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FORM 10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



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QUARTERLY REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 2002

FIRST NATIONAL BANCSHARES, INC.

(exact name of registrant as specified in its charter)


|                               |  |                                   
|------------------------------ |  | ----------------------------------
|Florida                        |  | 06-1522028                        
|                               |  |                                   
|(Jurisdiction of Organization) |  | I.R.S. Employer
Identification No.

|                                                                           |  |                 
|-------------------------------------------------------------------------- |  | ----------------
|5817 Manatee Avenue West, Bradenton, Florida
(Address of principal office) |  | 34209
(Zip Code)

Registrants telephone number, including area code: (941) 794-6969

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements of the past 90 days.

Yes X            No

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date.

|                                              |  |                                                   
|--------------------------------------------- |  | --------------------------------------------------
|Common stock, par value $.10 per share(class) |  | 1,844,165 sharesOutstanding as of November 7, 2002





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TABLE OF CONTENTS



|                              |                                                                                        |  |  |  |  |  |  | 
|----------------------------- | -------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements                                                          
|Consolidated Balance Sheet   
|Statement of Income          
|STATEMENTS OF CASH FLOWS     
|                              | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                              | Quantitative and Qualitative Disclosure About Market Risk                             
|                              | Disclosure of Evaluation of Disclosure Controls and Procedures                        
|Part II. Other Information   
|                              | Item 1: Legal Proceedings Against the Bank  None.                                    
|                              | Item 2: Changes in Securities and Use of Proceeds  None                              
|                              | Items 3: Defaults under Senior Securities  None                                      
|                              | Item 4: Submission of Matters to a vote of Security Holders  None.                   
|                              | Item 5: Other Information  None                                                      
|                              | Item 6: Exhibits and Reports on Form 8-K                                              
|SIGNATURES                   
|CEO Certification            
|CFO Certification            



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FIRST NATIONAL BANK OF MANATEE
Index to Form 10-Q
For the period ended September 30, 2002

|           |  |                                                                                                             |    |  |    |      |  | 
|---------- |  | ----------------------------------------------------------------------------------------------------------- | -- |  | -- | ---- |  | 
|           |  |                                                                                                             |    |  |    | Page
|PART I.    |  | FINANCIAL INFORMATION                                                                                       |    |  |    |     
|           |  | Item 1. Financial Statements                                                                                |    |  |    |     
|           |  | Condensed Consolidated Balance Sheets, September 30, 2002 and December 31, 2001                             |    |  | 1  |     
|           |  | Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2002 and 2001 |    |  | 3  |     
|           |  | Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2002 and 2001       |    |  | 5  |     
|           |  | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations               |    |  | 7  |     
|           |  | Item 3. Quantitative and Qualitative Disclosure About Market Risk                                           |    |  | 11 |     
|           |  | Item 4. Disclosure of Evaluation of Disclosure Controls and Procedures                                      |    |  | 12 |     
|PART II.   |  | OTHER INFORMATION.                                                                                          |    |  |    |     
|           |  | Item 1.  Legal Proceedings                                                                                  |    |  | 13 |     
|           |  | Item 2.  Changes in Securities and Use of Proceeds                                                          |    |  | 13 |     
|           |  | Item 3.  Defaults under Senior Securities                                                                   |    |  | 13 |     
|           |  | Item 4.  Submission of Matters to a vote of Security Holders                                                |    |  | 13 |     
|           |  | Item 5.  Other Information                                                                                  |    |  | 13 |     
|           |  | Item 6.  Exhibits and Reports on Form 8-K                                                                   |    |  | 13 |     
|SIGNATURES |  |                                                                                                             | 14 | 





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PART I. FINANCIAL INFORMATION




Item 1. Financial Statements




FIRST NATIONAL BANCSHARES, INC.
Consolidated Balance Sheet

Assets (000s)

|                           |                      |  |              |        |             |  |         |        | 
|-------------------------- | -------------------- |  | ------------ | ------ | ----------- |  | ------- | ------ | 
|                           |                      |  | September 30 |        | December 31
|                           |                      |  |              |        |            
|                           |                      |  | 2002         |        | 20011      
|                           |                      |  |              |        |            
|                           |                      |  | (Unaudited)  |        |             |  |        
|CASH & DUE FROM BANKS      |                      |  |              |        |             |  |         |       
|                           | Non-Interest Bearing |  |              | 5,641  |             |  |         | 8,094  | 
|                           | Interest Bearing     |  |              | 5,240  |             |  |         | 12,873 | 
|BONDS & SECURITIES         |                      |  | 39,232       |        |             |  | 37,903  |       
|Total Fixed Rate Loans     |                      |  | 22,956       |        |             |  | 21,895  |       
|Total Construction Loans   |                      |  | 1,307        |        |             |  | 5,053   |       
|Total Prime Loans          |                      |  | 27,492       |        |             |  | 23,793  |       
|                           | ARM Residential      |  |              | 36,164 |             |  |         | 33,933 | 
|                           | ARM Multi-Family     |  |              | 5,356  |             |  |         | 3,283  | 
|                           | ARM Commercial       |  |              | 62,819 |             |  |         | 56,954 | 
|Total ARM Mortgages        |                      |  | 104,339      |        |             |  | 94,535  |       
|Total Tax Exempt Loans     |                      |  | 471          |        |             |  | 622     |       
|Non-Accrual Loans          |                      |  | 1,626        |        |             |  | 0       |       
|Total Loans (Gross)        |                      |  | 158,191      |        |             |  | 145,899 |       
|Overdrafts                 |                      |  | 61           |        |             |  | 46      |       
|Reserve for Bad Debts      |                      |  | 1,668       |        |             |  | 1,551  |       
|FASB 91 Fees               |                      |  | 219         |        |             |  | 91     |       
|TOTAL LOANS (NET)          |                      |  | 156,365      |        |             |  | 144,302 |       
|Fixed Assets               |                      |  | 8,064        |        |             |  | 5,872   |       
|OREO & Repos               |                      |  | 24           |        |             |  | 593     |       
|Other Assets               |                      |  | 1,569        |        |             |  | 2,833   |       
|TOTAL FIXED & OTHER ASSETS |                      |  | 9,657        |        |             |  | 9,298   |       
|**TOTAL ASSETS             |                      |  | 216,135      |        |             |  | 212,471 |       

(1)  Condensed from audited financial statements





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Liabilities and Stockholders Equity (000s)

|                                                                                                                                                            |                         |  |              |        |             |  |         |        | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- |  | ------------ | ------ | ----------- |  | ------- | ------ | 
|                                                                                                                                                            |                         |  | September 30 |        | December 31
|                                                                                                                                                            |                         |  |              |        |            
|                                                                                                                                                            |                         |  | 2002         |        | 20011      
|                                                                                                                                                            |                         |  |              |        |            
|                                                                                                                                                            |                         |  | (unaudited)  |        |             |  |        
|Total Demand Deposits                                                                                                                                       |                         |  | 49,007       |        |             |  | 53,042  |       
|                                                                                                                                                            | Savings                 |  |              | 15,570 |             |  |         | 13,689 | 
|                                                                                                                                                            | MMA                     |  |              | 36,155 |             |  |         | 46,448 | 
|                                                                                                                                                            | Certificates of Deposit |  |              | 68,379 |             |  |         | 62,670 | 
|Total Time Deposits                                                                                                                                         |                         |  | 120,104      |        |             |  | 122,807 |       
|TOTAL DEPOSITS                                                                                                                                              |                         |  | 169,111      |        |             |  | 175,849 |       
|Repurchase Agreements                                                                                                                                       |                         |  | 21,295       |        |             |  | 12,966  |       
|Other Borrowings                                                                                                                                            |                         |  | 5,000        |        |             |  | 5,414   |       
|Accruals                                                                                                                                                    |                         |  | 1,211        |        |             |  | 1,195   |       
|Suspense and Other Liabilities                                                                                                                              |                         |  | 96           |        |             |  | 0       |       
|**TOTAL LIABILITIES                                                                                                                                         |                         |  | 196,713      |        |             |  | 195,424 |       
|Common Stock  Par Value $.10
(authorized 2,500,000; issued and
outstanding 1,839,315 and 1,748,799 at
September 30, 2002 and
December 31,2001 respectively |                         |  | 184          |        |             |  | 175     |       
|Additional Paid in Capital                                                                                                                                  |                         |  | 16,611       |        |             |  | 14,666  |       
|Unrealized Gains & Losses                                                                                                                                   |                         |  | 733          |        |             |  | 266     |       
|Current Year Earnings                                                                                                                                       |                         |  | 1,894        |        |             |  | 1,940   |       
|**TOTAL SHAREHOLDER EQUITY                                                                                                                                  |                         |  | 19,422       |        |             |  | 17,047  |       
|**TOTAL LIABILITIES & EQUITY                                                                                                                                |                         |  | 216,135      |        |             |  | 212,471 |       

(1)  Condensed from audited financial statements







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FIRST NATIONAL BANCSHARES, INC

Statement of Income

For the Period January 1 through September 30 (000s)

|                            |                                     |                         |                       |                                |       |          |       |          |       |          |       |          |     |       |       |       |     |       |       | 
|--------------------------- | ----------------------------------- | ----------------------- | --------------------- | ------------------------------ | ----- | -------- | ----- | -------- | ----- | -------- | ----- | -------- | --- | ----- | ----- | ----- | --- | ----- | ----- | 
|                            |                                     |                         |                       |                                |       | 9 months |       | 9 months |       | 3 months |       | 3 months
|                            |                                     |                         |                       |                                |       | 2002     |       | 2001     |       | 2002     |       | 2001    
|                            |                                     |                         |                       |                                |       |          |       |          |       |          |       |         
|Interest Income:            |                                     |                         |                       |                                |       |          |       |          |       |          |       |          |     |       |       |      
|                            | Loan Interest (excluding fees)      |                         |                       | 8,112                          |       |          |       | 8,687    |       |          |       | 2,720    |     |       |       | 2,868 |    
|                            | Loan Fees                           |                         |                       | 114                            |       |          |       | 118      |       |          |       | 33       |     |       |       | 45    |    
|                            | Investment
Securities               |                         |                       |                                |       |          |       |          |       |          |       |          |     |       |       |       |    
|                            |                                     | Taxable                 |                       |                                | 1,242 |          |       |          | 1,307 |          |       |          | 408 |       |       |       | 413 |      
|                            |                                     | Exempt from Federal Tax |                       |                                | 276   |          |       |          | 282   |          |       |          | 91  |       |       |       | 94  |      
|                            | Interest Bearing Bank Deposits      |                         |                       | 63                             |       |          |       | 316      |       |          |       | 27       |     |       |       | 86    |    
|                            | Federal
Funds Sold                  |                         |                       | 0                              |       |          |       | 0        |       |          |       | 0        |     |       |       | 0     |    
|                            |                                     |                         | Total Interest Income |                                |       | 9,807    |       |          |       | 10,710   |       |          |     | 3,279 |       |       |     | 3,505 |      
|Interest Expense            |                                     |                         | 2,904                 |                                |       |          | 5,360 |          |       |          | 967   |          |     |       | 1,614 |      
|                            |                                     |                         |                       | Net Interest Income            |       |          | 6,903 |          |       |          | 5,350 |          |     |       | 2,311 |       |     |       | 1,891 | 
|Provision for Credit Losses |                                     |                         | 235                   |                                |       |          | 109   |          |       |          | 46    |          |     |       | 39    |      
|Net Interest Income         |                                     |                         |                       |                                |       |          |       |          |       |          |       |          |     |       |       |      
|                            | After Provision for Credit Losses   |                         |                       | 6,668                          |       |          |       | 5,241    |       |          |       | 2,265    |     |       |       | 1,852 |    
|Other Operating Income      |                                     |                         |                       |                                |       |          |       |          |       |          |       |          |     |       |       |      
|                            | Service Charges on deposit accounts |                         |                       | 369                            |       |          |       | 360      |       |          |       | 130      |     |       |       | 124   |    
|                            | Investment Security Gains           |                         |                       | 1                             |       |          |       | 2        |       |          |       | 1       |     |       |       | 2     |    
|                            | Trust Fees                          |                         |                       | 432                            |       |          |       | 413      |       |          |       | 140      |     |       |       | 145   |    
|                            | Investment Sales Fees               |                         |                       | 181                            |       |          |       | 155      |       |          |       | 54       |     |       |       | 33    |    
|                            | Other Income                        |                         |                       | 267                            |       |          |       | 185      |       |          |       | 81       |     |       |       | 60    |    
|                            |                                     |                         |                       | Total Other Income             |       |          | 1,248 |          |       |          | 1,115 |          |     |       | 404   |       |     |       | 364   | 
|Other
Operating Expenses    |                                     |                         |                       |                                |       |          |       |          |       |          |       |          |     |       |       |      
|                            | Salaries & Employee Benefits        |                         |                       | 3,022                          |       |          |       | 2,582    |       |          |       | 1,012    |     |       |       | 888   |    
|                            | Occupancy & Equipment Expense       |                         |                       | 844                            |       |          |       | 946      |       |          |       | 287      |     |       |       | 329   |    
|                            | Other Expenses                      |                         |                       | 1,135                          |       |          |       | 1,081    |       |          |       | 390      |     |       |       | 361   |    
|                            |                                     |                         |                       | Total Other Operating Expenses |       |          | 5,001 |          |       |          | 4,610 |          |     |       | 1,689 |       |     |       | 1,580 | 
|                            |                                     |                         |                       | Profit Before Tax              |       |          | 2,915 |          |       |          | 1,746 |          |     |       | 981   |       |     |       | 636   | 
|Estimated Income Taxes      |                                     |                         | 1,021                 |                                |       |          | 571   |          |       |          | 350   |          |     |       | 213   |      
|                            |                                     |                         |                       | Profit After Tax               |       | $        | 1,894 |          |       | $        | 1,175 |          |     | $     | 631   |       |     | $     | 423   | 





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FIRST NATIONAL BANCSHARES, INC

EARNINGS PER SHARE
For the Period January 1 through September 30

|                                          |  |          |           |          |  |          |           |          |  |   |           |  |  |   |           | 
|----------------------------------------- |  | -------- | --------- | -------- |  | -------- | --------- | -------- |  | - | --------- |  |  | - | --------- | 
|                                          |  | 9 months |           | 9 months |  | 3 months |           | 3 months
|                                          |  | 2002     |           | 2001     |  | 2002     |           | 2002    
|                                          |  |          |           |          |  |          |           |         
|Profit After Tax                          |  | $        | 1,894,000 |          |  | $        | 1,175,000 |          |  | $ | 631,000   |  |  | $ | 423,000   | 
|Average Shares Outstanding1               |  |          | 1,838,501 |          |  |          | 1,831,501 |          |  |   | 1,839,315 |  |  |   | 1,832,199 | 
|Earnings per Share  Basic                |  | $        | 1.03      |          |  | $        | .64       |          |  | $ | .34       |  |  | $ | .23       | 
|Average
Shares Outstanding Fully Diluted1 |  |          | 1,994,569 |          |  |          | 1,970,957 |          |  |   | 1,994,459 |  |  |   | 1,972,745 | 
|Earnings per Share Fully Diluted          |  | $        | .95       |          |  | $        | .60       |          |  | $ | .32       |  |  | $ | .21       | 

1.     Adjusted for stock dividends paid on September 30, 2001 and 2002.

FIRST NATIONAL BANCSHARES, INC
COMPREHENSIVE INCOME

For the Period January 1 through September 30 (000s)

COMPREHENSIVE INCOME: Under FASB Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income, the Company is required to report a
measure of all changes in equity, not only reflecting net income but certain
other changes as well. At September 30, 2002 and 2001, comprehensive income was
as follows:

|                                         |  |          |       |          |  |          |       |          |  |   |     |  |  |   |     | 
|---------------------------------------- |  | -------- | ----- | -------- |  | -------- | ----- | -------- |  | - | --- |  |  | - | --- | 
|                                         |  | 9 months |       | 9 months |  | 3 months |       | 3 months
|                                         |  | 2002     |       | 2001     |  | 2002     |       | 2002    
|                                         |  |          |       |          |  |          |       |         
|Profit After Tax                         |  | $        | 1,894 |          |  | $        | 1,175 |          |  | $ | 631 |  |  | $ | 423 | 
|Unrealized Securities Gains Net of Taxes |  | $        | 467   |          |  | $        | 803   |          |  | $ | 103 |  |  | $ | 468 | 
|                                         |  |          |       |          |  |          |       |          |  |   |     |  |  |   |     | 
|Comprehensive Income                     |  | $        | 2,361 |          |  | $        | 1,978 |          |  | $ | 734 |  |  | $ | 891 | 





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STATEMENTS OF CASH FLOWS
(000s)
For the Period January 1 through September 30 (000s)

|                                                                                            |                                                                       |   |         |       |      |   |        |      |  
|------------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | - | ------- | ----- | ---- | - | ------ | ---- | -
|                                                                                            |                                                                       |   | 2002    |       | 2001
|                                                                                            |                                                                       |   |         |       |     
|Operating activities                                                                        |                                                                       |   |         |       |      |   |        |     
|Net Income                                                                                  |                                                                       |   | 1,894   |       |      |   | 1,175  |     
|Adjustments to reconcile net income to cash provided by operating activities:               |                                                                       |   |         |       |      |   |        |     
|                                                                                            | Depreciation & leasehold amortization                                 |   |         | 267   |      |   |        | 388  |  
|                                                                                            | Allowance for loan losses net of charge offs                          |   |         | 117   |      |   |        | 68   |  
|                                                                                            | Decrease (increase) in accrued interest receivable                    |   |         | 98    |      |   |        | 108  |  
|                                                                                            | Increase (decrease) in accrued interest payable and other liabilities |   | (302    | )     |      |   | 94     |     
|                                                                                            | Decrease (increase) in other assets                                   |   |         | 1,761 |      |   |        | (153 | )
|                                                                                            |                                                                       |   |         |       |      |   |        |     
|Net cash provided by operating activities                                                   |                                                                       |   | 3,835   |       |      |   | 1,680  |     
|Investing activities                                                                        |                                                                       |   |         |       |      |   |        |     
|Purchase of securities                                                                      |                                                                       |   | (1,329  | )     |      |   | 517    |     
|Loans originated, net of principal collections                                              |                                                                       |   | (12,308 | )     |      |   | (3,911 | )   
|Capital expenditures                                                                        |                                                                       |   | (2,458  | )     |      |   | (614   | )   
|Proceeds from sale of other real estate owned                                               |                                                                       |   | 569     |       |      |   | 438    |     
|Increase (decrease) in overnight funds purchased                                            |                                                                       |   | 0       |       |      |   | 0      |     
|Decrease (increase) in overnight funds sold                                                 |                                                                       |   | 0       |       |      |   | (1,703 | )   
|                                                                                            |                                                                       |   |         |       |      |   |        |     
|Net cash provided (used) by investing activities                                            |                                                                       |   | (15,526 | )     |      |   | (5,273 | )   
|Financing activities                                                                        |                                                                       |   |         |       |      |   |        |     
|Net increase (decrease) in demand deposits, NOW
accounts, money market and savings accounts |                                                                       |   | (4,035  | )     |      |   | 5,453  |     
|Net increase (decrease)  certificates of deposit                                           |                                                                       |   | (2,703  | )     |      |   | (3,843 | )   
|Increase (decrease) in securities sold under agreements to repurchase                       |                                                                       |   | 8,329   |       |      |   | 2,284  |     
|Dividends paid                                                                              |                                                                       |   | (5      | )     |      |   | (8     | )   
|Proceeds from issuance of common stock                                                      |                                                                       |   | 19      |       |      |   | 38     |     
|Retirement of common stock                                                                  |                                                                       |   | 0       |       |      |   | 0      |     
|Principal payments under capital lease obligation                                           |                                                                       |   | 0       |       |      |   | (36    | )   
|                                                                                            |                                                                       |   |         |       |      |   |        |     
|Net cash (used) provided by financing activities                                            |                                                                       |   | 1,605   |       |      |   | 3,888  |     
|                                                                                            |                                                                       |   |         |       |      |   |        |     
|Net increase in cash and due from banks                                                     |                                                                       |   | (10,086 | )     |      |   | 295    |     
|Cash and due from banks at beginning of year                                                |                                                                       |   | 20,967  |       |      |   | 4,496  |     
|                                                                                            |                                                                       |   |         |       |      |   |        |     
|Cash and due from banks at end of quarter                                                   |                                                                       | $ | 10,881  |       |      | $ | 4,791  |     
|                                                                                            |                                                                       |   |         |       |      |   |        |     
|Schedule of non-cash investing activities                                                   |                                                                       |   |         |       |      |   |        |     
|Loans transferred to other real estate owned                                                |                                                                       | $ | 0       |       |      | $ | 95     |     
|                                                                                            |                                                                       |   |         |       |      |   |        |     





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NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1  Basis of Financial Reporting

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with instructions to Form 10-Q and do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all normal and recurring adjustments necessary for fair presentation of such
financial statements have been included. For further information, refer to the
consolidated financial statements and the notes thereto included in the Banks
annual report on Form 10-K for the year ended December 31, 2001.

Results for the nine month period ended September 30, 2002, may not necessarily
be indicative of those to be expected for the entire year.





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Managements Discussion and Analysis of Financial Condition and Results of Operations.

Overview.

The 1ST National Bank & Trust (formerly First National Bank of Manatee)
(the Bank) commenced operations on July 18, 1986. The Banks activities since
inception have consisted of accepting deposits, originating a variety of loans.
The Banks first branch was opened on Anna Maria Island (5 miles west of the
main office) in October, 1994. The second branch was opened in May of 1996 on
State Road 64 (5 miles east of the main office). In January of 1997 year, the
bank opened its third branch on State Road 70 (8 miles southeast of the main
office). In December of 1997, the bank acquired a site at University Blvd. and
Lakewood Ranch Blvd. for a future branch. That site was sold in 2001. The
Bank opened its fourth branch in November of 2000 at the corner of US 301 and
Old Tampa Road in Ellenton (Manatee County). The bank also opened a Trust
Department in March of 1995. The Bank, as a local independent bank, follows a
philosophy of developing its equity and deposit base and focusing its lending
activities within its community. The Banks underlying lending policy has been
and is anticipated to continue being directed toward better-than-normal credit
risks.

On January 1, 1999 the Bank was merged into First National Bancshares,
Inc., a Florida corporation (the Holding Company). The Holding Company was
formed specifically for the purpose of having the Bank merged into it. At the
time of the merger, the Holding Company had assets of $128,000 and a net worth
of ($55,000). The Holding Company is now a one bank holding company with no
other subsidiaries than the Bank. Therefore, there are no significant
adjustments from the financial information of the Bank to the consolidated
financial information for the Holding Company.

The following discussion and analysis is based on the Holding Companys
financial condition and results of operations for the period from January 1,
2002 through September 30, 2002. This discussion and analysis should be read
in conjunction with the financial statement summaries of the Holding Company,
included elsewhere in this quarterly report.

Results of Operations.

Earnings in the first three quarters of 2002 were up $719,000 or $.39 per
share when compared to earnings in the same period last year This is a 61%
increase in year to date earnings. Third quarter earnings were up $208,000 over
last year or $.11 per share. This is a 49% increase in third quarter earnings.
The increased earnings are a direct result of net interest income increasing
year to year. Year to date net interest income increased by 29% ($$1,553,000)
while the third quarters increase was 22% or $520,000. This increased net
interest income was offset by a $391,000 (8%) year to date in other operating
expenses and a $110,000 (7%) increase in the third quarter. The increase in
overhead was softened by an year to date increase in other operating income of
$132,000 (12%) and a third quarter increase of $39,000 or 11%. The Banks year
to date contribution of $235,000 to loan loss reserve was $$126,000 greater
than last year and was the result of increased loan growth and increased charge
offs in the banks indirect automobile lending. The bank ceased making
indirect auto loans in June of 2001. The increase in operating expenses from
last year was due entirely to increased employee expense. This resulted
from the expansion of the Trust Department, the opening of mortgage secondary
market activities, and increased contribution to the





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employee incentive program
that is tied to the earnings of the bank.

Net Interest Income. The major component of the Banks earning capacity is net
interest income, which represents the difference or spread between interest
income on earning assets and interest bearing liabilities, primarily deposits.
The spread is considered positive when rate-sensitive assets exceed
rate-sensitive liabilities, and negative when rate-sensitive liabilities exceed
rate sensitive assets. Net interest income is also affected by changes in
interest rates earned and paid, and by changes in the volume of
interest-earning assets and interest-bearing liabilities. To the extent
possible, the Bank follows a strategy intended to insulate the Banks interest
rate spread from adverse changes in interest rates by maintaining spreads
through the adjustability of its earning assets and interest-bearing
liabilities. On September 30, 2002, the Banks assets had a repriceability
over a three year period that closely matched its liability repriceability..

The Bank had good growth in its loan portfolio and this combined with
increasing interest margins has significantly increased net interest income.
Net interest income for nine months in 2002 was $6,903,000 compared to
$5,350,000 in 2001. For the third quarter, net interest income was $2,311,000
compared to $1,891,000 last year.

Interest Earning Assets. Real estate related loans at September 30, 2002,
accounted for a majority of the banks loan portfolio. Most of the mortgages
are variable rate loans and are adjustable each one to five years. Thus,
volatile interest rates can result in the real estate loans lagging market
conditions. In the first half of 2000, rates were stabile allowing the
portfolio to keep pace with market rates. In the second half of 2000, rates
began to fall dramatically and accelerated later in the year and continued into
2001. This had a temporary negative impact on in the banks net interest
income until rates stabilized and the banks balance sheet repriced to the new
market rates. The banks interest margin was much improved in the last three
quarters of 2001 and has continued to improve over the first three quarters of
this year.

The Banks investment portfolio is concentrated primarily in U.S.
Government agencies and corporations. About 24% of the Banks investment
portfolio re-prices in one year. Due to falling interest rates, the Banks
Available-for-Sale portfolio has a market value of about $733,000 above book
value.

Non-interest Earning Assets. Non-interest earning assets accounted for 7% of
total assets on September 30, 2002, and primarily consisted of cash and due
from banks, equipment and branches, deferred taxes, and accrued interest
receivable.

Funding Sources. The primary source of funds for the Banks lending and
investment activities is deposits. At September 30, 2002 the Banks total
deposits were $169 million plus $21 million in repurchase agreements. The
Banks deposits are highly concentrated in interest-bearing accounts, which is
typical for the Banks market area. The Bank has 16% of its deposits in NOW
Accounts and 71% of its deposits in Savings, MMAs and CD deposits. Despite the
high concentration of certificates of deposit, the Bank does not anticipate the
maturity of such certificates to affect the Banks liquidity, as management
believes that the high concentration was primarily due to customer
relationships and not higher than market rates. Over the last several years,
the bank has been able to grow without growing its deposits from certificates.
The Bank is not in the practice of paying above





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##### Table of Contents



market rates on deposits.

Non-interest Income. The Banks non-interest income for the nine month period
ended September 30, 2002 was $1,247 including $613,000 from its Financial
Services and Trust Department. These are up 12% and 8% over last year. In the
third quarter total other income was up $39,000 or 11% and Trust and Financial
Services income was us $16,000 or 9%. Periodic security transactions generate
investment gains or losses and are primarily a result of tax management
considerations and liquidity requirements. The bank has had $1,000 in security
losses in 2002. The other significant items of non-interest income represented
service charges on deposit accounts, and merchant credit card account income.

Non-interest Expense. The Banks non-interest expense for the nine month
period ended September 30, 2002 was $5,001,000 including $3,023,000 of salaries
and employee benefits. This are up 8% and 17% from last year. In the third
quarter, the banks other operating expenses were $1,690,000 and staff expenses
were $1,013,000, up 7% and 14% from the prior year. The Banks occupancy and
equipment expenses for the nine month period ended September 30, 2002 were
$844,000, down 11% from 2001 and the third period expense was $287,000, down
13% from the prior year. This reduction in expense is directly attributable to
the banks purchase of its main office building at Manatee
Avenue West and 59th Street and the corresponding elimination of the lease.

Allowance for Credit Losses. The allowance for credit losses is established
through a provision for credit losses charged to expenses. Loans are charged
against the allowance for credit losses when management believes that the
collectability of the principal is unlikely. The allowance is an amount that
management believes will be adequate to absorb losses inherent in existing
loans and commitments to extend credit based on evaluations of the
collectability and prior loan loss experience of loans and commitments to
extend credit. The evaluations take into consideration such factors as changes
in the nature and volume of the loan portfolio, overall portfolio quality,
review of specific problem loans, and current economic conditions that may
affect the borrowers ability to pay.

An allowance for loan loss expense of $235,000 was charged to operating
expenses for the nine month period ended September 30, 2002 including $46,000
that was charged in the third quarter of the year. The Bank had net charge
offs during these respective periods of $115,000 and $3,000. The balance of the
loan loss reserve expense was to cover the growth in the loan portfolio. At
September 30, 2002 the Bank has a total of $1,668,000 reserved for future loan
losses. This is up from $1,551,000 at September 30, 2001.

Loans on which the accrual of interest has been discontinued are
designated as non-accrual loans. Accrual of interest on loans is discontinued
either when reasonable doubt exists as to the full, timely collection of
interest or when a loan becomes contractually past due by 90 days or more with
respect to interest or principal. When a loan is placed on non-accrual status,
all interest previously accrued but not collected is reversed against current
period interest income unless it is adequately secured. Income on such loans
is then recognized only to the extent that cash is received and the future
collection of principal is probable. Interest accruals are resumed on such
loans only when they are brought fully current with respect to interest and
principal and when in the judgment of
management, the loans are estimated to be fully collectible as to both
principal and interest. The bank had two non-accrual real estate loans at
September 30, 2002 totaling $1,626,000. In October, one of





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##### Table of Contents



the loans in the
amount of $1,350,000 was brought current. Where appropriate, the Bank makes
specific reserves for future losses on non-performing loans. The Bank has set
up no specific reserves on either of these loans.

The bank also had no other real estate owned at September 30, 2002.

Capital Resources. In the normal course of business, the capital position of
the Bank is reviewed by management and regulatory authorities. The Comptroller
of the Currency has specified guidelines for purposes of evaluating a banks
capital adequacy. Currently, banks must maintain a minimum primary capital
ratio of capital-to-assets of 4%. Primary capital includes the Banks
stockholders equity, subordinated debt, and the allowance for credit losses.
At September 30, 2002, the Banks primary capital ratio was approximately 8.6%.
In 1991, the Comptroller began evaluating banks capital on a risk basis i.e.
more capital will be required for commercial loans than for residential real
estate loan and even less will be required for government bonds. The
Comptroller will require a minimum of an 8% capital ratio under this risk based
method. Currently the Bank has a risk based capital ratio in excess of 13%.

Liquidity. Management of the Bank continually evaluates its liquidity
position. Management believes that the Banks investment portfolio, when
combined with interest bearing bank balances and Fed Funds sold, provides
adequate liquidity to meet the Banks needs. As noted in Funding Sources
above, management believes that the high concentration of time deposits is
primarily due to customer relationships and not to higher-than-market rates
and, thus, do not present any unusual liquidity risk. In addition, the bank has
established borrowing lines with correspondent banks, and with the Federal Home
Loan Bank to cover liquidity needs.

Impact of Inflation and Changing Prices. Unlike most industrial companies,
virtually all of the Banks assets and liabilities are monetary in nature. As
a result, interest rates have a more significant impact on the Banks
performance than do the effects of inflation. Interest rates do not
necessarily move in the same direction or with the same magnitude as the prices
of goods and services, since such prices are affected by inflation. In the
current interest rate environment, liquidity and the maturity structure of a
financial institutions assets and liabilities are also critical to the
maintenance of acceptable performance levels.





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##### Table of Contents






Quantitative and Qualitative Disclosure About Market Risk

The Bank periodically performs asset/liability analysis to assess the
Banks sensitivity to changing market conditions.

The primary functions of asset/liability management is to assure adequate
liquidity and maintain an appropriate balance between interest-sensitive
earning assets and interest-bearing liabilities. Liquidity management involves
the ability to meet the cash flow requirements of customers who may be either
depositors wanting to withdraw funds or borrowers needing assurance that
sufficient funds will be available to meet their credit needs. Interest rate
sensitivity management seeks to avoid fluctuating net interest margins and to
enhance consistent growth of net interest income through periods of changing
interest rates.

Marketable investment securities, particularly those of shorter
maturities, are a principal source of asset liquidity. Securities maturing or
expected to be called within one year or less amounted to $8,781,000 at
September 30, 2002 representing 24% of the investment securities portfolio.

Federal funds and lines of credit with other banks also provide the bank
with sources of funds for meeting its liquidity needs. At year-end, the bank
had lines of credit established with other banking institutions totaling
$23,500,000.

Brokered deposits are deposit instruments, such as certificates of
deposit, bank investment contracts and certain municipal investment contracts
that are issued through brokers who then offer and/or sell these deposit
instruments to one or more investors. The Bank does not currently purchase or
sell brokered deposits.

Maturities of time certificates of deposit and other time deposits of
$100,000 or more,
outstanding at September 30, 2002, are summarized as follows:

|                         |  |                        |        | 
|------------------------ |  | ---------------------- | ------ | 
|                         |  | Time Deposits         
|                         |  |                       
|                         |  | (thousands of dollars)
|3 months or less         |  | $                      | 4,390  | 
|Over 3 through 12 months |  |                        | 10,174 | 
|Over 12 months           |  |                        | 7,856  | 
|                         |  |                        |        | 
|Total                    |  | $                      | 22,420 | 

Interest rate sensitivity varies with different types of interest earning
assets and interest-bearing liabilities. Overnight federal funds on which rates
change daily and loans which are tied to the prime rate differ considerably
from long-term investment securities and fixed-rate loans. Similarly, time
deposits over $100,000 and money market accounts are much more interest rate
sensitive than savings accounts. The shorter term interest rate sensitivities
are key to measuring the interest sensitivity gap, or excess interest-sensitive
earning assets over interest-bearing liabilities.

The following table shows the interest sensitivity gaps for four different
time intervals as of June 30, 2002. For the first year, interest-sensitive
assets exceed liabilities by $13,479,000. For the
next two years, liabilities reprice more rapidly than assets lowering the
banks asset sensitive position





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##### Table of Contents



to an essentially balanced position for the
three year period. The excess of interest-bearing liabilities over
interest-earning assets for the one-to-three year period is primarily related
to the longer maturities of CDs and NOW and MMA accounts that are regarded as
much less rate sensitive.

|                               |  |      |        |        |  |                        |        |        |  |   |         |   |  |   |        | 
|------------------------------ |  | ---- | ------ | ------ |  | ---------------------- | ------ | ------ |  | - | ------- | - |  | - | ------ | 
|                               |  |      |        |        |  | As of June 30          |        |        |  |  
|                               |  |      |        |        |  | (thousands of dollars) |        |        |  |  
|                               |  |     
|                               |  | 0-90 |        | 91-365 |  | 1-3                    |        | Over 3
|                               |  | Days |        | Days   |  | Years                  |        | Years 
|                               |  |      |        |        |  |                        |        |       
|Interest-sensitive assets      |  | $    | 59,611 |        |  | $                      | 50,308 |        |  | $ | 57,885  |   |  | $ | 31,070 | 
|Interest-sensitive liabilities |  |      | 38,993 |        |  |                        | 57,447 |        |  |   | 68,992  |   |  |   | 3,241  | 
|                               |  |      |        |        |  |                        |        |        |  |   |         |   |  |   |        | 
|Interest sensitivity gap       |  |      | 20,618 |        |  |                        | (7,139 | )      |  |   | (11,107 | ) |  |   | 27,829 | 
|Cumulative gap                 |  | $    | 20,618 |        |  | $                      | 13,479 |        |  | $ | 2,372   |   |  | $ | 30,201 | 

The primary interest sensitive assets and liabilities in the one-year
maturity range are loans and time deposits. Trying to minimize this gap while
maintaining earnings is a continual challenge in a changing interest rate
environment and one of the objectives of the Banks asset/liability management
strategy.




Disclosure of Evaluation of Disclosure Controls and Procedures

Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Companys management, including the Companys Chairman and Chief Executive
Officer and President and Chief Financial Officer, of the effectiveness of
the design and operation of the Companys disclosure controls and procedures
pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the
Chairman and Chief Executive Officer and President and Chief Financial
Officer concluded that the Companys disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Company (including its consolidated subsidiaries) required to be included in
the Companys periodic SEC filings.

There were no significant changes made in the Companys internal controls
or in other factors that could significantly affect these internal controls
subsequent to the date of the evaluation performed by the Companys Chief
Executive Officer and Chief Financial Officer.





---



##### Table of Contents








|Part II. |  | Other Information
|-------- |  | -----------------






|Item 1: |  | Legal Proceedings Against the Bank  None.
|------- |  | ------------------------------------------






|Item 2: |  | Changes in Securities and Use of Proceeds  None
|------- |  | ------------------------------------------------






|Items 3: |  | Defaults under Senior Securities  None
|-------- |  | ---------------------------------------






|Item 4: |  | Submission of Matters to a vote of Security Holders  None.
|------- |  | -----------------------------------------------------------






|Item 5: |  | Other Information  None
|------- |  | ------------------------






|Item 6: |  | Exhibits and Reports on Form 8-K
|------- |  | --------------------------------
|       
|        |  | Exhibits                        



| |      |  |                                                                                                                         |  |                                                                                                                                         
| | ---- |  | ----------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
| | a)   |  | Plan of acquisition, reorganization, arrangement,
liquidation, or succession.  None                                   
|
| | b)   |  | Articles of incorporation and by-laws.                                                                                 
|
| |      |  | 1)                                                                                                                      |  | A copy of the Amended and Restated
Articles of Incorporation of the Registrant is included
as Exhibit 3.A to the Registration Statement.
|
| |      |  | 2)                                                                                                                      |  | A copy of the Bylaws of the
Registrant is included as Exhibit 3.B to this
Registration Statement.                                       
|
| | c)   |  | Instruments defining the rights of securities
holders, including indentures.                                           
|
| |      |  | None                                                                                                                   
|
| | d)   |  | Published report regarding matters submitted to
vote of security holders.                                              
|
| |      |  | None                                                                                                                   
|
| | 99.1 |  | Certification pursuant to 18 U.S.C. section 1350,
as enacted pursuant to section 906 of the Sarbanes-Oxley Act
of 2002.
|
| | 99.2 |  | Certification pursuant to 18 U.S.C. section 1350,
as enacted pursuant to section 906 of the Sarbanes-Oxley Act
of 2002.





---



##### Table of Contents






SIGNATURES

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

|                        |  |                                                             
|----------------------- |  | ------------------------------------------------------------
|                        |  | FIRST NATIONAL BANCSHARES, INC.                             
|                        |  | (Registrant)                                                
|                        |  |                                                             
|Date: November 14, 2002 |  | By -s- Glen W. Fausset
President and Chief Financial Officer





---



##### Table of Contents



CERTIFICATIONS*

I, Francis I. duPont, III, certify that:

|   |  |                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | I have reviewed this quarterly report on Form 10-Q of First National Bancshares, Inc.;                                                                                                                                                                                                                                                                                                   
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;                                                           
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                                                                              
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                                                                                
|  
|   |  | a)                                                                                                                                                                                                                                                                                                                                                                                        |  | Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
|  
|   |  | b)                                                                                                                                                                                                                                                                                                                                                                                        |  | Evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|  
|   |  | c)                                                                                                                                                                                                                                                                                                                                                                                        |  | Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        
|  
|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):                                                                                                                                           
|  
|   |  | a)                                                                                                                                                                                                                                                                                                                                                                                        |  | All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and 
|  
|   |  | b)                                                                                                                                                                                                                                                                                                                                                                                        |  | Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                         
|  
|6  |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

|                        |  |                                                               | 
|----------------------- |  | ------------------------------------------------------------- | 
|Date: November 14, 2002 |  | -s- Francis
I. duPont, III
Title: Principal Executive Officer





---



##### Table of Contents



CERTIFICATIONS*

I, Glen W. Fausset, certify that:

|   |  |                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | I have reviewed this quarterly report on Form 10-Q of First National
Bancshares, Inc.;                                                                                                                                                                                                                                                                                                   
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;                                                           
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                                                                              
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                                                                                
|  
|   |  | a)                                                                                                                                                                                                                                                                                                                                                                                        |  | Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
|  
|   |  | b)                                                                                                                                                                                                                                                                                                                                                                                        |  | Evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|  
|   |  | c)                                                                                                                                                                                                                                                                                                                                                                                        |  | Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        
|  
|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):                                                                                                                                           
|  
|   |  | a)                                                                                                                                                                                                                                                                                                                                                                                        |  | All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and 
|  
|   |  | b)                                                                                                                                                                                                                                                                                                                                                                                        |  | Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                         
|  
|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

|                        |  |                                                   
|----------------------- |  | --------------------------------------------------
|Date: November 14, 2002 |  | -s- Glen W.
Fausset
Title: Chief Financial Officer