial Ownership Reporting Compliance

Section 16(a) does not apply to the Corporations directors, executive officers or 10%
beneficial owners because the Corporations common stock is not registered under Section 12 of the Exchange Act.

Audit Committee

The entire Board of Directors functions as the Corporations Audit Committee and in this capacity met one time in 2002. All of the
Corporations directors, with the exception of Chairman of the Board and President Carter, are independent for the purposes of the NASDAQ listing standards. The Board has not adopted a written charter setting forth the
responsibilities and authority of the Board in its capacity as the Audit Committee. Although, Mr. Carter is not independent under the NASDAQ listing standards, the Board has determined that Mr. Carter possesses the knowledge and experience
required to be considered an audit committee financial expert. The Board of Directors believes that all of the Corporations directors possess the financial knowledge and expertise necessary to protect the Corporations shareholders in
performing the functions of the Audit Committee.

ITEM 10. EXECUTIVE COMPENSATION.

The following information is provided as of December 31, 2002.

Executive Compensation

The Corporation does not have any paid
employees or directors. All of its accounting, other professional services, record keeping and other operational needs will be met by other organizations on a fee-for-service basis. It is contemplated that such fees will be based on time expended
plus reimbursable expenses. It is anticipated that such costs and expenses will be



14



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covered by the lease payments from the lease of the bank branches. At the present time, Bank Services of Virginia, Inc.,
provides these services. Bank Services of Virginia, Inc. is a bank service corporation equally owned by the Participating Banks that currently provides various bookkeeping and related services to the Participating Banks.

The Corporation does not have any equity compensation plans or employment or change in control agreements.

Mr. Worth Harris Carter, Jr., Chairman of the Board and President, serves as the Chief Executive Officer of the Corporation.

Director Compensation

The Directors receive no compensation for Board service or for committee meetings attended.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following
table shows as of December 31, 2002, the beneficial ownership of the Corporations common stock of each director, the executive officer identified in the Summary Compensation Table and the Corporations directors and executive
officers as a group. To the Corporations knowledge, Mr. Carter is the Corporations only shareholder beneficially holding more than 5% of the Corporations outstanding common stock. As of December 31, 2002, the
Corporations directors and executive officers as a group, beneficially owned 55,756 shares or 14% of the Corporations outstanding common stock.



|                                                           |  |                                                    |     |  |                                    |  
|---------------------------------------------------------- |  | -------------------------------------------------- | --- |  | ---------------------------------- | -
|Name                                                       |  | Amount and Nature ofBeneficial Ownership (1)(2)(3) |     |  | Percent of CommonStock Outstanding |  
|Worth Harris Carter, Jr.                                   |  | 47,605                                             | (4) |  | 11.95                              | %
|Robert W. Conner                                           |  | 1,119                                              | (5) |  | 0.28                               | %
|William G. Davis                                           |  | 2,271                                              |     |  | 0.57                               | %
|Charles E. Hall                                            |  | 135                                                |     |  | 0.03                               | %
|Haller G. Prillaman                                        |  | 3,470                                              |     |  | 0.87                               | %
|R.E. Williams                                              |  | 1,156                                              |     |  | 0.29                               | %
|All Directors and Executive Officer as a Group (6 persons) |  | 55,756                                             |     |  | 14.0                               | %

---

|(1) | For purposes of this table, beneficial ownership has been determined in accordance with the provisions of Rule 13d-3 of the Securities Exchange Act of 1934 under which, in general,
a person is deemed to be the beneficial owner of a security if he has or shares the power to vote or direct the voting of the security or the power to dispose of or direct the disposition of the security, or if he has the right to acquire beneficial
ownership of the security within sixty days.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Includes shares held by affiliated corporations, spouses, minor or dependent children, relatives sharing the individuals home, and shares held as custodian or trustee.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Unless otherwise indicated, the shares listed in the table represent sole voting and investment power.
|--- | ------------------------------------------------------------------------------------------------------



|(4) | Includes the following shares with respect to which Mr. Carter is deemed to be the beneficial owner: 4,601 shares held by Mr. Carter as custodian and 2,529 shares held by
Mr. Carters family members and 538 shares held by C & C Realty, Inc., of which Mr. Carter is president and a 50% owner.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



15



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|(5) | Includes the following shares with respect to which Mr. Conner is deemed to be the beneficial owner: 219 shares held by Mr. Conners family members.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

The Corporation knows of no arrangements, including any pledge by any person of securities of the Corporation, which may at a subsequent
date result in a change in control of the Corporation.

Equity Compensation Plans.    No disclosure regarding equity
compensation plans has been provided because the Corporation does not have any outstanding equity compensation plans or arrangements that would be covered by Item 201(d) of Regulation S-B.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information provided in Note 8 of the financial statements
accompanying this report is incorporated herein by reference.

ITEM 13. EXHIBITS.

The following exhibits are filed as part of this Form 10-KSB:

Exhibits:



|    |  |                                                                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|3.1 |  | Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Form SB-2 filed with the SEC on June 16, 1993)                           
|    | 
|3.2 |  | Bylaws (incorporated by reference to Exhibit 3.2 to Form SB-2 filed with the SEC on June 16, 1993)                                              
|    | 
|13  |  | Portion of 2002 Annual Report to Shareholders                                                                                                   
|    | 
|21  |  | Subsidiaries (incorporated by reference to Exhibit 21 to Form 10-KSB, for the period ended December 31, 2000, filed with the SEC on May 5, 2006)
|    | 
|31  |  | Certification by principal executive officer and principal financial officer pursuant to Rule 13a-14(a)                                         
|    | 
|32  |  | Certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. § 1350                                       

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table presents the fees for professional audit services
rendered by Goodman & Company for the audit of the Corporations annual financial statements for the years ended December 31, 2002 and December 31, 2001, and fees billed for other services rendered by Goodman &
Company during those periods. All services reflected in the following fee table for 2002 and 2001 were pre-approved, respectively, in accordance with the policy of the Board of Directors.



|                   |  |                         |        |      |   |       
|------------------ |  | ----------------------- | ------ | ---- | - | ------
|                   |  | Year Ended December 31,
|                   |  | 2002                    |        | 2001
|Audit fees1        |  | $                       | 13,372 |      | $ | 9,532 
|Audit-related fees |  |                         |       |      |   |      
|Tax fees2          |  |                         | 1,653  |      |   | 1,178 
|All other fees     |  |                         |       |      |   |      
|                   |  |                         |        |      |   |       
|Total Fees         |  | $                       | 15,025 |      | $ | 10,710
|                   |  |                         |        |      |   |       



16



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|1 | Audit fees consist of audit and review services, consents and review of documents to be filed
with the SEC.
|- | -----------------------------------------------------------------------------------------------------------

|2 | Tax fees consist of preparation of federal and state tax returns and consultation concerning tax compliance issues.
|- | -------------------------------------------------------------------------------------------------------------------

Also in its capacity as the Audit Committee, the Board of Directors pre-approves all audit (including audit-related) and permitted non-audit services to be performed by
the independent auditors. The Board of Directors annually approves the scope and fee estimates for the year-end audit to be performed by the Corporations independent auditors for the fiscal year. With respect to other permitted services, the
Board of Directors pre-approves specific engagements, projects and categories of services on a fiscal year basis, subject to individual project and annual maximums.



17



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SIGNATURES

In accordance with the requirements of Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                  |  |                                                                                      
|----------------- |  | -------------------------------------------------------------------------------------
|                  |  | BANK BUILDING CORPORATION                                                            
|                  | 
|Date: May 1, 2006 |  | /s/ Worth Harris Carter, Jr.                                                         
|                  |  | Worth Harris Carter, Jr.                                                             
|                  |  | Chairman of the Board, President, Chief Executive Officer and Chief Financial Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.



|                                                      |  |                                                                                                                                                                   |  |            
|----------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|Signature                                             |  | Capacity                                                                                                                                                          |  | Date       
|                                                      |  |                                                                                                                                                                  
|/s/ Worth Harris Carter, Jr. Worth
Harris Carter, Jr. |  | Chairman of the Board, President, Chief Executive Officer and Chief Financial Officer (principal executive, principal financial and principal
accounting officer) |  | May 1, 2006
|                                                      |  |                                                                                                                                                                  
|/s/ Robert W. Conner Robert W.
Conner                 |  | Director                                                                                                                                                          |  | May 1, 2006
|                                                      |  |                                                                                                                                                                  
|/s/ Charles E. Hall Charles E.
Hall                   |  | Director                                                                                                                                                          |  | May 1, 2006
|                                                      |  |                                                                                                                                                                  
|/s/ Haller G. Prillaman Haller G.
Prillaman           |  | Director                                                                                                                                                          |  | May 1, 2006
|                                                      |  |                                                                                                                                                                  
|/s/ R. E. Williams R.E.
Williams                      |  | Director                                                                                                                                                          |  | May 1, 2006



18