Item 2. Description of Property



At December 31, 2002, the Bank's net investment in Bank premises and equipment
in service was $10,915,165. A schedule by type is shown in Note 7 to the
financial statements. A description of the Bank's property is as follows.


Our main office in Honaker, Virginia, which we own, contains 11,800 square feet
on three floors and is situated on 2.5 acres. The building contains a full
service branch, administration operations,  bookkeeping and credit
departments, two drive-thru lanes and an ATM. The office is an attractive brick
building with adequate room for current operations. The office is located at 2
Gent Drive, Honaker, Virginia 24260.


The Branch at Weber City, which we own, is a 2,700 square foot brick building
situated on a 200 x 150 lot. It contains a full service branch with three
drive-thru lanes and an ATM. The branch is located at 131 U.S. Highway 23 South,
Weber City, Virginia 24290.


The Branch at Castlewood, which we own, is a 4,500 square foot brick building
situated on a 300 x 150 lot. It contains a full service branch with two
drive-thru lanes and an ATM. The branch is located at 102 Miners Drive,
Castlewood, Virginia 24224.


The Branch at Haysi, which we own, is a 2,400 square foot brick building
situated on a one-fourth acre lot. It contains a full service branch with
drive-thru lanes and an ATM. The branch is located at 402 Main Street, Haysi,
Virginia 24256.


The Branch at Lebanon, which we own, is a 6,000 square foot building, of brick
construction, situated on a one acre lot. It contains a full service branch with
drive-thru lanes and an ATM. The branch is located at 685 North East Main
Street, Lebanon, Virginia 24266.


The Branch at Pounding Mill, which we own, is a 3,600 square foot brick building
situated on a one acre lot. It contains a full service branch with two
drive-thru lanes and an ATM. The branch is located on Route 460 at Pounding
Mill, Virginia 24637.


The Branch at Princeton, which we own, is a 3,600 square foot brick building
situated on a .39 acre lot. It contains a full service branch with two
drive-thru lanes and an ATM. The branch is located at 1221 Stafford Drive,
Princeton, West Virginia 24740.


On January 3, 2002, we opened a branch in Gate City, Virginia, which we own. The
branch is a 3,600 square foot brick building situated on a one acre lot. It
contains a full service branch with two drive-thru lanes and an ATM. The branch
is located at 326 East Jackson Street, Gate City, Virginia 24251.


On May 16, 2002, we opened a branch in Clintwood, Virginia, which we own and
which replaces the loan production office. The Bank is a 3,600 square foot brick
building situated on a one acre lot. It contains a full service branch with
drive thru lanes and an ATM. The branch is located on Route 83, Colley Shopping
Center, Clintwood, Virginia 24228.


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On August 8, 2002, we opened a branch in Big Stone Gap, Virginia, which we own.
The Bank is a 2,800 square foot brick building situated on a half-acre lot. It
contains a full service branch with drive thru lanes and ATM. The branch is
located at 419 Shawnee Avenue East, Big Stone Gap, Virginia 24219.


On September 26, 2002, we opened a branch in Tazewell, Virginia, which we own.
The Bank is a 1,900 square foot bricked building situated on a 0.4 acre lot. It
contains a full service branch with drive thru lanes and an ATM. The branch is
located at 157 Tazewell Mall Circle, Tazewell, Virginia 24630.


On December 5, 2002, we opened a semi-branch at Davenport, from leased
facilities, primarily as a deposit-taking service to the community. The building
is an original mobile unit, converted to a stationary structure, with partial
wood siding and partial brick exterior. It contains one drive thru lane and no
ATM. The location is at the intersection of State Routes 80 and 600, Davenport,
VA 24239.


The loan production offices located in Norton and Abingdon are leased through
operating lease arrangements with varying term lengths.


We believe that all of our properties are maintained in good operating condition
and are suitable and adequate for our operational needs.


Land was purchased and construction is nearing completion for a full service
branch in Grundy, Virginia. Approval was granted by the State Corporation
Commission on March 3, 2003 for the new branch, which we own. The building is a
3,400 square foot building, situated on one acre of land. It contains a full
service branch with drive thru lanes and an ATM. The branch is located on U.S.
Route 460, RR4, Box 49, Grundy, Virginia 24614. The scheduled opening date is
April 2003.


Land has been purchased and preliminary construction has begun for a full
service branch in  Bloomingdale,  Tennessee.  It is  anticipated
that construction will be completed by late autumn 2003, at costs similar to
those for the Gate City and Clintwood branches.


We will continue to investigate and consider other possible sites that would
enable us to profitably serve our chosen market area. Purchases of premises and
equipment for the year 2003 will depend on the decision to open additional
branches.