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FORM 10-K-ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT of 1934.
For the fiscal year ended December 31, 2000
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: 333-2524
FNB Corporation
(Exact name of registrant as specified in its charter)
Virginia 54-1791618
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
105 Arbor Drive, Christiansburg, Virginia 24068
(Address of principal executive offices) (Zip Code)
(540)382-4951
(Registrant's telephone number, including area code)
Former name, former address and former fiscal year, if changed since
last report.)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common stock, $5 par value
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
The aggregate market value of voting stock held by non-affiliates of the
registrant as of March 9, 2001, was $66,997,378.
4,030,853 shares outstanding as of March 9, 2001
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Corporation's Annual Report to Stockholders for the year ended
December 31, 2000, are incorporated into Parts I and II hereof. Portions of
the Corporation's Notice of Annual Meeting and Proxy Statement for the Annual
Meeting of May 8, 2001, are incorporated into Part III hereof.
PART I
Item 1. Business
General. Subsequent to December 31, 1995, The Board of Directors of First
National Bank (the "Bank") approved a reorganization whereby a bank holding
company (FNB Corporation) was incorporated under the laws of the Commonwealth
of Virginia. On June 11, 1996, the shareholders of the Bank approved a plan
for the holding company to exchange one share of its stock for each share of
stock of the Bank. A registration statement was filed with the Securities and
Exchange Commission (SEC) to register the stock of the holding company, and
such registration statement was subsequently declared effective by the SEC.
On July 11, 1996, the Office of the Comptroller of the Currency (OCC) approved
the plan, and the exchange was subsequently consummated. As a result, the
Bank became a wholly owned subsidiary of the holding company during the third
quarter of 1996, and the holding company began filing periodic reports under
the Securities Exchange Act of 1934. Prior to the consummation of the
exchange, the Bank filed periodic reports with the OCC. The holding company
and its subsidiaries are collectively referred to herein as the
"Corporation."
First National Bank, which was organized in 1905, does a general banking
business, serving the commercial, agricultural, and personal banking needs of
its trade territory, commonly referred to as the New River Valley, which
consists of Montgomery County, Virginia and portions of surrounding counties.
The Bank engages in and offers a full range of banking services, including
trust services; demand, savings, and time deposits used to fund the loan
demand in our trade area; commercial, farm, consumer installment, mortgage,
credit card, FHA and SBA guaranteed loans.
Under national banking law, nontraditional activities of a bank must be
operated through a corporate subsidiary of the bank. During 1992, FNB formed
a wholly-owned subsidiary in order to expand its business operations. FNB
Financial Services, Inc. is a member of the Virginia Title Center, L.L.C. and
acts as an agent in the issuance of title insurance policies. Additionally,
this subsidiary has been licensed by the Commonwealth of Virginia to offer
annuity products through First National's Trust Department. Any reference in
this report to the operations of the Corporation shall include the activities
of FNB Financial Services, Inc.
The local economy is tied primarily to the area's three largest employers -
Virginia Polytechnic Institute and State University, with a student population
in excess of 25,000; Radford University, with a student population in excess
of 8,000; and the Radford Arsenal, a large munitions plant operated under
contract to the U.S. Army. Other industries
include a wide variety of manufacturing concerns and agriculture-related
enterprises. The Bank's main office is located in Christiansburg, the County
Seat, with offices strategically located to take advantage of its trade area's
population mix. Of the Bank's thirteen full service offices, nine are located
in Montgomery County, one in the City of Radford, one in the Town of Dublin
and two in the Town of Wytheville.
Refer to the Corporation's 2000 Annual Report to Stockholders under the
heading "Selected Consolidated Financial Information" for a five year summary
of selected consolidated financial information which is incorporated by
reference into this Form 10-K.
Construction of a new corporate headquarters facility was completed during the
first quarter of 1997.
Competition. The Corporation is the largest bank in the area, with
approximately 42 percent deposit market share in Montgomery County. It is
estimated that the Corporation holds nearly 26 percent of total deposits in
all of the Corporation's markets combined including the offices of those
state-wide and multi-state bank holding companies located in our trade area.
Competition in the trade area consists of state-wide and multi-state bank
holding companies, independent banks, and credit unions.
Loan Commitments. The portfolio is not concentrated within any single
industry or group of related industries, nor is there any material risk other
than that which is expected in the normal course of business of a bank in this
location. Corporation policy establishes lending limits for each officer.
Loan requests for amounts exceeding loan officer lending authority are
referred to the officer loan committee which can approve loans up to 80% of
the bank's legal lending limit. Loan requests exceeding this limit are
referred to the Executive Committee of the Board of Directors. The following
table relates outstanding loans for the dates indicated (in thousands):
December 31,
2000 1999
Commercial $113,645 113,321
Consumer 77,433 69,312
Real estate - commercial 77,341 74,113
Real estate - construction 19,637 18,772
Real estate - mortgage 121,530 106,754
Total loans $409,586 382,272
The Corporation is a party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend credit
and standby letters of credit. Those instruments involve, to varying degrees,
elements of credit risk in excess of the amount recognized in the balance
sheet. The contract amounts of those instruments reflect the extent of
involvement the Corporation has in particular classes of financial
instruments.
The Corporation's exposure to credit loss in the event of nonperformance by
the other party to the financial instrument for commitments to extend credit
and standby letters of credit is represented by the contractual amount of
those instruments. The Corporation uses the same credit policies in making
commitments and conditional obligations as it does for on-balance-sheet
instruments.
Except for unused home equity lines totaling $25,951 at December 31, 2000, and
$26,872 at December 31, 1999 (included in the amounts below) the Corporation
may not require collateral or other security to support the following
financial instruments with credit risk (in thousands):
December 31,
2000 1999
Contract Amounts
Financial instruments whose contract
amounts represent credit risk:
Commitments to extend credit $79,310 88,046
Standby letters of credit 5,045 5,905
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Corporation evaluates
each customer's credit worthiness on a case-by-case basis. The amount of
collateral obtained, if deemed necessary by the Corporation upon extension of
credit, is based on management's credit evaluation of the customer.
Collateral held varies but may include securities, accounts receivable,
inventory, property, plant and equipment, and income-producing commercial
properties.
Standby letters of credit are conditional commitments issued by the
Corporation to guarantee the performance of a customer to a third party.
Those guarantees are primarily issued to support public and private borrowing
arrangements, including commercial paper, bond financing, and similar
transactions. The credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loans to customers.
Collateral held varies but may include securities, accounts receivable,
inventory, property, plant and equipment and income-producing commercial
properties.
Deposit Concentrations. The Corporation's deposits are obtained from a wide
range of depositors. There are no material concentrations of deposits from
any individual or organization.
Employees. The Corporation had 229 full-time equivalent employees as of
December 31, 2000, of which 73 were officers.
Securities Act Guide 3. Statistical Disclosure by Bank Holding Companies. The
following schedules are included:
Average Balance Sheets
Rate/Volume Variance
Securities Available-For-Sale at Fair Value
Securities Held-To-Maturity at Amortized Cost
Securities--Maturity/Yield Schedule
Types of Loans
Loan Maturities and Interest Sensitivity
Nonperforming Assets and Past Due Loans
Pro forma/Recorded Interest on Nonaccrual Loans
Analysis of Allowance for Loan Losses
Allocation of Allowance for Loan Losses
Deposit Maturities
Interest Sensitivity Analysis
AVERAGE BALANCE SHEET
2000
Average
Average Income/ Yield/
(thousands) Balance Expense Rate
ASSETS
Loans (Net of unearned income) (1)(2) $397,154 36,769 9.26%
Securities:
Taxable 50,307 3,186 6.33
Nontaxable (2) 43,119 3,182 7.38
Total securities 93,426 6,368 6.82
Federal funds sold 1,686 99 5.87
Total interest-earning assets 492,266 43,236 8.78
Allowance for loan losses (5,588)
Cash and due from banks, noninterest-
bearing 11,465
Bank premises and equipment, net 13,546
Other real estate owned 253
Other assets 6,159
Total assets $518,101
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits:
Demand and savings $134,661 3,966 2.95%
Time 174,097 9,915 5.70
Certificates of deposit of
$100,000 and over 55,793 3,348 6.00
Total interest-bearing deposits 364,551 17,229 4.73
Federal funds purchased and securities
sold under agreements to repurchase 9,274 437 4.71
Other borrowed funds 41,735 2,436 5.84
Total interest-bearing liabilities 415,560 20,102 4.84
Demand deposits, noninterest-bearing 48,333
Other liabilities 4,573
Stockholders' equity 49,635
Total liabilities and stockholders'
equity $518,101
Interest income and rate earned $43,236 8.78%
Interest expense and rate paid 20,102 4.84
Interest rate spread 3.94
NET INTEREST INCOME AND NET YIELD
ON AVERAGE EARNING ASSETS $23,134 4.70%
(1) Interest on nonaccrual loans has been included only to the extent
reflected in the statements of income. Nonaccrual loans are included in
average balances for yield computations.
(2) Income and rates on non-taxable loans and securities are computed on a tax
equivalent basis using a federal tax rate of 34%.
AVERAGE BALANCE SHEET
1999
Average
Average Income/ Yield/
(thousands) Balance Expense Rate
ASSETS
Loans (net of unearned income)(1)(2) $ 359,268 32,219 8.97%
Securities:
Taxable 51,576 3,157 6.12
Nontaxable(2) 47,414 3,414 7.20
Total securities 98,990 6,571 6.64
Federal funds sold 3,632 183 5.04
Total interest-earning assets 461,890 38,973 8.44
Allowance for loan losses (4,961)
Cash and due from banks, noninterest-
bearing 11,652
Bank premises and equipment, net 13,360
Other real estate owned 43
Other assets 5,535
Total assets $ 487,519
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits:
Demand and savings $ 126,671 3,400 2.68%
Time 167,143 8,905 5.33
Certificates of deposit of $100,000
and over 55,093 2,931 5.32
Total interest-bearing deposits 348,907 15,236 4.37
Federal funds purchased and securities
sold under agreements to repurchase 9,231 380 4.12
Other borrowed funds 37,207 1,994 5.36
Total interest-bearing liabilities 395,345 17,610 4.45
Demand deposits, noninterest-bearing 42,733
Other liabilities 3,422
Stockholders' equity 46,019
Total liabilities and
stockholders' equity $487,519
Interest income and rate earned $38,973 8.44%
Interest expense and rate paid 17,610 4.45
Interest rate spread 3.98
NET INTEREST INCOME AND NET YIELD
ON AVERAGE EARNING ASSETS $21,363 4.63%
(1) Interest on nonaccrual loans has been included only to the extent
reflected in the statements of income. Nonaccrual loans are included in
average balances for yield computations.
(2) Income and rates on non-taxable loans and securities are computed on a tax
equivalent basis using a federal tax rate of 34%.
AVERAGE BALANCE SHEET
1998
Average
Average Income/ Yield/
(thousands) Balance Expense Rate
ASSETS
Loans (Net of unearned income) (1)(2) $ 312,369 29,258 9.37%
Securities:
Taxable 49,206 3,082 6.26
Nontaxable (2) 46,425 3,452 7.44
Total securities 95,631 6,534 6.83
Federal funds sold 9,518 507 5.33
Total interest-earning assets 417,518 36,299 8.69
Allowance for loan losses (4,401)
Cash and due from banks, noninterest-
bearing 10,415
Bank premises and equipment, net 12,642
Other real estate owned 37
Other assets 4,788
Total assets $ 440,999
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing deposits:
Demand and savings $ 105,744 2,958 2.80%
Time 173,533 9,801 5.65
Certificates of deposit of
$100,000 and over 49,607 2,870 5.79
Total interest-bearing deposits 328,884 15,629 4.75
Federal funds purchased and securities
sold under agreements to repurchase 6,496 261 4.02
Other borrowed funds 22,612 1,283 5.67
ESOP debt 874 76 8.70
Total interest-bearing liabilities 358,866 17,249 4.81
Demand deposits, noninterest-bearing 36,239
Other liabilities 3,539
Stockholders' equity 42,355
Total liabilities and stockholders'
equity $440,999
Interest income and rate earned $36,299 8.69%
Interest expense and rate paid 17,249 4.81
Interest rate spread 3.89
NET INTEREST INCOME AND NET YIELD
ON AVERAGE EARNING ASSETS $19,050 4.56%
(1) Interest on nonaccrual loans has been included only to the extent
reflected in the statements of income. Nonaccrual loans are included in
average balances for yield computations.
(2) Income and rates on non-taxable loans and securities are computed on a tax
equivalent basis using a federal tax rate of 34%.
RATE/VOLUME VARIANCE
2000 Compared to 1999 1999 Compared to 1998
Due to Due to Due to Due to
(thousands) Change Volume Rate Change Volume Rate
INTEREST INCOME
Loans $ 4,550 3,453 1,097 2,961 4,299 (1,338)
Securities:
Taxable 29 (79) 108 75 147 (72)
Nontaxable (232) (313) 81 (38) 72 (110)
Federal funds sold (84) (106) 22 (324) (305) (19)
Total 4,263 2,955 1,308 2,674 4,213 (1,539)
INTEREST EXPENSE
Demand and savings 566 225 341 442 574 (132)
Time 1,010 383 627 (896) (351) (545)
Certificates of deposit
of $100,0000 and over 417 40 377 61 305 (244)
Federal funds purchased
and securities sold
under agreements to
repurchase 57 2 55 119 111 8
Other borrowed funds 442 253 189 711 805 (94)
ESOP debt - - - (76) (38) (38)
Total 2,492 903 1,589 361 1,406 (1,045)
Net interest income $ 1,771 2,052 (281) 2,313 2,807 (494)
Variances caused by changes in rate times the changes in volume are allocated
equally.
SECURITIES AVAILABLE-FOR-SALE AT FAIR VALUE
December 31,
(thousands) 2000 1999 1998
U.S. Treasury $ 503 4,026 7,164
U.S. Government agencies and
corporations 16,152 14,824 19,624
States and political subdivisions 17,092 14,753 11,648
Other securities 35,227 34,551 18,796
Totals $ 68,974 68,154 57,232
SECURITIES HELD-TO-MATURITY AT AMORTIZED COST
December 31,
(thousands) 2000 1999 1998
U.S. Treasury $ - - -
U.S. Government agencies and
corporations - - -
States and political subdivisions 28,193 33,221 38,322
Other securities - - 30
Totals $ 28,193 33,221 38,352
SECURITIES--MATURITY/YIELD SCHEDULE
As of December 31, 2000
Securities Available-for-Sale
Approximate Taxable
Amortized Fair Equivalent
(thousands) Costs Values Yield(1)
U.S. Treasury:
1 through 5 years $ 500 503 6.16
Total 500 503 6.16
U.S. Government
agencies and corporations:
Within 1 year 1,470 1,473 6.28
1 through 5 years 8,477 8,482 6.53
6 through 10 years 4,447 4,363 6.73
Over 10 years 1,823 1,834 7.21
Total 16,217 16,152 6.64
States and political subdivisions:
Within 1 year 100 100 5.47
1 through 5 years 10,690 10,746 6.21
6 through 10 years 3,948 3,958 6.49
Over 10 years 2,305 2,288 6.66
Total 17,043 17,092 6.33
Other securities:
Within 1 year 3,011 2,996 5.51
1 through 5 years 24,488 24,669 7.11
6 through 10 years 4,053 3,978 6.75
Over 10 years 3,585 3,584 7.13
Total 35,137 35,227 6.94
$ 68,897 68,974 6.71
(1) Yields on non-taxable investment securities are computed on a tax
equivalent basis using a federal tax rate of 34%.
SECURITIES--MATURITY/YIELD SCHEDULE
As of December 31, 2000
Securities Held-To-Maturity
Approximate Taxable
Amortized Fair Equivalent
(thousands) Costs Values Yield(1)
U.S. Treasury:
1 through 5 years $ - - -
Total - - -
U.S. Government
agencies and corporations:
Within 1 year - - -
1 through 5 years - - -
6 through 10 years - - -
Over 10 years - - -
Total - - -
States and political subdivisions:
Within 1 year 3,423 3,437 7.06
1 through 5 years 19,913 20,205 7.10
6 through 10 years 4,857 4,947 6.95
Over 10 years - - -
Total 28,193 28,589 7.07
Other securities:
Within 1 year - - -
1 through 5 years - - -
6 through 10 years - - -
Over 10 years - - -
Total - - -
$ 28,193 28,589 7.07
(1) Yields on non-taxable investment securities are computed on a tax
equivalent basis using a federal tax rate of 34%.
TYPES OF LOANS
December 31,
2000 1999 1998
% of % of % of
(thousands) Amount Total Amount Total Amount Total
Commercial $113,645 27.7 113,321 29.7 85,536 26.0
Consumer 77,433 18.9 69,312 18.1 66,526 20.3
Real estate - commercial 77,341 18.9 74,113 19.4 65,165 19.8
Real estate - construction 19,637 4.8 18,772 4.9 16,686 5.1
Real estate - mortgage 121,530 29.7 106,754 27.9 94,686 28.8
$409,586 100.0 382,272 100.0 328,599 100.0
TYPES OF LOANS
December 31,
1997 1996
% of % of
(thousands) Amount Total Amount Total
Commercial $ 64,247 22.0 56,461 20.7
Consumer 66,059 22.7 62,906 23.0
Real estate - commercial 56,404 19.4 52,232 19.1
Real estate - construction 8,657 3.0 4,926 1.8
Real estate - mortgage 95,703 32.9 96,856 35.4
$291,070 100.0 273,381 100.0
LOAN MATURITIES AND INTEREST SENSITIVITY
As of December 31, 2000
One
Within Through Over
(thousands) One Year Five Years Five Years Total
Commercial:
Fixed interest rates $ 7,956 30,628 25,488 64,072
Floating interest rates 49,291 - 282 49,573
Total 57,247 30,628 25,770 113,645
Real estate-commercial:
Fixed interest rates 1,120 8,054 31,536 40,710
Floating interest rates 34,362 1,836 433 36,631
Total 35,482 9,890 31,969 77,341
Real estate-construction:
Fixed interest rates 575 2,187 6,563 9,325
Floating interest rates 10,312 - - 10,312
Total 10,887 2,187 6,563 19,637
$ 103,616 42,705 64,302 210,623
NONPERFORMING ASSETS AND PAST DUE LOANS
December 31,
thousands) 2000 1999 1998 1997 1996
Nonaccrual loans $ 2,391 4,517 1,109 893 573
Restructured loans - - - - -
Other real estate owned 281 129 30 98 185
Total nonperforming assets 2,672 4,646 1,139 991 758
Accruing loans past due
90 days $ 410 25 161 196 595
PRO FORMA/RECORDED INTEREST ON NONACCRUAL LOANS
(thousands) 2000 1999 1998 1997 1996
Pro forma interest-nonaccrual
loans $ 239 406 105 92 60
Recorded interest-nonaccrual
loans $ - 1 1 3 3
Interest related to nonaccrual loans is recognized on the cash basis. Loans
are generally placed on nonaccrual status when the collection of principal or
interest is 90 days or more past due, unless the obligation is both well-
secured and in the process of collection. Pro forma interest represents the
amount of interest that would have been recorded if the loans had been current
in accordance with their original terms.
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES
(thousands) 2000 1999 1998 1997 1996
AVERAGE LOANS OUTSTANDING $ 397,154 359,268 312,369 278,824 257,571
ALLOWANCE FOR LOAN LOSSES
Balance, beginning of period $ 5,173 4,640 4,291 4,179 3,988
Provision for loan losses 1,082 1,445 1,135 550 595
6,255 6,085 5,426 4,729 4,583
Loans charged off:
Commercial 377 713 507 42 122
Consumer 494 355 441 402 402
Real estate - commercial - 50 - 25 21
Real estate - construction - - - - -
Real estate - mortgage - 15 22 159 15
Total loans charged off 871 1,133 970 628 560
Recovery of loans previously
charged off:
Commercial 22 9 54 17 29
Consumer 249 178 130 134 125
Real estate - commercial - - - 37 2
Real estate - construction - - - 2 -
Real estate - mortgage 15 34 - - -
Total recoveries 286 221 184 190 156
Net loans charged off 585 912 786 438 404
Balance, end of period $ 5,670 5,173 4,640 4,291 4,179
Net charge-offs to average
loans outstanding 0.15% 0.25% 0.25 0.16 0.16
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
December 31,
(thousands) 2000 1999 1998 1997 1996
Commercial $ 3,140 2,555 2,388 1,218 961
Consumer 837 839 841 792 487
Real estate - commercial 867 612 418 649 738
Real estate - construction 164 66 58 161 28
Real estate - mortgage 576 538 621 688 743
Unassigned portion of allowance 86 563 314 783 1,222
$ 5,670 5,173 4,640 4,291 4,179
Management continually reviews the loan portfolio for signs of deterioration.
In making their evaluation of the portfolio, factors considered include the
individual strength of borrowers, the strength of the individual industries,
the value and marketability of collateral, specific market strengths and
weaknesses, and general economic conditions. Management believes that the
allowance for loan losses at December 31, 2000 is adequate to cover potential
loan losses inherent in the loan portfolio.
DEPOSIT MATURITIES
As of December 31, 2000
Mature Within
Over Six
Three Over Three Months
Months Months Through Over
or Through Twelve Twelve
(thousands) Less Six Months Months Months Total
Certificates of
deposit and other
time deposits of
$100M and over $ 7,695 6,415 25,048 19,971 59,129
All other deposits 82,993 26,254 94,372 168,911 372,530
Total deposits $ 90,688 32,669 119,420 188,882 431,659
INTEREST SENSITIVITY ANALYSIS
As of December 31, 2000
Mature or Reprice Within
Over Three
Three Months Over One
Months Through Year To Over
or Twelve Five Five
(thousands) Less Months Years Years Total
INTEREST-EARNING ASSETS
Loans $137,899 111,025 139,613 19,383 407,920
Securities:
Available-for-sale,
at fair value 1,378 4,226 44,919 18,451 68,974
Held-to-maturity,
at amortized cost 815 2,669 19,873 4,836 28,193
Other interest-earning
assets 3,939 - - - 3,939
Total interest-
earning assets $144,031 117,920 204,405 42,670 509,026
INTEREST-BEARING LIABILITIES
Certificates of deposit
and other time deposits
of $100M and over $ 13,143 27,434 18,552 - 59,129
Time 35,152 90,480 62,194 23 187,849
All other deposits 59,255 23,160 102,056 210 184,681
Federal funds purchased
and securities sold
under agreements to
repurchase 10,634 - - - 10,634
Other borrowed funds 5,000 25,000 9,734 1,366 41,100
Total interest-
bearing
liabilities $123,184 166,074 192,536 1,599 483,393
Interest sensitivity
gap per period $ 20,847 (48,154) 11,869 41,071 25,633
Cumulative interest
sensitivity gap 20,847 (27,307) (15,438) 25,633 -
Refer to the Bank's 2000 Annual Report to Stockholders under the heading
"Selected Consolidated Financial Information" for a five year summary of
financial information which includes return on equity, return on assets and
other ratios, which is incorporated by reference into this Form
10-K.
Item 2. Properties
The Corporation has thirteen full service offices at the following locations:
Full Service
1. Christiansburg Office, 50 North Franklin Street, Christiansburg,
Virginia, containing 9,000 square feet;
2. Blacksburg Office, 601 North Main Street, Blacksburg, Virginia,
containing 8,750 square feet;
3. Riner Office, Route 8, Riner, Virginia, containing 1,600 square
feet;
4. Roanoke Street Office, l340 Roanoke Street, Christiansburg,
Virginia, containing 1,200 square feet;
5. Radford Office, 50 First Street, Radford, Virginia, containing
8,000 square feet;
6. New River Valley Mall Office, 646 New River Road, Christiansburg,
Virginia, containing 917 square feet.
7. Corporate Research Center Office, 1872 Pratt Drive, Suite 1125,
Blacksburg, Virginia, containing 360 square feet.
8. Shawsville Office, 250 Alleghany Spring Road, Shawsville,
Virginia, containing 2,712 square feet.
9. Dublin Office, 2 Town Center Drive, Dublin, Virginia, containing
2,640 square feet.
10. FNB Center, 105 Arbor Drive, Christiansburg, Virginia, containing
72,816 square feet.
11. Wytheville Office, 280 West Main Street, Wytheville, Virginia,
containing 3,000 square feet.
12. South Main Blacksburg Office, 1206 South Main Street, Blacksburg,
Virginia, containing 1,100 square feet.
13. Wytheville office, 900 North 4th Street, Wytheville Virginia,
containing 3,000 square feet.
All of such space is used by the Corporation in its operations. The
Corporation owns properties 1, 2, 3, 5, 8, 9, 10 and 13 and leases properties
4, 6, 7, 11, and 12 from independent parties on terms which management
believes are satisfactory.
Other Real Estate.
Other Real Estate is composed of two nonfarm nonresidential properties.
Item 3. Legal Proceedings
From time to time, the Corporation is a party to lawsuits arising in the
normal course of business in which claims for money damages are asserted.
Management, after consulting with legal counsel handling the respective
matters, is of the opinion that the ultimate outcome of such pending actions,
whether or not adverse to the Corporation, will not have a material effect
upon the Corporation's financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of 2000.
PART II
Item 5. Market for the Corporation's Common Stock and Related Security
Holder Matters
The Corporation has only one (1) class of Common Stock with a Par Value of $5
per share. There were approximately 1,044 stockholders of record as of
December 31, 2000, holding 4,049,887 shares of the authorized 10,000,000
shares. The Corporation's stock began appearing on the Nasdaq Stock Market
under the symbol FNBP on July 7, 1998. Previously, the stock appeared on the
over-the-counter bulletin board under the same symbol. The recent market
prices and other related shareholder data is incorporated by reference into
this Form 10-K from the section entitled, "Market Price and Dividend Data," in
the Corporation's 2000 Annual Report to Stockholders which is filed as Exhibit
13 to this Annual Report on Form 10-K. Prior to 1997, the Corporation had
consistently paid a semi-annual dividend on its common stock. Beginning in
the second quarter of 1997, the dividend payment was changed to a quarterly
basis, which is currently anticipated to be the normal frequency for the
foreseeable future. There are no known restrictions on the retained earnings
that would affect the ability to pay further dividends other than those
imposed by regulatory agencies. See Note 12 of the notes to consolidated
financial statements in the Corporation's 2000 Annual Report to Stockholders
under the caption Dividend Restrictions and Capital Requirements, which is
filed as Exhibit 13 to this Form 10-K and is incorporated herein by reference.
Item 6. Selected Financial Data
Selected financial data is located in the Corporation's 2000 Annual Report to
Stockholders, which is filed as Exhibit 13 to this Form 10-K, under the
caption "Selected Consolidated Financial Information," which is incorporated
herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of
Operations is located in the section of the Corporation's 2000 Annual Report
to Stockholders, which is filed as Exhibit 13 to this Form 10-K, under the
same heading, and is incorporated herein by reference.
Item 7(A) Quantitative and Qualitative Disclosures About Market Risk
Information regarding market risks is included in the section of the 2000
Annual Report to Stockholders entitled "Market Risks Related to Financial
Instruments," which is filed as Exhibit 13 to this Form 10-K and is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The following independent auditors' report, consolidated financial statements,
and supplementary financial information included in the Corporation's 2000
Annual Report to Stockholders, which is filed as Exhibit 13 to this Form 10-K,
are incorporated herein by reference:
Independent Auditors' Report
Consolidated Balance Sheets - December 31, 2000 and 1999
Consolidated Statements of Income - Years ended December 31, 2000, 1999,
and 1998
Consolidated Statements of Comprehensive Income - Years ended December
31, 2000, 1999, and 1998
Consolidated Statements of Cash Flows - Years ended December 31, 2000,
1999, and 1998
Consolidated Statements of Changes in Stockholders' Equity - Years
ended December 31, 2000, 1999, and 1998
Notes to Consolidated Financial Statements
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Corporation
Information on directors is incorporated by reference from the Corporation's
Proxy Statement for the 2000 Annual Meeting of Stockholders under the heading
"Election of Directors."
Information on executive officers is incorporated by reference from the
Corporation's Proxy Statement for the 2000 Annual Meeting of Stockholders
under the heading "Executive Officers of the Corporation."
Election of Directors. A total of 3,644,786 shares of a possible 4,093,996
shares or 89.0 percent of eligible shares were voted at the May 9, 2000,
stockholders meeting. No class of voting stock withheld or cast against any
nominee for Director in aggregate five percent or more of total shares cast by
such class.
Item 11. Executive Compensation
Information on executive compensation is incorporated by reference from the
Corporation's Proxy Statement for the 2000 Annual Meeting of Stockholders
under the heading "Executive Compensation."
Employee Stock Ownership Plan. The Corporation instituted a qualified
employee stock ownership plan in 1983 which covers substantially all
employees. The Corporation makes periodic contributions to the plan that are
used to purchase the Corporation's common stock from available sources. The
shares are then allocated among plan participants based upon compensation and
years of service. Stock allocated to a particular participant (or its value)
is generally distributed upon retirement, death, disability, termination, or
(under certain circumstances) attaining a specified age. The plan is
administered by a committee appointed by the Corporation's Board of Directors.
Information on the Corporation's leveraged ESOP is included in Note 10 of
notes to consolidated financial statements, and is incorporated by reference
from the Corporation's 2000 Annual Report to Stockholders which is included as
Exhibit 13 to this Form 10-K.
Information on compensation of directors compensation committee and executive
compensation matters is incorporated by reference from the Corporation's Proxy
Statement for the 2000 Annual Meeting of Stockholders under the heading "Board
of Directors and Committees of the Board."
The Corporation's performance graph is incorporated by reference from the
Corporation's Proxy Statement under the heading "Performance Graph."
Item 12. Security Ownership of Certain Beneficial Owners and Management
Principal Security Holders. The Corporation knows of no person or group that
beneficially owned more than five percent of the outstanding shares of Common
Stock as of March 6, 2001.
Executive Officers. The persons currently serving as executive officers of
the Corporation and their security ownership, are as follows:
Percent of
Number Shares Owned Outstanding
Name (Age) Title as of 2/16/01(A)(B) Shares
J. Daniel President & Chief 54,305 1.3
Hardy, Jr. (51) Executive Officer
Daniel A. Senior Vice President &
Becker (58) Chief Financial Officer 502 *
* Less than one percent.
(A) Includes shares that may be deemed beneficially owned due to sole or
joint ownership, voting power or investment power; including shares owned by
or held for the benefit of an executive officer's spouse or another immediate
family member residing in the household of the executive officer that may be
deemed beneficially owned.
(B) Includes estimated 2000 Employee Stock Ownership Plan allocation.
Directors. Information on security ownership of directors is incorporated by
reference from the Corporation's Proxy Statement for the 2000 Annual Meeting
of Stockholders under the heading "Election of Directors."
Item 13. Certain Relationships and Related Transactions
Directors and officers of the Corporation and persons with whom they are
associated have had and expect to have in the future, banking transactions
with the Corporation in the ordinary course of their businesses. In the
opinion of management of the Corporation, all such loans and commitments for
loans were made on substantially the same terms, including interest rates,
collateral and repayment terms as those prevailing at the same time for
comparable transactions with other persons, were made in the ordinary course
of business, and do not involve more than a normal risk of collectibility or
present other unfavorable features. The aggregate amount of direct loans to
any one director, officer or principal stockholder (and related persons), does
not exceed 10 percent of the Corporation's equity capital accounts (nor 20
percent of such accounts for all such persons as a group) and did not during
the previous two fiscal years.
Information on transactions with management is incorporated herein by
reference from the Corporation's Proxy Statement for the 2000 Annual Meeting
of Stockholders under the heading "Transactions with Management."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
a(1). Consolidated Financial Statements. See Index to Consolidated Financial
Statements.
a(2). Financial Statement Schedules. The financial statement schedules are
omitted as the required information is inapplicable or the information
is presented in the consolidated financial statements or related notes.
a(3). Exhibits.
See Index to Exhibits
b. Reports on Form 8-K.
The Corporation did not file any reports on Form 8-K during the fourth
quarter of 2000.
c. Exhibits.
Included in item 14a(3) above
d. Financial Statement Schedules.
Included in item 14a(2) above
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FNB Corporation
By: s/J. Daniel Hardy, Jr.
J. Daniel Hardy, Jr.
President & Chief Executive Officer
By: s/Daniel A. Becker
Daniel A. Becker
Senior Vice President &
Chief Financial Officer
Date: March 19, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following directors on behalf of the
registrant and in that capacity and on the dates indicated.
Signature Date
s/Kendall O. Clay March 19, 2001
Kendall O. Clay
s/Douglas Covington March 19, 2001
Douglas Covington
s/Daniel D. Hamrick March 19, 2001
Daniel D. Hamrick
s/J. Daniel Hardy, Jr. March 19, 2001
J. Daniel Hardy, Jr.
s/James L. Hutton March 19, 2001
James L. Hutton
s/Steven D. Irvin March 19, 2001
Steven D. Irvin
s/Joan H. Munford March 19, 2001
Joan H. Munford
s/Charles W. Steger March 19, 2001
Charles W. Steger
s/Jon T. Wyatt March 19, 2001
Jon T. Wyatt
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
The following independent auditors' report and consolidated financial
statements of the Corporation are incorporated by reference from the
Corporation's 2000 Annual Report to Stockholders included within this document
as an Exhibit:
Independent Auditors' Report
Consolidated Balance Sheets --
December 31, 2000 and 1999
Consolidated Statements of Income -- Years
Ended December 31, 2000, 1999, and 1998
Consolidated Statements of Comprehensive Income -- Years
Ended December 31, 2000, 1999, and 1998
Consolidated Statements of Cash Flows -
Years Ended December 31, 2000, 1999, and 1998
Consolidated Statements of Changes in Stockholders' Equity -
Years Ended December 31, 2000, 1999, and 1998
Notes to Consolidated Financial Statements
All schedules are omitted as the required information is inapplicable or the
information is presented in the consolidated financial statements or related
notes.
INDEX TO EXHIBITS
Exhibit # Description
(2) Plan of Merger
(2)A Merger agreement dated July 10, 2000 between FNB Corporation and
CNB Holdings, Inc. filed with the Commission as exhibit (2)A on
Form 10-Q for the quarter ended June 30, 2000, is incorporated
herein by reference.
(2)B Merger agreement dated August 7, 2000 between FNB Corporation and
SWVA Bancshares, Inc. filed with the Commission as exhibit (2)B on
Form 10-Q for the quarter ended June 30, 2000, is incorporated
herein by reference.
(2)C Purchase and assumption agreement dated September 18, 2000 between
FNB Corporation and First Union National Bank filed with the
Commission as exhibit (2)C on Form 10-Q for the quarter ended
September 30, 2000, is incorporated herein by reference.
(3)(i) Articles of Incorporation
Registrant's Articles of Incorporation, filed with the Commission
as Exhibit 3.1 to the Annual Report on Form 10-K for the year
ended December 31, 1996, is incorporated herein by reference.
(3)(ii) Articles of Amendment to Articles of Incorporation, incorporated
herein by reference to Exhibit 3.3 of Registrant's Registration
Statement on Form S-4 dated September 13, 2000.
(3)(iii) Registrant's Bylaws
(10) Material Contracts
(10)A Consulting and Noncompetition Agreement With put Option dated
January 15, 1999, between Samuel H. Tollison and Registrant, filed
with the Commission as Exhibit (10)D on Form 10-K for the year
ended December 31, 1998, is incorporated herein by reference.
(10)B First Amendment to Consulting and Noncompetition Agreement dated
December 23, 1999, between Samuel H. Tollison and Registrant,
filed with the Commission as Exhibit (10)B on Form 10-K for the
year ended December 31, 1999, is incorporated herein by reference.
(10)C Employment agreement dated September 11, 1997 between Julian D.
Hardy Jr., First National Bank, and Registrant, filed with the
Commission as Exhibit (10)B on Form 10-Q for the quarter ended
September 30, 1997, is incorporated herein by reference.
(10)D Change in control agreements with eight senior officers of First
National Bank and one senior officer of Registrant. All
agreements have identical terms and, as such, only a sample copy
of the agreements was filed with the Commission as Exhibit (10)C
on Form 10-Q for the quarter ended September 30, 1997, and is
incorporated herein by reference. The officers covered by the
agreements are as follows:
(1) Daniel A. Becker, Senior Vice President, Chief Financial
Officer, dated April 1, 1999
(2) Keith J. Houghton, Senior Vice President, Manager,
Commercial Banking, dated April 1, 1999
(3) Darlene S. Lancaster, Senior Vice President, Manager,
Mortgage Loan Department, dated August 25, 1997
(4) Kay O. McCoy, Senior Vice President, Manager Retail Banking,
dated April 7, 2000
(5) R. Bruce Munro, Senior Vice President, Chief Credit
Administration Officer, dated August 25, 1997
(6) Woody B. Nester, Senior Vice President, Cashier, dated
August 25, 1997
(7) Peter A. Seitz, Executive Vice President, dated August 25,
1997
(8) Perry D. Taylor, Senior Vice President, Comptroller, dated
August 25, 1997
(9) Litz H. Van Dyke, Executive Vice President, dated August 25,
1997
The agreements with Mr. Seitz and Mr. Van Dyke were terminated
under the terms of the Employment Agreement referred to in Exhibit
(10)E below.
(10)E Employment agreement dated March 23, 1999 with two executive
officers of First National Bank. Both agreements have indentical
terms, and as such, only a sample copy of the agreement was filed
with the Commission as Exhibit (10)E on Form 10-Q for the quarter
ended March 31, 1999, and is incorporated herein by reference.
The officers covered by this agreement are:
(1) Peter A. Seitz, Executive Vice President
(2) Litz H. Van Dyke, Executive Vice President
(10)F Change in control agreement dated March 15, 2000 between Joseph W.
Beury and First National Bank. The agreement was filed with the
Commission as Exhibit (10)C on Form 10-Q for the quarter ended
March 31, 2000, and is incorporated herein by reference.
(13) 2000 Annual Report to Stockholders
(21) Subsidiaries of the Registrant
(23) Consent of Independent Accountants