UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2001
------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------------------- ----------------------
Commission file number 0-8144
------
F.N.B. CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1255406
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2150 GOODLETTE ROAD NORTH, NAPLES, FL 34102
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(Address of principal executive offices) (Zip Code)
(800) 262-7600
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(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) 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 for the past 90 days.
Yes X No
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
--- ----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT JULY 31, 2001
----- ----------------------------
COMMON STOCK, $2 PAR VALUE 25,612,682 SHARES
- -------------------------- -----------------
F.N.B. CORPORATION
FORM 10-Q
June 30, 2001
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheet 2
Consolidated Income Statement 3
Consolidated Statement of Cash Flows 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosure of Market Risk 19
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Changes in Securities 20
Item 3. Defaults Upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 21
Signatures 22
1
F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
Dollars in thousands, except par values
Unaudited
JUNE 30, DECEMBER 31,
2001 2000
------------- ------------
ASSETS
Cash and due from banks $ 144,745 $ 147,530
Interest bearing deposits with banks 6,967 1,860
Federal funds sold 73,983 39,332
Mortgage loans held for sale 4,773 1,042
Securities available for sale 460,718 441,480
Securities held to maturity (fair
value of $46,501 and $73,508) 45,799 73,522
Loans, net of unearned income of $52,835 and $62,270 3,072,730 3,096,833
Allowance for loan losses (39,800) (40,373)
---------- ----------
NET LOANS 3,032,930 3,056,460
---------- ----------
Premises and equipment 113,530 113,936
Other assets 185,250 180,759
---------- ----------
TOTAL ASSETS $4,068,695 $4,055,921
========== ==========
LIABILITIES
Deposits:
Non-interest bearing $ 501,752 $ 478,167
Interest bearing 2,760,205 2,769,783
---------- ----------
TOTAL DEPOSITS 3,261,957 3,247,950
Other liabilities 75,967 65,768
Short-term borrowings 270,839 282,865
Long-term debt 107,030 119,698
---------- ----------
TOTAL LIABILITIES 3,715,793 3,716,281
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock - $.01 and $10 par value
Authorized - 20,000,000 shares
Issued - 159,857 and 167,732 shares
Aggregate liquidation value - $3,996 and $4,193 2 1,678
Common stock - $.01 and $2 par value
Authorized - 100,000,000 shares
Issued - 25,735,974 and 24,489,817 shares 257 48,980
Additional paid-in capital 295,634 216,647
Retained earnings 53,286 75,127
Accumulated other comprehensive income 6,524 2,196
Treasury stock - 119,680 and 233,741 shares at cost (2,801) (4,988)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 352,902 339,640
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,068,695 $4,055,921
========== ==========
See accompanying Notes to Consolidated Financial Statements
2
F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
Dollars in thousands, except per share data
Unaudited
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
2001 2000 2001 2000
-------- -------- -------- --------
INTEREST INCOME
Loans, including fees $66,878 $66,440 $134,664 $130,071
Securities:
Taxable 6,579 6,557 13,513 13,183
Nontaxable 417 481 816 968
Dividends 367 428 841 854
Other 1,633 191 3,280 425
------- ------- -------- --------
TOTAL INTEREST INCOME 75,874 74,097 153,114 145,501
------- ------- -------- --------
INTEREST EXPENSE
Deposits 28,310 27,299 59,181 53,001
Short-term borrowings 3,103 4,101 6,870 7,804
Long-term debt 1,880 1,914 3,856 3,690
------- ------- -------- --------
TOTAL INTEREST EXPENSE 33,293 33,314 69,907 64,495
------- ------- -------- --------
NET INTEREST INCOME 42,581 40,783 83,207 81,006
Provision for loan losses 2,652 3,061 4,893 6,119
------- ------- -------- --------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 39,929 37,722 78,314 74,887
------- ------- -------- --------
NON-INTEREST INCOME
Insurance commissions and fees 8,481 5,642 17,056 11,592
Service charges 6,268 5,596 12,134 10,945
Trust 1,244 1,077 2,441 2,147
Gain on sale of securities 390 38 422 78
Gain on sale of loans 2,009 628 3,267 1,076
Other 1,658 1,585 3,345 3,476
------- ------- -------- --------
TOTAL NON-INTEREST INCOME 20,050 14,566 38,665 29,314
------- ------- -------- --------
59,979 52,288 116,979 104,201
------- ------- -------- --------
NON-INTEREST EXPENSES
Salaries and employee benefits 22,122 20,784 46,011 41,782
Net occupancy 2,791 2,466 5,579 4,939
Equipment 3,242 3,224 6,676 6,420
Merger related 3,274 3,557
Other 12,022 10,081 29,709 19,772
------- ------- -------- --------
TOTAL NON-INTEREST EXPENSES 43,451 36,555 91,532 72,913
------- ------- -------- --------
INCOME BEFORE INCOME TAXES 16,528 15,733 25,447 31,288
Income taxes 5,564 4,996 8,239 9,907
------- ------- -------- --------
NET INCOME $10,964 $10,737 $ 17,208 $ 21,381
======= ======= ======== ========
NET INCOME PER COMMON SHARE: *
Basic $.43 $.42 $.67 $.84
==== ==== ==== ====
Diluted $.41 $.41 $.65 $.82
==== ==== ==== ====
CASH DIVIDENDS PER COMMON SHARE * $.18 $.17 $.35 $.33
==== ==== ==== ====
* Restated to reflect a 5 percent stock dividend declared on April 23, 2001.
See accompanying Notes to Consolidated Financial Statements
3
F.N.B. CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Dollars in thousands
Unaudited
SIX MONTHS ENDED
JUNE 30,
-----------------------
2001 2000
--------- ---------
OPERATING ACTIVITIES
Net income $ 17,208 $ 21,381
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,843 6,437
Provision for loan losses 4,893 6,119
Deferred taxes (3,471) 2,616
Net gain on sale of securities (422) (78)
Net gain on sale of loans (3,267) (1,076)
Proceeds from sale of loans 13,865 14,547
Loans originated for sale (14,329) (9,012)
Net change in:
Interest receivable 2,522 (1,006)
Interest payable (1,558) 1,199
Other, net 8,153 (9,603)
--------- ---------
Net cash flows from operating activities 30,437 31,524
--------- ---------
INVESTING ACTIVITIES
Net change in:
Interest bearing deposits with banks (5,107) 1,828
Federal funds sold (34,651) 3,307
Loans 17,713 (211,469)
Securities available for sale:
Purchases (115,643) (43,139)
Sales 14,058 12,820
Maturities 89,472 40,638
Securities held to maturity:
Purchases (7,861) (1,664)
Maturities 35,583 7,202
Increase in premises and equipment (5,280) (8,725)
Net cash paid for mergers and acquisitions (2,545)
--------- ---------
Net cash flows from investing activities (14,261) (199,202)
--------- ---------
FINANCING ACTIVITIES
Net change in:
Non-interest bearing deposits, savings and NOW (464) 32,671
Time deposits 14,471 111,795
Short-term borrowings (12,026) (15,417)
Increase in long-term debt 3,961 45,193
Decrease in long-term debt (16,629) (33,652)
Net issuance/acquisition of treasury stock 568 659
Cash dividends paid (8,842) (7,859)
--------- ---------
Net cash flows from financing activities (18,961) 133,390
--------- ---------
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS (2,785) (34,288)
Cash and due from banks at beginning of period 147,530 178,403
--------- ---------
CASH AND DUE FROM BANKS AT END OF PERIOD $ 144,745 $ 144,115
========= =========
See accompanying Notes to Consolidated Financial Statements
4
F.N.B. CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 2001
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements give
retroactive effect to the mergers of Citizens Community Bancorp, Inc. (Citizens)
and OneSource Group, Inc. (OneSource), with and into F.N.B. Corporation (the
Corporation). These transactions were consummated on April 30, and January 26,
2001, respectively, and have been accounted for as a poolings-of-interests. The
accompanying unaudited financial statements are presented as if the mergers had
been consummated for all the periods presented. The accompanying unaudited
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they 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 adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. For
further information, refer to the consolidated financial statements for the year
ended December 31, 2000 and footnotes thereto included in the Corporation's
Annual Report on Form 10-K.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain estimates and
assumptions that affect the amounts reported in the financial statements. The
Corporation cautions that any forward looking statements contained in this
report, in a report incorporated by reference to this report or made by
management of the Corporation, involve risks and uncertainties and are subject
to change based upon various factors. Actual results could differ materially
from those expressed or implied.
MERGERS AND ACQUISITIONS
On June 14, 2001, the Corporation announced the signing of a definitive
merger agreement with Promistar Financial Corporation (Promistar), a bank
holding company headquartered in Johnstown, Pennsylvania, with assets of more
than $2.3 billion. Under the terms of the merger agreement, each outstanding
share of Promistar common stock will be converted into .926 shares of the
Corporation's common stock. A total of 17,570,288 shares of the Corporation's
common stock are anticipated to be issued. The transaction, which will be
accounted for as a pooling-of-interests, is scheduled for completion in the
first quarter of 2002, pending regulatory and shareholder approval. Promistar's
banking affiliate, Promistar Bank, will be merged into an existing affiliate,
First National Bank of Pennsylvania.
On April 30, 2001, the Corporation completed its affiliation with
Citizens Community Bancorp, Inc. (Citizens), a bank holding company
headquartered in Marco Island, Florida, with assets of $181.0 million. Under the
terms of the merger agreement, each outstanding share of Citizens common stock
was converted into .524 shares of the Corporation's common stock. A total of
1,775,244 shares of the Corporation's common stock were issued. The transaction
was accounted for as a pooling- of-interests. Citizens' banking affiliate,
Citizens Community Bank of Florida, operates as a division of an existing
affiliate, First National Bank of Florida.
The Corporation regularly evaluates the potential acquisition of, and
holds discussions with, various acquisition candidates and as a general rule the
Corporation publicly announces such acquisitions only after a definitive
agreement has been reached.
5
REINCORPORATION
F.N.B. Corporation formally completed its reincorporation in the state
of Florida, effective June 1, 2001. The Corporation now legally operates from
corporate headquarters located in Naples, Florida. The relocation of the
Corporation's headquarters from Hermitage, Pennsylvania, to Naples, Florida,
originally was announced in early March, and was overwhelmingly approved by
shareholders at the Corporation's Annual Meeting of Shareholders in April.
F.N.B. Corporation was incorporated in 1974 in Hermitage, Pennsylvania, and at
that time substantially all of the Corporation's business was being conducted in
Pennsylvania. The Corporation expanded into Florida four years ago. As a result
of the dynamic growth experienced in that state and because of subsequent
acquisitions, a significant portion of the Corporation's assets and shareholders
now reside in Florida. By relocating to Southwest Florida, the Corporation is
now closer to the long-term growth of its customer base. In connection with the
reincorporation, the Corporation reduced the par value of both its common stock
and preferred stock to $0.01.
CHARTER CONSOLIDATION
During the first quarter of 2001, the Corporation completed its charter
consolidation plan which reduced the number of bank charters from eight to
three. The Corporation's five Florida banks were merged under First National
Bank of Florida and its two Pennsylvania banks were combined under First
National Bank of Pennsylvania. The Corporation had previously consolidated its
Ohio banks under a single charter, Metropolitan National Bank. In connection
with these charter consolidations, the trust operations of First National Bank
of Florida were consolidated into the Corporation's national trust company,
First National Trust Company. The Corporation incurred pre-tax consolidation
expense of $3.2 million arising from legal and accounting fees, consulting fees,
data processing conversion charges, early retirement, involuntary separation and
related benefit costs. Involuntary separation costs associated with 42
terminated employees totaled $1.4 million of the total consolidation expense.
These separation costs have been reflected within the income statement caption
salaries and employee benefits. The total amount of separation payments paid
during the first six months of 2001 was $1.0 million. The remaining separation
costs will be paid in accordance with the contractual terms of the employment
and compensation agreements of the terminated employees.
RESERVE FOR LEGAL EXPENSES
During the first quarter of 2001, the Corporation recorded a pre-tax
charge of approximately $4.0 million to cover estimated legal expenses
associated with five cases filed against one of the Corporation's subsidiary
banks. The plaintiffs allege that a third-party independent administrator
misappropriated funds from their individual retirement accounts held by the
subsidiary bank. The Corporation established the reserve as a result of
developments which occurred immediately prior to March 31, 2001. The Corporation
believes this reserve will be sufficient for all costs associated with the
litigation, including settlements and adverse judgements.
NEW ACCOUNTING STANDARD
Financial Accounting Standards Statement (FAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities," requires all derivatives to be
recorded on the balance sheet at fair value and establishes standard accounting
methodologies for hedging activities. The statement is effective for the
Corporation's fiscal year ending December 31, 2001. The adoption of this
statement did not have a material impact on the accompanying financial
statements.
6
PER SHARE AMOUNTS
Per share amounts have been adjusted for common stock dividends,
including the 5 percent stock dividend declared on April 23, 2001.
Basic earnings per share is calculated by dividing net income, adjusted
for preferred stock dividends declared, by the sum of the weighted average
number of shares of common stock outstanding.
Diluted earnings per common share is calculated by dividing net income
by the weighted average number of shares of common stock outstanding, assuming
conversion of outstanding convertible preferred stock from the beginning of the
year or date of issuance and the exercise of stock options and warrants. Such
adjustments to net income and the weighted average number of shares of common
stock are made only when such adjustments dilute earnings per share.
EARNINGS PER SHARE
The following tables set forth the computation of basic and diluted
earnings per share (in thousands, except per share data):
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
BASIC
Net income $ 10,964 $ 10,737 $ 17,208 $ 21,381
Less: Preferred stock
dividends declared (76) (105) (153) (212)
---------- ---------- ---------- ----------
Earnings applicable to
basic earnings per share $ 10,888 $ 10,632 $ 17,055 $ 21,169
========== ========== ========== ==========
Average common shares outstanding 25,564,999 25,365,570 25,538,876 25,352,882
========== ========== ========== ==========
Earnings per share $.43 $.42 $.67 $.84
==== ==== ==== ====
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
DILUTED
Earnings applicable to
diluted earnings per share $ 10,964 $ 10,737 $ 17,208 $ 21,381
========== ========== ========== ==========
Average common shares outstanding 25,564,999 25,365,570 25,538,876 25,352,882
Series A convertible
preferred stock 18,650 26,798 18,650 26,798
Series B convertible
preferred stock 374,279 432,882 378,582 448,362
Net effect of dilutive stock
options and stock warrants
based on the treasury stock
method 636,406 343,927 541,611 378,795
---------- ---------- ---------- ----------
26,594,334 26,169,177 26,477,719 26,206,837
========== ========== ========== ==========
Earnings per share $.41 $.41 $.65 $.82
==== ==== ==== ====
7
CASH FLOW INFORMATION
Following is a summary of supplemental cash flow information (in
thousands):
Six Months Ended
June 30
----------------------
2001 2000
---------- ----------
Cash paid for:
Interest $71,465 $63,296
Taxes 3,587 3,738
Noncash Investing and Financing Activities:
Acquisition of real estate in settlement of loans 1,502 769
Loans granted in the sale of other real estate 578 252
COMPREHENSIVE INCOME
The components of comprehensive income, net of related tax, are as
follows (in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ---------------------
2001 2000 2001 2000
--------- --------- --------- ---------
Net income $10,964 $10,737 $17,208 $21,381
Other comprehensive income:
Unrealized gains on securities:
Unrealized holding gains
(losses) arising
during the period 1,240 733 4,400 (532)
Less: reclassification
adjustment for gains
included in net income (197) (17) (72) (71)
------- ------- ------- -------
Other comprehensive income 1,043 716 4,328 (603)
------- ------- ------- -------
Comprehensive income $12,007 $11,453 $21,536 $20,778
======= ======= ======= =======
BUSINESS SEGMENTS
The Corporation operates in three reportable segments: community banks,
insurance agencies and consumer finance. The Corporation's community bank
subsidiaries offer services traditionally offered by full-service commercial
banks, including commercial and individual demand and time deposit accounts and
commercial, mortgage and individual installment loans. In addition to
traditional banking products, the Corporation's community bank subsidiaries
offer trust services as well as various alternative products, including
securities brokerage and investment advisory services, mutual funds, insurance
and annuities. The Corporation's insurance agencies are full-service insurance
companies offering all lines of commercial and personal insurance through major
carriers. The Corporation's consumer finance subsidiary is involved in making
personal installment loans to individuals and purchasing installment sales
finance contracts from retail merchants. This activity is funded through the
sale of the Corporation's subordinated notes at the finance company's branch
offices. The following tables provide financial information for these segments
of the Corporation (in thousands). Other items shown in the tables below
represent the parent company, other non-bank subsidiaries and eliminations,
which are necessary for purposes of reconciling to the consolidated amounts.
8
At or for the three months Community Insurance Finance All
ended June 30, 2001 Banks Agencies Companies Other Consolidated
---------- ---------- ---------- --------- ------------
Interest income $ 69,395 $ 45 $ 6,948 $ (514) $ 75,874
Interest expense 31,421 64 2,191 (383) 33,293
Provision for loan losses 1,552 1,100 2,652
Non-interest income 12,217 6,409 447 977 20,050
Non-interest expense 32,038 5,212 3,016 2,567 42,833
Intangible amortization 389 198 31 618
Income tax expense (credit) 5,262 444 393 (535) 5,564
Net income 10,950 536 664 (1,186) 10,964
Core operating earnings 11,900 536 664 95 13,195
Total assets 3,885,402 28,936 145,585 8,772 4,068,695
At or for the three months Community Insurance Finance All
ended June 30, 2000 Banks Agencies Companies Other Consolidated
---------- ---------- ---------- --------- ------------
Interest income $ 69,479 $ 40 $ 5,991 $ (1,413) $ 74,097
Interest expense 32,617 37 1,713 (1,053) 33,314
Provision for loan losses 2,101 960 3,061
Non-interest income 9,180 4,438 403 545 14,566
Non-interest expense 28,916 3,739 2,625 786 36,066
Intangible amortization 446 32 11 489
Income tax expense 4,718 155 389 (266) 4,996
Net income 9,861 515 696 (335) 10,737
Core operating earnings 9,861 515 696 (335) 10,737
Total assets 3,853,022 15,726 125,616 (6,300) 3,988,064
* Core operating earnings exclude merger-related costs of $2.2 million, on an
after-tax basis, for the three months ended June 30, 2001.
9
At or for the six months Community Insurance Finance All
ended June 30, 2001 Banks Agencies Company Other Consolidated
---------- ---------- ---------- --------- ------------
Interest income $ 140,481 $ 99 $ 13,871 $ (1,337) $ 153,114
Interest expense 66,196 147 4,522 (958) 69,907
Provision for loan losses 2,693 2,200 4,893
Non-interest income 22,247 13,405 897 2,116 38,665
Non-interest expense 68,230 10,181 5,948 5,933 90,292
Intangible amortization 783 393 64 1,240
Income tax expense (credit) 7,862 1,132 755 (1,510) 8,239
Net income 16,964 1,651 1,279 (2,686) 17,208
Core operating earnings 21,447 1,651 1,279 (140) 24,237
Total assets 3,885,402 28,936 145,585 8,772 4,068,695
At or for the six months Community Insurance Finance All
ended June 30, 2000 Banks Agencies Comapny Other Consolidated
---------- ---------- ---------- --------- ------------
Interest income $ 135,422 $ 65 $ 12,005 $(1,991) $ 145,501
Interest expense 62,642 67 3,355 (1,569) 64,495
Provision for loan losses 4,199 1,920 6,119
Non-interest income 17,736 9,417 753 1,408 29,314
Non-interest expense 58,034 7,210 5,322 1,389 71,955
Intangible amortization 888 48 22 958
Income tax expense (credit) 8,699 690 761 (243) 9,907
Net income 18,696 1,467 1,378 (160) 21,381
Core operating earnings 18,696 1,467 1,378 (160) 21,381
Total assets 3,853,022 15,726 125,616 (6,300) 3,988,064
* Core operating earnings exclude consolidation expenses of $2.1 million and
merger-related and other non-recurring costs of $5.0 million, on an after-tax
basis, for the six months ended June 30, 2001.
10
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
FINANCIAL INFORMATION SUMMARY
Core operating earnings for the first six months of 2001 increased to
$24.2 million from $21.4 million for the first six months of 2000. Basic core
operating earnings per share were $.94 and $.84 for the six months ended June
30, 2001 and 2000, respectively, while diluted core operating earnings per share
were $.92 and $.82 for those same periods. Core operating earnings consist of
net income adjusted for non- recurring items. Non-recurring items incurred
during the first six months of 2001 included charter consolidation expenses of
$2.1 million and merger related and other non-recurring costs of $5.0 million,
net of tax. Including these costs, net income was $17.2 million for the first
six months of 2001, resulting in diluted earnings per share of $.65. There were
no non-recurring items during the first six months of 2000. Highlights for the
first six months of 2001 include:
o A return on average assets of 1.19% and a return on average
equity of 14.14%, both based on core operating earnings.
o An increase in non-interest income of $9.4 million, including a
28.1% or $6.9 million increase in fee income, which consists of
service charges, insurance commissions and trust income.
o A 6.1% increase in average earning assets.
o Continued strong asset quality.
o Completion of affiliations with Ostrowsky & Associates, Inc.,
James T. Blalock, OneSource Group, Inc. and Citizens Community
Bank of Florida.
o Completion of consolidation of charters which is expected to
increase after- tax earnings on an annualized basis by
approximately $2.9 million, or $0.12 per share, by the year 2002.
11
FIRST SIX MONTHS OF 2001 AS COMPARED TO FIRST SIX MONTHS OF 2000:
The following table provides information regarding the average balances
and yields and rates on interest earning assets and interest bearing liabilities
(dollars in thousands):
Six Months Ended June 30 2001 2000
---------------------------- ----------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
---------- -------- ------ ---------- -------- ------
ASSETS
Interest earning assets:
Interest bearing deposits
with banks $ 4,437 $ 74 3.34% $ 3,489 $ 133 7.62%
Federal funds sold 131,879 3,206 4.86 10,005 292 5.84
Securities:
Taxable 457,995 14,187 6.25 441,078 13,878 6.33
Non-taxable (1) 43,570 1,418 6.51 51,185 1,630 6.37
Loans (1) (2) 3,086,096 135,336 8.84 3,003,345 130,621 8.75
---------- -------- ---------- --------
Total interest
earning assets 3,723,977 154,221 8.35 3,509,102 146,554 8.40
---------- -------- ---------- --------
Cash and due from banks 126,218 127,679
Allowance for loan losses (40,525) (38,803)
Premises and equipment 113,965 112,232
Other assets 179,351 159,396
---------- ----------
$4,102,986 $3,869,606
========== ==========
LIABILITIES
Interest bearing liabilities:
Deposits:
Interest bearing demand $ 560,811 $ 5,983 2.15 $ 528,362 $ 6,030 2.30
Savings 833,133 10,983 2.66 795,119 11,139 2.82
Other time 1,415,430 42,215 6.01 1,319,148 35,832 5.46
Short-term borrowings 275,220 6,870 5.03 285,374 7,804 5.50
Long-term debt 113,430 3,856 6.80 114,951 3,690 6.42
---------- -------- ---------- -------
Total interest
bearing liabilities 3,198,024 69,907 4.41 3,042,954 64,495 4.26
---------- -------- ---------- --------
Non-interest bearing
demand deposits 486,393 451,268
Other liabilities 72,937 63,147
---------- ----------
3,757,354 3,557,369
---------- ----------
STOCKHOLDERS' EQUITY 345,632 312,237
---------- ----------
$4,102,986 $3,869,606
========== ==========
Net interest earning assets $ 525,953 $ 466,148
========== ==========
Net interest income $ 84,314 $ 82,059
======== ========
Net interest spread 3.94% 4.14%
===== =====
Net interest margin (3) 4.57% 4.70%
===== =====
(1) The amounts are reflected on a fully taxable equivalent basis using the
federal statutory tax rate of 35% adjusted for certain federal tax
preferences.
(2) Average balance includes non-accrual loans. Loans consist of average
total loans less average unearned income. The amount of loan fees
included in interest income on loans is immaterial.
(3) Net interest margin is calculated by dividing the difference between
total interest earned and total interest paid by average interest
earning assets.
12
Net interest income, the Corporation's primary source of earnings, is
the amount by which interest and fees generated by interest earning assets,
primarily loans and securities, exceed interest expense on deposits and borrowed
funds. During the first six months of 2001, net interest income, on a fully
taxable equivalent basis, totaled $84.3 million, as compared to $82.1 million
for the first six months of 2000. Net interest income consisted of interest
income of $154.2 million and interest expense of $69.9 million for the first six
months of 2001 compared to $146.6 million and $64.5 million for each,
respectively, for the first six months of 2000. Net interest margin decreased
from 4.70% at June 30, 2000 to 4.57% at June 30, 2001. The yield on total
interest earning assets decreased by 5 basis points and the rate paid on
interest bearing liabilities increased by 15 basis points. Although the
Corporation has experienced margin compression, net interest income has risen as
earning assets increased by 6.1%. There is a possibility that the compression
could continue, as further discussed within the "Liquidity and Interest Rate
Sensitivity" section of this report.
The following table sets forth certain information regarding changes in
net interest income attributable to changes in the volumes and rates of interest
earning assets and interest bearing liabilities for the six months ending June
30, 2001 as compared to the six months ending June 30, 2000 (in thousands):
Volume Rate Net
------- ------- -------
INTEREST INCOME
Interest bearing deposits with banks $ 55 $ (114) $ (59)
Federal funds sold 2,955 (41) 2,914
Securities:
Taxable 461 (152) 309
Non-taxable (249) 37 (212)
Loans 3,433 1,282 4,715
------- ------- -------
6,655 1,012 7,667
------- ------- -------
INTEREST EXPENSE
Deposits:
Interest bearing demand 759 (806) (47)
Savings 835 (991) (156)
Other time 2,682 3,701 6,383
Short-term borrowings (275) (659) (934)
Long-term debt (48) 214 166
------- ------- -------
3,953 1,459 5,412
------- ------- -------
NET CHANGE $ 2,702 $ (447) $ 2,255
======= ======= =======
The amount of change not solely due to rate or volume changes was
allocated between the change due to rate and the change due to volume based on
the net size of the rate and volume changes.
Interest income on loans, on a fully taxable equivalent basis,
increased 3.4% from $130.6 million for the six months ended June 30, 2000 to
$135.3 million for the six months ended June 30, 2001. This increase was the
result of an increase in average loans of 2.8% and an increase of 9 basis points
in the average yield over the same period last year.
Interest expense on deposits increased $6.2 million or 11.7% for the
six months ended June 30, 2001, compared to the same period of 2000, as average
interest bearing deposits rose 6.3% over this period. The average balances in
time deposits, savings deposits and interest bearing demand deposits increased
by $96.3 million, $38.0 million and $32.4 million, respectively. The average
balance in non-interest bearing demand deposits increased by $35.1 million.
Interest expense on short-term borrowings decreased $934,000, as the average
balance of short-term borrowings decreased $10.2 million and the rate paid
decreased by 47 basis points. Interest expense on long-term debt increased
13
$166,000 from June 30, 2000 despite a $1.5 million decrease in average long-term
debt due to an increase in the rate paid of 38 basis points.
The provision for loan losses charged to operations is a direct result
of management's analysis of the adequacy of the allowance for loan losses which
takes into consideration factors, including qualitative factors, relevant to the
collectibility of the existing portfolio. The provision for loan losses was $4.9
million for the first six months of 2001, as compared to $6.1 million for the
first six months of 2000. The decrease reflects the Corporation's continued
strong asset quality. The allowance for loan losses as a percentage of total
loans was 1.30% at June 30, 2001 and 1.28% at June 30, 2000.
Non-interest income increased 31.9% from $29.3 million during the first
six months of 2000 to $38.7 million during the first six months of 2001.
Insurance commissions and fees, service charges and trust income increased $6.9
million or 28.1% over the first six months of 2000. These higher levels of fee
income are attributable to insurance agency purchases that were consummated
after June 30, 2000, increases in deposits and the Corporation's continued
expansion into annuity and mutual fund sales and trust services. Additionally,
gains on the sale of loans increased $2.2 million during this same period.
Non-interest expenses increased 25.5% from $72.9 million during
the first six months of 2000 to $91.5 million during the first six months of
2001. This increase was primarily attributable to non-recurring items during the
first six months of 2001, including consolidation expenses of $3.2 million, a
$4.0 million legal reserve related to a defalcation by a third party IRA
administrator and merger related costs of $3.6 million (see Notes to
Consolidated Financial Statements). Excluding these items, non-interest expenses
totaled $80.7 million for the first six months of 2001. In addition to the
previously mentioned non-recurring items, non-interest expenses increased due to
insurance agency purchases that were consummated after June 30, 2000. Excluding
the impact of the insurance agency purchases, non-interest expenses would have
increased by $4.7 million or 6.4% on a year over year basis.
The Corporation's income tax expense was $8.2 million for the first six
months of 2001 compared to $9.9 million for the same period of 2000. The
effective tax rate of 32.4% for the six months ended June 30, 2001 was lower
than the 35.0% federal statutory tax rate due to the tax benefits resulting from
tax-exempt instruments and excludable dividend income.
SECOND QUARTER OF 2001 AS COMPARED TO SECOND QUARTER OF 2000:
During the second quarter of 2001, net interest income increased $1.8
million or 4.4% over the second quarter of 2000. Total interest income increased
$1.8 million, or 2.4%, accounting for the entire increase in net interest
income. This increase was primarily the result of an increase in interest income
on federal funds sold. Total interest expense remained constant at $33.3
million. However, interest expense on deposits increased $1.0 million or 3.7%
due to increases in the level of deposits, while interest expense on borrowings
decreased $1.0 million or 17.2%, due to a decrease in short-term borrowings.
The provision for loan losses totaled $2.7 million for the second
quarter of 2001, as compared to $3.1 million for the second quarter of 2000.
14
Non-interest income increased 37.6% during the second quarter of 2001
compared to the same period of 2000, primarily due to a $3.7 million or 29.9%
increase in insurance commissions and fees, service charges and trust income.
These higher levels of fee income are attributable to growth in insurance,
increases in deposits and the Corporation's continued expansion into annuity
and mutual fund sales and trust services. Additionally, gains on the sale of
loans increased $1.4 million during this same period.
Non-interest expenses increased 18.8% during the second quarter of
2001, compared to the second quarter of 2000, primarily due to non-recurring
merger related costs of $3.3 million during the second quarter of 2001.
Excluding these items, non- interest expenses totaled $40.2 million for the
second quarter of 2001. In addition to the previously mentioned non-recurring
item, non-interest expenses increased by $1.6 million from insurance agency
purchases.
LIQUIDITY AND INTEREST RATE SENSITIVITY
The Corporation monitors its liquidity position on an ongoing basis to
assure that it is able to meet the need for funds at all times. Given the
monetary nature of its assets and liabilities and the source of liquidity
provided by the available for sale securities portfolio, the Corporation has
sufficient sources of funds available as needed to meet its routine, operational
cash needs.
Additionally, the Corporation has external sources of funds available
should it desire to use them. These include approved lines of credit with
several major domestic banks, of which $78.0 million was unused at June 30,
2001. To further meet its liquidity needs, the Corporation also has access to
the Federal Home Loan Bank and the Federal Reserve Bank, as well as other
funding sources.
The financial performance of the Corporation is at risk from interest
rate fluctuations. This interest rate risk arises due to differences between the
amount of interest-earning assets and interest-bearing liabilities subject to
repricing over a period of time, the difference between the change in various
interest rates and the embedded options in certain financial instruments. The
Board of Directors has established an Asset/Liability Policy in order to achieve
and maintain earnings performance consistent with long-term goals while
maintaining acceptable levels of interest rate risk, a "well-capitalized"
balance sheet and adequate levels of liquidity. This policy designates the
Asset/Liability Committee (ALCO) as the body responsible for meeting this
objective. The Corporation utilizes an asset/liability model to support its
balance sheet strategies. The Corporation uses gap analysis, net interest income
simulations and the economic value of equity to measure its interest rate risk.
The gap analysis which follows measures the interest rate risk of the
Corporation by comparing the difference between the amount of interest-earning
assets and interest- bearing liabilities subject to repricing over a period of
time. The cumulative one-year gap ratio was 1.05 at June 30, 2001, as compared
to .88 at June 31, 2000. A ratio of more than one indicates a net-asset
repricing position and, conversely, a ratio of less that one indicates a
net-liability repricing position during the subsequent twelve months.
15
Following is the gap analysis as of June 30, 2001 (in thousands):
Within 4-12 1-5 Over
3 Months Months Years 5 Years Total
---------- --------- ---------- ----------- ----------
INTEREST EARNING ASSETS
Interest bearing deposits
with banks $ 5,016 $ 1,824 $ 127 $ 6,967
Federal funds sold 73,983 73,983
Securities 70,974 99,811 $ 266,579 69,153 506,517
Loans, net of unearned 902,706 691,476 1,245,717 237,604 3,077,503
---------- --------- ---------- ----------- ----------
1,052,679 793,111 1,512,296 306,884 3,664,970
Other assets 403,725 403,725
---------- --------- ---------- ----------- ----------
$1,052,679 $ 793,111 $1,512,296 $ 710,609 $4,068,695
========== ========= ========== =========== ==========
INTEREST BEARING LIABILITIES
Deposits:
Interest checking $ 124,817 $ 431,734 $ 556,551
Savings 350,905 467,620 818,525
Time deposits 364,542 $ 668,395 $ 352,192 1,385,129
Borrowings 227,315 29,174 42,675 78,705 377,869
---------- --------- ---------- ----------- ----------
1,067,579 697,569 394,867 978,059 3,138,074
Other liabilities 577,719 577,719
Stockholders' equity 352,902 352,902
---------- --------- ---------- ----------- ----------
$1,067,579 $ 697,569 394,867 $ 1,908,680 $4,068,695
========== ========= ========== =========== ==========
PERIOD GAP $ (14,900) $ 95,542 $1,117,429 $(1,198,071)
========== ========= ========== ===========
CUMULATIVE GAP $ (14,900) $ 80,642 $1,198,071
========== ========= ==========
CUMULATIVE GAP AS A PERCENT
OF TOTAL ASSETS (.37)% 1.98% 29.45%
========== ========= ==========
RATE SENSITIVE ASSETS/RATE
SENSITIVE LIABILITIES
(CUMULATIVE) .99 1.05 1.55 1.17
========== ========= ========== ==========
Net interest income simulations measure the exposure to short-term
earnings from changes in market rates of interest in a more rigorous and
explicit fashion. The Corporation's current financial position is combined with
assumptions regarding future business to calculate net interest income under
varying hypothetical interest rate scenarios. The economic value of equity (EVE)
measures the Corporation's long-term earnings exposure from changes in market
rates of interest. EVE is defined as the present value of assets minus the
present value of liabilities at a point in time. A decrease in EVE due to a
specified rate change indicates a decline in the long-term earnings capacity of
the balance sheet assuming that the rate change remains in effect over the life
of the balance sheet. Both net interest income simulations and EVE capture
balance sheet risks (such as changing embedded options) that a single gap
analysis fails to expose. The following table presents an analysis of the
potential sensitivity of the Corporation's annual net interest income and EVE to
sudden and sustained 200 basis point changes in market rates:
16
JUNE 30,
--------------------
2001 2000
--------- ---------
Net interest income change (12 months):
- 200 basis points (3.2)% 2.3 %
+ 200 basis points (0.3)% (4.5)%
Economic value of equity:
- 200 basis points (5.8)% (0.5)%
+ 200 basis points (2.7)% (6.1)%
The preceding measurements assumed no change in asset/liability
composition. The disclosed measures are well within the limits set forth in the
Corporation's Asset/Liability Policy. As such, the measures do not necessarily
reflect the actions the ALCO may undertake in response to certain changes in
interest rates.
The computation of the prospective effects of hypothetical interest
rate changes requires numerous assumptions regarding characteristics of new
business and the behavior of existing positions. These business assumptions are
based upon the Corporation's experience, business plans and published industry
experience. Key assumptions employed in the model include asset prepayment
speeds, the relative price sensitivity of certain assets and liabilities and the
expected life of non-maturity deposits. Because these assumptions are inherently
uncertain, actual results will differ from simulated results.
CAPITAL RESOURCES
The assessment of capital adequacy depends on a number of factors such
as asset quality, liquidity, earnings performance, changing competitive
conditions and economic forces. The Corporation seeks to maintain a strong
capital base to support its growth and expansion activities, to provide
stability to current operations and to promote public confidence. Capital
adequacy is further discussed in the "Regulatory Matters" section of this
report.
Capital management is a continuous process. Since December 31, 2000,
stockholders' equity has increased $8.4 million as a result of earnings
retention. For the six months ended June 30, 2001, the return on average equity
was 14.14% and the dividend payout ratio was 36.08%, both based on core
operating earnings. Book value per common share was $13.62 at June 30, 2001,
compared to $12.42 at June 30, 2000.
LOANS
Following is a summary of loans (dollars in thousands):
JUNE 30, DECEMBER 31,
2001 2000
---------- ------------
Real estate:
Residential $1,154,764 $1,162,568
Commercial 886,452 845,136
Construction 215,479 204,267
Installment loans to individuals 304,884 341,436
Commercial, financial and agricultural 398,664 401,983
Lease financing 165,322 204,187
Unearned income (52,835) (62,744)
---------- ----------
$3,072,730 $3,096,833
========== ==========
17
NON-PERFORMING ASSETS
Non-performing assets include non-performing loans and other real estate
owned. Non-performing loans include non-accrual loans and restructured loans.
Non-accrual loans represent loans on which interest accruals have been
discontinued. It is the Corporation's policy to discontinue interest accruals
when principal or interest is due and has remained unpaid for 90 days or more
unless the loan is both well secured and in the process of collection. When a
loan is placed on non-accrual status, all unpaid interest is reversed.
Non-accrual loans may not be restored to accrual status until all delinquent
principal and interest has been paid or the loan becomes both well secured and
in the process of collection. Consumer installment loans are generally charged
off against the allowance for loan losses upon reaching 90 to 180 days past due,
depending on the installment loan type. Restructured loans are loans in which
the borrower has been granted a concession on the interest rate or the original
repayment terms due to financial distress.
Non-performing loans are closely monitored on an ongoing basis as part
of the Corporation's loan review and work-out process. The potential risk of
loss on these loans is evaluated by comparing the loan balance to the fair value
of any underlying collateral or the present value of projected future cash
flows. Losses are recognized where appropriate.
Following is a summary of non-performing assets (dollars in thousands):
JUNE 30, DECEMBER 31,
2001 2000
------------ ------------
Non-performing assets:
Non-accrual loans $11,827 $10,392
Restructured loans 3,205 2,810
------- -------
Total non-performing loans 15,032 13,202
Other real estate owned 4,914 4,786
------- -------
Total non-performing assets $19,946 $17,988
======= =======
Asset quality ratios:
Non-performing loans as percent of total loans .49% .43%
Non-performing assets as percent of total assets .49% .44%
ALLOWANCE FOR LOAN LOSSES
Management's analysis of the allowance for loan losses includes the
evaluation of the loan portfolio based on internally generated loan review
reports and the historical loss experience of the remaining balances of the
various homogeneous loan pools which comprise the loan portfolio. Specific
factors which are evaluated include the previous loan loss experience with the
customer, the status of past due interest and principal payments on the loan,
the collateral position of the loan, the quality of financial information
supplied by the borrower and the general financial condition of the borrower.
Historical loss experience on the remaining portfolio segments is considered in
conjunction with the current status of economic conditions, loan loss trends,
delinquency and non-accrual trends, credit administration and concentrations of
credit risk.
18
Following is a summary of changes in the allowance for loan losses and
selected ratios (dollars in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2001 2000 2001 2000
-------- -------- -------- --------
Balance at beginning of period $40,318 $38,719 $40,373 $37,197
Charge-offs (3,615) (2,547) (6,446) (4,506)
Recoveries 445 439 980 862
------- ------- ------- -------
Net charge-offs (3,170) (2,108) (5,466) (3,644)
Provision for loan losses 2,652 3,061 4,893 6,119
------- ------- ------- -------
Balance at end of period $39,800 $39,672 $39,800 $39,672
======= ======= ======= =======
Allowance for loan losses to:
Total loans, net of unearned income 1.30% 1.28%
Non-performing loans 264.77% 357.47%
REGULATORY MATTERS
Quantitative measures established by regulators to ensure capital
adequacy require the Corporation and its banking subsidiaries to maintain
minimum amounts and ratios of total and tier 1 capital (as defined in the
regulations) to risk-weighted assets (as defined) and of tier 1 capital to
average assets (as defined).
As of March 31, 2001, the Corporation and each of its banking
subsidiaries have been categorized as "well capitalized" under the regulatory
framework for prompt corrective action. Management believes, as of June 30,
2001, that the Corporation and each of its banking subsidiaries are all "well
capitalized". Following are capital ratios as of June 30, 2001 for the
Corporation (dollars in thousands):
Well Capitalized Minimum Capital
Actual Requirements Requirements
----------------- ----------------- -----------------
Amount Ratio Amount Ratio Amount Ratio
--------- ------- --------- ------- --------- -------
Total Capital $358,053 11.7% $307,394 10.0% $245,916 8.0%
(to risk-weighted assets)
Tier 1 Capital 318,270 10.4% 184,437 6.0% 122,958 4.0%
(to risk-weighted assets)
Tier 1 Capital 318,270 7.8% 204,082 5.0% 163,266 4.0%
(to average assets)
The Corporation and its banking subsidiaries are subject to various
regulatory capital requirements administered by federal and state banking
agencies. Failure to meet minimum capital requirements can initiate certain
mandatory, and discretionary actions by regulators that, if undertaken, could
have a direct material effect on the Corporation's financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Corporation and its banking subsidiaries must meet specific capital
guidelines that involve quantitative measures of assets, liabilities and certain
off-balance sheet items as calculated under regulatory accounting practices. The
Corporation's and banking subsidiaries' capital amounts and classifications are
also subject to qualitative judgments by the regulators about components, risk
weightings and other factors.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK.
The information called for by this item is provided under the caption
"Liquidity and Interest Rate Sensitivity" under Item 2 - Management's Discussion
and Analysis of Financial Condition and Results of Operations.
19
PART II
ITEM 1. LEGAL PROCEEDINGS
During the first quarter of 2001, the Corporation established a legal
reserve of approximately $4.0 million associated with individual
retirement accounts at one of its banking subsidiaries. Various cases
have been filed in the 20th Judicial Circuit and for Lee County,
Florida, naming the subsidiary of the Corporation as a co-defendant.
The plaintiffs allege that a third-party independent administrator
misappropriated funds from their individual retirement accounts held
with the banking subsidiary (see Notes to Consolidated Financial
Statements).
The Corporation and persons to whom the Corporation may have
indemnification obligations, in the normal course of business, are
subject to various pending and threatened lawsuits in which claims for
monetary damages are asserted. Management, after consultation with
outside legal counsel, does not at the present time anticipate the
ultimate aggregate liability, arising out of such pending and
threatened lawsuits will have a material adverse effect on the
Corporation's financial position. At the present time, management is
not in a position to determine whether any pending or threatened
litigation will have a material adverse effect on the Corporation's
results of operation in any future reporting period.
ITEM 2. CHANGES IN SECURITIES
Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of F.N.B. Corporation was held on
April 23, 2001. Proxies were solicited pursuant to Section 14(a) of the
Securities and Exchange Act of 1934 and there was no solicitation in
opposition to the Corporation's solicitations.
The Corporation's 2001 Incentive Plan was approved with 12,607,196
shares voted for, 3,040,417 shares voted against and 347,586
abstentions.
The Corporation's Agreement and Plan of Merger to reincorporate in the
state of Florida was approved with 14,360,726 shares voted for, 837,912
shares voted against and 191,424 abstentions.
All of the Corporation's nominees for directors as listed in the proxy
statement were elected with the following vote:
Shares Voted Shares
"For" "Withhold"
------------ --------------
Alan C. Bomstein 17,781,727 543,534
Charles T. Cricks 17,778,543 547,717
Henry M. Ekker 17,777,460 548,801
James S. Lindsay 17,781,314 544,947
Paul P. Lynch 17,776,009 550,251
20
ITEM 5. OTHER INFORMATION
The Secretary of the Corporation must receive written notice of any
proposal submitted by a shareholder of the Corporation for
consideration at the Annual Meeting of Shareholders on or prior to the
date which is 120 days prior to the date on which the Corporation first
mailed its proxy materials for the prior year's Annual Meeting of
Shareholders. Accordingly, any shareholder proposal must be submitted
to the Corporation by November 19, 2001 to be considered at the 2002
Annual Meeting of Shareholders.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Articles of Incorporation of the Corporation as
currently in effect. (incorporated by reference to
Exhibit 4.1 of the Corporation's Form 8-K filed on
June 1, 2001).
3.2 By-Laws of the Corporation as currently in effect.
(incorporated by reference to Exhibit 4.2 of the
Corporation's Form 8-K filed on June 1, 2001).
10.15 Employment agreement between F.N.B. Corporation and
Gary L. Tice. (filed herewith).
(b) Reports on Form 8-K
A report on Form 8-K, dated June 1, 2001, was filed by the
Corporation to announce that the reincorporation from the
Commonwealth of Pennsylvania to the State of Florida was
effective June 1, 2001. The Form 8-K also included the
Articles of Incorporation and By-laws for the Corporation.
A report on Form 8-K, dated June 14, 2001, was filed by the
Corporation to announce the Agreement and Plan of Merger
entered into with Promistar Financial Corporation on June 13,
2001.
21
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.
F.N.B. CORPORATION
------------------------------------------
(Registrant)
Dated: August 13, 2001 /s/Gary L. Tice
--------------------------- ------------------------------------------
Gary L. Tice
President and Chief Executive Officer
(Principal Executive Officer)
Dated: August 13, 2001 /s/John D. Waters
--------------------------- ------------------------------------------
John D. Waters
Vice President and Chief Financial Officer
(Principal Financial Officer)
22