##### Table of Contents



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 JUNE 30, 2005
 FIRST NATIONAL BANCSHARES, INC.
  Florida
    
    333-60283
    
    06-1522028(Jurisdiction of Organization)
    
    Commission
File Number
    
    I.R.S. Employer
Identification No.
 5817 Manatee Avenue West, Bradenton, Florida
(Address of principal office)
    
    34209
(Zip Code)
 (941) 794-6969
  þ o
  o þ
  Common stock, par value $.10 per share
    
    3,402,848 shares(class)
    
    Outstanding as of August 3, 2005




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PagePART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Consolidated Balance Sheets,
June 30, 2005 and December 31, 2004
    
    
    1Condensed Consolidated Statements
of Income for the three and six months ended
June 30, 2005 and 2004
    
    
    3Condensed Consolidated Statements of Cash Flows for the six months ended
June 30, 2005 and June 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
    
    
    12Item 4. Controls and procedures
    
    
    13PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    14Item 2. Changes in Securities and Use of Proceeds
    
    
    14Item 3. Defaults under Senior Securities
    
    
    14Item 4. Submission of Matters to a vote of Security Holders
    
    
    14Item 5. Other Information
    
    
    14Item 6. Exhibits and Reports on Form 8-K
    
    
    15SIGNATURES
    
    
    15Amendment to the Restated Articles of IncorporationSection 302 Certification of CEOSection 302 Certification of CFOCertifcation of CEO pursuant to 18 U.S.C. section 1350Certifcation of CfO pursuant to 18 U.S.C. section 1350




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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
  
  Assets (000s)
 June 30
    
    December 312005
    
    2004(Unaudited)Cash and due from banks
    
    $
    11,819
    
    
    $
    6,826Federal funds sold
    
    
    0
    
    
    
    0Cash and cash equivalents
    
    
    11,819
    
    
    
    6,826Interest-bearing deposits in banks
    
    
    556
    
    
    
    5,636Securities available for sale
    
    
    68,263
    
    
    
    57,795Federal Home Loan Bank stock, at cost
    
    
    1,594
    
    
    
    1,353Loans, net of allowance for loan losses
of $2,558 and $2,362
    
    
    252,670
    
    
    
    233,395Foreclosed assets
    
    
    0
    
    
    
    0Premises and equipment, net
    
    
    7,390
    
    
    
    7,555Goodwill
    
    
    975
    
    
    
    975Intangible Assets
    
    
    241
    
    
    
    249Other assets
    
    
    4,423
    
    
    
    3,823TOTAL ASSETS
    
    $
    347,931
    
    
    $
    317,607
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Liabilities and Stockholders Equity (000s)
 June 30
    
    December 312005
    
    2004(Unaudited)DepositsNon-interest bearing deposits
    
    
    42,642
    
    
    
    31,934Interest Bearing deposits
    
    
    249,725
    
    
    
    236,848TOTAL DEPOSITS
    
    
    292,367
    
    
    
    268,782Repurchase Agreements
    
    
    2,824
    
    
    
    3,343Accrued Expenses and Other Liabilities
    
    
    2,156
    
    
    
    1,377Short Term Borrowings
    
    
    6,200
    
    
    
    0Long Term Borrowings
    
    
    15,100
    
    
    
    17,250TOTAL LIABILITIES
    
    
    318,647
    
    
    
    290,752Stockholders EquityCommon Stock, par value $.10 per share;Authorized 7,500,000 shares;Issued and Outstanding, 3,362,159
    
    
    336
    
    
    
    329Additional Paid in Capital
    
    
    22,949
    
    
    
    22,239Accumulated other comprehensive income
    
    
    (192
    )
    
    
    20Retained Earnings
    
    
    6,191
    
    
    
    4,267Net Stockholders Equity
    
    
    29,284
    
    
    
    26,855Total Liabilities and Stockholders Equity
    
    
    347,931
    
    
    
    317,607
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FIRST NATIONAL BANCSHARES, INC
 
 Statement of Income (unaudited)
 For the Period January 1 through June 30 (000s)
 6 months
    
    6 months
    
    3 months
    
    3 months2005
    
    2004
    
    2005
    
    2004Interest and dividend income:Loans, including fees
    
    $
    8,068
    
    
    $
    6,485
    
    
    $
    4,110
    
    
    $
    3,299Debt securities:Taxable
    
    
    1,088
    
    
    
    732
    
    
    
    593
    
    
    
    339Tax-exempt
    
    
    228
    
    
    
    169
    
    
    
    122
    
    
    
    84Other
    
    
    133
    
    
    
    44
    
    
    
    61
    
    
    
    29Total interest and dividend income
    
    
    9,517
    
    
    
    7,430
    
    
    
    4,886
    
    
    
    3,751Interest expense:Deposits
    
    
    2,632
    
    
    
    1,721
    
    
    
    1,431
    
    
    
    876Federal funds purchased and securities sold
under agreements to repurchase
    
    
    36
    
    
    
    50
    
    
    
    18
    
    
    
    25Long-term debt
    
    
    279
    
    
    
    225
    
    
    
    142
    
    
    
    117Total interest expense
    
    
    2,947
    
    
    
    1,996
    
    
    
    1,591
    
    
    
    1,018Net interest income
    
    
    6,570
    
    
    
    5,434
    
    
    
    3,295
    
    
    
    2,733Provision for loan losses
    
    
    194
    
    
    
    200
    
    
    
    153
    
    
    
    70Net interest income, after provision for loan
losses
    
    
    6,376
    
    
    
    5,234
    
    
    
    3,142
    
    
    
    2,663Non-interest income:Customer service fees
    
    
    162
    
    
    
    193
    
    
    
    84
    
    
    
    95Trust Services Fees
    
    
    713
    
    
    
    555
    
    
    
    356
    
    
    
    338Financial Product Sales Commissions and fees
    
    
    154
    
    
    
    200
    
    
    
    86
    
    
    
    72Net gain (loss) on available-for-sale securities
    
    
    5
    
    
    
    -3
    
    
    
    5
    
    
    
    -3Net gain (loss) on sale of assets
    
    
    -1
    
    
    
    0
    
    
    
    -3
    
    
    
    0Other
    
    
    315
    
    
    
    195
    
    
    
    209
    
    
    
    96Total non-interest income (charges)
    
    
    1,348
    
    
    
    1,140
    
    
    
    737
    
    
    
    598Non-interest expenses:Salaries and employee benefits
    
    
    2,943
    
    
    
    2,621
    
    
    
    1,506
    
    
    
    1,319Occupancy and equipment
    
    
    745
    
    
    
    683
    
    
    
    374
    
    
    
    354Legal, examination, and audit expenses
    
    
    152
    
    
    
    127
    
    
    
    59
    
    
    
    61Data processing
    
    
    71
    
    
    
    68
    
    
    
    35
    
    
    
    35Other
    
    
    836
    
    
    
    773
    
    
    
    434
    
    
    
    416Total non-interest expenses
    
    
    4,747
    
    
    
    4,272
    
    
    
    2,408
    
    
    
    2,185Income before income taxes
    
    
    2,977
    
    
    
    2,102
    
    
    
    1,471
    
    
    
    1,076Income tax expenses
    
    
    1,051
    
    
    
    744
    
    
    
    515
    
    
    
    383Net income
    
    $
    1,926
    
    
    $
    1,358
    
    
    $
    956
    
    
    $
    693Earnings per ShareBasic
    
    $
    .58
    
    
    $
    .42
    
    
    $
    .29
    
    
    $
    .21Diluted
    
    $
    .55
    
    
    $
    .39
    
    
    $
    .27
    
    
    $
    .20
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FIRST NATIONAL BANCSHARES, INC
 EARNINGS PER SHARE
 For the Period January 1 through June 30
 6 months
    
    6 months
    
    3 months
    
    3 months2005
    
    2004
    
    2005
    
    2004Profit After Tax
    
    $
    1,926,000
    
    
    $
    1,358,000
    
    
    $
    956,000
    
    
    $
    693,000Average Shares Outstanding
    
    
    3,300,306
    
    
    
    3,266,346
    
    
    
    3,307,568
    
    
    
    3,251,011Earnings per Share  Basic
    
    $
    0.58
    
    
    $
    0.42
    
    
    $
    0.29
    
    
    $
    0.21Average Shares Outstanding Fully diluted
    
    
    3,511,642
    
    
    
    3,486,300
    
    
    
    3,525,792
    
    
    
    3,482,157Earnings per Share Fully Diluted
    
    $
    0.55
    
    
    $
    0.39
    
    
    $
    0.27
    
    
    $
    0.20
  COMPREHENSIVE INCOME
 (unaudited) (000s)
 For the Period January 1 through June 30
  6 months
    
    6 months
    
    3 months
    
    3 months2005
    
    2004
    
    2005
    
    2004Profit After Tax
    
    $
    1,926,000
    
    
    $
    1,358,000
    
    
    $
    956,000
    
    
    $
    693,000Unrealized Securities Gains Net of Taxes
    
    -$
    212,000
    
    
    -$
    490,000
    
    
    $
    363,000
    
    
    -$
    811,000Comprehensive Income
    
    $
    1,714,000
    
    
    $
    868,000
    
    
    $
    1,319,000
    
    
    -$
    118,000
 4




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STATEMENTS OF CASH FLOWS
 (unaudited) (000s)
  2005
    
    2004Operating activitiesNet Income
    
    
    1,926
    
    
    
    1,358Adjustments to reconcile net income to cash provided by operating
activities:Allowance for loan losses (net of charge offs)
    
    
    196
    
    
    
    199Depreciation
    
    
    281
    
    
    
    256Increase (decrease) in accrued interest payable
    
    
    429
    
    
    
    279Increase (decrease) in accounts payable and other liabilities
    
    
    350
    
    
    
    388Decrease (increase) in accrued interest receivable
    
    
    -338
    
    
    
    -153Decrease (increase) in other assets
    
    
    -32
    
    
    
    -188Net cash provided by operating activities
    
    
    2,812
    
    
    
    2,139Investing activitiesProceeds from sales and maturities of Investment Securities
net of Purchases
    
    
    -11,000
    
    
    
    -4,833Loans originated, net of principal collections
    
    
    -19,616
    
    
    
    -19,509Cash received in merger with Trust Company of Florida
    
    
    0
    
    
    
    112Capital expenditures
    
    
    -116
    
    
    
    -65Proceeds from sale of other R. E. and assets owned
    
    
    0
    
    
    
    0Increase (decrease) in overnight funds borrowed
    
    
    6,200
    
    
    
    0Decrease (increase) in federal funds and overnight funds
sold
    
    
    5,080
    
    
    
    -1,785Net cash provided (used) by investing activities
    
    
    -19,452
    
    
    
    -26,080Financing activitiesNet increase (decrease) in demand deposits
    
    
    10,708
    
    
    
    6,365Net increase (decrease) time deposits
    
    
    12,877
    
    
    
    22,642Increase (decrease) in securities sold under agreements to
repurchase
    
    
    -519
    
    
    
    -8,531Increase (decrease) in term borrowings
    
    
    -2,150
    
    
    
    4,400Dividends paid
    
    
    0
    
    
    
    0Proceeds from issuance of common stock
    
    
    717
    
    
    
    335Retirement of common stock
    
    
    0
    
    
    
    0Net cash (used) provided by financing activities
    
    
    21,633
    
    
    
    25,211Net increase in cash and due from banks
    
    
    4,993
    
    
    
    1,270Cash and due from banks at beginning of year
    
    
    6,826
    
    
    
    6,876Cash and due from banks at end of quarter
    
    
    11,819
    
    
    
    8,146Schedule 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
   June 302004($000's
    )Net interest income
    
    
    5,434Total other operating income
    
    
    1,239Net Income
    
    
    1,305Basic earnings per share
    
    
    0.40Fully diluted earnings per share
    
    
    0.39
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Note 3
  Quarter Ended June 30,2005
    
    2004(in thousands)Service cost
    
    $
    185
    
    
    $
    179Interest cost
    
    
    109
    
    
    
    96Expected return on plan assets
    
    
    (126
    )
    
    
    (117
    )Amortization of prior service cost
    
    
    3
    
    
    
    2Recognized net actuarial loss
    
    
    55
    
    
    
    37$
    226
    
    
    $
    197
  Quarter Ended June 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
  Quarter Ended June 30,2005
    
    2004(in thousands)Net income
    
    $
    1,926
    
    
    $
    1,358Additional expense had the Corporation adopted
SFAS No. 123
    
    
    (52
    )
    
    
    (50
    )Pro forma net income
    
    $
    1,874
    
    
    $
    1,308Basic earnings per share  As reported
    
    
    .58
    
    
    
    .42- Pro forma
    
    
    .57
    
    
    
    .40Diluted earnings per share  As reported
    
    
    .55
    
    
    
    .39- Pro forma
    
    
    .53
    
    
    
    .38
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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.
  8




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Results of Operations.
   Net Interest Income.
  9




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Interest Earning Assets.
  Non-interest Earning Assets.
 Funding Sources.
 Non-interest Income.
   Non-interest Expense.
 Allowance for Credit Losses.
 10




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Capital Resources.
 Liquidity.
 Impact of Inflation and Changing Prices.
 11




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Item 3. Quantitative and Qualitative Disclosure About Market Risk
      (thousands of dollars)3 months or less
    
    $
    4,297Over 3 through 12 months
    
    
    34,184Over 12 through 36 months
    
    
    4,534Over 36 months
    
    
    960Total
    
    $
    43,975
   As of June 30(thousands of dollars)0-90
    
    91-365
    
    1-3
    
    3-5
    
    Over 5Days
    
    Days
    
    Years
    
    Years
    
    YearsInterest-Sensitive Assets
    
    $
    96,654
    
    
    $
    84,003
    
    
    $
    89,960
    
    
    $
    36,364
    
    
    $
    17,631Interest-Sensitive Liabilities
    
    $
    59,906
    
    
    $
    98,863
    
    
    $
    110,306
    
    
    $
    4,774
    
    
    $
    Interest-Sensitive Gap
    
    $
    36,748
    
    
    $
    (14,860
    )
    
    $
    (20,346
    )
    
    $
    31,590
    
    
    $
    17,631Cumulative Gap
    
    $
    36,748
    
    
    $
    21,888
    
    
    $
    1,542
    
    
    $
    33,132
    
    
    $
    50,763
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Item 4. Controls and Procedures.
   13




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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
  Each of the following ten (10) nominees were elected to the Board of
Directors for a term of one (1) year by the following votes:
 For
    
    WithheldBeverly Beall
    
    
    2,698,063
    
    
    
    13,765Robert G. Blalock
    
    
    2,687,821
    
    
    
    24,007Allen J. Butler
    
    
    2,698,063
    
    
    
    13,765Rosemary Carlson
    
    
    2,695,511
    
    
    
    16,317Francis I. duPont, III
    
    
    2,698,063
    
    
    
    13,765Glen W. Fausset
    
    
    2,698,063
    
    
    
    13,765Sarah Pappas
    
    
    2,691,408
    
    
    
    20,420Raymond A. Weigel, III
    
    
    2,698,063
    
    
    
    13,765Irving Zamikoff
    
    
    2,698,063
    
    
    
    13,765Dan C. Zoller
    
    
    2,697,048
    
    
    
    14,780
 
 Item 5: Other Information
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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.
 
 SIGNATURES
  August 15, 2005
    
    
    
    FIRST NATIONAL BANCSHARES, INC.By
    
    /s/ F.I. duPont, IIIF. I. duPont, III, Chairman & CEOBy
    
    /s/ Glen W. FaussetGlen W. Fausset, President and CFO
 15




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Exhibit Index
 Exhibit No
    
    Description3.1(b)
    
    Amendment to the Restated Articles of Incorporation of the Registrant.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.