Several factors had a negative impact on the margin, including the repurchase of 1.161 million shares of the corporation's stock, which reduced investable funds. As a consequence, the margin was reduced by approximately three basis points. In the early part of the quarter, noninterest earning cash was higher than normal, a direct result of potential Y2K-related deposit withdrawal activity that never materialized. In the latter part of the quarter, the corporation began to benefit from improved internal cash forecasting techniques that take advantage of a reduced need for cash on hand in the branches. The increase in interest rates generally had little impact because First Virginia has traditionally attempted to balance its rate-sensitive assets and liabilities so changes in interest rates do not impact the corporation's net interest margin.
Asset quality continues to be excellent.
Most of this decline was due to a drop in fee income from credit card activities following the sale of the corporation's credit card portfolio at the end of the first quarter of 1999. Most of this was attributable to a decline in credit card expenses and in consulting fees incurred in the prior year in connection with the service charge income increase and Y2K. Other noninterest expenses were stable or up modestly resulting in the overall decline. During the first quarter, the corporation repurchased 1.161 million shares of stock, leaving 4.038 million shares remaining in the corporation's currently authorized share repurchase program. First Virginia is the largest independent banking company headquartered in Virginia, and one of the 50 largest in the United States. There are 10 banks in the First Virginia group, including six banks with 309 offices in Virginia, two banks with 58 offices in Maryland and two banks with 26 offices in East Tennessee.