<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 For the quarterly period ended March 31, 1999
___ Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _______________ to ________________
Commission File No. 333-1546
FNB BANCSHARES, INC.
---------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
South Carolina 57-1033165
-------------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
Post Office Box 1539, Gaffney, South Carolina 29342
---------------------------------------------------
(Address of Principal Executive Offices)
(864) 488-2265
--------------
(Issuer's Telephone Number, Including Area Code)
Not Applicable
--------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since
Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
--- ---
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
616,338 shares of common stock, par value $.01 per share, were issued
and outstanding as of May 6, 1999.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FNB BANCSHARES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, 1999 DECEMBER 31, 1998
(UNAUDITED) (AUDITED)
------------ ------------
<S> <C> <C>
ASSETS
Cash and Cash Equivalents:
Cash and due from banks $ 1,206,549 $ 1,017,765
Federal funds sold 2,250,000 2,350,000
------------ ------------
3,456,549 3,367,765
Securities:
Securities held to maturity (estimated market 2,199,251 1,799,791
value of $2,195,698 in 1999 and $1,803,397 in 1998)
Nonmarketable equity securities 83,700 71,100
Time deposits with other banks 0 500,000
Loans Receivable 22,625,391 20,254,948
Less allowance for loan loss (334,997) (303,248)
------------ ------------
Loans, net 22,290,394 19,951,700
Premises and equipment 2,210,185 1,803,557
Accrued interest receivable 160,913 127,576
Other assets 413,678 413,590
------------ ------------
Total Assets $ 30,814,670 $ 28,035,079
============ ============
LIABILITIES
Deposits:
Non-interest bearing transaction accounts $ 4,202,219 $ 3,070,299
Interest bearing transaction accounts 3,843,702 3,281,387
Savings 4,257,088 3,115,763
Time deposits $100,000 and over 3,141,682 2,988,725
Other time deposits 8,844,077 8,639,662
------------ ------------
24,288,768 21,095,836
Securities sold under agreements to repurchase 505,875 869,269
Accrued interest payable 39,816 47,799
Other Liabilities 142,873 185,602
------------ ------------
Total Liabilities 24,977,332 22,198,506
------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 10,000,000
shares authorized and unissued
Common Stock, $.01 par value; 10,000,000
shares authorized; 616,338 shares issued 6,163 6,163
Capital surplus 6,112,318 6,112,318
Retained earnings (deficit) (281,143) (281,908)
------------ ------------
Total Stockholders' equity 5,837,338 5,836,573
------------ ------------
Total Liabilities and Stockholders' equity $ 30,814,670 $ 28,035,079
============ ============
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE> 3
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
FNB BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
INTEREST INCOME
Loans, including fees $ 514,767 $ 356,370
Investment securities, taxable 31,507 26,834
Federal funds sold 26,592 50,243
Time deposits with other banks 0 7,380
--------- ---------
Total Interest Income 572,866 440,827
--------- ---------
INTEREST EXPENSE
Time deposits $100,000 and over 39,627 38,481
Other deposits 158,609 114,852
Securities sold under agreement to repurchase 4,526 6,457
--------- ---------
Total Interest Expense 202,762 159,790
--------- ---------
NET INTEREST INCOME 370,104 281,037
Provision for loan loss 39,000 40,000
--------- ---------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 331,104 241,037
--------- ---------
OTHER INCOME
Service charges on deposit accounts 7,297 7,765
Sold loan fees 58,250 0
Other service charges, commissions and fees 46,749 25,617
--------- ---------
112,296 33,382
--------- ---------
OTHER EXPENSE
Salaries and employee benefits 193,511 145,158
Occupancy expense 31,836 25,773
Furniture and equipment 35,530 24,850
Other operating expense 181,688 91,269
--------- ---------
442,565 287,050
--------- ---------
INCOME (LOSS) BEFORE TAXES 835 (12,631)
INCOME TAX EXPENSE (BENEFIT) 70 0
--------- ---------
NET INCOME (LOSS) $ 765 $ (12,631)
========= =========
PER SHARE
Average shares outstanding 616,338 616,338
Net income (loss) $ .00 $ (.02)
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE> 4
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
FNB BANCSHARES, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
NET INCOME (LOSS) $ 765 $(12,631)
Other comprehensive income,
net of tax 0 0
Total other comprehensive income 0 0
Comprehensive income (loss) $ 765 $(12,631)
======== ========
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE> 5
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
FNB BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD ENDED MARCH 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Retained
Common Stock Capital Earnings
Shares Amount Surplus (Deficit) Total
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1998 616,338 $ 6,163 $ 6,112,318 $ (281,908) $ 5,836,573
Net income (loss) 0 0 0 765 765
----------- ----------- ----------- ----------- -----------
BALANCE, MARCH 31, 1999 616,338 $ 6,163 $ 6,112,318 $ (281,143) $ 5,837,338
=========== =========== =========== =========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE> 6
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
FNB BANCSHARES, INC.
UNAUDITED STATEMENTS OF CASH FLOWS
FROM DECEMBER 31 TO MARCH 31
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 765 $ (12,631)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Provision for loan losses 39,000 40,000
Depreciation 41,677 22,320
Accretion and premium amortization 292 356
Increase in interest receivable (33,337) (19,674)
Increase (decrease) in interest payable (7,983) (6,488)
(Increase) decrease in other assets (88) 69,065
Increase (decrease) in other liabilities (42,729) (56,219)
----------- -----------
Net cash used by operating activities (2,403) 36,729
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase securities held to maturity (812,352) (799,562)
Maturity of securities held to maturity 400,000 400,000
Purchase Time Deposits 0 (500,000)
Maturity of Time Deposits 500,000 600,000
Net increase in loans made to customers (2,377,694) (1,328,047)
Net increase in premises and equipment (448,305) (16,042)
----------- -----------
Net cash used by investing activities (2,738,351) (1,643,651)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand deposits, interest bearing
transaction accounts and savings accounts 2,835,560 1,277,693
Net increase in time deposits 357,372 2,656,009
Net increase (decrease) in Repurchase Agreements (363,394) (23,390)
----------- -----------
Net cash provided by financing activities 2,829,538 3,910,312
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 88,784 2,303,390
----------- -----------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,367,765 2,437,433
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,456,549 $ 4,740,823
=========== ===========
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE> 7
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
FNB BANCSHARES, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION AND CONSOLIDATION - FNB Bancshares, Inc. a bank holding company
(the "Company") and its subsidiary, First National Bank of the Carolinas (the
"Bank"), provide banking services to domestic markets principally in Cherokee
County, South Carolina. The Bank commenced operations on October 18, 1996. The
consolidated financial statements include the accounts of the parent company and
its wholly-owned subsidiary after elimination of all significant intercompany
balances and transactions.
BASIS OF PRESENTATION. The accompanying consolidated financial statements have
been prepared in accordance with the requirements for interim financial
statements and, accordingly, they are condensed and omit disclosures which would
substantially duplicate those contained in the most recent annual report to
shareholders. The financial statements for the interim periods are unaudited
and, in the opinion of management, include all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation. The financial
information as of December 31, 1998 has been derived from audited financial
statements as of that date. For further information, refer to the financial
statements and the notes included in FNB Bancshares, Inc.'s 1998 annual report.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The following is a discussion of the Company's financial condition as of March
31, 1999 compared to December 31, 1998, and the results of operations for the
three months ended March 31, 1999 compared to the three months ended March 31,
1998. These comments should be read in conjunction with the Company's condensed
consolidated financial statements and accompanying footnotes appearing in this
report.
This report contains "forward-looking statements" relating to, without
limitation, future economic performance, plans and objectives of management for
future operations, and projections of revenues and other financial items that
are based on the beliefs of the Company's management, as well as assumptions
made by and information currently available to the Company's management. The
words "expect," "anticipate," and "believe," as well as similar expressions, are
intended to identify forward-looking statements. The Company's actual results
may differ materially from the results discussed in the forward-looking
statements, and the Company's operating performance each quarter is subject to
various risks and uncertainties that are discussed in detail in the Company's
filings with the Securities and Exchange Commission, including the "Risk
Factors" section in the Company's Registration Statement on Form S-1
(Registration Number 333-1546) as filed with and declared effective by the
Securities and Exchange Commission.
<PAGE> 8
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION (CONTINUED)
RESULTS OF OPERATIONS FOR 1999 COMPARED TO 1998:
Net Interest Income
Net interest income for the three month period ended March 31, 1999 was $370,104
compared to $281,037 for the three month period ended March 31, 1998. The
interest rate spread was 4.39% at March 31, 1999 and 3.92% at March 31, 1998.
The increased income is primarily attributed to growth in the loan portfolio, as
the amount of total loans increased to $22.6 million at March 31, 1999 as
compared to $15.5 million at March 31, 1998. The largest component of interest
income was interest on loans, which increased to $514,767 for the three months
ended March 31, 1999 as compared to $356,370 for the three months ended March
31, 1998. These increases were primarily attributable to growth in the Bank's
loan portfolio. Interest on investment securities increased to $31,507 for the
three months ended March 31, 1999 as compared to $26,834 for the three months
ended March 31, 1998. This increase is due primarily to growth in the investment
portfolio from $1,900,537 at March 31, 1998 to $2,199,251 at March 31, 1999. The
increases in interest income were partially offset by increases in interest
expense to $202,762 for the three months ended March 31, 1999 as compared to
$159,790 for the three months ended March 31, 1998.
Provision and Allowance for Loan Losses
The provision for loan losses is the charge to operating earnings that
management believes is necessary to maintain the allowance for possible loan
losses at an adequate level. For the three months ended March 31, 1999, the
provision charged to expense was $39,000, compared to $40,000 charged to expense
for the three months ended March 31, 1998. The loan loss reserve was $334,997 as
of March 31, 1999, or 1.48% of gross loans, as compared to $303,248 as of
December 31, 1998, or 1.50% of gross loans. Management reviews the loan
portfolio periodically to evaluate the outstanding loans and to measure both the
performance of the portfolio and the adequacy of the allowance for loan losses.
This analysis includes a review of delinquency trends, actual losses, and
internal credit ratings. Management's judgment as to the adequacy of the
allowance is based upon a number of assumptions about future events which it
believes to be reasonable, but which may or may not be accurate. Because of the
inherent uncertainty of assumptions made during the evaluation process, there
can be no assurance that loan losses in future periods will not exceed the
allowance for loan losses or that additional allocations will not be required.
Non-Interest Income
Non-interest income for the three months ended March 31, 1999 was $112,296 as
compared to $33,382 for the three months ended March 31, 1998. Of the amount for
three months ended March 31, 1999, $7,297 was a result of deposit account
service charges and account maintenance fees; $29,202 was a result of NSF and
overdraft fees; $17,547 was other miscellaneous service charges, and $58,250 was
due to sold loan fees. Of the sold loan fees, $44,250 was due to the sale of one
large commercial loan. This increase in fees is attributed to overall growth of
the deposit portfolio and also reflects that the Bank now selling mortgage loans
on the secondary market.
<PAGE> 9
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION (CONTINUED)
Non-Interest Expense
Non-Interest Expense for the three month period ended March 31, 1999 was
$442,565 as compared to $287,050 for the three month period ended March 31,
1998. Salaries and employee benefits comprise $193,511 and $145,158,
respectively, of this amount. Depreciation of buildings, furniture and equipment
accounted for $41,677 and $22,320 for the three month periods ended March 31,
1999 and March 31, 1998, respectively. The increase in depreciation is due to
the Company's new main office facility, which the Company moved into in January
1999.
ASSETS AND LIABILITIES
During the first three months of 1999, total assets increased $2,779,591, or
10%, when compared to December 31, 1998. The primary growth in assets was in
loans with an increase of $2,370,443, or 12%, since December 31, 1998. Total
liabilities increased $2,778,826 or 13% when compared to December 31, 1998.
Within the deposit area, savings accounts, which include money market accounts,
increased 37%, interest bearing transaction accounts increased 17%,
non-interest bearing transaction accounts increased 37%, and time deposits
increased 3%. This growth rate is a reflection of the fact that the Bank is
relatively young, as it opened for business on October 18, 1996, and the Company
does not expect to maintain or duplicate this growth rate for the long term. The
Company's management closely monitors and seeks to maintain appropriate levels
of interest earning assets and interest bearing liabilities so that maturities
of assets are such that adequate funds are provided to meet customer withdrawals
and demand. Management expects asset and liability growth to continue at a rapid
pace during the coming months, with the growth tapering off to a slower, more
deliberate and controllable pace over the longer term, and believes capital
should continue to be adequate for the next 12 months.
Loans
Balances within the major loan categories as of March 31, 1999 and December 31,
1998 are as follows:
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
-------------- -----------------
<S> <C> <C>
Commercial and Industrial $ 6,021,259 $ 5,212,393
Real Estate - Construction 511,820 566,720
Real Estate - Other 10,657,631 9,571,462
Installment and consumer credit lines 5,434,681 4,904,373
----------- -----------
$22,625,391 $20,254,948
=========== ===========
</TABLE>
<TABLE>
<S> <C> <C>
Allowance for loan loss, December 31, 1998 $ 303,248
Provision 39,000
Recoveries 5,053
Charge-offs 12,304
Allowance for loan loss, March 31, 1999 $ 334,997
Gross loans outstanding, December 31, 1998 $20,254,948
Gross loans outstanding, March 31, 1999 $22,625,391
Allowance for loan losses to loans outstanding, December 31, 1998 1.50%
----
Allowance for loan losses to loans outstanding, March 31, 1999 1.48%
----
</TABLE>
<PAGE> 10
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION (CONTINUED)
Deposits
Balances within the major deposit categories as of March 31, 1999 and December
31, 1998 are as follows:
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
-------------- -----------------
<S> <C> <C>
Non-interest bearing demand deposits $ 4,202,219 $ 3,070,299
Interest bearing demand deposits 3,843,702 3,281,387
Savings deposits 4,257,088 3,115,763
Time deposit $100,000 and over 3,141,682 2,988,725
Other time deposits 8,844,077 8,639,662
----------- -----------
$24,288,768 $21,095,836
=========== ===========
</TABLE>
Liquidity
Liquidity needs are met by the Company through scheduled maturities of loans and
investments on the asset side and through pricing policies on the liabilities
side for interest-bearing deposit accounts. The level of liquidity is measured
by the loan-to-total borrowed funds ratio which was 91% at March 31, 1999 and
92% at December 31, 1998.
Capital Resources
Total shareholders' equity increased $765 to $5,837,338 at March 31, 1999. The
increase is attributable to income for the period.
Bank holding companies and their banking subsidiaries are required by banking
regulators to meet certain minimum levels of capital adequacy which are
expressed in the form of certain ratios. Capital is separated into Tier 1
capital (essentially common shareholders' equity less intangible assets) and
Tier 2 capital (essentially the allowance for loan losses limited to 1.25% of
risk weighted assets). The first two ratios, which are based on the degree of
credit risk in the Company's assets, require the weighting of assets based on
assigned risk factors and include off-balance sheet items such as loan
commitments and stand-by letters of credit. The ratio of Tier 1 capital to
risk-weighted assets must be at least 4% and the ratio of total capital (Tier 1
capital plus Tier 2) to risk-weighted assets must be at least 8%. The capital
leverage ratio supplements the risk-based capital guidelines. The leverage ratio
is Tier 1 capital divided by the adjusted quarterly average total assets. Banks
and bank holding companies are required to maintain a minimum leverage ratio of
3.0%.
The following table summarizes the Company's risk-based capital at March 31,
1999 (in thousands):
<TABLE>
<S> <C>
Shareholders' equity $ 5,837
Less: intangibles 204
-------
Tier 1 capital $ 5,633
=======
Plus: allowance for loan losses (1) 298
-------
Total Capital $ 5,931
=======
Risk-Weighted assets $23,866
Risk based capital ratios
Tier 1 23.60%
Total capital 24.85%
Leverage ratio 19.22%
</TABLE>
(1) limited to 1.25% of risk-weighted assets
<PAGE> 11
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION (CONTINUED)
THE YEAR 2000
Issues. Some computers, software, and other equipment include programming codes
in which calendar year data is abbreviated to only two digits. As a result of
this design decision, some of these systems could fail to operate or fail to
produce correct results if "00" is interpreted to mean 1900, rather than 2000.
These problems are widely expected to increase in frequency and severity as the
year 2000 approaches and are commonly referred to as the "Year 2000 Problem".
Assessment. The Year 2000 Problem could affect computers, software, and other
equipment that the Company uses. Accordingly, the Company has developed a plan
that provides for, among other things, the replacement or modification of
existing information systems as necessary. Because the primary hardware and
software systems that the Company uses have been represented as certified by
their vendors as Year 2000 compliant, the Company has not incurred any
significant costs to date relating to software modifications or new
installations. Most systems have been made compliant through periodic software
upgrades provided by the various vendors as part of the license agreements.
While the Company does not expect the cost of these efforts to be material to
its financial position or any year's operating results, there can be no
assurance to this effect.
Internal Infrastructure. The Company utilizes an outsourced data processing
system, Fiserv, for most of its accounting functions. The Company's primary
systems have been tested by proxy with Fiserv, which has tested in environments
with like software and hardware systems as the Company. Banking regulators have
approved this type of testing as a valid means of testing. The Company has
received confirmation of Fiserv's testing results. Based on this review, the
Company does not believe that the data processing system has any material Year
2000 issues. The Company believes that it has also identified substantially all
of the major computers, software applications, and related equipment used in
connection with its internal operations that must be modified, upgraded, or
replaced to minimize the possibility of a material disruption of its business.
Management has completed upgrading and testing of its systems. Management has
spent approximately $40,000 to get all of its systems Year 2000 compliant. The
Company does not believe that any additional cost related to these efforts will
be material to its business, financial condition, or operating results.
Systems Other Than Information Technology Systems. In addition to computers and
related systems, the operation of the Company's office and facilities equipment,
such as fax machines, photocopiers, telephone switches, security systems, and
other devices, may be affected by the Year 2000 Problem. The Company has
completed its assessment of the potential effect of, and the costs of
remediating, the Year 2000 Problem on this equipment. The Company estimates that
its total cost of completing any required modifications, upgrades, or
replacements of these internal systems will not have a material effect on its
business, financial condition, or operating results.
Suppliers and Other Third Parties. The Company has been gathering information
from and has initiated communications with its suppliers and other third parties
to identify and, to the extent possible, resolve issues involving the Year 2000
Problem. However, the Company has limited or no control over the actions of its
suppliers and others. Therefore, while the Company expects that it will be able
to resolve any significant Year 2000 Problem with its own system, it cannot
guarantee that its suppliers or others will resolve any or all Year 2000
Problems with their systems before the occurrence of a material disruption to
its business. Any failure of these suppliers or others to resolve the Year 2000
Problems with their systems in a timely manner could have a material adverse
effect on the Company's business, financial condition, or operating results.
<PAGE> 12
PART I - FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION (CONTINUED)
YEAR 2000 ISSUES (CONTINUED)
Customers. The Company believes that the largest Year 2000 Problem exposure to
most companies is the preparedness of the customers of the companies. Management
is addressing with its customers the possible consequences of not being prepared
for Year 2000. Should large borrowers not sufficiently address this issue, the
Company may experience an increase in loan defaults. The amount of potential
loss from this issue is not quantifiable. Management is attempting to reduce
this exposure by educating its customers. The Company has implemented a
comprehensive Year 2000 credit review policy for all existing loans that exceed
$100,000 as well as an underwriting policy for all new loan requests. At
present, the Company's review indicates that the Company's exposure to credit
risks associated with Year 2000 is considered to be low. The Company's credit
review procedures will continue to include these policies throughout 1999.
Most Likely Consequences of Year 2000 Problems. The Company expects to identify
and resolve all Year 2000 Problems that could materially adversely affect its
business, financial condition, or operating results. However, the Company
believes that it is not possible to determine with complete certainty that all
Year 2000 Problems affecting it have been identified or corrected. The number of
devices that could be affected and the interactions among these devices are
simply too numerous. In addition, the Company cannot accurately predict how many
failures related to the Year 2000 Problem will occur with its suppliers,
customers, or other third parties or the severity, duration, or financial
consequences of such failures.
As a result, the Company expects that it could possibly suffer the following
consequences:
- A number of operational inconveniences and inefficiencies for
the Company, its service providers, or its customers that may
divert the Company's time and attention and financial and
human resources from its ordinary business activities; and
- System malfunctions that may require significant efforts by
the Company or its service providers or customers to prevent
or alleviate material business disruptions.
Contingency Plans. The Company has developed contingency plans to be implemented
as part of its efforts to identify and correct Year 2000 Problems affecting its
internal systems. The Company's Board of Directors approved the contingency
plans on October 27, 1998. Depending on the systems affected, these plans
include (a) accelerated replacement of affected equipment or software; (b) short
term use of backup equipment and software; (c) increased work hours for the
Company's personnel or use of contract personnel to correct, on an accelerated
schedule, any Year 2000 Problems which arise; and (d) other similar approaches.
If the Company is required to implement any of these contingency plans, these
plans could have a material adverse effect on its business, financial condition,
or operating results.
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
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
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule (for electronic filing purposes)
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter ended March 31, 1999
<PAGE> 14
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
FNB BANCSHARES, INC.
--------------------
(Registrant)
Date: May 6, 1999 By: /s/ V. Stephen Moss
-------------------------------------
President and Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF FNB BANCSHARES, INC. FOR THE 3 MONTHS ENDED MARCH 31,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,206,549
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,250,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 2,199,251
<INVESTMENTS-MARKET> 2,195,698
<LOANS> 22,625,391
<ALLOWANCE> 334,997
<TOTAL-ASSETS> 30,814,670
<DEPOSITS> 24,288,768
<SHORT-TERM> 0
<LIABILITIES-OTHER> 688,564
<LONG-TERM> 0
0
0
<COMMON> 6,163
<OTHER-SE> 5,831,175
<TOTAL-LIABILITIES-AND-EQUITY> 30,814,670
<INTEREST-LOAN> 514,767
<INTEREST-INVEST> 58,099
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 572,866
<INTEREST-DEPOSIT> 198,236
<INTEREST-EXPENSE> 202,762
<INTEREST-INCOME-NET> 370,104
<LOAN-LOSSES> 39,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 442,565
<INCOME-PRETAX> 835
<INCOME-PRE-EXTRAORDINARY> 835
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 765
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 8.50
<LOANS-NON> 15,763
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 303,248
<CHARGE-OFFS> 12,304
<RECOVERIES> 5,053
<ALLOWANCE-CLOSE> 334,997
<ALLOWANCE-DOMESTIC> 334,997
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
