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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED September 30, 2005
 FIRST NATIONAL BANCSHARES, INC.
  Florida
    
    333-60283
    
    06-1522028(Jurisdiction of Organization)
    
    Commission
    
    I.R.S. EmployerFile Number
    
    Identification No.
 5817 Manatee Avenue West, Bradenton, Florida
    
    34209(Address of principal office)
    
    (Zip Code)
 (941) 794-6969
  þ o
  o þ
 o þ
  Common stock, par value $.10 per share
    
    3,402,848 shares(class)
    
    Outstanding as of November 3, 2005




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PagePART I. FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets, September 30, 2005 and December 31, 2004
    
    
    1Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2005 and 2004
    
    
    3Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and September 30, 2004
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    8Item 3.
    
    Quantitative and Qualitative Disclosure About Market Risk
    
    
    11Item 4.
    
    Controls and procedures
    
    
    12PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    13Item 2.
    
    Changes in Securities and Use of Proceeds
    
    
    13Item 3.
    
    Defaults under Senior Securities
    
    
    13Item 4.
    
    Submission of Matters to a vote of Security Holders
    
    
    13Item 5.
    
    Other Information
    
    
    13Item 6.
    
    Exhibits and Reports on Form 8-K
    
    
    13SIGNATURES
    
    
    13Ex-31.1 Section 302 CEO Certification
    
    
    14Ex-31.2 Section 302 CFO Certification
    
    
    15Ex-32.1 Section 906 CEO Certification
    
    
    16Ex-32.2 Section 906 CFO Certification
    
    
    17EX-31.1: Section 302 Certification of Chairmand and CEOEX-31.2: Section 302 Certification of President & CFOEX-32.1: Section 906 Certification of Chairman & CEOEX-32.2: Section 906 Certification of President & CFO




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
  
  September
    
    
    December2005
    
    
    2004(Unaudited)Cash and due from banks
    
    $
    11,467
    
    
    $
    6,826Federal funds sold
    
    
    0
    
    
    
    0Cash and cash equivalents
    
    
    11,467
    
    
    
    6,826Interest-bearing deposits in banks
    
    
    339
    
    
    
    5,636Securities available for sale
    
    
    63,907
    
    
    
    57,795Federal Home Loan Bank stock, at cost
    
    
    1,650
    
    
    
    1,353Loans, net of allowance for loan losses of $2,717and $2,360
    
    
    268,260
    
    
    
    233,395Foreclosed assets
    
    
    0
    
    
    
    0Premises and equipment, net
    
    
    7,544
    
    
    
    7,555Goodwill
    
    
    975
    
    
    
    975Intangible Assets
    
    
    222
    
    
    
    249Other assets
    
    
    4,538
    
    
    
    3,823TOTAL ASSETS
    
    $
    358,902
    
    
    $
    317,607DepositsNon-interest bearing deposits
    
    $
    38,483
    
    
    $
    31,934Interest Bearing deposits
    
    
    260,805
    
    
    
    236,848TOTAL DEPOSITS
    
    
    299,288
    
    
    
    268,782Repurchase Agreements
    
    
    3,968
    
    
    
    3,343Accrued Expenses and Other Liabilities
    
    
    2,786
    
    
    
    1,377Short Term Borrowings
    
    
    9,100
    
    
    
    0Long Term Borrowings
    
    
    13,450
    
    
    
    17,250TOTAL LIABILITIES
    
    
    328,592
    
    
    
    290,752Stockholders EquityCommon Stock, par value $.10 per share;Authorized 7,500,000 shares;Issued and Outstanding, 3,402,848
    
    
    340
    
    
    
    329Additional Paid in Capital
    
    
    23,317
    
    
    
    22,239Accumulated other comprehensive income
    
    
    -373
    
    
    
    20Retained Earnings
    
    
    7,026
    
    
    
    4,267Net Stockholders Equity
    
    
    30,310
    
    
    
    26,855Total Liabilities and Stockholders Equity
    
    $
    358,902
    
    
    $
    317,607




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FIRST NATIONAL BANCSHARES, INC
 
 Statement of Income (unaudited)
   9 months
    
    
    9 months
    
    
    3 months
    
    
    3 months2005
    
    
    2004
    
    
    2005
    
    
    2004Interest and dividend income:Loans, including fees
    
    $
    12,597
    
    
    $
    10,058
    
    
    $
    4,529
    
    
    $
    3,574Debt securities:Taxable
    
    
    1,631
    
    
    
    1,113
    
    
    
    543
    
    
    
    381Tax-exempt
    
    
    350
    
    
    
    253
    
    
    
    122
    
    
    
    84Other
    
    
    171
    
    
    
    55
    
    
    
    38
    
    
    
    11Total interest and dividend income
    
    
    14,749
    
    
    
    11,479
    
    
    
    5,232
    
    
    
    4,050Interest expense:Deposits
    
    
    4,336
    
    
    
    2,652
    
    
    
    1,704
    
    
    
    931Federal funds purchased and securities sold
under agreements to repurchase
    
    
    69
    
    
    
    64
    
    
    
    33
    
    
    
    14Long-term debt
    
    
    431
    
    
    
    354
    
    
    
    152
    
    
    
    129Total interest expense
    
    
    4,836
    
    
    
    3,070
    
    
    
    1,889
    
    
    
    1,074Net interest income
    
    
    9,913
    
    
    
    8,409
    
    
    
    3,343
    
    
    
    2,976Provision for loan losses
    
    
    352
    
    
    
    302
    
    
    
    158
    
    
    
    102Net interest income, after provision
for loan losses
    
    
    9,561
    
    
    
    8,107
    
    
    
    3,185
    
    
    
    2,874Non-interest income:Customer service fees
    
    
    255
    
    
    
    285
    
    
    
    93
    
    
    
    92Trust Services Fees
    
    
    1,097
    
    
    
    897
    
    
    
    384
    
    
    
    342Financial Product Sales Commissions and fees
    
    
    226
    
    
    
    272
    
    
    
    72
    
    
    
    72Net gain (loss) on available-for-sale securities
    
    
    5
    
    
    
    -3
    
    
    
    0
    
    
    
    0Net gain (loss) on sale of assets
    
    
    -3
    
    
    
    0
    
    
    
    -2
    
    
    
    0Other
    
    
    434
    
    
    
    272
    
    
    
    119
    
    
    
    77Total non-interest income (charges)
    
    
    2,014
    
    
    
    1,723
    
    
    
    666
    
    
    
    583Non-interest expenses:Salaries and employee benefits
    
    
    4,487
    
    
    
    3,934
    
    
    
    1,544
    
    
    
    1,313Occupancy and equipment
    
    
    1,136
    
    
    
    1,048
    
    
    
    391
    
    
    
    365Legal, examination, and audit expenses
    
    
    246
    
    
    
    191
    
    
    
    94
    
    
    
    64Data processing
    
    
    108
    
    
    
    103
    
    
    
    37
    
    
    
    35Other
    
    
    1,336
    
    
    
    1,147
    
    
    
    500
    
    
    
    375Total non-interest expenses
    
    
    7,313
    
    
    
    6,423
    
    
    
    2,566
    
    
    
    2,152Income before income taxes
    
    
    4,262
    
    
    
    3,407
    
    
    
    1,285
    
    
    
    1,305Income tax expenses
    
    
    1,503
    
    
    
    1,211
    
    
    
    452
    
    
    
    467Net income
    
    $
    2,759
    
    
    $
    2,196
    
    
    $
    833
    
    
    $
    838




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9 months
    
    
    9 months
    
    
    3 months
    
    
    3 months2005
    
    
    2004
    
    
    2005
    
    
    2004Profit After Tax
    
    $
    2,759
    
    
    $
    2,196
    
    
    $
    833
    
    
    $
    838Average Shares Outstanding
    
    
    3,334
    
    
    
    3,272
    
    
    
    3,403
    
    
    
    3,284Earnings per Share  Basic
    
    $
    0.83
    
    
    $
    0.67
    
    
    $
    0.24
    
    
    $
    0.26Average Shares Outstanding Fully Diluted
    
    
    3,516
    
    
    
    3,491
    
    
    
    3,525
    
    
    
    3,499Earnings per Share Fully Diluted
    
    $
    0.78
    
    
    $
    0.63
    
    
    $
    0.24
    
    
    $
    0.24
 COMPREHENSIVE INCOME
 (unaudited) (000s)
For the Period January 1 through September 30
  9 months
    
    9 months
    
    3 months
    
    3 months2005
    
    2004
    
    2005
    
    2004Profit After Tax
    
    
    2,759
    
    
    
    2,196
    
    
    
    833
    
    
    
    838Unrealized Securities Gains Net of Taxes
    
    
    -393
    
    
    
    71
    
    
    
    -181
    
    
    
    561Comprehensive Income
    
    
    2,366
    
    
    
    2,267
    
    
    
    652
    
    
    
    1,399




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STATEMENTS OF CASH FLOWS
 (unaudited) (000s)
 2005
    
    
    2004Operating activitiesNet Income
    
    
    2,759
    
    
    
    2,196Adjustments to reconcile net income to cash provided by operating activities:Allowance for loan losses (net of charge offs)
    
    
    352
    
    
    
    293Depreciation
    
    
    459
    
    
    
    406Increase (decrease) in accrued interest payable
    
    
    634
    
    
    
    508Increase (decrease) in accounts payable and other liabilities
    
    
    775
    
    
    
    746Decrease (increase) in accrued interest receivable
    
    
    -443
    
    
    
    -213Decrease (increase) in other assets
    
    
    -35
    
    
    
    -316Net cash provided by operating activities
    
    
    4,501
    
    
    
    3,620Investing activitiesProceeds from sales and maturities of Investment Securities
net of Purchases
    
    
    -7,039
    
    
    
    -2,901Loans originated, net of principal collections
    
    
    -35,217
    
    
    
    -29,264Cash received in merger with Trust Company of Florida
    
    
    0
    
    
    
    112Capital expenditures
    
    
    -421
    
    
    
    -190Proceeds from sale of other R. E. and assets owned
    
    
    0
    
    
    
    0Increase (decrease) in overnight funds borrowed
    
    
    9,100
    
    
    
    0Decrease (increase) in federal funds and overnight funds sold
    
    
    5,297
    
    
    
    674Net cash provided (used) by investing activities
    
    
    -28,280
    
    
    
    -31,569Financing activitiesNet increase (decrease) in demand deposits
    
    
    1,526
    
    
    
    3,160Net increase (decrease) time deposits
    
    
    28,980
    
    
    
    24,153Increase (decrease) in securities sold under agreements to
repurchase
    
    
    625
    
    
    
    -6,846Increase (decrease) in term borrowings
    
    
    -3,800
    
    
    
    8,250Dividends paid
    
    
    0
    
    
    
    -9Proceeds from issuance of common stock
    
    
    1,089
    
    
    
    357Retirement of common stock
    
    
    0
    
    
    
    0Net cash (used) provided by financing activities
    
    
    28,420
    
    
    
    29,065Net increase in cash and due from banks
    
    
    4,641
    
    
    
    1,116Cash and due from banks at beginning of year
    
    
    6,826
    
    
    
    6,876Cash and due from banks at end of quarter
    
    $
    11,467
    
    
    $
    7,992Schedule of non-cash investing activitiesLoans transferred to other real estate owned
    
    $
    0
    
    
    $
    0




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NOTES TO CONDENSED FINANCIAL STATEMENTS
 Note 1  Basis of Financial Reporting
   Note 2
   September 302004($000s)Net interest income
    
    
    8,409Total other operating income
    
    
    1,822Net Income
    
    
    2,143Basic earnings per share
    
    
    0.65Fully diluted earnings per share
    
    
    0.61




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Note 3
  9 Months Ended September 30,2005
    
    
    2004(in thousands)Service cost
    
    $
    282
    
    
    $
    269Interest cost
    
    
    165
    
    
    
    144Expected return on plan assets
    
    
    (189
    )
    
    
    (176
    )Amortization of prior service cost
    
    
    5
    
    
    
    3Recognized net actuarial loss
    
    
    82
    
    
    
    56$
    345
    
    
    $
    296
  Period Ended September 30,2005
    
    2004Discount rate
    
    
    5.75
    %
    
    
    5.75
    %Expected long-term rate of return on plan
assets
    
    
    8.00
    %
    
    
    8.00
    %Annual salary increase
    
    
    4.00
    %
    
    
    4.00
    %
 Note 4
   9 Months EndedSeptember 302005
    
    
    2004(000s)Net income
    
    $
    2,759
    
    
    $
    2,196Additional expense had the Corporation adopted SFAS No. 123
    
    
    (74
    )
    
    
    (76
    )Pro forma net income
    
    $
    2,685
    
    
    $
    2,120Basic earnings per share  As reported
    
    $
    0.83
    
    
    $
    0.67 Pro forma
    
    $
    0.81
    
    
    $
    0.65Diluted earnings per share  As reported
    
    $
    0.78
    
    
    $
    0.63 Pro forma
    
    $
    0.76
    
    
    $
    0.61




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Forward Looking Statements.
  Overview.
 st
    Critical Accounting Policies and Estimates




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Results of Operations.
   Net Interest Income.




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Interest Earning Assets.
  Non-interest Earning Assets.
 Funding Sources.
 Non-interest Income.
   Non-interest Expense.
 Allowance for Credit Losses.




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Capital Resources.
 Liquidity.
 Impact of Inflation and Changing Prices.




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Item 3. Quantitative and Qualitative Disclosure About Market Risk
      (000s)3 months or less
    
    $
    22,989Over 3 through 12 months
    
    
    27,517Over 12 through 36 months
    
    
    3,341Over 36 months
    
    
    960Total
    
    $
    50,506
   
 0-90
    
    
    91-365
    
    
    1-3
    
    
    3-5
    
    
    Over 5Days
    
    
    Days
    
    
    Years
    
    
    Years
    
    
    YearsInterest-Sensitive Assets
    
    $
    102,571
    
    
    $
    100,295
    
    
    $
    88,302
    
    
    $
    29,715
    
    
    $
    14,597Interest-Sensitive Liabilities
    
    $
    98,017
    
    
    $
    75,104
    
    
    $
    111,067
    
    
    $
    3,135
    
    
    $
    Interest-Sensitive Gap
    
    $
    4,553
    
    
    $
    25,191
    
    
    $
    (22,765
    )
    
    $
    26,580
    
    
    $
    14,597Cumulative Gap
    
    $
    4,553
    
    
    $
    29,744
    
    
    $
    6,979
    
    
    $
    33,559
    
    
    $
    48,156




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Item 4. Controls and Procedures.




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PART II. OTHER INFORMATION
 
 Item 1: Legal Proceedings Against the Bank
 
 Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
   
 Items 3: Defaults under Senior Securities
 
 Item 4: Submission of Matters to a vote of Security Holders
  
 Item 5: Other Information
 
 Item 6: Exhibits
  3.1(a)
    
    Amended and Restated Articles of Incorporation of the Registrant, incorporated by reference
to Exhibit 3.A to the Registration Statement on Form S-4 filed with the Commission on July 31,
1998 (Registration No. 333-60283).3.1(b)
    
    Amendment to the Restated Articles of Incorporation of the Registrant.3.2
    
    Amended Bylaws of the Registrant, incorporated by reference to the annual report on Form 10-K
filed with the Commission on March 26, 2004 (Registration No. 333-60283).31.1
    
    Section 302 Certification of CEO31.2
    
    Section 302 Certification of CFO32.1
    
    Certification of CEO pursuant to 18 U.S.C. section 1350, as enacted pursuant to section 906
of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of CFO pursuant to 18 U.S.C. section 1350, as enacted pursuant to section 906
of the Sarbanes-Oxley Act of 2002.




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SIGNATURES
  November 9, 2005
    
    
    
    FIRST NATIONAL BANCSHARES, INC.By
    
    /s/ Glen W. FaussetGlen W. Fausset, President and CFO