FNB CORP/PA, 10-K, 1999-03-17

FNB CORP/PA
10-K, 1999-03-17
NATIONAL COMMERCIAL BANKS

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<PAGE> 1
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 (Fee Required)

For the fiscal year ended December 31, 1998

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)

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)

One F.N.B. Boulevard
Hermitage, Pennsylvania 16148
- ---------------------------------------- ------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 724-981-6000
-----------------

Securities registered pursuant to Section 12(b) of the Act: NONE
---------

Securities registered pursuant to Section 12(g) of the Act:
---------

Common Stock, par value $2 per share
7 1/2% Cumulative Convertible Preferred Stock,
Series B, par value $10 per share
----------------------------------------------
(Title of Class)

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 the 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. [ ]

The registrant estimates that as of February 28, 1999, the aggregate market
value of the voting stock held by non-affiliates of the registrant, computed by
reference to the last sale price as reported in the NASDAQ system for such date,
was approximately $441,494,979.

APPLICABLE ONLY TO CORPORATE REGISTRANTS:
As of February 28, 1999, the registrant had outstanding 19,199,000 shares of
common stock having a par value of $2 per share.

Continued

<PAGE> 2

DOCUMENTS INCORPORATED BY REFERENCE

<TABLE>
<CAPTION>
Part of Form 10-K into
DOCUMENT which Document is Incorporated
-------- ------------------------------
<S> <C>
Annual Report to Stockholders for fiscal year
ended December 31, 1998 I & II

Definitive proxy statement for the 1999 Annual
Meeting of Stockholders to be held on April 28, 1999 III
</TABLE>

<PAGE> 3

FORM 10-K
1998

INDEX

<TABLE>
<CAPTION>
PART I
PAGE
<S> <C>
Item 1. Business
General I-2
Statistical Disclosure I-8

Item 2. Properties I-8

Item 3. Legal Proceedings I-8

Item 4. Submission of Matters to a Vote of Security Holders I-8

PART II

Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters. II-1

Item 6. Selected Financial Data. II-1

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations. II-1

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. II-1

Item 8. Financial Statements and Supplementary Data. II-1

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. II-1

PART III

Item 10. Directors and Executive Officers of the Registrant. III-1

Item 11. Executive Compensation. III-1

Item 12. Security Ownership of Certain Beneficial Owners and Management. III-1

Item 13. Certain Relationships and Related Transactions. III-1

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. IV-1

Signatures IV-2

Index to Exhibits IV-5
</TABLE>

I-1

<PAGE> 4

PART I

ITEM 1. BUSINESS
GENERAL

F.N.B. Corporation (the Corporation) was formed in 1974 as a bank
holding company. The Corporation has one reportable business segment: community
banking. Refer to "Business Segments" on page 23 of the Annual Report to
Shareholders for the year ended December 31, 1998, which is incorporated by
reference. As of December 31, 1998, the Corporation owned and operated nine
community banks and one consumer finance company in Pennsylvania, southwestern
Florida, eastern Ohio and western New York. In recent years, the Corporation has
expanded its market presence in southwest Florida through affiliations with
community banks located primarily between Naples and Clearwater, Florida. During
1998, the Corporation acquired West Coast Bank (West Coast), Seminole Bank and
Citizens Holding Corporation, located in Sarasota, Seminole and Clearwater,
Florida, respectively. On January 13, 1999, the Corporation completed its
affiliation with Guaranty Bank & Trust (Guaranty), located in Venice, Florida.
Guaranty was merged with an existing affiliate, West Coast, to form West Coast
Guaranty Bank, N.A. The merger was accounted for as a pooling of interests.

The Corporation regularly evaluates the potential acquisition of, and
holds discussions with, various potential acquisition candidates and as a
general rule the Corporation publicly announces such acquisitions only after a
definitive agreement has been reached.

The Corporation, through its subsidiaries, provides a full range of
financial services, principally to consumers and small- to medium-size
businesses in its market areas. The Corporation's business strategy has been to
focus primarily on providing quality, community-based financial services adapted
to the needs of each of the markets it serves. The Corporation has emphasized
its community orientation by preserving the names and local boards of directors
of its subsidiaries, by allowing its subsidiaries certain autonomy in
decision-making and thus enabling them to respond to customer requests more
quickly, and by concentrating on transactions within its market areas. However,
while the Corporation has sought to preserve the identities and autonomy of its
subsidiaries, it has established centralized legal, loan review, accounting,
investment, audit and data processing functions. The centralization of these
processes has enabled the Corporation to maintain consistent quality of these
functions and to achieve certain economies of scale.

The Corporation's lending philosophy is to minimize credit losses by
following strict credit approval standards (which include independent analysis
of realizable collateral value), diversifying its loan portfolio by industry and
borrower and conducting ongoing review and management of the loan portfolio. The
Corporation is an active residential mortgage lender, and its commercial loans
are generally to established businesses within its market areas. The Corporation
does not have a significant amount of construction loans and has no highly
leveraged transaction loans.

No material portion of the deposits of the Corporation's bank
subsidiaries has been obtained from a single or small group of customers, and
the loss of any customer's deposits or a small group of customers' deposits
would not have a material adverse effect on the business of the Corporation. The
majority of the deposits held by the Corporation's bank subsidiaries have been
generated within the respective subsidiary's market area.

I-2

<PAGE> 5

Following is information as of December 31, 1998 for the Corporation's
community bank and consumer finance subsidiaries (including the year established
and location of principal office for each). All subsidiaries are wholly-owned by
the Corporation (dollars in thousands).

<TABLE>
<CAPTION>
NUMBER
TOTAL TOTAL OF
COMMUNITY BANK SUBSIDIARIES: ASSETS DEPOSITS OFFICES
---------- ---------- -------
<S> <C> <C> <C>
First National Bank of Pennsylvania (Est. 1864)
Hermitage, Pennsylvania........................ $1,229,283 $1,075,911 36
First National Bank of Naples (Est. 1988)
Naples, Florida................................ 664,500 519,109 7
First National Bank of Florida (Est. 1997)
Clearwater, Florida............................ 325,330 280,360 12
Cape Coral National Bank (Est. 1994)
Cape Coral, Florida............................ 301,056 271,987 5
West Coast Guaranty Bank, N.A. (Est. 1999)*
Sarasota, Florida.............................. 273,410 235,951 7
Metropolitan National Bank (Est. 1922)
Youngstown, Ohio............................... 246,696 216,388 8
Reeves Bank (Est. 1868)
Beaver Falls, Pennsylvania..................... 143,972 130,880 8
First National Bank of Fort Myers (Est. 1989)
Fort Myers, Florida............................ 82,998 74,623 2
First County Bank, N.A. (Est. 1987)
Chardon, Ohio.................................. 62,210 57,527 3
---------- ---------- --
$3,329,455 $2,862,736 88
========== ========== ==
CONSUMER FINANCE SUBSIDIARY:
Regency Finance Company (Est. 1927)
Hermitage, Pennsylvania........................ $ 88,154 34
========== ==
</TABLE>

* Result of the merger of West Coast Bank and Guaranty Bank and Trust
Company, which was affiliated with the Corporation on January 13, 1999.

The Corporation has five other subsidiaries, Penn-Ohio Life Insurance
Company, Est. 1981 (Penn-Ohio), F.N.B. Investment Corporation, Est. 1997 (F.N.B.
Investment) Customer Service Center of F.N.B., L.L.C., Est. 1996 (Customer
Service), Mortgage Service Corporation, Est. 1944 (Mortgage Service), and F.N.B.
Building Corporation, Est. 1987 (F.N.B. Building). Penn-Ohio underwrites, as a
reinsurer, credit life and accident and health insurance sold by the
Corporation's subsidiaries. F.N.B. Investment holds equity securities and other
assets for the holding company. Customer Service provides data processing and
other services to the affiliates of the Corporation. Mortgage Service services
mortgage loans for unaffiliated financial institutions and F.N.B. Building owns
real estate that is leased to certain affiliates.

OPERATIONS OF THE BANK SUBSIDIARIES

The Corporation's 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 bank subsidiaries
offer various alternative investment products, including mutual funds and
annuities.

I-3

<PAGE> 6

In addition, First National Trust Company, a national trust company
formed in January 1999, provides a broad range of personal and corporate
fiduciary services, including the administration of decedent and trust estates.
As of December 31, 1998, trust assets under management totaled $670.0 million.

OPERATIONS OF THE CONSUMER FINANCE SUBSIDIARY

The Corporation's consumer finance subsidiary, Regency Finance Company
(Regency), is involved principally in making personal installment loans to
individuals and purchasing installment sales finance contracts from retail
merchants. Such activity is primarily funded through the sale of the
Corporation's subordinated notes at Regency's branch offices.

MARKET AREA AND COMPETITION

The Corporation, through its subsidiaries, currently operates 122
offices in 34 counties in Pennsylvania, southwestern Florida, eastern Ohio and
western New York. The economies of the primary market areas in which the
Corporation's Pennsylvania and Ohio subsidiaries operate have evolved during the
past decade from ones dominated by heavy industry to ones which have a more
diversified mix of light manufacturing, service and distribution industries.
This area is served by Interstate Routes 90, 76, 79 and 80, and is located at
the approximate midpoint between New York City and Chicago. The area is also
close to the Great Lakes shipping port of Erie and the Greater Pittsburgh
International Airport. The Corporation's Florida subsidiaries operate in a four
county area represented by high growth and median family income levels. The
industries served in this market include a diversified mix of tourism,
construction, services, light manufacturing, distribution and agriculture. The
market extends north to Tampa and south through Naples and is served by
Interstate 75 and U.S. Highway 41.

The Corporation's subsidiaries compete with a large number of other
financial institutions, such as commercial banks, savings banks, savings and
loan associations, credit life insurance companies, mortgage banking companies,
consumer finance companies, credit unions and commercial finance and leasing
companies, many of which have greater resources than the Corporation, for
deposits, loans and service business. Money market mutual funds, insurance
agencies, brokerage houses and similar institutions currently provide many of
the financial services offered by the Corporation's subsidiaries.

In the consumer finance subsidiary's market areas, the active
competitors include banks, credit unions and national, regional and local
consumer finance companies, some of which have substantially greater resources
than that of the consumer finance subsidiary. The ready availability of consumer
credit through charge accounts and credit cards constitutes additional
competition. The principal methods of competition include the rates of interest
charged for loans, the rates of interest paid to obtain funds and the
availability of customer services.

With reciprocal interstate banking, the Corporation also faces the
prospect of additional competitors entering its markets as well as additional
competition in its efforts to acquire other subsidiaries and branches throughout
Pennsylvania, Florida, Ohio and in other neighboring states. (See "Regulation
and Supervision.")

EMPLOYEES

As of February 28, 1999, the Corporation and its subsidiaries had 1,359
full-time and 293 part-time employees. Management of the Corporation considers
its relationship with its employees to be satisfactory.

I-4

<PAGE> 7

MERGERS, ACQUISITIONS AND DIVESTITURE

See "Mergers, Acquisitions and Divestiture" footnote in the Notes to
Consolidated Financial Statements, which is incorporated by reference to the
Corporation's Annual Report to Stockholders.

REGULATION AND SUPERVISION

Bank holding companies, banks and consumer finance companies are
extensively regulated under both federal and state law. The following summary
information describes statutory or regulatory provisions, it is qualified by
reference to the particular statutory and regulatory provisions. Any change in
applicable law or regulation may have a material effect on the business and
prospects of the Corporation and its subsidiaries.

The regulation and examination of the Company and its subsidiaries are
designed primarily for the protection of depositors and not the Corporation or
its stockholders.

BANK HOLDING COMPANIES

The Corporation is registered as a bank holding company under the Bank
Holding Company Act of 1956 (BHCA) and, as such, is subject to regulation by the
Federal Reserve Board (FRB). As a bank holding company, the Corporation is
required to file with the FRB an annual report and such additional information
as the FRB may require pursuant to the BHCA. The FRB may also make examinations
of the Corporation.

The BHCA requires the prior approval of the FRB in any case where a bank
holding company proposes to acquire direct or indirect ownership or control of
more than 5% of the voting shares of any bank (unless it owns a majority of such
bank's voting shares) or otherwise to control a bank or to merge or consolidate
with any other bank holding company. The Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 authorizes the FRB to permit a bank holding
company that meets all applicable capital requirements to acquire control, or
substantially all of the assets, of a bank located in another state that is not
the bank holding company's home state, regardless of whether the other state
prohibits such transaction.

The BHCA also prohibits a bank holding company, with certain exceptions,
from acquiring more than 5% of the voting shares of any company that is not a
bank and from engaging in any business other than banking or managing or
controlling banks. Under the BHCA, the FRB is authorized to approve the
ownership of shares by a bank holding company in any company, the activities of
which the Federal Reserve has determined to be so closely related to banking or
to managing or controlling banks as to be a proper incident thereto. The FRB has
by regulation determined that certain activities are closely related to banking
within the meaning of the BHCA. These activities, which are listed in Regulation
Y of the FRB regulations, include: operating a mortgage company, finance
company, credit card company or factoring company; performing certain data
processing operations; providing investment and finance advice; and acting as an
insurance agent for certain types of credit-related insurance.

I-5

<PAGE> 8

Activities which the FRB has approved by order in connection with
specific applications by bank holding companies include the operation of a
credit card bank or other non-bank banks, certain expanded student loan
servicing activities, the buying and selling of gold and silver bullion and
silver coin for the account of customers and for itself, the provision of
certain financial office services, the printing and sale of checks and similar
documents, underwriting and dealing in commercial paper, certain municipal
revenue bonds and one to four family mortgage backed securities, subject to
certain conditions, and underwriting and dealing in corporate debt or equity
securities, subject to certain conditions. Bank holding companies also are
permitted to acquire savings associations subject to the applicable requirements
of the BHCA.

In approving acquisitions by bank holding companies of banks and
companies engaged in banking-related activities, the FRB considers a number of
factors, including the expected benefits to the public, such as greater
convenience, increased competition or gains in efficiency, as weighed against
the risks of possible adverse effects, such as undue concentration of resources,
decreased or unfair competition, conflicts of interest or unsound banking
practices. The FRB is also empowered to differentiate between new activities and
activities commenced through acquisition of a going concern.

Bank holding companies and their subsidiary banks are also subject to
the provisions of the Community Reinvestment Act of 1977 (CRA). Under the terms
of the CRA, the FRB (or other appropriate bank regulatory agency) is required,
in connection with its examination of a financial institution, to assess the
financial institution's record in meeting the credit needs of the communities
served by the financial institution, including low and moderate-income
neighborhoods. Further, such assessment is also required of any financial
institution which has applied to (i) obtain a federally-regulated financial
institution charter; (ii) obtain deposit insurance coverage for a newly
chartered institution; (iii) establish a new branch office that will accept
deposits; (iv) relocate an office; or (v) merge or consolidate with, or acquire
the assets or assume the liabilities of, a federally-regulated financial
institution. In the case of a bank holding company applying for approval to
acquire a bank, savings and loan, or other bank holding company, the FRB will
assess the record of each subsidiary of the applicant bank holding company, and
such records may be the basis for denying the application or imposing conditions
in connection with approval of the application.

BANKS

The Corporation's bank subsidiaries are supervised and regularly
examined (including off-site monitoring) by the Office of the Comptroller of
Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the FRB, and
the Pennsylvania Department of Banking. The various laws and regulations
administered by these regulatory agencies affect corporate practices, such as
payment of dividends, incurring debt, acquisition of financial institutions and
other companies, and affect business practices and operations, such as payment
of interest on deposits, the charging of interest on loans, types of business
conducted and location of offices.

I-6

<PAGE> 9

CONSUMER FINANCE SUBSIDIARY

The Corporation's consumer finance subsidiary is subject to regulation
under Pennsylvania, Ohio and New York state laws which require, among other
things, that it maintain licenses for consumer finance operations in effect for
each of its offices. Representatives of the Pennsylvania Department of Banking,
the Ohio Division of Consumer Finance and the State of New York Banking
Department periodically visit the offices of the consumer finance subsidiary and
conduct extensive examinations in order to determine compliance with such laws
and regulations. Such examinations include a review of loans and the collateral
thereof, as well as a check of the procedures employed for making and collecting
loans. Additionally, the consumer finance subsidiary is subject to certain
federal laws which require that certain information relating to credit terms be
disclosed to customers and afford customers in certain instances the right to
rescind transactions.

LIFE INSURANCE SUBSIDIARY

Penn-Ohio is subject to examination on a triennial basis by the Arizona
Department of Insurance. Representatives of the Department of Insurance will
periodically determine whether Penn-Ohio has maintained required reserves,
established adequate deposits under a reinsurance agreement and complied with
reporting requirements under Arizona statutes.

GOVERNMENTAL POLICIES

The operations of the Corporation and its subsidiaries are affected not
only by general economic conditions, but also by the policies of various
regulatory authorities. In particular, the FRB regulates money and credit and
interest rates in order to influence general economic conditions. These policies
have a significant influence on overall growth and distribution of loans,
investments and deposits and affect interest rates charged on loans or paid for
time and savings deposits. FRB monetary policies have had a significant effect
on the operating results of all financial institutions in the past and may
continue to do so in the future.

I-7

<PAGE> 10

STATISTICAL DISCLOSURE

Statistical disclosure information regarding the Corporation is included
in the Management's Discussion and Analysis, which is incorporated by reference
to the Corporation's Annual Report to Stockholders (see Part II, Item 7 below).
The following information is contained therein:

I. Distribution of Assets, Liabilities and Stockholders' Equity;
Interest Rates and Interest Differential

II. Investment Portfolio

III. Loan Portfolio

IV. Summary of Loan Loss Experience

V. Deposits

VI. Return on Equity and Assets

VII. Short-Term Borrowings

ITEM 2. PROPERTIES

The Corporation operates a six-story building in Hermitage, Pennsylvania
which serves as its northern executive offices and shares this facility with its
lead banking affiliate, First National Bank of Pennsylvania. The Corporation
also owns an eight-story building in Naples, Florida, which serves as its
Florida executive and administrative offices.

The banking and consumer finance subsidiaries' branch offices are
located in 23 counties in Pennsylvania, 6 counties in eastern Ohio, 4 counties
in southwestern Florida and 1 county in western New York. At December 31, 1998,
the Corporation's subsidiaries owned 57 of the Corporation's 117 branch
locations and leased the remaining 60 branch locations under operating leases
expiring at various dates through the year 2010. For additional information
regarding the lease commitments, see the Premises and Equipment footnote in the
Annual Report to Shareholders.

ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings to which the Corporation
or any of its subsidiaries is a party, or of which any of their property is the
subject, except ordinary routine proceedings which are incidental to the
ordinary conduct of business. In the opinion of management, pending legal
proceedings will not have a material adverse effect on the consolidated
financial position of the Corporation and its subsidiaries.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of 1998.

I-8

<PAGE> 11

PART II

Information relating to Items 5, 6, 7 and 8 is provided in the
Corporation's 1998 Annual Report to Stockholders under the captions and on the
pages indicated below, and is incorporated herein by reference:

<TABLE>
<CAPTION>
PAGES IN 1998
ANNUAL REPORT
CAPTION IN 1998 ANNUAL REPORT TO STOCKHOLDERS TO STOCKHOLDERS
<S> <C>
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS 42

ITEM 6. SELECTED FINANCIAL DATA 28

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 30

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 33-35

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 1-27,29

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.
</TABLE>

II-1

<PAGE> 12

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information relating to directors of the Corporation is provided in the
Corporation's definitive proxy statement filed with the Securities and Exchange
Commission in connection with its annual meeting of stockholders to be held
April 28, 1999. Such information is incorporated herein by reference.
Information relating to executive officers of the Corporation is provided in
Part I.

ITEM 11. EXECUTIVE COMPENSATION

Information relating to this item is provided in the Corporation's
definitive proxy statement filed with the Securities and Exchange Commission in
connection with its annual meeting of stockholders to be held April 28, 1999.
Such information is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

III-1

<PAGE> 13

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A) 1. FINANCIAL STATEMENTS

The following consolidated financial statements of F.N.B.
Corporation and subsidiaries and report of independent auditors,
included in the Corporation's 1998 Annual Report to Stockholders,
are incorporated herein by reference:

<TABLE>
<CAPTION>
PAGES IN 1998
ANNUAL REPORT
TO STOCKHOLDERS
---------------
<S> <C>
Consolidated Balance Sheet 1
Consolidated Income Statement 2
Consolidated Statement of Stockholders' Equity 3
Consolidated Statement of Cash Flows 4
Notes to Consolidated Financial Statements 5 - 27
Report of Independent Auditors 27
Quarterly Earnings Summary 29
</TABLE>

(A) 2. FINANCIAL STATEMENT SCHEDULES

All Schedules are omitted because they are not applicable.

(A) 3. EXHIBITS

The exhibits filed or incorporated by reference as a part of this
report are listed in the Index to Exhibits which appears at page
IV-5 and are incorporated by reference.

(B) REPORTS ON FORM 8-K

A Report on Form 8-K, dated October 29, 1998, was filed by the
Corporation. The Form 8-K included Audited Supplemental
Consolidated Financial Statements for the years ended December
31, 1997, 1996 and 1995 with Report of Independent Auditors and
Management's Discussion and Analysis giving effect to the merger
of the Corporation and Citizens Holding Corporation on a
pooling-of-interests basis.

IV-1

<PAGE> 14

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.

F.N.B. CORPORATION

By /s/ Peter Mortensen
-----------------------------------
Peter Mortensen, Chairman and Chief
Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Peter Mortensen Chairman, Chief Executive March 2, 1999
- --------------------------- Officer and Director
Peter Mortensen (Principal Executive Officer)

/s/ Stephen J. Gurgovits Vice Chairman and Director March 2, 1999
- ---------------------------
Stephen J. Gurgovits

/s/ Gary L. Tice President, Chief Operating March 2, 1999
- --------------------------- Officer and Director
Gary L. Tice

/s/ William J. Rundorff Executive Vice President March 2, 1999
- ---------------------------
William J. Rundorff

/s/ John D. Waters Vice President and Chief March 2, 1999
- --------------------------- Financial Officer (Principal
John D. Waters Financial and Accounting Officer)

- --------------------------- Director
W. Richard Blackwood

- --------------------------- Director
Alan C. Bomstein

/s/ William B. Campbell Director March 2, 1999
- ---------------------------
William B. Campbell

/s/ Charles T. Cricks Director March 2, 1999
- ---------------------------
Charles T. Cricks
</TABLE>

IV-2

<PAGE> 15

<TABLE>
<CAPTION>
<S> <C> <C>
Director
- ---------------------------
Henry M. Ekker

/s/ Thomas W. Hodge Director March 2, 1999
- ---------------------------
Thomas W. Hodge

/s/ James S. Lindsay Director March 2, 1999
- ---------------------------
James S. Lindsay

/s/ Paul P. Lynch Director March 2, 1999
- ---------------------------
Paul P. Lynch

/s/ Edward J. Mace Director March 2, 1999
- ---------------------------
Edward J. Mace

Director
- ---------------------------
Robert S. Moss

/s/ Richard C. Myers Director March 2, 1999
- ---------------------------
Richard C. Myers

Director
- ---------------------------
William A. Quinn

Director
- ---------------------------
George A. Seeds

/s/ William J. Strimbu Director March 2, 1999
- ---------------------------
William J. Strimbu

Director
- ---------------------------
Archie O. Wallace

/s/ Joseph M. Walton Director March 2, 1999
- ---------------------------
Joseph M. Walton

Director
- ---------------------------
James T. Weller

/s/ Eric J. Werner Director March 2, 1999
- ---------------------------
Eric J. Werner
</TABLE>

IV-3

<PAGE> 16

<TABLE>
<CAPTION>
<S> <C> <C>
/s/ R. Benjamin Wiley Director March 2, 1999
- ---------------------------
R. Benjamin Wiley

/s/ Donna C. Winner Director March 2, 1999
- ---------------------------
Donna C. Winner
</TABLE>

IV-4

<PAGE> 17

INDEX TO EXHIBITS

The following exhibits are filed or incorporated by reference as part of this
report:

3.1. Restated Articles of Incorporation of the Corporation as currently
in effect and any amendments thereto. (incorporated by reference to
Exhibit 3.1. of the Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996).

3.2. By-laws of the Corporation as currently in effect. (incorporated by
reference to Exhibit 4 of the Corporation's Form 10-Q for the
quarter ended June 30, 1994).

4 The rights of holders of equity securities are defined in portions
of the Restated Articles of Incorporation and By-laws. The Restated
Articles of Incorporation are incorporated by reference to Exhibit
3.1. of the registrant's Form 10-K for the year ended December 31,
1996. The By-laws are incorporated by reference to Exhibit 4 of the
registrant's Form 10-Q for the quarter ended June 30, 1994. A
designation statement defining the rights of F.N.B. Corporation
Series A - Cumulative Convertible Preferred Stock is incorporated by
reference to Form S-14, Registration Statement of F.N.B.
Corporation, File No. 2-96404. A designation statement defining the
rights of F.N.B. Corporation Series B - Cumulative Convertible
Preferred Stock is incorporated by reference to Exhibit 4 of the
registrant's Form 10-Q for the quarter ended June 30, 1992. The
Corporation agrees to furnish to the Commission upon request copies
of all instruments not filed herewith defining the rights of holders
of long-term debt of the Corporation and its subsidiaries.

10.1. Form of agreement regarding deferred payment of directors' fees by
First National Bank of Pennsylvania. (incorporated by reference to
Exhibit 10.1. of the Corporation's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993).

10.2. Form of agreement regarding deferred payment of directors' fees by
F.N.B. Corporation. (incorporated by reference to Exhibit 10.2. of
the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993).

10.3. Form of Deferred Compensation Agreement by and between First
National Bank of Pennsylvania and four of its executive officers.
(incorporated by reference to Exhibit 10.3. of the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31,
1993).

10.4. Revised and Restated Amendment No. 2 to Employment Agreement between
F.N.B. Corporation and Peter Mortensen. (incorporated by reference
to Exhibit 10.5. of the Corporation's Form 10-Q for the quarter
ended September 30, 1996). Continuation of Employment Agreement.
(filed herewith).

10.5. Employment Agreement between F.N.B. Corporation and Stephen J.
Gurgovits. (filed herewith).

10.6. Employment Agreement between F.N.B. Corporation and William J.
Rundorff. (incorporated by reference to exhibit 10.9 of the
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991). Amendment No. 2 to Employment Agreement.
(incorporated by reference to Exhibit 10.8. of the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31,
1995).

IV-5

<PAGE> 18

10.7. Basic Retirement Plan (formerly the Supplemental Executive
Retirement Plan) of F.N.B. Corporation effective January 1, 1992.
(incorporated by reference to Exhibit 10.9. of the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31,
1993).

10.8. F.N.B. Corporation 1990 Stock Option Plan as amended effective
February 2, 1996. (incorporated by reference to Exhibit 10.10. of
the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995).

10.9. F.N.B. Corporation Restricted Stock Bonus Plan dated January 1,
1994. (incorporated by reference to Exhibit 10.11. of the
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993).

10.10. Employment Agreement between F.N.B. Corporation and John D. Waters.
(incorporated by reference to Exhibit 10.13. of the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31,
1995).

10.11. F.N.B. Corporation Restricted Stock and Incentive Bonus Plan.
(incorporated by reference to Exhibit 10.13. of the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 31,
1995).

10.12. F.N.B. Corporation 1996 Stock Option Plan. (incorporated by
reference to Exhibit 10.13. of the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995).

10.13. F.N.B. Corporation Director's Compensation Plan. (incorporated by
reference to Exhibit 10.13. of the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995).

10.14. F.N.B. Corporation 1998 Director's Stock Option Plan. (filed
herewith).

13 Annual Report to Stockholders. (filed herewith).

21 Subsidiaries of the Registrant. (filed herewith).

23.1 Consent of Ernst & Young LLP, Independent Auditors.
(filed herewith).

23.2 Consent of Hill, Barth & King, Independent Auditors.
(filed herewith).

23.3 Consent of PricewaterhouseCoopers LLP, Independent Auditors.
(filed herewith).

23.4 Consent of Hacker, Johnson, Cohen & Grieg PA, Independent Auditors.
(filed herewith).

27 Financial Data Schedule. (filed herewith).

99.1 Report of Independent Auditors, Hill, Barth & King, Inc. for the
1996 audit of Southwest Banks, Inc. (filed herewith).

99.2 Report of Independent Auditors, PricewaterhouseCoopers LLP for the
1996 audit of West Coast Bancorp, Inc. (Filed herewith).

99.3 Report of Independent Auditors, Hacker, Johnson, Cohen & Grieb PA
for the 1997 and 1996 Audits of Seminole Bank. (filed herewith).

99.4 Report of Independent Auditors, Hacker, Johnson, Cohen & Grieb PA
for the 1997 and 1996 Audits of Citizens Holding Corporation and
Subsidiaries. (filed herewith).

IV-6

<PAGE> 1

Exhibit 10.4

CONTINUATION OF EMPLOYMENT AGREEMENT

THIS CONTINUATION OF EMPLOYMENT AGREEMENT (the "Agreement") is entered
into as of November 24, 1998, by and between F.N.B. CORPORATION, a Pennsylvania
corporation (the "Company"), and PETER MORTENSEN, an individual residing in
Naples, Florida ("Mortensen").

Witnesseth that:

WHEREAS, Mortensen has been an employee of the Company's principal
subsidiary since March 1, 1959 and was for many years its President and Chief
Executive Officer and is currently and for many years has been the Chairman of
the Board of Directors of the Company (the "Chairman") and Chief Executive
Officer of the Company,

WHEREAS, Mortensen and the Company are parties to an Employment
Agreement dated January 1, 1990, which agreement has been amended from time to
time (collectively, the "Employment Agreement"),

WHEREAS, Mortensen and the Company are parties to a Post-Employment
Services Agreement dated September 10, 1996 (the "Post-Employment Agreement"),

WHEREAS, Mortensen plans to step down as Chief Executive Officer of the
Company on or prior to December 31, 2000, which is the expiration date of the
term of his employment under Section 1 (b) of the Employment Agreement,

WHEREAS, the Company does not wish to lose the benefit of Mortensen's
years of experience with the Company, especially in connection with oversight of
the Company's banking subsidiaries, his knowledge of the markets in which the
Company competes, and his expertise in the financial services industry,

<PAGE> 2

WHEREAS, Mortensen and the Company desire to revoke and terminate the
Post-Employment Agreement and to reflect in this Agreement current market
practices for executive compensation and part-time service arrangements, and the
changes in the size, complexity, and geographic scope of the Company since 1996,

WHEREAS, outside experts and consultants with experience in, insight
into, and knowledge of banking industry executive compensation practices and
part-time service arrangements have advised the Company that the terms of this
Agreement are consistent with industry practices for treatment of executives and
part-time employees with the experience, knowledge, ability, and other
qualifications of Mortensen, as well as for the size, condition, and location of
the Company;

WHEREAS, outside bank regulatory counsel has advised the Company that
this Agreement does not violate any publicly announced rule, regulation, or
policy governing executive compensation or part-time employment applicable to
the Company;

WHEREAS, Mortensen and the Company are committed to complying with all
applicable statutes, laws, ordinances, orders, and regulations, and to operating
the Company in a safe and sound manner; and

WHEREAS, the Company and Mortensen each desires that Mortensen's
services continue to be available to the Company in the capacity of Senior
Executive, Chairman, a Member of the Board of Directors of the Company (a "Board
Member"), and an internal consultant on a part-time employee basis upon the
terms and conditions herein set forth.

<PAGE> 3

NOW, THEREFORE, in consideration of the promises and covenants herein
contained, and intending to be legally bound, the parties hereto agree as
follows:

1. Effect on Other Agreements.

(a) The Employment Agreement. Except as specifically set forth
in this Agreement, the parties to this Agreement remain bound by and subject to
the terms of the Employment Agreement. Wherever the terms of this Agreement
conflict with the terms of the Employment Agreement, the terms of the Employment
Agreement shall be without effect, and the terms of this Agreement shall govern
the parties.

(b) The Post-Employment Agreement. Except with respect to its
effect on other agreements as set forth in Paragraph 1 of the Post-Employment
Agreement, the parties hereby revoke and terminate the Post-Employment
Agreement. The revocation and termination of the Post-Employment Agreement
pursuant to this Agreement in no way shall affect the Post- Employment
Agreement's effect on the October 13, 1995 Agreement, Consulting Agreement, or
Amendment No. 2 to Employment Agreement.

2. Continued Service as Chairman and Chief Executive Officer. Mortensen
hereby agrees to continue to serve in a full-time capacity as the Company's
Chairman and Chief Executive Officer and as a Board Member of the Company for a
period which shall, consistent with Section 1 (b) of the Employment Agreement,
end not later than December 31, 2000, unless otherwise extended by the Board of
Directors of the Company (the "CEO Term"). Except as specifically provided in
this Agreement, the terms and conditions of Mortensen's employment during the
CEO Term, including but not limited to duties, compensation, benefits, and
termination, shall be as set forth in the Employment Agreement.

<PAGE> 4

3. Continued Service as Senior Executive and Chairman of the Board.
Mortensen hereby agrees to serve as Senior Executive and as a Board Member of
the Company, subject to his election as a Board Member by the Shareholders of
the Company, for a period not to exceed three years after cessation of his
full-time employment with the Company during the CEO Term (the "Post-CEO Term").
If requested by the Board, Mortensen agrees to serve as Chairman. Mortensen
shall not be required to devote in excess of one thousand (1,000) hours per year
to his duties during the Post-CEO Term. Mortensen's service as Senior Executive
and as a Board Member or as Chairman during the Post-CEO Term shall be subject
to the following terms and conditions:

(a) Duties. Mortensen shall perform such duties as Senior
Executive or as Chairman under this Paragraph as the Chief Executive Officer or
the Board may reasonably request. These duties may include, but in no way are
limited to, any or all of the following: providing advice and counsel to
management, participating in corporate strategic planning; providing advice in
connection with major corporate transactions, such as mergers and acquisitions;
presiding over all meetings of the Board and Shareholders; planning the contents
and agenda of such meetings with the assistance of management; supervising the
work of various committees of the Board (except for the Audit Committee);
serving as Chairman of the Executive Committee, recruiting, training, and
supervising the activities of other Board Members; communicating with other
participants in the financial services industry and markets to obtain
independent information, insights, and assessments of trends and developments in
the industry for the benefit and assistance of the Board in discharging its
duties; representing the Company in its participation in the affairs of industry
trade associations; supervising the Company's communications with its
shareholders; participating

<PAGE> 5

in customer relations and public relations; participating in charitable and
community organizations which the Company or its subsidiaries wish to support;
and any other duties assigned from time to time by the Chief Executive Officer
or the Board. Mortensen shall devote his best efforts to fulfilling his roles as
Senior Executive and as Chairman under this Paragraph and shall apply
substantially the same degree of skill and diligence in such service as applied
by him during the CEO Term. However, Mortensen shall not be required to devote
more than one thousand (1,000) hours on an annual basis to his duties under this
Paragraph.

(b) Compensation. The Company shall, on its regularly
scheduled paydays, pay Mortensen pro-rated portions of an annual fee equal to
fifty percent (50%) of his annual salary in effect during the final year of the
CEO Term, subject to all lawfully required deductions. In addition, throughout
the Post-CEO Term, Mortensen shall continue to participate in the Company's
bonus and stock option plans on the same terms as applicable to other members of
the Company's management under the prevailing practices of the Company. Except
as provided in Subparagraph 3(f) of this Agreement, Mortensen shall not be paid
any other fees or compensation with respect to service as Senior Executive or
service on the Board or committees of the Board during the Post CEO Term.

(c) Benefits. To the extent that the Company makes benefits,
including but not limited to medical, dental, vision care and life insurance,
available to similarly situated individuals, the Company shall also provide
Mortensen with such benefits during the Post- CEO Term.

(d) Non-Selection or Termination as Chairman. If the Board
does not elect Mortensen to be Chairman, or terminates his service during the
Post-CEO Term for any

<PAGE> 6

reason other than Proper Cause (as defined either in Section 5 of the Employment
Agreement or in Subparagraph 3(e) of this Agreement), Disability (as defined
either in Section 4 of the Employment Agreement or in Paragraph 5 of this
Agreement), Death (pursuant to Paragraph 6 of this Agreement), or material
breach of this Agreement (collectively, the "Non-Payment Reasons"), the Company
shall thereafter be and remain obligated to pay to Mortensen compensation at the
rate described in Subparagraph 3(b) of this Agreement and to provide him the
benefits described in Subparagraph 3(c) of this Agreement until the third
anniversary of the commencement of the Post-CEO Term. If the Company terminates
Mortensen's services as Senior Executive and as Chairman during the Post-CEO
Term for any NonPayment Reason, the Company shall be relieved of its obligations
to pay compensation and benefits, except for accrued and unpaid items.

(e) Termination. In addition to the definition of Proper Cause
for termination as set forth in Section 5 of the Employment Agreement, the
occurrence of any of the following events or circumstances shall constitute
Proper Cause for the removal of Mortensen as Senior Executive and as Chairman,
at the election of the Board, during the Post-CEO Term:

(i) Mortensen's voluntary resignation as Senior Executive
or as a Board Member without approval of the Board
for reasons other than a breach of this Agreement in
any material respect by the Company which has not
been cured within thirty (30) calendar days after the
Company's receipt of a written notice of such breach
from Mortensen;

(ii) the perpetration of defalcations by Mortensen
involving the Company or any of its affiliates, as
established by certified public accountants employed
by the Company, or willful, reckless, or grossly
negligent conduct of Mortensen entailing a
substantial violation of any material provision of
the laws, rules, regulations, or orders of any
governmental agency applicable to the Company or its
subsidiaries;

<PAGE> 7

(iii) the repeated and deliberate failure by Mortensen,
after advance written notice to him, to comply with
reasonable policies or directives of the Board; or

(iv) Mortensen's breach of this Agreement in any other
material respect, and his failure to cure such breach
within thirty (30) calendar days after Mortensen
receives written notice of such breach from the
Company;

provided. however, that the inability of the Company to achieve favorable
results of operations during the Post-CEO Term for reasons essentially unrelated
to the events or circumstances described in Subparagraph 3(e) of this Agreement
shall not be deemed to constitute "Proper Cause." In the event of termination
pursuant to this Subparagraph, the Company shall be relieved of its obligations
to pay compensation and benefits, except for accrued and unpaid items.

(f) Mortensen may serve as a director of any subsidiary of
the Company and receive the usual fee paid to any other director of such
subsidiary.

4. Engagement of Mortensen as a Consultant Following the Post-CEO Term.
The Company hereby agrees to employ Mortensen on a part-time basis as an
internal consultant to the Company immediately following the Post-CEO Term, and
Mortensen hereby agrees to accept such employment. Mortensen's term as an
internal consultant to the Company under this Paragraph (the "Consultant Term")
shall commence upon the termination of the Post-CEO Term. The Consultant Term
shall last for a minimum of one (1) year and for a maximum of four (4) years, at
the Company's sole discretion. Mortensen's service during the Consultant Term
shall be subject to the following terms and conditions:

(a) Duties. Mortensen shall perform consulting services as
requested by the Company that may involve, but are not limited to, projects
relating to strategic planning,

<PAGE> 8

growth and expansion, merger and acquisition transactions, investor relations,
human resources needs assessments and performance appraisals, and other aspects
of the operations, financial affairs, and business of the Company and its
subsidiaries as may be directed by the Company. Notwithstanding any provision of
this Agreement to the contrary, Mortensen shall not be required to perform any
duties or services that would result in a suspension or modification of his
benefits under any retirement benefits program of the Company.

(b) Compensation. The Company shall pay Mortensen based on a
daily fee rate equal initially to the rate of compensation paid to Mortensen at
the end of the Post-CEO Term divided by seventy (70) (the "Daily Rate"). The
Compensation Committee may modify the Daily Rate taking into account the current
market for services by consultants of comparable experience and expertise,
including other consultants utilized by the Company. The total fee paid to
Mortensen under this Paragraph during any annual period (as measured from the
commencement date of the Consultant Term or any anniversary of that date) (an
"Annual Period") shall be the Daily Rate in effect for such period multiplied by
seventy (70) (the "Annual Amount"). The Company shall be obligated to pay
Mortensen the Annual Amount even if the Company does not request Mortensen to
perform services. In addition, throughout the Consultant Term, Mortensen shall
continue to participate in the Company's bonus and stock option plans under the
prevailing practices of the Company during the Consultant Term.

(c) Payments. The Company shall pay Mortensen at intervals
that are consistent with the Company's custom and practice for paying other
officers and employees.

(d) Other Terms and Conditions. The other terms and conditions
governing Mortensen's part-time employment during the Consultant Term shall be
identical to the terms and conditions as set forth in Subparagraphs 3(c), 3(e),
and 3(f) of this Agreement.

<PAGE> 9

5. Disability. Mortensen's service as Senior Executive and Chairman or
during the Consultant Term may be terminated at the election of the Company upon
a determination by the Board, made in the Board's sole discretion, that
Mortensen will be unable, by reason of physical or mental incapacity, to perform
the reasonably expected duties assigned to him pursuant to this Agreement for a
period longer than six (6) consecutive months or more than nine (9) months in
any consecutive twelve (12) month period ("Disability"). In the exercise of its
discretion, the Board shall give due consideration to, among such other factors
as it deems appropriate to the best interests of the Company, the opinion of
Mortensen's personal physician or physicians and the opinion of any physician or
physicians selected by the Board for these purposes. Mortensen shall submit to
examination by any physician or physicians so selected by the Board and shall
otherwise cooperate with the Board as it makes the determination contemplated
hereunder (such cooperation to include, without limitation, consenting to the
release of information by any such physician or physicians to the Board). In the
event of termination pursuant to this Subparagraph, the Company shall be
relieved of its obligations to pay compensation and benefits, except for accrued
and unpaid items, but shall be obligated, until the earlier of: (i) the fourth
anniversary of the commencement date of the Consultant Term; or (ii) Mortensen's
death, to pay or provide to Mortensen the following:

(i) Subject to the above time limitations, during the
first twelve (12) months of Disability, Mortensen
shall receive quarterly disability income benefits in
amounts equal to one hundred percent (100%) of the
base quarterly compensation then in effect under this
Agreement; and

(ii) Subject to the above time limitations, following the
first twelve (12) months of Disability, Mortensen
shall receive quarterly disability

<PAGE> 10

income benefits in amounts equal to sixty percent
(60%) of the base quarterly compensation then in
effect under this Agreement.

The Company shall be entitled to a credit against its
obligation to pay such disability benefits for the amounts received from time to
time by Mortensen pursuant to any disability income insurance policy maintained
by the Company, or any other employment, and no right to disability benefit
payment shall survive Mortensen's death.

6. Death. This Agreement shall be terminated automatically in the event
of Mortensen's death during the term of this Agreement. If this Agreement is
terminated pursuant to this Paragraph, the Company shall be obligated to pay to
Mortensen's estate any amounts owed to Mortensen for any work provided to the
Company prior to his death, as well as a lump sum payment equivalent to twelve
(12) months of his base compensation then in effect under this Agreement.

7. Confidentiality. For purposes of this Agreement, "proprietary
information" shall mean any information relating to the business of the Company
or its subsidiaries that has not previously been publicly released by duly
authorized representatives of the Company and shall include (but shall not be
limited to) Company information encompassed in all marketing and business plans,
financial information, costs, pricing information, and all methods, concepts, or
ideas in or reasonably related to the business of the Company or its
subsidiaries and not in the public domain.Mortensen agrees to regard and
preserve as confidential all proprietary information that has been or may be
developed or obtained by him in the course of providing consulting services to
the Company and its subsidiaries, whether he has such information in his memory
or in writing or other physical form. Mortensen shall not, without written

<PAGE> 11

authorization from the Company to do so, use for his benefit or purposes, nor
disclose to others, either during the term of this Agreement or thereafter,
except as required by the conditions of his consultancy hereunder, any
proprietary information connected with the business or development of the
Company or its subsidiaries. This prohibition shall not apply after the
proprietary information has been voluntarily disclosed to the public,
independently developed and disclosed by others, or otherwise enters the public
domain through lawful means.

8. Non-Competition. Mortensen agrees that during the term of this
Agreement and for a period of two years after the termination of his services
under this Agreement, he will not in any way, directly or indirectly, manage,
operate, control, accept employment or a consulting position with, or otherwise
advise or assist or be connected with, or own or have any other interest in, or
right with respect to the revenues, receipts, profits, or losses of (other than
through ownership of not more than 4.9 percent of the outstanding equity
securities of any person, firm, or corporation), any Competitive Enterprise. For
purposes of this Paragraph, "Competitive Enterprise" means any person, firm, or
corporation that directly or indirectly: (I) is engaged in commercial banking or
any other activity that is competitive with the Company or any of its present or
future subsidiaries, and (ii) conducts such banking or other activities
described in clause (i) of this Paragraph in any county in which the Company or
any of its present or future subsidiaries then operates.

Without limitation of the Company's rights and remedies under this
Agreement or as otherwise provided by law or in equity, it is understood and
agreed between the parties that the right of Mortensen to receive and retain any
Payments otherwise due to him under this

<PAGE> 12

Agreement shall be suspended and canceled if and for so long as he shall be in
violation of the foregoing covenant not to compete. If and when Mortensen shall
have cured such violation and shall have tendered to the Company any and all
economic benefits directly or indirectly received or receivable by him arising
therefrom, such right shall be automatically reinstated.

9. Reimbursement of Expenses. During the term of this Agreement, the
Company shall reimburse Mortensen for all reasonable and customary documented
expenses actually incurred by Mortensen in the discharge of his duties hereunder
and not otherwise reimbursed by any other person or entity. It is understood
that such reasonable and customary expenses shall be reimbursed on the same
basis as applies to other officers and employees of the Company under the policy
of the Company in effect at the time the expenses are incurred.

10. Assignment; Successors. Except as provided in Paragraph 6 of this
Agreement, the benefits of this Agreement are and shall be personal to
Mortensen, and shall not inure to the benefit of Mortensen's heirs, personal
representatives, or assigns. The duties of Mortensen hereunder shall be personal
and not assignable or delegable by him in any manner whatsoever. This Agreement
shall be binding upon and shall inure to the benefit of the Company, its
successors, and its assigns.

11. Injunctive Relief. It is understood and agreed by and between the
parties hereto that the services to be rendered by Mortensen hereunder are of a
special, unique, extraordinary, and intellectual character, which gives them a
peculiar value, the loss of which may not be reasonably or adequately
compensated in damages, and additionally that a breach by Mortensen of the
covenants set forth in Paragraphs 7 and 8 of this Agreement will cause

<PAGE> 13

the Company great and irreparable injury and damage. Mortensen hereby expressly
agrees that the Company shall be entitled to the remedies of injunction,
specific performance, and other equitable relief to prevent any breach of
Paragraphs 7 and 8 of this Agreement by Mortensen. This provision shall not,
however, be construed as a waiver of any of the remedies that the Company may
have for damages or otherwise.

12. Arbitration. Any dispute or controversy as to the validity
(including but not limited to issues related to actual or potential conflicts
between any provision of this Agreement and any statute, law ordinance, order,
or regulation), interpretation, construction, application, or enforcement of, or
otherwise arising under or in connection with, this Agreement shall be submitted
at the request of either party hereto for resolution and settlement through
arbitration in Pittsburgh, Pennsylvania in accordance with the rules then
prevailing of the American Arbitration Association. Any award rendered therein
shall be final and binding on each of the parties hereto and their heirs,
executors, administrators, successors, and assigns, and judgment may be entered
thereon in any court having jurisdiction. The foregoing provisions of this
Paragraph shall not be deemed to limit the rights and remedies reserved to the
Company under and pursuant to Paragraph 11 of this Agreement.

13. Governing Law. This Agreement shall be deemed to be a contract
under the laws of the Commonwealth of Pennsylvania and shall be for all purposes
construed and enforced in accordance with the laws of said Commonwealth. Nothing
contained in this Agreement shall be interpreted, construed, or applied to
require the commission of any act contrary to law. Whenever there is any
conflict between any provision of this Agreement and any statute, law,
ordinance, order, or regulation, the latter shall prevail; but, in such event,
any such provision

<PAGE> 14

of this Agreement shall be restated, curtailed, and limited only to the extent
necessary to bring it within applicable legal requirements, and the remainder of
this Agreement shall maintain its full force and effect. If it is not possible
to restate, curtail, or limit the provision in a valid or legal manner, then
that invalid or illegal portion shall be deemed not to constitute a part of the
Agreement and the remaining provisions shall maintain their full force and
effect.

14. Waiver. The inaction in light of or waiver by either party to this
Agreement of a breach of any of the provisions of this Agreement shall not
constitute a waiver of any subsequent breach.

15. Entire Agreement: Amendment. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter contained herein
and supersedes all prior agreements, arrangements, and understandings relating
to the subject matter and may only be amended by a written agreement signed by
both parties hereto or their duly authorized representatives. Nothing contained
in this Agreement shall be deemed to limit, impair, or affect any
post-employment retirement benefits provided for under the Employment Agreement
or any retirement plan of the Company or its subsidiaries in which Mortensen is
a participant or beneficiary.

16. Counterparts Clause. This Agreement shall be executed in two
counterparts, each of which shall be valid and enforceable.

<PAGE> 15

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written. ATTEST: F.N.B. CORPORATION

/s/ William J. Rundorff By:/s/ James T. Weller Sr.
- --------------------------- -----------------------------------
Asst. Secretary Chairman of the Compensation
Committee of the Board of Directors

WITNESS:

/s/ William J. Rundorff /s/ Peter Mortensen
- --------------------------- -----------------------------------
Peter Mortensen

<PAGE> 1

Exhibit 10.5

EMPLOYMENT AGREEMENT

THIS AGREEMENT, entered into as of this 1st day of July, 1998, by and between:

STEPHEN J. GURGOVITS, an individual residing in Sharon,
Pennsylvania 16146 (the "Officer"),

and

F.N.B. CORPORATION, a Pennsylvania corporation (the "Employer"),

WITNESSETH THAT:

WHEREAS, the Officer is the Vice Chairman of the Employer and the
President and Chief Executive Officer of First National Bank of Pennsylvania, a
wholly-owned banking subsidiary of the Employer ("First National"); and the
Employer and First National desire to assure themselves of the continued benefit
of the Officer's services and experience, and the parties desire that said
employment relationship be established upon the terms and conditions herein set
forth; and

WHEREAS, the Officer and First National are parties to an Employment
Agreement dated January 1, 1990, as amended by an Amendment to said Employment
Agreement dated November 21, 1994; and

WHEREAS, as additional consideration for this Employment Agreement the
parties desire to terminate the January 1, 1990 Employment Agreement and any
amendments thereto and thereby forever rescind all obligations thereunder; and

WHEREAS, Officer and Employer intend all policies and procedures of the
Employer and its parent company, F.N.B. Corporation, as modified from time to
time, to remain in full force and effect.

NOW, THEREFORE, in consideration of the premises and covenants herein
contained, and intending to be legally bound, the parties hereto agree as
follows:

SECTION 1 RECITALS

The foregoing recitals are incorporated by reference as if fully set forth
herein.

<PAGE> 2

SECTION 2 TERM OF AGREEMENT.

The initial term of the Agreement shall commence on the date of execution
("Commencement Date") and continue until sixty (60) months thereafter unless
sooner terminated under Sections 4, 5 or 6. On the first anniversary of the
Commencement Date and thereafter on each succeeding anniversary of the
Commencement Date the term of employment shall automatically extend for an
additional twelve (12) month period. However, either party may terminate the
automatic renewal by providing the other party written notice of termination at
least ninety (90) days prior to the next succeeding Commencement Date
anniversary. Notwithstanding the provisions governing the terms of this
Agreement, this Agreement shall be immediately terminated upon the death of the
Officer. In no event shall the term of the Agreement renew beyond December 31,
2008.

SECTION 3 COMPENSATION.

In consideration for services rendered to the Employer under this Agreement, the
Employer shall pay and provide to the Officer the following compensation and
benefits:

(A) SALARY. The Employer shall pay the Officer a minimum base
salary at the rate of $315,000 per year during the term
hereof, to be paid in accordance with the Employer's normal
payroll practice, with such minimum base salary to be adjusted
from time to time to reflect (i) such merit increases as the
Board of Directors of the Employer may determine are
appropriate and (ii) annual cost of living increases
commensurate with those given other key executive officers of
First National.

(B) LIFE INSURANCE. The Employer shall promptly pay or reimburse
the premiums due and payable for $811,000 in the aggregate of
"split-dollar" life insurance on the life of the Officer
presently in force under Policy Nos. 3009275, 3010740, 3142301
and 3176134 issued by Guardian Life Insurance Company, or such
other comparable policy or policies as the Employer and the
Officer may select from time to time by mutual agreement. All
such policies shall be owned by the Officer; and provided an
amount equal to 100% of all premiums paid by the Employer in
maintaining all such policies shall be repaid to the Employer,
the death benefits thereunder shall be payable to one or more
beneficiaries as designated by the Officer.

(C) PARTICIPATION IN PERFORMANCE AND INCENTIVE COMPENSATION AND
BONUS PLANS. At the discretion of the Compensation Committee
of the Employer, the Officer shall be entitled to participate
in incentive compensation, stock option and such other bonus
plans comparable to those given to similarly-positioned
officers of the Employer or its present or future subsidiaries
or affiliates only during the term of his employment with the
Employer.

<PAGE> 3

(D) FRINGE BENEFITS. The Officer shall be entitled to vacations,
retirement benefits and other fringe benefits, including but
not limited to Employer's 401(k) Plan, Retirement Income Plan,
Basic Retirement Plan, Stock Option Plan or other plans that
may be established hereafter and group life, disability and
health insurance coverages, comparable with those furnished to
similarly positioned officers of the Employer and consistent
with the prevailing compensation policies and practices of the
Employer (now and in the future) as they may change from time
to time, with respect to similarly-positioned officers of the
Employer or its present or future subsidiaries or affiliates.

SECTION 4 RESIGNATION.

If the Officer voluntarily resigns as an officer or employee of the Employer or
its significant present or future subsidiaries or affiliates, the Officer shall
no longer be considered an employee for any purpose and the Officer shall not be
entitled to any compensation or benefits after the effective date of the
Officer's resignation. Notwithstanding the foregoing, nothing contained herein
shall affect the Officer's vested rights, if any.

SECTION 5 TERMINATION FOR PROPER CAUSE.

(A) The occurrence of any of the following events or circumstances
shall constitute "Proper Cause" for termination, at the
election of the Board of Directors of the Employer, of the
employment of the Officer under this Agreement:

(1) the perpetration of defalcations by the Officer
involving the Employer or any of its present or future
subsidiaries or affiliates, as established by
certified public accountants employed by the Employer,
or willful, reckless or grossly negligent conduct of
the Officer entailing a substantial violation of any
material provision of the laws, rules, regulations or
orders of any governmental agency applicable to the
Employer or its subsidiaries and affiliates;

(2) the repeated and deliberate failure by the Officer
after advance written notice to comply with reasonable
policies or directives of the Employer or the Chairman
of the Board of Directors of the Employer; or

(3) the Officer shall breach this Agreement in any other
material respect and fail to cure such breach within
30 calendar days after the Officer receives written
notice of such breach from the Employer.

(B) If Employer terminates the Officer for Proper Cause, the
Officer shall not be an employee nor shall the Officer be
entitled to any compensation or benefits after the effective
date of the Officer's termination. Notwithstanding the
foregoing, nothing contained herein shall affect the Officer's
vested rights, if any.

<PAGE> 4

SECTION 6 TERMINATION WITHOUT CAUSE.

(A) SEPARATION PAY. Employer may terminate this Agreement at any
time whether or not such termination constitutes "Proper
Cause" as defined in Section 5 hereof. In the event Employer
terminates Officer's employment without Proper Cause as
defined in Section 5 hereof:

(1) The Officer shall not be considered an employee after
the effective date of the termination.

(2) Employer shall pay to Officer an amount equal to the
Officer's salary for the remaining portion of the
Term of the Agreement (as described at Section 2
hereof).

(3) Employer shall pay the Officer the Separation Pay in
bi-monthly installments less all withholdings
required by law and authorized deductions.

(4) Officer will not be entitled to receive any benefits
or bonuses described in Section 3(b) and (c) hereof.

(5) Officer will be entitled to receive such Separation
Pay only if the Officer executes and does not revoke
a Release of all claims and liabilities in form
prescribed by Employer.

(6) In the event of the death of Officer during the Term
of the Agreement (as described at Section 2 hereof)
the Officer shall be entitled to the lesser of the
amount equal to Officer's salary for the remainder of
said Term of Agreement or twelve (12) months.

(7) (i) In the Event Officer is terminated without cause
with eighteen (18) or more months remaining on the
balance of the Term of the Agreement as described in
Section 2 hereof, the Employer shall be obligated to
pay on behalf of Officer the group life and health
insurance coverages described in Section 3(c) hereof,
less the same contribution as required by employee's
group life and health insurance coverages pursuant to
prevailing policies and practices of the Employer
with respect to similarly positioned officers of
Employer, for the balance of the Term of this
Agreement.

<PAGE> 5

(ii) In the event Officer is terminated without cause
with less than eighteen (18) months remaining on the
balance of the Term of this Agreement as described in
Section 2 hereof, the Employer shall be obligated to
pay on behalf of Officer the group life and health
insurance coverages described in Section 3(c) hereof
for a minimum period of eighteen (18) months after
the Officer's termination, less the same contribution
as required by employee's group life and health
insurance coverages pursuant to prevailing policies
and practices of the Employer with respect to
similarly positioned officers of Employer or its
present or future subsidiaries or affiliates, and the
health insurance coverage provided under this Section
6(7)(ii) shall be considered the health/medical
coverage that the Employer is obligated to make
available under the Consolidated Omnibus Budget
Reconciliation Act (COBRA).

(8) Nothing herein shall restrict the Officer's vested
rights, if any, pursuant to Employer's 401(k) Plan,
Retirement Income Plan, Basic Retirement Plan and
Stock Option Plan or other Employer plans that may be
established hereafter. Notwithstanding the Officer
receiving any payments under the terms of this
Section 6(a), on the date of the Officer's
termination, all vesting, for purposes of the
Employer's 401(k) Plan, Retirement Income Plan, Basic
Retirement Plan and Stock Option Plan, or other such
plans now in existence or are established in the
future, shall cease.

(B) TERMINATION OF SEPARATION PAY. Notwithstanding the foregoing
or any other provision of this Agreement, the Officer shall
not be entitled to any further separation payments and the
separation pay period shall end upon the occurrence of any of
the following:

(1) Officer files suit or submits any matter to
arbitration in violation of the Release executed in
connection with Section 6(a)(5) hereof.

(2) Officer violates any term or condition of this
Agreement, including, but not limited to, the
Non-Competition and Confidentiality provisions of
this Agreement.

(3) Officer's misappropriation of trade secrets.

(4) Employer learns that the Officer committed a material
breach of the Agreement during the terms of this
Agreement.

<PAGE> 6

SECTION 7 NON-COMPETITION.

(A) For purposes of this Agreement, reference to the term
"Competitive Enterprise" shall mean any bank holding company,
or insured depository institution (including an institution in
the organization stage or in the process of applying for or
receiving appropriate regulatory approval), including without
limitation, any federal or state chartered bank, savings bank,
savings and loan association, savings association or credit
union offering services or products similar to those presently
or in the future offered by the Employer or its subsidiary,
First National Bank of Pennsylvania ("Bank").

(B) During the two (2) year period immediately following
termination of Officer's employment (which may include,
without limitation, his resignation or any event specified in
Sections 5 and 6 hereof) (hereinafter referred to as
"Restricted Period"), the Officer shall not:

(1) accept a position as director, officer, employee,
consultant, advisor or agent of any Competitive
Enterprise which is located in any county, in which
the Bank or its present or future subsidiaries
operate an office or facilities;

(2) in any way, directly or indirectly, for the purpose
of selling any product or service in any county in
which the Bank has offices or facilities, that
compete with a product or service offered by the Bank
or its present or future subsidiary(ies), solicit,
divert, or entice any existing or potential
customer(s) or business(es) of the Bank or its
present or future subsidiary(ies) which are
identified by the Bank as a customer or business with
whom the Officer solicited, became aware of, or
transacted business during his employment with the
Bank;

(3) employ or assist in employing any present employee of
the Employer or any of its affiliates (whether or not
such employment is full time or is pursuant to a
written contract), for the purpose of having such
employee perform services for any Competitive
Enterprise or other organization in competition with
the business of the Employer or any of its present or
future subsidiaries or affiliates; and

(4) in any way, directly or indirectly, make any oral or
written statement, comments, or other communications
designed or intended to impugn, disparage or
otherwise malign the reputation, ethics, competency,
morality or qualifications of the Employer or its
affiliates, or any directors, or customers thereof.

<PAGE> 7

(C) Without limitation of the Employer's rights and remedies under
this Agreement or as otherwise provided by law or in equity,
it is understood and agreed between the parties that the right
of the Officer to receive and retain any payments otherwise
due under this Agreement shall be suspended and canceled if
and for so long as he shall be in violation of the foregoing
covenant. If and when the Officer shall have cured such
violation within twenty (20) days of receipt of written notice
from Employer and shall have tendered to the Employer any and
all economic benefits directly or indirectly received or
receivable by the Officer arising therefrom, the Officer's
right to receive payments under this Agreement shall be
automatically reinstated but only for the remainder of the
period during which such payments are due him.

(D) If the Employer terminates Officer without Proper Cause as
defined in Section 5 hereof, and if the Officer shall duly
have complied with and observed the covenants of this Section
7, the Officer may be discharged from the covenants of this
Section 7 at any time during the Restricted Period by filing
with the Employer a duly executed statement satisfactory to
Employer, releasing the Employer and, if applicable, its
insurance carriers, from any and all obligations under the
terms of this Agreement.

SECTION 8 CONFIDENTIALITY.

(A) For purposes of this Agreement, "Proprietary Information"
shall mean any information relating to the business of the
Employer or any of its present or future subsidiaries or
affiliates that has not previously been publicly released by
authorized representatives of the Employer or any authorized
representatives of any of its present or future subsidiaries
or affiliates, and shall include (but shall not be limited to)
Employer information encompassed in all marketing and business
plans, financial information, costs, pricing information,
customer and client lists and relationships between Employer
and dealers, distributors, sales representatives, wholesalers,
customers, clients, suppliers, and others who have business
dealings with Employer, and all methods, concepts, or ideas in
or reasonably related to the business of the Employer or any
of its present or future subsidiaries or affiliates and not in
the public domain.

(B) The Officer agrees to regard and preserve as confidential all
Proprietary Information that has been or may be developed or
obtained by the Officer in the course of his employment with
the Employer and its subsidiaries and affiliates, whether he
has such information in his memory or in writing or other
physical form. The Officer shall not, without written
authorization from the Employer, use for his benefit or
purposes, nor disclose to others at any time, either during
the term of Officer's employment or thereafter, except as
required by the conditions of his employment hereunder, any
Proprietary Information connected with the business or
development of the Employer or its subsidiaries or affiliates.
This prohibition shall not apply after the Proprietary
Information has been voluntarily disclosed to the public,
independently developed and disclosed by others, or otherwise
enters the public domain through lawful means.

<PAGE> 8

SECTION 9 REMOVAL OF DOCUMENTS OR OBJECTS.

The Officer agrees not to remove from the premises of the Employer or any of its
present or future subsidiaries or affiliates, except as an employee of the
Employer in pursuit of the business of the Employer or any of its present or
future subsidiaries or affiliates, or except as specifically permitted in
writing by the Employer, any document or object containing or reflecting any
Proprietary Information. The Officer recognizes that all such documents,
tangible and intangible property and objects, whether developed by him or by
someone else, are the exclusive property of the Employer.

SECTION 10 INJUNCTIVE RELIEF.

(A) It is understood and agreed by and between the parties hereto
that the services to be rendered by the Officer hereunder are
of a special, unique, extraordinary and intellectual
character, which gives them a peculiar value, the loss of
which may not be reasonably or adequately compensated in
damages, and additionally that a breach by the Officer of the
covenants set out in Sections 7, 8, and 9 of this Agreement
will cause the Employer great and irreparable injury and
damage. The Officer hereby expressly agrees that the Employer
shall be entitled to the remedies of injunction, specific
performance and other equitable relief to prevent a breach of
Sections 7, 8, and 9 of this Agreement by the Officer. This
provision shall not, however, be construed as a waiver of any
of the remedies which the Employer may have for damages or
otherwise.

(B) As a result of the uncertainty in determining damages,
Employer and Officer, as a reasonable mode of determining
damages, agree that upon a determination of the Officer's
breach of Section 7, 8, or 9, Employer shall be entitled to
damages equal to one (1) year of the Officer's base salary at
the time Officer's employment with Employer ceases, and they
agree that the damages are liquidated damages and not a
penalty. Furthermore, the Employer's liquidated damages are in
addition to and not in lieu of Employer's right to seek
injunctive relief.

SECTION 11 SUBSIDIARIES AND AFFILIATES.

It is understood and agreed by the parties hereto that, at the election and
direction of the Employer's Board of Directors and without modification of the
terms and provisions hereof, the Officer shall also serve as an officer of any
one or more present or future subsidiaries or affiliates of the Employer and,
when and as so determined by the Board and any such subsidiary or affiliate, the
rights, duties and obligations of the Officer and Employer expressed and implied
in this Agreement shall inure to the benefit of and bind any such subsidiary or
affiliate with the same force and effect as would be obtained if the subsidiary
or affiliate were a party hereto jointly and severally with the Employer.

SECTION 12 SUCCESSORS, ASSIGNS, ETC.

(A) This Agreement shall be binding upon, and shall inure to the
benefit of, the Officer and the Employer and their respective
permitted successors, assigns, heirs, legal representatives
and beneficiaries.

<PAGE> 9

(B) Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy, or similar
process or assignment by operation of law, and any attempt,
voluntary or involuntary, to effect any such action shall be
null, void and of no effect; provided, however, that nothing
in this Section 12 shall preclude the assumption of such
rights by executors, administrators or other legal
representatives of the Officer or his estate and their
assigning any rights hereunder to the person or persons
entitled thereto.

(C) Nothing in this Agreement shall preclude the Employer from
consolidating or merging into or with or transferring all or
substantially all of its assets to another corporation which
assumes this Agreement and all obligations and undertakings of
the Employer hereunder. Upon such a consolidation, merger or
transfer of assets and assumption, the term "Employer" as used
herein shall mean such other corporation and this Agreement
shall continue in full force and effect.

SECTION 13 MERGER OR CONSOLIDATION.

In the event of the merger or consolidation of the Employer with another
corporation during this Agreement and as a result of such merger or
consolidation the shareholders of the Employer as of the day preceding such
transaction will own less than 51% of the outstanding voting securities of the
surviving corporation, or in the event that there is (in a single transaction or
series of related transactions) a sale or exchange of 80% or more of the Common
Stock of the Employer for securities of another entity in which shareholders of
the Employer will own less than 51% of such entity's outstanding voting
securities, or in the event of the sale by the Employer of a substantial portion
of its assets to an unrelated third party, the Officer shall have the right, at
his option, to terminate his employment under this Agreement upon 30 days'
advance written notice, provided such written notice shall have been delivered
to the Employer during the period beginning upon public announcement of the
subject transaction and ending not more than 60 days after the effective date of
such transaction. The Officer shall thereupon be entitled to receive from the
Employer a cash bonus (the "Cash Bonus") whose "present value" (as defined in
Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the
"Code")) on the closing date of such transaction is equal to two hundred
ninety-nine percent (299%) of the Officer's "base amount" (as defined in Section
280(G)(b)(3) of the Code. Said present value of the Cash Bonus is hereinafter
referred to as the "Initial Present Value". The Cash Bonus shall be paid in
three installments as follows: an amount equal to one-third (1/3) of the Initial
Present Value shall be paid on the effective date of the termination of his
employment hereunder; an additional amount equal to one-third of the Initial
Present Value shall be paid on the last day of the sixth month following such
effective date; and a final amount equal to one-third of the Initial Present
Value shall be paid on the last day of the twelfth month following such
effective date. If the Officer does not elect to terminate this Agreement as
aforesaid, then this Agreement shall remain in effect and be assigned and
transferred to the Employer's successor in interest, and the Employer shall
cause such assignee to assume the Employer's obligations hereunder; and in such
event the Officer hereby confirms his agreement to continue to perform his
duties and obligations according to the terms and conditions hereof for such
assignee or transferee of this Agreement.

<PAGE> 10

SECTION 14 NOTICES.

All notices and other communications which are required or may be given under
this Agreement shall be in writing and shall be deemed to have been given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed as follows:

(A) To the Employer at the address designated as its headquarters,
Attention: CEO.
With a copy to F.N.B. Corporation, One F.N.B. Boulevard -
4th Floor, Hermitage, PA 16148,
Attention: Corporate Counsel.

(B) To the Officer at his address provided to Employer from time
to time for salary and other similar purposes.

or to such other place as either party shall have specified by notice in writing
to the other.

SECTION 15 GOVERNMENTAL REGULATION.

Nothing contained in this Agreement shall be interpreted, construed or applied
to require the commission of any act contrary to law and whenever there is any
conflict between any provision of this Agreement and any statute, law ordinance,
order or regulation, the latter shall prevail; but in such event any such
provision of this Agreement shall be curtailed and limited only to the extent
necessary to bring it within applicable legal requirements.

SECTION 16 ARBITRATION.

Any dispute or controversy as to the validity, interpretation, construction,
application or enforcement of, or otherwise arising under or in connection with
this Agreement, shall be submitted at the request of either party hereto for
resolution and settlement through arbitration in Pennsylvania in accordance with
the rules then prevailing of the American Arbitration Association. Any award
rendered therein shall be final and binding on each of the parties hereto and
their heirs, executors, administrators, successors and assigns, and judgment may
be entered thereon in any court having jurisdiction. The foregoing provisions of
this Section 16 shall not be deemed to limit the rights and remedies reserved to
the Employer under and pursuant to Section 10 hereof.

SECTION 17 GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania.

SECTION 18 DIVISIBILITY.

Should a court or arbitrator declare any provision hereof to be invalid, such
declaration shall not affect the validity of the Agreement as a whole or any
part thereof, other than the specific portion declared to be invalid.

SECTION 19 HEADINGS.

The headings to the Sections and paragraphs hereof are placed herein for
convenience of reference only and in case of any conflict the text of this
Agreement, rather than the headings, shall control.

<PAGE> 11

SECTION 20 ENTIRE AGREEMENT; AMENDMENT.

This Agreement sets forth the entire understanding of the parties in respect of
the subject matter contained herein and supersedes the Officer's January 1, 1990
Employment Agreement and amendments thereto and all prior agreements,
arrangements and understandings relating to the subject matter and may only be
amended by a written agreement signed by both parties hereto or their
duly-authorized representatives.

IN WITNESS WHEREOF, on the 19th day of January, 1999, the parties hereto have
executed this Agreement to be effective as of the date first above written.

WITNESS: STEPHEN J. GURGOVITS

/s/ Nancy J. Dillon /s/ Stephen J. Gurgovits
- ------------------------- ------------------------------

ATTEST: F.N.B. CORPORATION

By: /s/ William J. Rundorff
- ------------------------- ------------------------------
SECRETARY
Name:
-------------------------
Title: EVP
------------------------
[SEAL]

<PAGE> 1

EXHIBIT 10.14

F.N.B. CORPORATION

1998 DIRECTORS' STOCK OPTION PLAN

PURPOSE

The purpose of the F.N.B. Corporation Directors' Stock Option
Plan (the "Plan") is to promote the interests of F.N.B. Corporation (the
"Corporation") and its shareholders by attracting and retaining experienced and
knowledgeable directors and by aligning their economic interest more closely
with those of the Corporation's shareholders.

SECTION 1

Effective Date and Duration of Plan

The effective date of the Plan shall be May 21,1998 (the
"Effective Date"), which is the date of adoption of the Plan by the Executive
Committee of the Board of Directors of the Corporation.

SECTION 2

Administration

The Plan shall be administered by the Corporation's Board of
Directors and the Executive Committee of the Corporation's Board of Directors
(collectively hereinafter referred to as "Board"). The Board shall interpret the
Plan and prescribe such rules, regulations and procedures in connection with the
operation of the Plan as it shall deem to be necessary and advisable for the
administration of the Plan consistent with the purposes of the Plan.

Subject to applicable state and federal laws and regulations
or rules issued by Nasdaq or other national stock exchange on which the
Corporation's stock is listed, the Board may at any time terminate or modify the
Plan. The Board's authority to amend the Plan includes the following: (i) a
material increase in the total number of common shares available for issuance
under the Plan; (ii) a material modification of the eligibility requirements for
participation in the Plan; or (iii) a material increase in the benefits accorded
to participants under the Plan.

SECTION 3

Eligibility

All current directors of the Corporation are eligible to
participate in the Plan. Future directors of the Corporation will also be
eligible to participate in the Plan.

Subject to the provisions of the Plan, the Board shall have
full and final authority, in its discretion, to grant stock options (with or
without stock appreciation rights) as described herein and to determine the
directors to whom stock options (with or without stock appreciation rights)
shall be granted and the number of shares to be covered by each stock option.
During the term of the Plan, the Board may issue annual grants of stock options
to non-employee Directors of the Corporation equivalent to the total cash
compensation received by such non-employee Director or which such non-employee
Director would have been entitled to receive from the Corporation during the
prior year as a member of the Corporation's Board of Directors or any
Committee(s) thereof. The Board may issue annual grants of stock options to
employee Directors of the Corporation equivalent to the average total cash
compensation received by non-employee Directors from the Corporation during the
prior year.

<PAGE> 2

SECTION 4

Shares Available Under the Plan

Initially, the aggregate number of shares of the Corporation's
common stock which may be issued or delivered and as to which stock options may
be granted under the Plan is 400,000 shares. To the extent permitted under the
terms of Section 2 of the Plan, the Board may from time to time increase or
decrease the aggregate number of shares reserved for issuance with the grant of
options under the Plan.

If any stock option granted under the Plan is canceled by
mutual consent or terminates or expires for any reason without having been
exercised in full, the number of shares subject to such stock option shall again
be available for purposes of the Plan, except that to the extent that stock
appreciation rights granted in conjunction with a stock option under the Plan
are exercised and the related stock option surrendered, the number of shares
available for purposes of the Plan shall be reduced by the number of shares, if
any, of Common Stock issued or delivered upon exercise of such stock
appreciation rights.

The shares which may be issued or delivered under the Plan may
be either authorized but unissued shares or repurchased shares or partly each.

SECTION 5

Grant of Stock Options, Stock Appreciation Rights, and
Limited Stock Appreciation Rights

The Board shall have authority, in its discretion, to grant
"non-statutory stock options" (stock options which do not qualify under Section
422 of the Internal Revenue Code of 1986, as amended). The Board also shall have
the authority, in its discretion, to grant stock appreciation rights in
conjunction with non-statutory stock options with the effect provided in Section
6(D) hereof. Stock appreciation rights granted in conjunction with a
non-statutory stock option may be granted either at the time such stock option
is granted or at any time thereafter during the term of such stock option. The
Board shall also have the authority, in its discretion, to grant limited stock
appreciation rights in accordance with the provisions of, and subject to the
terms and conditions set forth in Section 10.

SECTION 6

Terms and Conditions of Stock Options and
Stock Appreciation Rights

Stock options and stock appreciation rights granted under the
Plan shall be subject to the following terms and conditions:

(A) The purchase price at which each stock option may be
exercised (the "option price") shall be such price as the Board, in its
discretion, shall determine but shall not be less than one hundred
percent (100%) of the fair market value per share of Common Stock
covered by the stock option on the date of grant.

(B) The option price shall be payable in full in any one or
more of the following ways:

(i) in cash; and/or

(ii) in shares of Common Stock (which are owned by
the optionee free and clear of all liens and other
encumbrances and which are not subject to the restrictions set
forth in Section 9) having a fair market value on the date of
exercise of the stock option, determined as provided in
Section 6(H), equal to the option price for the shares being
purchased.

If the option price is paid in whole or in
part in shares of Common Stock, any portion of the option
price representing a fraction of a share shall be paid in
cash. The date of exercise of a stock option shall be
determined under procedures established by the Board, and the
option price shall be payable at such time or times as the
Board, in its discretion, shall determine. No shares shall be
issued or delivered upon exercise of a stock option until full
payment of the

<PAGE> 3

option price has been made. When full payment of the option
price has been made and subject to the restrictions set forth
in Section 9, the optionee shall be considered for all
purposes to be the owner of the shares with respect to which
payment has been made. Payment of the option price with shares
shall not increase the number of shares of Common Stock which
may be issued or delivered under the Plan as provided in
Section 4; or

(iii) by withholding such number of shares of Common
Stock then issuable upon exercise of the option as shall have
an aggregate fair market value equal to the option price for
the shares being acquired upon exercise of the option.

(C) Subject to Section 11 hereof, no stock option shall be
exercisable during the first twelve (12) months of its term, except
that this limitation on exercise shall not apply if the optionee dies
during such twelve (12) month period. No non-statutory stock option
shall be exercisable after the expiration of ten (10) years from the
date of grant. Subject to this Section 6(C) and Sections 6(F), 6(G) and
6(H), stock options may be exercised at such times, in such amounts and
subject to such restrictions as shall be determined, in its discretion,
by the Board.

(D) Stock appreciation rights shall be exercisable to the
extent that the related stock option is exercisable and only by the
same person or persons who are entitled to exercise the related stock
option. Stock appreciation rights shall entitle the optionee to
surrender the related stock option, or any portion thereof, and to
receive from the Corporation in exchange therefor that number of shares
of Common Stock having an aggregate fair market value equal to the
excess of the fair market value of one share of Common Stock on such
date of exercise over the option price per share, multiplied by the
number of shares covered by the stock option, or portion thereof, which
is surrendered. Cash shall be paid in lieu of any fractional shares.
The Board shall have the authority, in its discretion, to determine
that the obligation of the Corporation shall be paid in cash or part in
cash and part in shares, except that the Corporation shall not pay to
any person who is subject to the provisions of Section 16 of the
Exchange Act at the time of exercise of stock appreciation rights any
portion of the obligation of the Corporation in cash (except cash in
lieu of a fractional share) unless such stock appreciation rights are
exercised in a period during which such person is not prohibited from
trading Corporation stock by the rules and regulations promulgated
under Section 16 of the Exchange Act by the Securities and Exchange
Commission. The date of exercise of stock appreciation rights shall be
determined under procedures established by the Board, and payment under
this Section 6(D) shall be made by the Corporation as soon as
practicable after the date of exercise. To the extent that a stock
option as to which stock appreciation rights have been granted in
conjunction therewith is exercised, the stock appreciation rights shall
be canceled. For the purposes of this Section 6(D), the fair market
value of Common Stock shall be determined as provided in Section 6(H).

(E) No stock option or stock appreciation rights shall be
transferable by an optionee other than by will, or if an optionee dies
intestate, by the laws of descent and distribution of the state of
domicile of the optionee at the time of death, and all stock options
and stock appreciation rights shall be exercisable during the lifetime
of an optionee only by the optionee.

(F) Unless otherwise determined by the Board and set forth in
the stock option agreement referred to in Section 6(G) or an amendment
thereto:

(i) Following the death of an optionee during his or
her tenure as a director of the Corporation, any outstanding
stock option held by the optionee at the time of death shall
be exercisable in full (whether or not so exercisable on the
date of the death of the optionee) by such optionee's estate
or by the person or persons entitled to do so under the will
of the optionee, or, if the optionee shall fail to make
testamentary disposition of the stock option or shall die
intestate, by the legal representative of the optionee, at any
time prior to the expiration date of such stock option or
within one (1) year after the date of death, whichever is the
shorter period. Following the death of an optionee after his
or her resignation or retirement from the Corporation's Board
of Directors, but during a period when a stock option is
exercisable in full (whether or not so exercisable on the date
of the death of the optionee) as provided in clause (i) above,
any outstanding stock option held by the optionee at the time
of death shall be exercisable by such optionee's estate or by
such person or persons entitled to do so under the Will of the
optionee or by such legal representative to the

<PAGE> 4

extent the stock option was exercisable by the optionee at the
time of death at any time prior to the expiration date of such
stock option.

(ii) In the event a director resigns from the Board
or is terminated from the Board as a result of intentional,
willful, reckless or grossly negligent conduct of the director
entailing a substantial violation of any material provisions
of federal or state laws, rules, regulations, or orders or
directives of any governmental agency applicable to the
Corporation or its affiliates, or Corporation policy or
agreement with the Corporation, the rights of such optionee
under any then outstanding stock option shall terminate at the
time of the director's resignation or termination. In
addition, if an optionee engages in the operation or
management of a business, whether as owner, partner, officer,
director, consultant, advisor or agent (whether paid or
unpaid) or otherwise and whether during or after the
director's resignation from the Corporation's Board, which is
in competition with the Corporation or any of its
Subsidiaries, the Board may in its discretion immediately
terminate all stock options held by the optionee. Whether an
optionee has engaged in the operation or management of a
business which is in competition with the Corporation or any
of its Subsidiaries shall be determined in each case by a
majority vote of the Board and any such determination by the
Board shall be final and binding.

(G) All stock options and stock appreciation rights shall be
confirmed by a stock option agreement, or an amendment thereto, which
shall be executed by the Chief Executive Officer or the President (if
other than the Chief Executive Officer) or any Executive Vice President
or Vice President on behalf of the Corporation and by the director to
whom such stock options and stock appreciation rights are granted.

(H) Fair market value of the Common Stock,

(i) so long as the Common Stock trades on the Nasdaq
National Market, the "fair market value" of such stock shall
be the average of the closing bid and ask price quoted on the
Nasdaq National Market on the trade date immediately preceding
the date as of which "fair market value" is to be determined
or other reasonable method or formula as may be determined by
the Board in its discretion; or

(ii) in the event the Common Stock ceases to be
traded on the Nasdaq National Market and is traded on another
exchange, the "fair market value" of such stock shall be as
set forth in such reliable publication as the Board, in its
discretion, may choose to rely upon, by taking the average of
the highest and lowest price per share transaction of the
Common Stock as quoted on such exchange on the nearest date
before the date as of which fair market value is to be
determined or by such other reasonable method or formula as
may be determined by the Board in its discretion.

(I) The obligation of the Corporation to issue or deliver
shares of Common Stock under the Plan shall be subject to (i) the
effectiveness of a registration statement under the Securities Act of
1933, as amended, with respect to such shares, if deemed necessary or
appropriate by counsel for the Corporation, and (ii) all other
applicable laws, regulations, rules and orders which may then be in
effect.

Subject to the foregoing provisions of this Section 6
and the other provisions of the Plan, any stock option or stock
appreciation rights granted under the Plan shall be subject to such
other terms and conditions as the Board shall deem advisable.

SECTION 7

Reload Options

(A) Authorization of Reload Options. Concurrently with the
award of any stock option under this Plan (such option is hereinafter
referred to as the "Underlying Option"), to any participant in the
Plan, the Board may grant a reload option (the "Reload Option") to such
participant pursuant to which the participant shall be entitled to
purchase, as provided in Section 6(B), a number of shares of Common
Stock as specified below. A Reload Option shall be exercisable for a
number of shares of Common Stock equal to (a) the number of shares
delivered by the participant to the Corporation to exercise the
Underlying Option pursuant to Section 5(b)(ii) or (iii) and (b) to the
extent authorized by the Board, the number of shares used

<PAGE> 5

to satisfy any tax withholding requirement incident to the exercise of
the Underlying Option, subject to the availability of shares of Common
Stock under the Plan at the time of such exercise. The grant of a
Reload Option shall become effective upon the exercise of the
Underlying Option by delivering to the Corporation shares held by the
participant pursuant to Section 5(b)(ii) or (iii). Reload Options are
not intended to qualify as "incentive stock options" under Section 422
of the Code.

(B) Reload Option Amendment. Each stock option agreement in
connection with an option granted under the Plan shall state whether
the Board has authorized Reload Options with respect to the Underlying
Option covered by such agreement. Upon the exercise of an Underlying
Option, the Reload Option will be evidenced by an amendment to the
stock option agreement governing the Underlying Option.

(i) The option price per share for a Reload Option
shall be the fair market value per share of the Common Stock
on the date the grant of the Reload Option becomes effective.

(ii) Each Reload Option shall be fully exercisable
subject to such limitations on exercisability, if any, as may
be imposed by the Board in its discretion at the time of the
grant of the Underlying Option. The term of each Reload Option
shall be equal to the remaining option term of the Underlying
Option.

(iii) No Reload Option granted to a participant shall
become effective when options are exercised by such
participant (or by such participant's estate or personal
representative) pursuant to the terms of the Plan following
termination of the participant's tenure as a director of the
Corporation.

(iv) Except as otherwise provided in this Section 7,
the provisions of Section 6 of the Plan applicable to stock
options shall apply equally to Reload Options.

SECTION 8

Adjustment and Substitution of Shares

If a dividend or other distribution shall be declared upon the
Common Stock payable in shares of Common Stock, the number of shares of Common
Stock then subject to any outstanding stock option and the number of shares
which may be issued or delivered under the Plan but are not then subject to an
outstanding stock option shall be adjusted by adding thereto the number of
shares which would have been distributable thereon if such shares had been
outstanding on the date fixed for determining the stockholders entitled to
receive such stock dividend or distribution.

If the outstanding shares of Common Stock shall be changed
into or exchangeable for a different number or kind of shares of stock or other
securities of the Corporation or another corporation, whether through
reorganization, reclassification, recapitalization, stock split-up, combination
of shares, merger or consolidation, then there shall be substituted for each
share of Common Stock subject to any then outstanding stock option and for each
share of Common Stock which may be issued or delivered under the Plan but is not
then subject to an outstanding stock option, the number and kind of shares of
stock or other securities into which each outstanding share of Common Stock
shall be so changed or for which each such share shall be exchangeable.

In the case of any adjustment or substitution as provided for
in this Section 8, the aggregate option price for all shares subject to each
then outstanding stock option prior to such adjustment or substitution shall be
the aggregate option price for all shares of stock or other securities
(including any fraction) to which such shares shall have been adjusted or which
shall have been substituted for such shares. Any new option price per share
shall be carried to at least three decimal places with the last decimal place,
rounded.

All fractional shares or other securities which result from
any such adjustment or substitution shall be carried to at least three decimal
places with the last decimal place, rounded. However, upon exercise of stock
options, no adjustment or substitution provided for in this Section 8 shall
require the Corporation to issue or sell a fraction of a share or other
security.

<PAGE> 6

SECTION 9

Restrictions on Transfer of Certain Shares

Shares of Common Stock acquired by a director of the
Corporation under exercise of an option pursuant to Section 6(B) shall not be
sold or otherwise transferred (including any sale or transfer pursuant to
Section 6(B)(iii)) prior to (i) the expiration of six months after the date of
the grant of the option to the optionee; or (ii) any lesser period of time
permitted by the Securities and Exchange Commission pursuant to Section 16b of
the Securities Exchange Act of 1934, whichever may first occur. The Corporation
is authorized to (i) retain the certificate(s) representing such shares or place
such certificates in the custody of its transfer agent, (ii) place a restrictive
legend on such shares, and/or (iii) issue a stop transfer order to the transfer
agent with respect to such shares in order to enforce the transfer restrictions
of this Section 9.

SECTION 10

Limited Stock Appreciation Rights

Limited stock appreciation rights may be granted in connection
with all or part of a non-statutory option, at the time such option is granted
or at any time thereafter during the term of the such option.

Limited stock appreciation rights shall entitle the holder of
an option in connection with which such limited stock appreciation rights are
granted, upon exercise of the limited stock appreciation rights, to surrender
the stock option, or any applicable portion thereof, and any related stock
appreciation rights, to the extent unexercised, and to receive an amount of cash
determined pursuant to this Section 10. Such option, and any related stock
appreciation rights, shall, to the extent so surrendered, thereupon cease to be
exercisable.

Limited stock appreciation rights shall be subject to the
following terms and conditions and to such other terms and conditions not
inconsistent with the Plan as shall from time to time be approved by the Board.

(A) Limited stock appreciation rights shall be exercisable,
subject to Section 10(B), during any one or more of the following
periods:

(i) for a period of 60 days beginning on the date on
which shares of Common Stock are first purchased pursuant to a
tender offer or exchange offer (other than such an offer by
the Corporation), whether or not such offer is approved or
opposed by the Corporation and regardless of the number of
shares of Common Stock purchased pursuant to such offer;

(ii) for a period of 60 days beginning on the date
the Corporation acquires knowledge that any person or group
deemed a person under Section 13(d)(3) of the Exchange Act
(other than any director of the Corporation on November 1,
1989, any Affiliate or Associate of any such director (with
such terms having the respective meanings set forth in Rule
12b-2 under the Exchange Act as in effect on November 1,
1989), any member of the family of any such director, any
trust (including the trustees thereof) established by or for
the benefit of any such persons, or any charitable foundation,
whether a trust or a corporation (including the trustees and
directors thereof) established by or for the benefit of any
such persons), in a transaction or series of transactions
shall become the beneficial owner, directly or indirectly
(with beneficial ownership determined as provided in Rule
13d-3, or any successor rule, under the Exchange Act), of
securities of the Corporation entitling the person or group to
10% or more of all votes (without consideration of the rights
of any class of stock to elect directors by a separate class
vote) to which all shareholders of the Corporation would be
entitled if the election of Directors were an election held on
such date;

(iii) for a period of 60 days beginning on the date
of filing under the Exchange Act of a Statement on Schedule
13D, or any amendment thereto, by any person or group deemed a
person under Section 13(d)(3) of the Exchange Act, disclosing
an intention or possible intention to acquire or change
control of the Corporation;

<PAGE> 7

(iv) for a period of 60 days beginning on the date of
the Corporation's Annual Meeting of Shareholders, during any
period of two consecutive years, when individuals who at the
beginning of such period constitute the Board of Directors of
the Corporation cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for
election by the shareholders of the Corporation, of each new
Director was approved by a vote of at least two-thirds of the
Directors then still in office who were Directors at the
beginning of such period; and

(v) for a period of 60 days beginning on the date of
approval by the shareholders of the Corporation of an
agreement (a "reorganization agreement") providing for (a) the
merger or consolidation of the Corporation with another
corporation where the shareholders of the Corporation,
immediately prior to the merger or consolidation, do not or
will not beneficially own, immediately after the merger or
consolidation, shares of the corporation issuing cash or
securities in the merger or consolidation entitling such
shareholders to 50% or more of all votes (without
consideration of the rights of any class of stock to elect
directors by a separate class vote) to which all shareholders
of such corporation would be entitled in the election of
Directors or where the members of the Board of Directors of
the Corporation, immediately prior to the merger or
consolidation, do not or will not, immediately after the
merger or consolidation, constitute a majority of the Board of
Directors of the corporation issuing cash or securities in the
merger or consolidation or (b) the sale or other disposition
of all or substantially all the assets of the Corporation.

(B) Subject to Section 11 hereof, limited stock appreciation
rights shall in no event be exercisable unless and until the holder of
the limited stock appreciation rights shall have completed at least six
months of continuous service with the Corporation or a Subsidiary, or
both, immediately following the date upon which the limited stock
appreciation rights shall have been granted.

(C) Upon exercise of limited stock appreciation rights, the
holder thereof shall be entitled to receive an amount of cash in
respect of each share of Common Stock subject to the related option
equal to the excess of the fair market value of such share over the
option price of such related option, and for this purpose fair market
value shall mean the highest sale price of the Common Stock as reported
on the Nasdaq National Market System or other national stock exchange
on which the Corporation's Common Stock is listed or the highest stock
price for Corporation Common Stock as set forth in such reliable
publication as the Board, in its discretion, may choose to rely upon
during the period beginning on the 90th day prior to the date on which
the limited stock appreciation rights are exercised and ending on such
date, except that (a) in the event of a tender offer or exchange offer
for Common Stock, fair market value shall mean the greater of the
highest sale price or highest price paid for Common Stock pursuant to
any tender offer or exchange offer in effect at any time beginning on
the 90th day prior to the date on which the limited stock appreciation
rights are exercised and ending on such date, (b) in the event of the
acquisition by any person or group of beneficial ownership of
securities of the Corporation entitling the person or group to 10% or
more of all votes to which all shareholders of the Corporation would be
entitled in the election of Directors or in the event of the filing of
a Statement on Schedule 13D, or any amendment thereto, disclosing an
intention or possible intention by any person or group to acquire
control of the Corporation, fair market value shall mean the greater of
such highest sale price or the highest price paid per share paid for
Common Stock shown on the Statement on Schedule 13D, or any amendment
thereto, filed by the person or group becoming a 10% beneficial owner
or disclosing an intention or possible intention to acquire control of
the Corporation and (c) in the event of approval by shareholders of the
Corporation of a reorganization agreement, fair market value shall mean
the greater of the highest sale price, highest price paid or the fixed
or formula price specified in the reorganization agreement if such
price is determinable as of the date of exercise of the limited stock
appreciation rights. Any securities or property which are part or all
of the consideration paid for Common Stock in a tender offer or
exchange offer or under an approved reorganization agreement shall be
valued at the higher of (a) the valuation placed on such securities or
property by the person making the tender offer or exchange offer or by
the corporation other than the Corporation issuing securities or
property in the merger or consolidation or to whom the Corporation is
selling or otherwise disposing of all or substantially all the assets
of the Corporation and (b) the valuation placed on such securities or
property by the Board.

(D) To the extent that limited stock appreciation rights shall
be exercised, the option in connection with which such limited stock
appreciation rights shall have been granted shall be deemed to have
been exercised and any related stock appreciation rights shall be
canceled. To the extent that the option

<PAGE> 8

in connection with which limited stock appreciation rights shall have
been granted or any related stock appreciation rights shall be
exercised, the limited stock appreciation rights granted in connection
with such option shall be canceled.

SECTION 11

Acceleration of the Exercise Date of Stock Options
and Related Stock Appreciation Rights

Notwithstanding any other provision of this Plan, all stock
options and stock appreciation rights shall become exercisable upon the
occurrence of any of the events specified in Section 10(A) whether or not such
options are then exercisable under the provisions of the applicable agreements
relating thereto, except that if stock appreciation rights have been granted
along with limited stock appreciation rights to the same option holder with
respect to the same option, in no event may the stock appreciation rights be
exercised for cash during any of the 60- day periods provided for in Section 10.

SECTION 12

Effect of the Plan on Pooling Accounting Requirements

It is intended that the Plan be administered and that shares of Common
Stock acquired upon exercise of stock options under the Plan comply with the
requirements of generally accepted accounting principles (including
pronouncements by the Financial Accounting Standards Board) relating to
accounting for certain mergers and business combinations to which the
Corporation or one or more of its subsidiaries may be parties on a pooling of
interests basis. Each stock option agreement relating to the grant of stock
options under the Plan may contain terms and provisions designed to ensure such
compliance.

SECTION 13

Effect of the Plan on the Rights of Directors and Corporation

Neither the adoption of the Plan nor any action of the Board
pursuant to the Plan shall be deemed to give any director any right to be
granted a stock option (with or without stock appreciation rights) under the
Plan and nothing in the Plan, in any stock option or stock appreciation rights
granted under the Plan or in any stock option agreement shall confer any right
to any director to continue as a director of the Corporation or interfere in any
way with the rights of the Corporation to remove the director from the Company's
Board of Directors in accordance with the Corporation's Articles of
Incorporation and Bylaws at any time.

- -------------------------------------------------------------------------------

F.N.B. Corporation o One F.N.B. Boulevard o

Hermitage, Pennsylvania 16148-3363 o (724) 981-6000

<PAGE> 1
EXHIBIT 13

[COVER]

[LOGO] F.N.B.
CORPORATION
...........................................................
1998 ANNUAL REPORT

o F.N.B. CORPORATION IS A GROWTH COMPANY.

o RECURRING EARNINGS INCREASED 11 PERCENT TO 35.5 MILLION

o TOTAL ASSETS GREW TO $3.3 BILLION.

<PAGE> 2

F.N.B. CORPORATION AND SUBSIDIARIES

HIGHLIGHTS OF 1998
Dollars in thousands, except per share data

<TABLE>
<CAPTION>
1998 1997 Change
---- ---- ------

<S> <C> <C> <C>
FOR THE YEAR*
Recurring Net Income $35,500 $31,956 +11%
Return on Average Assets 1.15% 1.16% -1%
Return on Average Equity 13.32% 13.43% -1%

Net Income $31,872 $36,200 -12%
Return on Average Assets 1.03% 1.32% -22%
Return on Average Equity 11.96% 15.21% -21%

PER COMMON SHARE*
Recurring Earnings
Basic $1.96 $1.81 +8%
Diluted 1.87 1.72 +9%

Earnings
Basic $1.75 $2.05 -15%
Diluted 1.68 1.95 -14%

Book Value $14.82 $14.14 +5%

AT YEAR END
Assets $3,250,695 $2,967,482 +10%
Net Loans 2,298,834 2,064,998 +11%
Deposits 2,708,572 2,467,057 +10%
</TABLE>

TOTAL ASSETS
(Dollars in billions)

[GRAPH]

1994 1995 1996 1997 1998
---- ---- ---- ---- ----
2.3 2.5 2.7 3.0 3.3

RECURRING NET INCOME
(Dollars in billions)

[GRAPH]

1994 1995 1996 1997 1998
---- ---- ---- ---- ----
17.9 24.3 26.0 32.0 35.5

* RECURRING NET INCOME EXCLUDES MERGER RELATED AND OTHER NON-RECURRING COSTS OF
$3.6 MILLION IN 1998 AND EXTRAORDINARY GAINS ON THE SALE OF A SUBSIDIARY AND
BRANCHES OF $8.8 MILLION AND MERGER RELATED AND OTHER NON-RECURRING COSTS OF
$4.6 MILLION IN 1997, ALL ON AN AFTER-TAX BASIS.

CONTENTS
1 CONSOLIDATED FINANCIAL HIGHLIGHTS
2 CHAIRMAN'S LETTER
4 BANKING AFFILIATE PROFILES
5 MARKET AREAS
6 ALL LEADERSHIP IS LOCAL
12 GROWTH STRATEGY NETS RESULTS
17 OFFICERS AND DIRECTORS
20 SHAREHOLDER INFORMATION

F.N.B. CORPORATION 1
<PAGE> 3

F.N.B. CORPORATION AND AFFILIATES

To Our Shareholders and Friends

It's always a pleasure to share good news and this is one of those occasions.
For several reasons, 1998 was an outstanding year for your company. The
Corporation's recurring earnings and dividend distributions reached record
highs. Strategic initiatives added strength and depth to the growing southwest
Florida franchise. In Pennsylvania and Ohio, the banking affiliates improved
their marketing presence in a number of key areas.

How good a year was it? First, a look at the recurring numbers.

* $35.5 MILLION NET INCOME
* 9% EARNINGS PER SHARE INCREASE
* 13.3% RETURN ON EQUITY
* $3.3 BILLION TOTAL ASSETS
* 1.2% RETURN ON ASSETS
* 117 OFFICES IN FOUR STATES

But numbers don't tell the whole story. Much of the company's 1998 success can
be attributed to good, old-fashioned leadership originating from within F.N.B.
Corporation. Not just through everyday banking of making loans and taking
deposits, but by going that extra mile to serve the needs of the customers, the
people and the businesses that populate the communities that the nine affiliate
banks call home.

As this year's Annual Report reveals, at F.N.B. Corporation leadership is
evident each and every day both inside and outside the banks. Here are some of
the significant business accomplishments of 1998.

First National Bank of Florida, with headquarters in Clearwater, now has 12
offices and $325 million in assets. It is the combination of three successful
community banks--Citizens Bank & Trust Company, Indian Rocks Bank and Seminole
Bank.

[PHOTO]

PETER MORTENSEN
Chairman & Chief Executive Officer

In February 1999, Guaranty Bank & Trust Company, headquartered in Venice,
merged with the company's Sarasota affiliate to form West Coast Guaranty Bank,
which now has seven offices and more than $273 million in assets. This Bank
enhances F.N.B.'s franchise in Florida, already well established in Naples,
Cape Coral and Fort Myers.

In Pennsylvania, First National Bank of Pennsylvania acquired three New Castle
area offices with $48.7 million in deposits from Mellon Bank. In Ohio, First
County Bank opened a new office in the growing Cleveland suburb of Mentor.

Looking ahead, F.N.B. realized that if it is to continue to grow and maintain
its traditional high level of performance, then it must develop additional
sources of non-interest, or fee based, income. During 1998 it took several
strategic steps in that direction. Private Banking, a specialized service
targeting high income, high net worth customers, was introduced at a number of
affiliate banks. Another source of fee generated revenue is alternative
investments. Both in Florida and Pennsylvania, F.N.B. banks are now offering
customers mutual funds, annuities and discount brokerage as part of a larger
menu of financial services.

F.N.B. CORPORATION 2

<PAGE> 4

The Corporation also was busy in the fields of trust and insurance. First
National Trust Company was formed to serve the fiduciary needs of its
banking customers. By year's end, F.N.B. had more than $670 million of
trust assets under management. F.N.B. Insurance Agency, Inc. was created to
sell real estate title insurance and may eventually broaden its line of
services. The year was truly a productive one, positioning the company to
compete in the rapidly changing financial services arena.

This year's Annual Report and editorial content is intended to be reader
friendly. The first article features specific examples of leadership both
inside the lobby and outside the office involving personal bankers from
each of the affiliates. The second essay profiles members of the company's
Administrative Committee, offering insight into how each contributes to the
strategic and operational decision making process at F.N.B. Corporation.
Those who take the time to read both articles will gain a behind the scenes
glimpse of those who contribute significantly to the success of the
Corporation.

In closing, other Board members join me in recognizing the contributions of
Thomas C. Elliott and John R. Perkins, both of whom retired as Directors
during 1998. Their many years of service are greatly appreciated. The Board
also welcomes Alan C. Bomstein of Clearwater, Florida as a new Director of
F.N.B. Corporation. A successful businessman and honored civic leader, Alan
will be a valuable asset to the Board.

All of us at F.N.B. look forward to adding value to our investment as
shareholders today, tomorrow and well into the next century. We thank you
for your held, encouragement and support.

Sincerely,

/s/ PETER MORTENSEN
--------------------------
PETER MORTENSEN
Chairman & Chief Executive Officer
March 5, 1999

F.N.B. CORPORATION 3

<PAGE> 5

BANKING AFFILIATE PROFILES

FIRST NATIONAL BANK OF PENNSYLVANIA
* Total assets of $1.2 billion
* Total deposits of $1.1 billion
* 36 offices in seven counties

FIRST NATIONAL BANK OF NAPLES
* Total assets of $665 million
* Total deposits of $519 million
* Seven offices in Collier County (Fla.)

FIRST NATIONAL BANK OF FLORIDA
* Total assets of $325 million
* Total deposits of $280 million
* 12 offices in Pinellas County

CAPE CORAL NATIONAL BANK
* Total assets of $301 million
* Total deposits of $272 million
* Five offices in Lee County (Fla.)

WEST COAST GUARANTY BANK
* Total assets of $273
* Total deposits of $236
* Seven offices in Sarasota County (Fla.)

METROPOLITAN NATIONAL BANK
* Total assets of $247 million
* Total deposits of $216 million
* Eight offices in eastern Ohio

REEVES BANK
* Total assets of $144 million
* Total deposits of $131 million
* Eight offices in western Pennsylvania

FIRST NATIONAL BANK OF FORT MYERS
* Total assets of $83 million
* Total deposits of $75 million
* Two offices in Lee County (Fla.)

FIRST COUNTY BANK
* Total assets of $62 million
* Total deposits of $58 million
* Three offices in northeastern Ohio

F.N.B. CORPORATION 4

<PAGE> 6

F.N.B. CORPORATION AND AFFILIATES

MARKET AREAS

[MAPS]

[SYMBOL]

THE CORPORATION'S MISSION
F.N.B. Corporation is a growth company. We are an affiliation of successful
community banks that seeks to provide high quality banking services to
individual and business customers in a manner that is consistent with our
philosophy of personal banking and our commitment to maximizing shareholder
value. To achieve this commitment we will attract and retain a professional
staff that is dedicated to exceptional customer satisfaction and superior
financial performance.

YEAR 2000 READINESS DISCLOSURE
F.N.B. Corporation and its banking affiliates have taken the steps necessary to
comply fully with stringent Y2K guidelines mandated by the Federal Financial
Institutions Examination Council (FFIEC). In July 1996, F.N.B. established a
corporate-wide Y2K Compliance Committee. The purpose of the Committee is to
assure that all F.N.B. and bank data processing systems, software, hardware and
associated equipment have been evaluated, tested and replaced as necessary. The
Corporation's goal is to have all services in full compliance before June 30,
1999, thereby insuring uninterrupted service to customers in the Year 2000 and
beyond.

F.N.B. CORPORATION 5

<PAGE> 7

ALL LEADERSHIP IS LOCAL
It Begins the Minute a Customer Walks in the Door

"SUCCESS IS ABOUT LEADERSHIP. SUCCESSFUL INDIVIDUALS ARE LEADERS, PEOPLE WITH
IDEAS AND VALUES, AND THE ENERGY AND GUTS TO DO WHAT NEEDS TO BE DONE.
ORGANIZATIONS ARE SUCCESSFUL BECAUSE THEY HAVE GOOD LEADERS NOT JUST AT THE
TOP, BUT AT ALL LEVELS."

NOEL M. TICHY, AUTHOR OF THE LEADERSHIP ENGINE.

A wise man once said "Don't ask me to define it but I know leadership when I
see it." Leadership is easy to find at F.N.B. Spend a day inside the
Corporation or at any of its affiliates and you will know leadership because
you will have witnessed it in the bank lobby, in the conference room, on the
teller line, on the computer screen and even in the employee lunchroom.

[LOGO]

At F.N.B. leadership starts with the Golden Rule: Treat every customer, every
coworker, every phone caller and everyone else you may come in contact with the
same way you want to be treated. It's part of the culture. If someone has a
suggestion that will positively influence a person's relationship with the
bank, then they champion that idea. If an employee feels they can improve the
bank's performance, they are empowered to make the necessary changes.
Employees are encouraged to take the initiative and are rewarded with
performance compensation when their efforts succeed.

IN MENTOR; OHIO, FOR EXAMPLE, LEADERSHIP BEGINS THE MINUTE A CUSTOMER WALKS IN
THE DOOR. WHEN FIRST COUNTY BANK OPENED ITS NEW OFFICE IN THIS PROSPEROUS
CLEVELAND SUBURB IN THE FALL OF 1998, THE BANK KNEW THAT IN ORDER TO PROVIDE
QUALITY SERVICE TO ITS NEW CUSTOMERS IT WOULD NEED TO DEPLOY A FIRST-RATE,
FRONT-LINE PARTNERSHIP OF PERSONAL BANKERS. AND IT DID.

The Bank's recipe for success: Name Tim McCreary as Branch Manager to
concentrate on deposits and Vice President and Senior Lender Bob Boyd to focus
on loans. With a combined 60 years of financial services experience, seasoned
veterans Tim and Bob know how to develop business by becoming active in the
community, knocking on doors and making phones ring. During the year, Bob
booked $5 million in commercial loans while Tim was responsible for attracting
more than $1.2 million in deposits. Working together, Tim and Bob are leading
the way in serving the Bank's new customers in Mentor.

[PHOTO}

TIM McCREARY (LEFT) AND BOB BOYD DISCUSS STRATEGY FOR BUILDING A CUSTOMER BASE
FOR THEIR NEW FIRST COUNTY BANK OFFICE IN MENTOR, OHIO.

F.N.B. CORPORATION 6

<PAGE> 8
[PHOTO]

DEE BARTH IS IN THE SWING OF THINGS ENJOYING PLAYGROUND EQUIPMENT, MADE
POSSIBLE BY A LOAN FROM WEST COAST GUARANTY BANK AT BAY HAVEN SCHOOL IN
SARASOTA.

AT WEST COAST GUARANTY BANK IN SARASOTA, FLORIDA, DEE BARTH IS MORE THAN JUST A
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER: SHE'S ALSO A PLAYGROUND
SAVIOR.

When nearby Bay Haven School of Basics Plus was mandated to upgrade its
playground equipment, there was no money in the budget. It was beginning to
look like the end of fun and games during recess. Dee, an active member of the
school's PTO Leadership Committee, went to bat for the kids and secured a loan
from the Bank. Now, every time Dee goes past the school yard she gets a warm
feeling inside. And, if no one's looking, she might even enjoy a swing ride.

WHILE MANY DEDICATED F.N.B. BANKERS TAKE THEIR WORK HOME WITH THEM, PETE
ASIMAKOPOULOS TAKES HIS TO CHURCH.

In his role as Vice President and Commercial Banking Manager at Metropolitan
National Bank in Youngstown, Ohio, Pete often spends "personal time" helping
his best customers. St. John Greek Orthodox Church, where he serves on the
Executive Committee and as Treasurer, just happens to be one of them. "The
church is fortunate to have someone with Pete's financial capabilities," says
Father Andrew Kolitsos, the church's pastor. "He's a gift. Whenever we need
him, he's always there for us. The church is truly grateful for his leadership
both here and in the community."

[PHOTO]
PETE ASIMAKOPOULOS BOTH WORKS AND PRAYS AT ST. JOHN GREEK ORTHODOX CHURCH,
WHICH IS A CUSTOMER OF METROPOLITAN NATIONAL BANK.

F.N.B. CORPORATION 7

<PAGE> 9
EVERY TIME A FIRST NATIONAL BANK OF NAPLES EMPLOYEE "DRESSES DOWN" BY WEARING
CASUAL CLOTHES TO WORK ON FRIDAY, THE FLORIDA SUN SHINES ON FOLKS OUTSIDE THE
BANK.

Here's how Project Donation works: A team made up of employees and managers,
including Linda Schnell, Barb Delario and Darby Moore, got together and came up
with a plan. If an employee chooses to wear appropriate business casual attire,
it will cost them a dollar each time they do. The Bank matches all employee
donations. At the end of the year, Project Donation had raised more than $9,800.

This is where the sunshine comes in. Team members identified specific families
or individuals in the community with special hardships. A recently widowed
mother of five received a sizeable gift certificate for groceries. Team
members bought, decorated and personally placed Christmas trees and presents in
several homes. This kind of leadership brings tears to the eyes of Project
Donation participants who have truly experienced the joy of giving.

AFTER PARTICIPATING IN LEADERSHIP CAPE CORAL 1998, SPONSORED BY THE CHAMBER OF
COMMERCE, CHRIS SCHRODER WASTED LITTLE TIME IN PUTTING WHAT HE LEARNED TO WORK.
IN DECEMBER THE ORGANIZATION NAMED HIM VOLUNTEER OF THE YEAR.

Chris, Vice President of Marketing at Cape Coral National Bank, has a
remarkable record of service to his community. He came to the Bank in 1997,
having retired after 22 years with the Fire Department, a Division Chief his
last four years. When not too busy putting out fires, he found time to own and
operate a photography studio. In his hours away from the Bank, Chris serves in
numerous voluntary and charitable capacities with the Chamber, the Rotary Club
and the Children's Science Center. Ask the folks in Cape Coral, both at the
Bank and in the community. They will tell you Chris Schroder's brand of
leadership has made him the "go to" guy.

[PHOTO]

DARBY MOORE, LINDA SCHNELL AND BARB DELARIO (LEFT TO RIGHT) ARE DRESSED UP AS
WELL AS DOWN TO DELIVER A GIFT ON BEHALF OF PROJECT DONATION AT FIRST NATIONAL
BANK OF NAPLES.

F.N.B. CORPORATION 8

<PAGE> 10

[PHOTO]
CHRIS SCHRODER SPENDS AS MUCH TIME OUTSIDE THE OFFICE WORKING ON BEHALF OF HIS
COMMUNITY AS HE DOES AT CAPE CORAL NATIONAL BANK.

OFTEN LEADERSHIP EMERGES FROM A PARTNERSHIP, ESPECIALLY ONE WHERE BOTH PARTIES
BENEFIT. SUCH IS THE CASE OF DELFIN GILBERT, FOUNDER AND PRESIDENT OF EXAL
CORPORATION AND RAY SLOVESKO, VICE PRESIDENT OF COMMERCIAL LENDING AT FIRST
NATIONAL BANK OF PENNSYLVANIA.

EXAL, which stands for "excellence in aluminum," in five short years has
become a leading manufacturer of one-piece extruded cans used to package a
variety of consumer and industrial products. When Delfin came to the United
States from Spain 14 years ago to help manage a family-owned industrial concern
in Hermitage, Pennsylvania, he became a First National customer.

In 1993, when Delfin decided to establish his own company, personal banker Ray
was right there to help. Ray structured an innovative lending arrangement lead
by the Bank and involving local, state and private sources of funds. As they
say, the rest is history. Delfin is on the list of Ray's favorite customers.
Delfin says it's a case of mutual admiration.

[PHOTO]
RAY SLOVESKO (LEFT), OF FIRST NATIONAL BANK OF PENNSYLVANIA, INSPECTS AN
ALUMINUM MOLD ON THE PRODUCTION LINE AT EXAL CORPORATION IN YOUNGSTOWN, OHIO.
WITH RAY IS DELFIN GILBERT, PRESIDENT OF EXAL.

F.N.B. CORPORATION 9

<PAGE> 11

[PHOTO]
KELLEY SCHNUR, VICKIE STAFFORD AND KELLY SIVELS (LEFT TO RIGHT) ARE SWIMMING IN
A SEA OF COMPUTERS DURING THE THREE-BANK MERGER CREATING THE FIRST NATIONAL
BANK OF FLORIDA.

IN BASEBALL, PLAYING TWO GAMES ON THE SAME DAY IS CALLED A DOUBLEHEADER. IN
BANK OPERATIONS LINGO, ATTEMPTING A THREE-BANK MERGER WHILE UNDERGOING A
SYSTEMS CONVERSION COULD BE CALLED A "DOUBLE-DREADER." JUST ASK VICKIE
STAFFORD, EXECUTIVE VICE PRESIDENT AND CASHIER AT FIRST NATIONAL BANK OF
FLORIDA.

During 1998, in a move designed to build a stronger franchise in Pinellas
County, Florida, F.N.B. made a strategic decision to merge its three area
affiliate banks into one. And, just for good measure, the data processing
systems of all three banks were converted into a brand new one at the same
time. Joining Vickie in leading the merger-conversion task force were Kelley
Schnur, Vice President of Loan Operations, and Kelly Sivels, Assistant Vice
President of Operations. The hours were long, the frustrations many. But once
all the customer concerns had been addressed and the high-tech dust had
settled, the seeds of a new and improved system for the combined Bank had been
planted by a dedicated staff. Don't ask them how they did it. They're too busy
growing the Bank.

F.N.B. CORPORATION 10

<PAGE> 12

ASK TOBY JEFFERS, VICE PRESIDENT OF REEVES BANK, WHAT HE ENJOYS MOST ABOUT
LIFE. SMILING, HE QUICKLY RESPONDS, "HELPING OTHERS."

Whether on the job or in his unofficial role as "Jack of All Trades" for the
Beaver County (Pa.) Chapter of Habitat For Humanity, Toby always leads by
example. If the Bank needs a new marketing plan, Toby writes it. If a Habitat
house needs a new front porch, Toby builds it. If Habitat needs financial
assistance, Toby finds it. If the Bank needs more customers, Toby recruits them.
Between making loans for the Bank and restoring houses for Habitat, Toby has
found time to serve as treasurer of the local Penn State University campus
advisory board, as a volunteer with the United Way and the YMCA and as a board
member of a local youth home.

AT FIRST NATIONAL BANK OF FORT MYERS, ROSA REEVES HAS ENTHUSIASM FOR HER JOB
MATCHED ONLY BY HER GENUINE DESIRE TO BE OF SERVICE TO OTHERS. A native of
Puerto Rico, she uses her language skills to translate both her church's
bulletin and the Bank's account brochures into Spanish. As the unofficial
charitable events coordinator, few are able to turn down a personal request
from Rosa to participate in a Bowlathon, a Walkathon or a baby shower for a
coworker. With Rosa on board, the Bank is on the road to success in Fort Myers.

[PHOTO]
TOBY JEFFERS IS "JACK OF ALL TRADES" AT BOTH REEVES BANK AND THE BEAVER COUNTY,
PENNSYLVANIA, CHAPTER OF HABITAT FOR HUMANITY.

IN A SPEECH BEFORE THE NAPLES ROTARY CLUB IN NOVEMBER ENTITLED "ALL LEADERSHIP
IS LOCAL," PETER MORTENSEN, CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF F.N.B.
CORPORATION, OBSERVED, "ADD IT ALL UP AND WHAT DO YOU GET? A unique brand of
personal leadership that emanates from the community banks, ultimately shaping
the culture of F.N.B. Corporation where the whole is truly greater than the sum
of its parts."

[PHOTO]
ROSA REEVES IS HELPING FIRST NATIONAL BANK OF FORT MYERS BOTH IN THE BANK AND
IN THE COMMUNITY.

F.N.B. CORPORATION 11

<PAGE> 13

GROWTH STRATEGY NETS RESULTS
FIRST TEAM FOCUSES ON GAME PLAN

[PHOTO]
THE ADMINISTRATIVE TEAM (LEFT TO RIGHT): BILL RUNDORFF, STEVE GURGOVITS, PETE
MORTENSEN, GARY TICE AND JOHN WATERS.

The Administrative Committee, consisting of the Corporation's five senior
executives, is truly the First Team at F.N.B. Collectively, they are
responsible for overseeing the management of its day-to-day operations and
mapping its future course. Additionally, each Team member has his own area of
administrative responsibility.

The First Team is a seasoned one. Together, its members represent more than 150
years of banking experience. In fact, the Chairman and Vice Chairman began
their close working relationship 38 years ago at First National Bank of
Pennsylvania, a remarkable accomplishment in today's world of corporate staff
shuffling, downsizing and mega-mergers.

Since embarking on its innovative, aggressive Florida merger strategy in late
1996, the Team has proven time and time again it has what it takes to identify,
negotiate, assimilate and successfully affiliate with and profitably manage an
expanding network of previously independent community banks.

F.N.B. CORPORATION 12

<PAGE> 14

AS IN THE GAME OF BASKETBALL, FIVE PLAYERS MAKE UP THE F.N.B. FIRST TEAM
STARTING LINEUP. HERE'S A LOOK AT THE ROSTER:

At center, PETER MORTENSEN. Chairman and Chief Executive Officer of F.N.B.,
Pete brings to the team over 40 years of commercial banking experience. A
founding Director of the holding company in 1974, Pete has built a reputation
within the industry as an uncompromising advocate of providing the highest
level of personal customer service through a profitable affiliation of
high-performing independent community banks. The combination of his grassroots
knowledge of rapidly growing, affluent southwest Florida and the economically
stable, yet profitable Pennsylvania-Ohio market drives the company's aggressive
expansion strategy. A graduate of the College of Wooster, he completed graduate
studies at the prestigious Wharton School of Finance at the University of
Pennsylvania. Pete has served as a Director of the American Bankers Association
and is a past President of the Pennsylvania Bankers Association.

SCOUTING REPORT: PETE IS THE TEAM'S TRUE PIVOT MAN. A BIG MAN IN STATURE, WHEN
PETE'S ON THE COURT THERE IS NEVER ANY DOUBT WHO'S CAPTAIN. STRENGTHS INCLUDE
HIS SHARP INTELLECT, UNCOMPROMISING DEDICATION TO PROMOTING THE INTERESTS OF
SHAREHOLDERS, CUSTOMERS AND EMPLOYEES, STRATEGIC VISION, BALL CONTROL, DRY
SENSE OF HUMOR AND PERSONAL INTEGRITY. CAN HE SLAM DUNK?

At power forward, STEPHEN J. GURGOVITS, Vice Chairman of F.N.B. and President
and Chief Executive Officer of First National Bank of Pennsylvania, the
company's original bank. He also is Chairman of Regency Finance Company and has
administrative responsibility for Reeves Bank. Steve began his distinguished
banking career in 1961, when he joined the Bank as a teller. After graduating
from Youngstown State University with a B.A. in economics, he successfully
completed key management assignments and was elected President of the Bank in
1988. A recognized leader in economic development, Steve currently serves on
and has previously chaired numerous educational, developmental and health care
institutions in western Pennsylvania.

SCOUTING REPORT: A WELL-RESPECTED, CONSUMMATE BANK CEO, STEVE CAN DO IT ALL:
LEND, BORROW, INVEST AND MARKET. STRENGTHS INCLUDE HIS ABILITY TO DELIVER
COMPLEX MESSAGES IN CLEAR, CONCISE AND UNDERSTANDABLE LANGUAGE, HIS OUTSTANDING
COMMERCIAL LENDING BACKGROUND, MENTORING SKILLS AND A GENUINE PASSION FOR
SERVING THE CUSTOMER. HE ONLY PLAYS TO WIN.

[PHOTO]
STEVE GURGOVITS, VICE CHAIRMAN

F.N.B. CORPORATION 13

<PAGE> 15

At point guard, GARY L. TICE, President and Chief Operating Officer of F.N.B.
and a founding Director and Chairman of First National Bank of Naples. Like his
teammate Steve, a graduate of Youngstown State University, Gary began his
banking career in 1973 with First National Bank of Pennsylvania, where he
worked with both Pete and Steve. In 1977 he relocated to Florida. In 1988 he
founded First National Bank of Naples, serving as its first Chairman, President
and Chief Executive Officer. The holding company for the Naples bank also
started Cape Coral National Bank and then merged into F.N.B. In 1997 Gary was
reunited with Pete and Steve when he was elected a Director and Officer of
F.N.B. Corporation. He is a member of the American Bankers Association Community
Bankers Council, a director of the Florida Bankers Association and a member of
the Bankers Roundtable. In 1998 he was named to the Collier County Junior
Achievement Business Leadership Hall of Fame.

SCOUTING REPORT: HIS ENTHUSIASM FOR PLAYING THE GAME IS CONTAGIOUS. ALWAYS IN
MOTION, HIS ENERGY LEVEL MAKES ALL AROUND HIM BETTER PLAYERS. STRENGTHS INCLUDE
HIS TENACITY, SALESMANSHIP, TECHNICAL SKILLS, ABILITY TO KEEP SEVERAL BALLS IN
THE AIR AT THE SAME TIME, OPTIMISTIC DEMEANOR; TEAM-BUILDING AND ASSERTIVENESS.
HE'S OFTEN CAUGHT TRAVELING, MOSTLY BETWEEN FLORIDA AND PENNSYLVANIA.

[PHOTO]
GARY TICE, PRESIDENT AND CHIEF OPERATING OFFICER

[PHOTO]
BILL RUNDORFF, EXECUTIVE VICE PRESIDENT

At the other forward position, WILLIAM J. RUNDORFF, Executive Vice President of
F.N.B. With management responsibilities for legal, regulatory compliance,
audit, credit review and public and governmental affairs, Bill is also
responsible for executive management of the Corporation's two Ohio banking
affiliates, Metropolitan National Bank and First County Bank. A graduate of
Grove City College and the University of Pittsburgh School of Law, he joined
the company in 1978 as Corporate Counsel. In 1983 he moved west to United Banks
of Colorado, a $7 billion multi-bank holding company headquartered in Denver
and served as Senior Vice President, Counsel and Secretary. Bill returned to
F.N.B. in 1991. He is a member of the Pennsylvania Bankers Association, the
Pennsylvania Bar Association, serves on the Lawyers Committee of the Bankers
Roundtable and is a lecturer at the American Bankers Association National
Graduate Compliance School.

SCOUTING REPORT: AN ENFORCER; WHEN NECESSARY HE CAN LAY DOWN THE LAW. A
DEFENSIVE SPECIALIST. EXTREMELY PROTECTIVE OF THE COMPANY'S RISK ASSESSMENT AND
PUBLIC REPUTATION. STRENGTHS INCLUDE COMMUNICATION SKILLS, MANAGEMENT
RECRUITING, TEACHING, NETWORKING, SOUL-SEARCHING, RESOURCEFULNESS AND A KEEN
SENSE OF HISTORY. TOP REBOUNDER.

F.N.B. CORPORATION 14

<PAGE> 16
Rounding out the squad, at shooting guard is the team's newest member, JOHN D.
WATERS. Vice President and Chief Financial Officer of F.N.B., John joined the
company in 1994. In addition to managing the Corporation's financial affairs, he
serves as the company's advance man for mergers and acquisitions. A graduate of
the University of Dayton, John is a veteran player with decades of previous
financial management experience in senior management positions with regional
banks and thrifts.

SCOUTING REPORT: A RARE COMBINATION OF NUMBERS CRUNCHER AND ENTERTAINING
DIPLOMAT. A REAL DEAL CLOSER. NEGOTIATED MORE AGREEMENTS IN LAST TWO YEARS THAN
AN N.B.A. GENERAL MANAGER. STRENGTHS INCLUDE A DISARMING MANNER, INTERPERSONAL
SKILLS, ABILITY TO QUICKLY DIGEST AND DISCERN COMPLEX FINANCIAL DATA, INDUSTRY
CONTACTS -- AND HE ALWAYS DOES HIS HOMEWORK.

[PHOTO]
JOHN WATERS, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

To help execute its ambitious growth plan, over the past three years the Team
has effectively strengthened its bench by recruiting highly skilled banking
professionals in the areas of finance, commercial lending, personnel,
operations, public affairs, legal, regulatory compliance and marketing.

No matter how skillful or talented individual members of this Team may be, its
ultimate success is determined by how well team members work together on the
court after the whistle. It's called teamwork.

This Annual Report is the First Team's score card. Working together these five
players continuously strive to create the right game plan to increase earnings
per share and enhance shareholder value, build capital, grow assets, attract
deposits, make loans and manage investments. Based on the strength of the
starting lineup, the outlook for 1999 and future seasons is excellent.

F.N.B. CORPORATION 15

<PAGE> 17

OTHER SUBSIDIARIES

In addition to its nine banking affiliates, F.N.B. is parent to three other
significant subsidiary companies, all of which are important to the future
success of the Corporation.

REGENCY FINANCE COMPANY, which traces its roots in the consumer
finance business to 1927, today operates 34 offices in Ohio,
Pennsylvania and New York. With assets of $88 million, it serves
more than 24,000 customers. The Company's success in part is due to
the small-town environment in which most offices are located.
Employees are hometown people with long-standing community
relationships. Regency provides loan products to meet virtually
every consumer's needs. Traditional small loans comprise 54 percent
of the portfolio, real estate lending accounts for 30 percent,
followed by sales finance receivables with 16 percent of total
outstandings. Regency prides itself as being the top performer in
return on assets and return on equity to its parent company.

CUSTOMER SERVICE CENTER is the name of F.N.B.'s operations
subsidiary. At one time or another, every affiliate bank customer's
account is updated and maintained by one of two service facilities,
located in Naples, Florida and Hermitage, Pennsylvania. In addition
to account reconcilement, the Center's 210 employees are responsible
for the Corporation's data processing, internal and external
mailings and computer programming. The Customer Service Center
prides itself on delivering the same level of superior service to
its customers, the affiliate banks, as the banks provide to their
customers.

FIRST NATIONAL TRUST COMPANY is the newest F.N.B. subsidiary. The
Company's mission is to satisfy the fiduciary needs of its clients
within the communities served by F.N.B. Corporation and its banking
affiliates. It provides personalized financial services utilizing a
staff of dedicated professionals. Services offered include
investment management, safekeeping of assets, record keeping,
employee benefits plan management, bill paying and reporting.

F.N.B. CORPORATION 16

<PAGE> 18

F.N.B. CORPORATION AND AFFILIATES

F.N.B. CORPORATION

OFFICERS

PETER MORTENSEN
Chairman & Chief Executive Officer

STEPHEN J. GURGOVITS
Vice Chairman

GARY L. TICE
President & Chief Operating Officer

WILLIAM J. RUNDORFF
Executive Vice President

JOHN D. WATERS
Vice President & Chief Financial Officer

DAVID B. MOGLE
Secretary & Treasurer

DIRECTORS

W. RICHARD BLACKWOOD
President,
Harry Blackwood, Inc.

ALAN C. BOMSTEIN
President & Chief Executive Officer
Creative Contractors, Inc.

WILLIAM B. CAMPBELL
Retired Business Executive

CHARLES T. CRICKS
Executive Vice President & Chief
Operating Officer,
Health Care Solutions, Inc.

HENRY M. EKKER
Attorney at Law,
Partner of Ekker, Kuster & McConnell

STEPHEN J. GURGOVITS
Vice Chairman,
F.N.B. Corporation;
President & Chief Executive Officer,
First National Bank of Pennsylvania

THOMAS W. HODGE
Retired Business Executive

JAMES S. LINDSAY
Licensed Real Estate Broker,
The Lindsay Company;
Managing Partner,
Dor-J's Partnership

PAUL P. LYNCH
Attorney at Law,
President & Chief Executive Officer,
Lynch Brothers Investments, Inc.

EDWARD J. MACE
Edward J. Mace,
Certified Public Accountant;
Chief Operating Officer,
Ribek Corporation

PETER MORTENSEN
Chairman & Chief Executive Officer,
F.N.B. Corporation;
Chairman,
First National Bank of Pennsylvania

ROBERT S. MOSS
Chairman,
Associated Contractors of
Conneaut Lake, Inc.

RICHARD C. MYERS
Retired Business Executive

WILLIAM A. QUINN
Retired Executive Vice President &
Cashier,
First National Bank of Pennsylvania

GEORGE A. SEEDS
Retired Business Executive

WILLIAM J. STRIMBU
President,
Nick Strimbu, Inc.

GARY L. TICE
President & Chief Operating Officer,
F.N.B. Corporation;
Chairman,
First National Bank of Naples

ARCHIE O. WALLACE
Attorney at Law,
Partner of Rowley, Wallace, Keck,
Karson & St. John

JOSEPH M. WALTON
Chairman & Chief Executive Officer,
Jamestown Paint Co.

JAMES T. WELLER
Chairman,
Liberty Steel Products, Inc.

ERIC J. WERNER
Chief Administrative Officer, General
Counsel & Secretary,
Werner Co.

R. BENJAMIN WILEY
Chief Executive Officer,
Greater Erie Community Action
Committee

DONNA C. WINNER
Co-owner,
The Radisson, Tara--A Country Inn,
The Winner, Tiffany's

DIRECTORS EMERITUS
THOMAS C. ELLIOTT
CHARLES C. HAMILTON
GEORGE E. LOWE, D.D.S.

GENERAL COUNSEL
COHEN & GRIGSBY, P.C.
2900 CNG TOWER
625 LIBERTY AVENUE
PITTSBURGH, PA

F.N.B. CORPORATION 17

<PAGE> 19

F.N.B. CORPORATION AND AFFILIATES

FIRST NATIONAL
BANK OF PENNSYLVANIA

DIRECTORS
WILLIAM B. CAMPBELL
CHARLES T. CRICKS
HENRY M. EKKER
STEPHEN J. GURGOVITS
President & Chief Executive Officer
THOMAS W. HODGE
KENNETH R. JAMES
JAMES E. KNARR, D.M.D.
PAUL P. LYNCH
PETER MORTENSEN
Chairman
ROBERT S. MOSS
GARY P. SCHNEIDER
WILLIAM J. STRIMBU
ARCHIE O. WALLACE
JOSEPH M. WALTON
JAMES T. WELLER
ERIC J. WERNER
R. BENJAMIN WILEY
DONNA C. WINNER

METROPOLITAN
NATIONAL BANK

DIRECTORS
RYERSON W. DALTON
SUZANNE FLEMING
C. CLARK HAMMITT
JAMES R. HARPSTER
LAWRENCE J. HESELOV
CARTER LEWIS
PETER MORTENSEN
JOHN M. NEWMAN
JOHN R. PERKINS
GARY J. ROBERTS
President & Chief Executive Officer
WILLIAM J. RUNDORFF

DIRECTORS EMERITUS
DAVID R. JONES
GEORGE A. SEEDS

FIRST NATIONAL
BANK OF NAPLES

DIRECTORS
WILLIAM B. CAMPBELL
C.C. COGHILL
RICHARD J. JAEGER
JAMES S. LINDSAY
EDWARD J. MACE
DONALD W. MAJOR
PETER MORTENSEN
RICHARD C. MYERS
ARLENE M. NICHOLS
JOSEPH R. PELLETIER
ANITA M. PITTMAN
DR. JAMES R. REHAK
GARRETT S. RICHTER
President & Chief Executive Officer
DAVID H. SCHAEFFER
GARY L. TICE
Chairman
MICHAEL E. WATKINS
LARRY A. WYNN

REEVES BANK

DIRECTORS
W. RICHARD BLACKWOOD
JOAN H. KLEIN
JOHN J. KNOBLOCH
HAROLD C. KORNMAN
RALPH LINARELLI, SR.
ROBERT A. RIMBEY
President & Chief Executive Officer
ALLEN F. SOBOL
EDWARD S. YOUNG
DONALD W. ZAHN

CAPE CORAL
NATIONAL BANK

DIRECTORS
ROBERT C. ADAMSKI
ROBERT J. AVERY
President
ANDREW A. BARNETTE
RICHARD D. BARTON, SR.
JO ELLEN BEAUVOIS
C.C. COGHILL
JAMES L. COTTRELL
DAVID W. GOMER
Chairman & Chief Executive Officer
DR. JOSEPH HOWARD
PAUL W. SANBORN
H. FRANK SIMONDS
GARY L. TICE

FIRST NATIONAL
BANK OF FLORIDA

DIRECTORS
ROBERT J. BANKS
ALAN C. BOMSTEIN
ROGER O. BOUCHARD
JAMES M. CANTONIS
C. DAVID CARLEY, JR.
DANIEL A. ENGELHARDT
ROBERT C. GEORGE
Chairman
WILLIAM E. HALE, M.D.
ROBERT L. HURD
WILLIAM S. JONASSEN
DUKE L. MITCHELL
CLOYD A. PETRO
F. WALLACE POPE, JR., ESQ.
ALBERT L. ROGERO, JR.
DAVID P. STONE
President & Chief Executive Officer
J. ERIC TAYLOR, JR., D.O.
GARY L. TICE
ROBERT T. TONG
O. LEE WASSON
HAROLD M. WARD, D.O.

F.N.B. CORPORATION 18

<PAGE> 20

F.N.B. CORPORATION AND AFFILIATES

FIRST NATIONAL BANK
OF FORT MYERS

DIRECTORS
J. KEITH ARNOLD
C. C. COGHILL
THOMAS R. CRONIN
Chairman
BENJAMIN C. FEW, III
THOMAS B. HART
RANDALL P. HENDERSON, JR.
JEFFERY C. LEDWARD
MARVIN L. METHENY
JAMES B. MCMENAMY
MARK L. MORRIS
President & Chief Executive Officer
STEPHEN R. ZELLNER, M.D.

WEST COAST
GUARANTY BANK

DIRECTORS
CHARLES J. BATTAGLIA
JAMES M. BRANDT, D.V.M.
ROBERT P. BROWN
M.M. DALTON
ROBERT A. DAVIDSON
PAT F. FERLISE
JAMES L. GOEHLER
WARREN S. HENDERSON
JOSEPH D. HUDGINS,
President & Chief Executive Officer
CHARLES E. JOHNSON, JR., M.D.
JAMES H. LANIER
JAMES M. LOMBARD
THOMAS E. MITCHELL
RICHARD M. MORRISON
JOHN W. REEDER
EDWIN D. TAYLOR
GARY L. TICE
DAVID F. VOIGT
Chairman
H. MONROE WARRINGTON

FIRST COUNTY BANK

DIRECTORS
JOHN A. BOND
HOWARD E. ERNST
D. JAMES HENDLEY
GREGORY S. PIKE
President & Chief Executive Officer
WILLIAM G. RIMES
GARY J. ROBERTS
WILLIAM J. SKIDMORE

DIRECTOR EMERITUS
ANDERSON A. ALLYN, SR.

REGENCY
FINANCE COMPANY

DIRECTORS
ALAN F. BENNETT
STEPHEN J. GURGOVITS
Chairman
RAYMOND J. HEATH
RUSSELL B. KLASEN
VICTOR C. LEAP
JOHN M. NEWMAN
ROBERT T. RAWL
GARY SOBOTKA
DOUGLAS J. SOLOCK
THOMAS M. TUGGLE
President & Chief Executive Officer

F.N.B. AFFILIATE SERVICES

OFFICERS
C.C. COGHILL
Senior Vice President
JAMES L. GOEHLER
Senior Vice President
GEORGE D. HAGI
Vice President--Regulatory Relations
JAMES G. ORIE
Vice President--Corporate Counsel
ROBERT T. REICHERT
Vice President--Controller
TERRY READ WALSTON
Vice President
JAMES R. FARMER
Auditor
EDWARD H. SEHON
Manager of Public Affairs
BERNIE G. SPONSELLER
Manager of Shareholder Services

F.N.B. CORPORATION 19

<PAGE> 21

SHAREHOLDER INFORMATION

EXECUTIVE OFFICES
F.N.B. Corporation
One F.N.B. Boulevard
Hermitage, PA 16148
Phone: (724) 981-6000

SHAREHOLDER RELATIONS AND STOCK TRANSFER AGENT
F.N.B. Shareholder Services
P.O. Box 11929
Naples, FL 34101-1929
Phone: (888) 441-4362

DIVIDEND REINVESTMENT
AND DIRECT STOCK PURCHASE PLAN
Shareholders as well as non-shareholders may participate in the Dividend
Reinvestment and Direct Stock Purchase Plan. The Plan provides that additional
shares of common stock may be purchased with reinvested dividends and voluntary
cash payments without broker fees. A prospectus and an enrollment card may be
obtained upon request to Shareholder Services.

FORM 10-K AND 10-Q AVAILABILITY
Copies of the Corporation's Annual Report on Form 10-K and Quarterly Reports on
Form 10-Q filed with the Securities and Exchange Commission will be furnished to
any shareholder, free of charge, upon request to Shareholder Services.

INSTITUTIONAL INVESTMENT AND ANALYST INQUIRIES
Institutional investors, analysts or individuals desiring financial information
or reports may contact: John D. Waters, Vice President and Chief Financial
Officer, F.N.B. Corporation, One F.N.B. Boulevard, Hermitage, PA 16148. Phone:
(724) 983-3440.

NEWS MEDIA INQUIRIES
Media representatives and others seeking public information may contact: Edward
H. Sehon, Manager of Public Affairs, F.N.B. Corporation, One F.N.B. Boulevard,
Hermitage, PA 16148. Phone: (724) 983-4841.

ANNUAL MEETING
The annual meeting of shareholders will be held at 4:00 p.m. on Wednesday, April
28, 1999 at the F.N.B. Data and Accounting Center, Corner of East State Street
and South Keel Ridge Road, Hermitage, PA 16148.

F.N.B. CORPORATION 20

<PAGE> 22

[COVER]

[LOGO] F.N.B.
CORPORATION
...........................................................
One F.N.B. Boulevard
Hermitage, PA 16148

<PAGE> 23

[LOGO] F.N.B.
CORPORATION
...........................................................

1998 FINANCIAL REVIEW

[LOGO]

TABLE OF CONTENTS

1 Consolidated Balance Sheet
2 Consolidated Income Statement
3 Consolidated Statement of Stockholders' Equity
4 Consolidated Statement of Cash Flows
5 Notes to Consolidated Financial Statements
27 Report of Independent Auditors
28 Selected Financial Data
29 Quarterly Earnings Summary
30 Management's Discussion
42 Market for Common Stock and Related
Shareholder Matters

<PAGE> 24

F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
Dollars in thousands, except par values

<TABLE>
<CAPTION>
December 31 1998 1997
- ----------- ---- ----
<S> <C> <C>
ASSETS
Cash and due from banks $ 128,868 $ 107,770
Interest bearing deposits with banks 3,692 4,081
Federal funds sold 33,075 36,355
Mortgage loans held for sale 15,947 6,536
Securities available for sale 447,005 460,419
Securities held to maturity (fair value of $90,412 and $138,937) 89,644 138,590
Loans, net of unearned income of $30,866 and $20,473 2,329,819 2,094,904
Allowance for loan losses (30,985) (29,906)
---------- ----------
NET LOANS 2,298,834 2,064,998
---------- ----------
Premises and equipment 90,738 73,463
Other assets 142,892 75,270
---------- ----------
TOTAL ASSETS $3,250,695 $2,967,482
========== ==========

LIABILITIES
Deposits:
Non-interest bearing $ 381,546 $ 311,885
Interest bearing 2,327,026 2,155,172
---------- ----------
TOTAL DEPOSITS 2,708,572 2,467,057
---------- ----------
Other liabilities 49,492 40,742
Short-term borrowings 150,981 127,186
Long-term debt 69,492 72,246
---------- ----------
TOTAL LIABILITIES 2,978,537 2,707,231
---------- ----------

STOCKHOLDERS' EQUITY
Preferred stock - $10 par value
Authorized - 20,000,000 shares
Issued - 237,985 and 287,500 shares
Aggregate liquidation value - $5,950 and $7,188 2,380 2,875
Common stock - $2 par value
Authorized - 100,000,000 shares
Issued - 18,074,404 and 17,240,710 shares 36,149 34,482
Additional paid-in capital 156,209 128,600
Retained earnings 74,274 92,598
Accumulated other comprehensive income 6,230 5,324
Treasury stock - 109,285 and 113,592 shares at cost (3,084) (3,628)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 272,158 260,251
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $3,250,695 $2,967,482
========== ==========
</TABLE>

See accompanying Notes to Consolidated Financial Statements

F.N.B. Corporation 1

<PAGE> 25

<TABLE>
<CAPTION>
F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT
Dollars in thousands, except per share data

Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
INTEREST INCOME
Loans, including fees $197,697 $180,765 $169,986
Securities:
Taxable 30,811 27,603 25,491
Non-taxable 2,320 2,414 2,428
Dividends 1,583 1,159 1,100
Other 3,574 4,337 3,375
-------- -------- --------
TOTAL INTEREST INCOME 235,985 216,278 202,380
-------- -------- --------
INTEREST EXPENSE
Deposits 91,982 82,503 76,322
Short-term borrowings 6,813 6,415 4,030
Long-term debt 4,590 3,746 4,384
-------- -------- --------
TOTAL INTEREST EXPENSE 103,385 92,664 84,736
-------- -------- --------
NET INTEREST INCOME 132,600 123,614 117,644
Provision for loan losses 7,255 11,100 9,773
-------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 125,345 112,514 107,871
-------- -------- --------
NON-INTEREST INCOME
Insurance commissions and fees 4,067 3,983 4,116
Service charges 16,105 13,345 12,594
Trust 1,907 1,934 1,769
Gain on sale of securities 1,384 1,252 788
Gain on sale of loans 3,316 1,730 961
Other 4,966 3,734 2,594
-------- -------- --------
TOTAL NON-INTEREST INCOME 31,745 25,978 22,822
-------- -------- --------
157,090 138,492 130,693
-------- -------- --------
NON-INTEREST EXPENSES
Salaries and employee benefits 57,889 51,688 47,596
Net occupancy 7,968 7,588 7,433
Amortization of intangibles 1,321 1,584 1,047
Equipment 8,486 7,531 6,960
Deposit insurance 1,022 875 1,128
Recapitalization of Savings Association Insurance Fund 3,176
Merger related 4,849 2,385 2,081
Promotional 2,379 2,633 2,925
Insurance claims paid 2,275 1,867 1,707
Other 22,985 22,179 23,822
-------- -------- --------
TOTAL NON-INTEREST EXPENSES 109,174 98,330 97,875
-------- -------- --------
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS 47,916 40,162 32,818
Income taxes 16,044 12,771 10,951
-------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEMS 31,872 27,391 21,867
Gain on sale of subsidiary and branches, net of tax of $4,743 8,809
NET INCOME $ 31,872 $ 36,200 $ 21,867
======== ======== ========

EARNINGS PER COMMON SHARE BEFORE EXTRAORDINARY ITEMS
Basic $ 1.75 $ 1.54 $ 1.22
======== ======== ========
Diluted $ 1.68 $ 1.48 $ 1.19
======== ======== ========
EARNINGS PER COMMON SHARE
Basic $ 1.75 $ 2.05 $ 1.22
======== ======== ========
Diluted $ 1.68 $ 1.95 $ 1.19
======== ======== ========
</TABLE>

See accompanying Notes to Consolidated Financial Statements

F.N.B. Corporation 2

<PAGE> 26

F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Dollars in thousands, except per share data

<TABLE>
<CAPTION>
Accumulated
Other Employee
Compre- Additional Compre- Stock
hensive Preferred Common Paid-In Retained hensive Ownership Treasury
Income Stock Stock Capital Earnings Income Plan Stock
------ ----- ----- ------- -------- ------ ---- -----

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996 $ 4,516 $ 30,206 $ 100,906 $ 74,451 $ 3,288 $(389) $ (464)
Net income $ 21,867 21,867
Change in accumulated other
comprehensive income (727) (727)
---------
Comprehensive income $ 21,140
=========
Cash dividends declared:
Preferred stock (766)
Common stock $.57 per share (6,123)
Purchase of common stock (3,421)
Issuance (retirement) of common stock (44) (438) 2,398
Stock dividend 1,016 9,711 (10,727)
Conversion of preferred stock (991) 399 592
Obligation under ESOP plan 389
------- -------- --------- -------- ------- ----- --------
Balance at December 31, 1996 3,525 31,577 110,771 78,702 2,561 0 (1,487)
Net income $ 36,200 36,200
Change in accumulated other
comprehensive income 2,763 2,763
---------
Comprehensive income $ 38,963
=========
Cash dividends declared:
Preferred stock (588)
Common stock $.60 per share (8,990)
Purchase of common stock (7,688)
Issuance of common stock 47 131 (497) 5,547
Issuance of common stock
for acquisition 1,260 2,240 4,177
Stock dividend 1,332 15,074 (16,406)
Conversion of preferred stock (650) 266 384
------- -------- --------- -------- ------- ----- --------
Balance at December 31, 1997 2,875 34,482 128,600 92,598 5,324 0 (3,628)
Net income $ 31,872 31,872
Change in accumulated other
comprehensive income 906 906
---------
Comprehensive income $ 32,778
=========
Cash dividends declared:
Preferred stock (492)
Common stock $.71 per share (12,227)
Purchase of common stock (16,989)
Issuance (retirement) of common stock (79) (577) (8,040) 17,533
Stock dividend 1,528 27,909 (29,437)
Conversion of preferred stock (495) 218 277
------- -------- --------- -------- ------- ----- --------
Balance at December 31, 1998 $ 2,380 $ 36,149 $ 156,209 $ 74,274 $ 6,230 $ 0 $ (3,084)
======= ======== ========= ======== ======= ===== ========
</TABLE>

See accompanying Notes to Consolidated Financial Statements

F.N.B. Corporation 3

<PAGE> 27

<TABLE>
<CAPTION>
F.N.B. CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
Dollars in thousands

Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 31,872 $ 36,200 $ 21,867
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization 8,616 7,867 6,821
Provision for loan losses 7,255 11,100 9,773
Provision for valuation allowance on other real estate owned 540 664
Deferred taxes (4,577) (1,460) (2,195)
Gain on securities available for sale (1,384) (1,252) (788)
Gain on sale of loans (3,316) (1,730) (961)
Extraordinary gain on sale of subsidiary and
branches, net of tax (8,809)

Proceeds from sale of loans 89,484 115,998 72,459
Loans originated for sale (95,579) (110,382) (64,694)
Net change in:
Interest receivable 212 (2,628) 1,353
Interest payable 760 1,783 620
Other, net (56,677) 4,693 5,562
--------- --------- ---------
Net cash flows from operating activities (23,334) 51,920 50,481
--------- --------- ---------

INVESTING ACTIVITIES
Net change in:
Interest bearing deposits with banks 389 (2,311) 3,097
Federal funds sold 3,280 (6,359) 54,214
Loans (241,637) (196,892) (203,384)
Securities available for sale:
Purchases (217,763) (266,561) (198,820)
Sales 14,284 40,682 43,667
Maturities 219,863 148,542 113,897
Securities held to maturity:
Purchases (13,624) (9,101) (48,756)
Maturities 62,637 60,423 50,616
Increase in premises and equipment (24,626) (19,423) (13,029)
Net cash received (paid) for mergers, acquisitions and divestiture 48,625 (50,362)
--------- --------- ---------
Net cash flows from investing activities (148,572) (301,362) (198,498)
--------- --------- ---------

FINANCING ACTIVITIES
Net change in:
Non-interest bearing deposits, savings and NOW 188,476 128,902 106,341
Time deposits 4,358 106,647 18,132
Short-term borrowings 23,795 (1,802) 40,711
Increase in long-term debt 16,838 44,010 32,899
Decrease in long-term debt (19,592) (29,862) (25,504)
Net acquisition of treasury stock (8,152) (2,460) (1,504)
Cash dividends paid (12,719) (9,578) (6,889)
--------- --------- ---------
Net cash flows from financing activities 193,004 235,857 164,186
--------- --------- ---------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 21,098 (13,585) 16,169
Cash and Cash Equivalents At Beginning Of Year 107,770 121,355 105,186
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 128,868 $ 107,770 $ 121,355
========= ========= =========
</TABLE>

See accompanying Notes to Consolidated Financial Statements

F.N.B. Corporation 4

<PAGE> 28

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS:
The Corporation is a bank holding company headquartered in Hermitage,
Pennsylvania, with administrative offices in Naples, Florida. It operates 9
community banks through 88 offices and a consumer finance company through 34
offices in Pennsylvania, Florida, Ohio and New York.

BASIS OF PRESENTATION:
The consolidated financial statements include the accounts of the Corporation
and its subsidiaries. All significant intercompany balances and transactions
have been eliminated. Certain reclassifications have been made to the prior
years' financial statements to conform to the current year's presentation.

USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

SECURITIES:
Debt securities are classified as held to maturity when management has the
positive intent and ability to hold securities to maturity. Securities held to
maturity are carried at amortized cost.

Debt securities not classified as held to maturity and marketable equity
securities are classified as available for sale. Securities available for sale
are carried at fair value with net unrealized securities gains (losses) reported
as a component of accumulated other comprehensive income.

Amortization of premiums and accretion of discounts are recorded as interest
income from securities. Realized gains and losses are recorded as net securities
gains (losses). The adjusted cost of specific securities sold is used to compute
gains or losses on sales.

Presently, the Corporation has no intention of establishing a trading
securities classification.

MORTGAGE LOANS HELD FOR SALE:
Mortgage loans held for sale are recorded at the lower of aggregate cost or
market value. Gain or loss on the sale of loans is included in non-interest
income.

LOANS AND THE ALLOWANCE FOR LOAN LOSSES:
Loans are reported at their outstanding principal adjusted for any charge-offs
and any deferred fees or costs on originated loans.

Interest income on loans is accrued on the principal amount outstanding. 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. While on non-accrual,
contractual interest payments are applied against principal until the loan is
restored to accrual status. 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. Loan
origination fees and related costs are deferred and recognized over the life of
the loans as an adjustment of yield.

The allowance for loan losses is based on management's evaluation of potential
losses in the loan portfolio, which includes an assessment of past experience,
current and future economic conditions, known and inherent risks in the loan
portfolio, the estimated value of underlying collateral and changes in the
composition of the loan portfolio. Additions are made to the allowance through
periodic provisions charged to income and recovery of principal on loans
previously charged off. Losses of principal are charged to the allowance when
the loss actually occurs or when a determination is made that a loss is
probable.

Impaired loans are identified and measured based on the present value of
expected future cash flows discounted at the loan's effective interest rate, or
at the loan's observable market price or at the fair value of

F.N.B. CORPORATION 5

<PAGE> 29

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the collateral if the loan is collateral dependent. If the recorded investment
in the loan exceeds the measure of fair value, a valuation allowance is
established as a component of the allowance for loan losses. Impaired loans
consist of non-homogeneous loans, which based on the evaluation of current
information and events, management has determined that it is probable that the
Corporation will not be able to collect all amounts due according to the
contractual terms of the loan agreement. The Corporation evaluates all
commercial and commercial real estate loans which have been classified for
regulatory reporting purposes, including non-accrual and restructured loans, in
determining impaired loans.

PREMISES AND EQUIPMENT:
Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed generally on the straight-line method.

OTHER REAL ESTATE OWNED:
Assets acquired in settlement of indebtedness are included in other assets at
the lower of fair value minus estimated costs to sell or at the carrying amount
of the indebtedness. Subsequent write-downs and net direct operating expenses
attributable to such assets are included in other expenses.

AMORTIZATION OF INTANGIBLES:
Goodwill is being amortized over 15 years on the straight-line method, and core
deposit intangibles are being amortized on accelerated methods over various
lives ranging from 7-17 years. The Corporation periodically evaluates its
goodwill and core deposit intangibles for impairment.

INCOME TAXES:
Income taxes are computed utilizing the liability method. Under this method
deferred taxes are determined based on differences between financial reporting
and tax bases of assets and liabilities and are measured using the enacted tax
rates and laws that will be in effect when the differences are expected to
reverse.

PER SHARE AMOUNTS:
Earnings and cash dividends per share have been adjusted for common stock
dividends.

Basic earnings per common 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 outstanding are made only when such adjustments dilute earnings per common
share.

CASH EQUIVALENTS:
The Corporation considers cash and due from banks as cash and cash
equivalents.

NEW ACCOUNTING STANDARDS:
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 standard will result in the
recognition of offsetting changes in value or cash flows of both the hedge and
the hedged item in earnings in the same period. The statement is effective for
the Corporation's fiscal year ending December 31, 2000. Because the Corporation
has not entered into any derivative transactions, the adoption of this statement
will have no impact on the financial statements.

FAS No. 134, "Accounting for Mortgage-Backed Securities Retained after the
Securitization of Mortgage Loans Held for Sale by a Mortgage Banking Entity,"
amends FAS No. 65 allowing mortgage-backed securities or other retained
interests arising from the securitization of mortgage loans to be classified
based on the mortgage banking entities ability and intent to sell or hold those
securities. Previously these securities had to be held within a trading account.
This statement is effective for the Corporation's fiscal year ending December
31, 1999.

F.N.B. CORPORATION 6

<PAGE> 30

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

American Institute of Certified Public Accountants Statement of Position (SOP)
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use," requires capitalization of certain costs incurred during an
internal use software development project. The SOP is effective for the
Corporation's fiscal year ending December 31, 1999. Application of this SOP is
not expected to have a material effect on the Corporation's financial position
or results of operations.

MERGERS, ACQUISITIONS AND DIVESTITURES

On January 13, 1999, the Corporation completed its affiliation with Guaranty
Bank & Trust (Guaranty), a community bank headquartered in Venice, Florida with
assets of $154.6 million. Under the terms of the merger agreement, each
outstanding share of Guaranty's common stock was converted into 1.536 shares of
the Corporation's common stock. A total of 1,250,994 shares of the Corporation's
common stock were issued. The transaction was accounted for as a
pooling-of-interests. On February 12, 1999, Guaranty was merged into an existing
subsidiary of the Corporation, West Coast Bank, to form West Coast Guaranty
Bank, N.A. Following is an unaudited summary of pro forma information, which
represents a combination of the results of operations of the Corporation and
Guaranty (in thousands, except per share data):

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Net interest income. . . . . . . $137,914 $128,432 $121,768
Net income . . . . . . . . . . . 31,553 37,002 22,375
Earnings per share before
extraordinary items (basic) . . 1.62 1.49 1.17
</TABLE>

On October 24, 1998, First National Bank of Pennsylvania (FNBPA) purchased
three Lawrence County branches. This purchase added $48.7 million in deposits.
As a result of the transaction, FNBPA recognized $5.1 million and $1.8 million
in goodwill and core deposit intangibles, respectively.

On August 31, 1998, the Corporation completed its affiliation with Citizens
Holding Corporation, headquartered in Clearwater, Florida, with assets totaling
$135.0 million. Under the terms of the merger agreement, each outstanding share
of Citizens' common stock was converted into 1.743 shares of the Corporation's
common stock. A total of 1,012,325 shares of the Corporation's common stock were
issued. Citizens' principal asset, Citizens Bank and Trust, was merged into an
existing subsidiary of the Corporation, First National Bank of Florida (FNB
Florida), formerly Indian Rocks National Bank, in Clearwater, Florida. Results
for prior years are restated to reflect this acquisition as a
pooling-of-interests.

On May 29, 1998, the Corporation completed its affiliation with Seminole Bank,
headquartered in Seminole, Florida, with assets totaling $92.2 million. Under
the terms of the merger agreement, each outstanding share of Seminole's common
stock was converted into 1.530 shares of the Corporation's common stock. A total
of 855,450 shares of the Corporation's common stock were issued. Seminole was
merged into an existing subsidiary of the Corporation, FNB Florida, in
Clearwater, Florida. Results for prior years are restated to reflect this
acquisition as a pooling-of-interests.

On January 20, 1998, the Corporation completed its affiliation with West Coast
Bank (West Coast), headquartered in Sarasota, Florida, with assets totaling
$107.4 million. Under the terms of the merger agreement, each outstanding share
of West Coast's common stock was converted into 1.0 share of the Corporation's
common stock. A total of 585,263 shares of the Corporation's common stock were
issued. Results for prior years have been restated to reflect this acquisition
as a pooling-of-interests.

The following table sets forth separate company financial information for the
year ended December 31, 1997. The F.N.B. Corporation results exclude the effects
of any mergers which occurred subsequent to December 31, 1997 (in thousands):

<TABLE>
<CAPTION>
NET
INTEREST NET
Year Ended December 31, 1997 INCOME INCOME
------ ------
<S> <C> <C>
F.N.B. Corporation . . . . . . . . . $111,030 $33,123
Citizens . . . . . . . . . . . . . . 4,800 1,052
Seminole . . . . . . . . . . . . . . 3,771 1,146
West Coast . . . . . . . . . . . . . 4,013 879
</TABLE>

During 1997, the Corporation affiliated with First National Bank of Naples,
Naples, Florida, Cape Coral National Bank, Cape Coral, Florida, West Coast
Bancorp, Inc. (WCBI), Cape Coral, Florida and First National Bank of Florida,
Clearwater, Florida. These affiliations added

F.N.B. CORPORATION 7
<PAGE> 31

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

assets and deposits of $790.7 million and $658.2 million, respectively, and were
accounted for as poolings-of-interests. The Corporation also acquired Mercantile
Bank of Southwest Florida (Mercantile), located in Naples, Florida. Mercantile
was merged into First National Bank of Naples and added assets and deposits of
$121.7 million and $108.2 million, respectively. The Corporation paid $13.6
million and accounted for the acquisition under the purchase method.

During 1997, the Corporation disposed of its subsidiary, Bucktail Bank and
Trust Company (Bucktail), in exchange for 565,384 shares of Sun Bancorp, Inc.
(Sun), a bank holding company headquartered in Selinsgrove, Pennsylvania. At
December 31, 1998, the Corporation's investment in Sun was accounted for using
the equity method and had a market value totaling $27.6 million and a carrying
value totaling $21.0 million. The Corporation recognized equity earnings from
Sun totaling $1.3 million for the year ended December 31, 1998. At December 31,
1998, Sun had total assets of $623.6 million and recognized net income of $8.7
million for the year then ended. The Corporation also sold three branches of its
subsidiary Metropolitan National Bank in 1997. These sales resulted in the
Corporation recognizing $8.8 million in after-tax extraordinary gains.

The Corporation regularly evaluates the potential acquisition of, and holds
discussions with, various potential acquisition candidates and as a general rule
the Corporation publicly announces such acquisitions only after a definitive
merger agreement has been reached.

SECURITIES

The amortized cost and fair value of securities are as follows (in thousands):

Securities available for sale:

GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1997 COST GAINS LOSSES VALUE
- ----------------- ---- ----- ------ -----
U.S. Treasury and other U.S. Government
agencies and corporations $ 306,602 $ 978 $ (260) $ 307,320
Mortgage-backed securities of
U.S. Government agencies 120,491 501 (146) 120,846
States of the U.S. and political subdivisions 1,486 51 1,537
Other debt securities 5,031 107 5,138
--------- --------- --------- ---------
TOTAL DEBT SECURITIES 433,610 1,637 (406) 434,841
Equity securities 18,590 7,002 (14) 25,578
--------- --------- --------- ---------
$ 452,200 $ 8,639 $ (420) $ 460,419
========= ======== ========= =========
</TABLE>

F.N.B. CORPORATION 8

<PAGE> 32

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1996 COST GAINS LOSSES VALUE
- ----------------- ---- ----- ------ -----
<S> <C> <C> <C> <C>
U.S. Treasury and other U.S. Government
agencies and corporations $281,766 $ 462 $ (855) $281,373
Mortgage-backed securities of
U.S. Government agencies 45,170 644 (176) 45,638
Other debt securities 2,000 (16) 1,984
-------- ------- -------- --------
TOTAL DEBT SECURITIES 328,936 1,106 (1,047) 328,995
Equity securities 15,419 3,942 (14) 19,347
-------- ------- -------- --------
$344,355 $ 5,048 $ (1,061) $348,342
======== ======= ======== ========
</TABLE>

Securities held to maturity:

<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1998 COST GAINS LOSSES VALUE
- ----------------- ---- ----- ------ -----
<S> <C> <C> <C> <C>
U.S. Treasury and other U.S. Government
agencies and corporations $ 9,188 $ 67 $ 9,255
Mortgage-backed securities of
U.S. Government agencies 30,026 96 $ (22) 30,100
States of the U.S. and political
subdivisions 49,883 639 (18) 50,504
Other debt securities 547 9 (3) 553
------- ------- -------- --------
$89,644 $ 811 $ (43) $ 90,412
======= ======= ======== ========
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1997 COST GAINS LOSSES VALUE
- ----------------- ---- ----- ------ -----
<S> <C> <C> <C> <C>
U.S. Treasury and other U.S. Government
agencies and corporations $ 22,990 $ 98 $ (20) $ 23,068
Mortgage-backed securities of
U.S. Government agencies 61,468 122 (228) 61,362
States of the U.S. and political
subdivisions 53,279 414 (41) 53,652
Other debt securities 853 6 (4) 855
-------- ------- -------- --------
$138,590 $ 640 $ (293) $138,937
======== ======= ======== ========
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
December 31, 1996 COST GAINS LOSSES VALUE
- ----------------- ---- ----- ------ -----
<S> <C> <C> <C> <C>
U.S. Treasury and other U.S. Government
agencies and corporations $ 22,554 $ 81 $ (43) $ 22,592
Mortgage-backed securities of
U.S. Government agencies 109,986 142 (757) 109,371
States of the U.S. and political
subdivisions 59,075 193 (443) 58,825
Other debt securities 1,188 5 (5) 1,188
-------- ------- -------- --------
$192,803 $ 421 $ (1,248) $191,976
======== ======= ======== ========
</TABLE>

F.N.B. CORPORATION 9

<PAGE> 33

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At December 31, 1998 and 1997, respectively, securities with a carrying value of
$137.1 million and $154.5 million were pledged to secure public deposits, trust
deposits and for other purposes as required by law. Securities with a carrying
value of $156.6 million and $137.1 million at December 31, 1998 and 1997,
respectively, were pledged as collateral for other borrowings.

As of December 31, 1998, the Corporation had not entered into any off-balance
sheet derivative transactions.

As of December 31, 1998, the amortized cost and fair value of securities, by
contractual maturities, were as follows (in thousands):

<TABLE>
<CAPTION>
HELD TO MATURITY AVAILABLE FOR SALE
--------------------------- ---------------------------
AMORTIZED FAIR AMORTIZED FAIR
December 31, 1998 COST VALUE COST VALUE
- ----------------- ---- ----- ---- -----
<S> <C> <C> <C> <C>
Due in one year or less $14,087 $ 14,147 $ 38,087 $ 38,250
Due from one to five years 31,098 31,517 162,189 163,606
Due from five to ten years 13,981 14,186 51,072 51,214
Due after ten years 452 462 2,986 2,922
------- -------- -------- --------
59,618 60,312 254,334 255,992
Mortgage-backed securities of
U.S. Government agencies 30,026 30,100 162,694 163,802
Equity securities 20,367 27,211
------- -------- -------- --------
$89,644 $ 90,412 $437,395 $447,005
======= ======== ======== ========
</TABLE>

Maturities may differ from contractual terms because borrowers may have the
right to call or prepay obligations with or without penalties. Periodic payments
are received on mortgage-backed securities based on the payment patterns of the
underlying collateral.

Proceeds from sales of securities available for sale during 1998, 1997 and
1996 were $14.3 million, $40.7 million and $43.7 million, respectively. Gross
gains and gross losses were realized on those sales as follows (in thousands):

Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
Gross gains $1,404 $1,365 $885
Gross losses (20) (113) (97)
------ ------ ----
$1,384 $1,252 $788
====== ====== ====

LOANS

Following is a summary of loans (in thousands):

December 31 1998 1997
- ----------- ---- ----
Real estate:
Residential $ 942,451 $ 905,065
Commercial 611,027 524,006
Construction 98,942 67,216
Installment loans to individuals 286,149 295,336
Commercial, financial and agricultural 289,850 263,902
Lease financing 132,266 59,852
Unearned income (30,866) (20,473)
---------- ----------
$2,329,819 $2,094,904
========== ==========

F.N.B. CORPORATION 10

<PAGE> 34

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The loan portfolio consists principally of loans to small- and medium-sized
businesses within the Corporation's primary market area of western Pennsylvania,
southwest Florida and eastern Ohio.

As of December 31, 1998, no concentrations of loans exceeding 10% of total
loans existed which were not disclosed as a separate category of loans.

Certain directors and executive officers of the Corporation and its
significant subsidiaries, as well as associates of such persons, were loan
customers during 1998. Such loans were made in the ordinary course of business
under normal credit terms and do not represent more than a normal risk of
collection. Following is a summary of the amount of loans in which the aggregate
of the loans to any such persons exceeded $60,000 during the year (in
thousands):

<TABLE>
<CAPTION>
<S> <C>
Total loans at December 31, 1997 . . . . . . . . . . $32,558
New loans. . . . . . . . . . . . . . . . . . . . . . 28,601
Repayments . . . . . . . . . . . . . . . . . . . . . (24,246)
Other. . . . . . . . . . . . . . . . . . . . . . . . 370
-------
Total loans at December 31, 1998 . . . . . . . . . . $37,283
=======
</TABLE>

Other represents the net change in loan balances resulting from changes in
related parties during the year.

NON-PERFORMING ASSETS

Following is a summary of non-performing assets (in thousands):

December 31 1998 1997
- ----------- ---- ----
Non-accrual loans $12,103 $ 8,340
Restructured loans 1,770 1,345
------- -------
TOTAL NON-PERFORMING LOANS 13,873 9,685
Other real estate owned 1,370 4,027
------- -------
TOTAL NON-PERFORMING ASSETS $15,243 $13,712
======= =======

For the years ended December 31, 1998, 1997 and 1996, income recognized on
non-accrual and restructured loans was $863,000, $477,000 and $798,000,
respectively. Income that would have been recognized during 1998, 1997 and 1996
on such loans if they were in accordance with their original terms was $1.6
million, $1.1 million and $1.5 million, respectively. Loans past due 90 days or
more were $2.9 million, $3.2 million and $3.1 million at December 31, 1998, 1997
and 1996, respectively.

Following is a summary of information pertaining to loans considered to be
impaired (in thousands):

<TABLE>
<CAPTION>
At or For the Year Ended December 31 1998 1997 1996
- ------------------------------------ ---- ---- ----
<S> <C> <C> <C>
Impaired loans with an allocated allowance $3,366 $1,316 $ 5,063
Impaired loans without an allocated allowance 4,998 5,605
------ ------ -------

TOTAL IMPAIRED LOANS $8,364 $1,316 $10,668
====== ====== =======
Allocated allowance on impaired loans 1,099 492 1,529
====== ====== =======
Portion of impaired loans on non-accrual 5,413 950 5,125
====== ====== =======
Average impaired loans 4,945 5,887 13,389
====== ====== =======
Income recognized on impaired loans 492 99 822
====== ====== =======
</TABLE>

F.N.B. CORPORATION 11

<PAGE> 35

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ALLOWANCE FOR LOAN LOSSES

Following is an analysis of changes in the allowance for loan losses (in
thousands):

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $ 29,906 $ 30,231 $ 26,673

Reduction due to the sale of a subsidiary and loans (3,828)
Addition due to acquisitions 1,167

Charge-offs (7,473) (10,035) (7,849)
Recoveries 1,297 1,271 1,634
-------- -------- --------
NET CHARGE-OFFS (6,176) (8,764) (6,215)
Provision for loan losses 7,255 11,100 9,773
-------- -------- --------
Balance at end of year $ 30,985 $ 29,906 $ 30,231
======== ======== ========
</TABLE>

PREMISES AND EQUIPMENT

Following is a summary of premises and equipment (in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997
- ----------- ---- ----
<S> <C> <C>
Land $ 18,056 $ 14,754
Premises 73,563 62,461
Equipment 49,947 41,964
--------- ---------
141,566 119,179
Accumulated depreciation (50,828) (45,716)
--------- ---------
$ 90,738 $ 73,463
========= =========
</TABLE>

Depreciation expense was $7.7 million for 1998, $6.5 million for 1997 and $6.0
million for 1996.

The Corporation has operating leases extending to 2044 for certain land,
office locations and equipment. Leases that expire are generally expected to be
renewed or replaced by other leases. Rental expense was $3.4 million for 1998,
$3.7 million for 1997 and $2.8 million for 1996. Total minimum rental
commitments under such leases were $27.6 million at December 31, 1998. Following
is a summary of future minimum lease payments for years following December 31,
1998 (in thousands):

1999 . . . . . . . . . . . . . . . $ 1,673
2000 . . . . . . . . . . . . . . . 1,387
2001 . . . . . . . . . . . . . . . 1,182
2002 . . . . . . . . . . . . . . . 1,113
2003 . . . . . . . . . . . . . . . 987
Later years. . . . . . . . . . . . 21,208

F.N.B. CORPORATION 12

<PAGE> 36

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DEPOSITS

Following is a summary of deposits (in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997
- ----------- ---- ----
<S> <C> <C>
Non-interest bearing $ 381,546 $ 311,885
Savings and NOW 1,212,881 1,068,156
Certificates of deposit and other time deposits 1,114,145 1,087,016
---------- ----------
$2,708,572 $2,467,057
========== ==========
</TABLE>

Following is a summary of the scheduled maturities of certificates of deposit
and other time deposits for each of the five years following December 31, 1998
(in thousands):

1999. . . . . . . . . . . . . . . . $858,032
2000. . . . . . . . . . . . . . . . 166,546
2001. . . . . . . . . . . . . . . . 45,107
2002. . . . . . . . . . . . . . . . 20,335
2003. . . . . . . . . . . . . . . . 22,731
Later years . . . . . . . . . . . . 1,394

Time deposits of $100,000 or more were $231.7 million and $213.4 million at
December 31, 1998 and 1997, respectively. Following is a summary of these time
deposits by remaining maturity at December 31, 1998 (in thousands):

<TABLE>
<CAPTION>
CERTIFICATES OTHER TIME
OF DEPOSIT DEPOSITS TOTAL
---------- -------- -----
<S> <C> <C> <C>
Three months or less $ 76,752 $ 5,229 $ 81,981
Three to six months 57,973 1,321 59,294
Six to twelve months 48,959 3,261 52,220
Over twelve months 21,199 16,997 38,196
-------- ------- --------
$204,883 $26,808 $231,691
======== ======= ========
</TABLE>

SHORT-TERM BORROWINGS

Following is a summary of short-term borrowings (in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997
- ----------- ---- ----
<S> <C> <C>
Securities sold under repurchase agreements $ 99,590 $ 59,136
Federal funds purchased 561 16,862
Other short-term borrowings 1,221 4,257
Subordinated notes 49,609 46,931
-------- --------
$150,981 $127,186
======== ========
</TABLE>

Credit facilities amounting to $45.0 million at December 31, 1998 were
maintained with various banks with rates which are at or below prime rate. The
facilities and their terms are periodically reviewed by the banks and are
generally subject to withdrawal at their discretion. These credit facilities
were unused at December 31, 1998.

F.N.B. CORPORATION 13

<PAGE> 37

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LONG-TERM DEBT

Following is a summary of long-term debt (in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997
---- ----
<S> <C> <C>
Federal Home Loan Bank advances . . . . $21,305 $28,386
Other long-term debt. . . . . . . . . . 6,000
Subordinated notes. . . . . . . . . . . 42,187 43,860
------- -------
$69,492 $72,246
======= =======
</TABLE>

Certain subsidiaries have lines of credit available with the Federal Home Loan
Bank. These lines totaled $406.5 million, of which $21.3 million was used as of
December 31, 1998. These advances are secured by residential real estate loans
and Federal Home Loan Bank Stock and are scheduled to mature in various amounts
periodically through the year 2008. Interest rates paid on these advances range
from 5.10% to 6.20% in 1998 and 5.66% to 6.32% in 1997.

Subordinated notes are unsecured and subordinated to other indebtedness of the
Corporation. The subordinated notes are scheduled to mature in various amounts
periodically through the year 2008. At December 31, 1998, $32.1 million of
long-term subordinated debt is redeemable prior to maturity at a discount equal
to three months of interest. The Corporation may require the holder to give 30
days prior written notice. No sinking fund is required and none has been
established to retire the debt. The weighted average interest rate on long-term
subordinated debt was 6.66% at December 31, 1998 and 7.58% at December 31, 1997.

Scheduled annual maturities for all of the long-term debt for each of the five
years following December 31, 1998 are as follows (in thousands):

1999. . . . . . . . . . . $21,136
2000. . . . . . . . . . . 5,013
2001. . . . . . . . . . . 8,276
2002. . . . . . . . . . . 17,178
2003. . . . . . . . . . . 7,380
Later years . . . . . . . 10,509

COMMITMENTS AND CREDIT RISK

The Corporation has commitments to extend credit and standby letters of credit
which involve certain elements of credit risk in excess of the amount stated in
the consolidated balance sheet. The Corporation's exposure to credit loss in the
event of non-performance by the customer is represented by the contractual
amount of those instruments. Consistent credit policies are used by the
Corporation for both on- and off-balance sheet items.

Following is a summary of off-balance sheet credit risk information (in
thousands):

December 31 1998 1997
---- ----
Commitments to extend credit. . . . . $415,428 $369,000
Standby letters of credit . . . . . . 21,158 21,059

At December 31, 1998, funding of approximately 75% of the commitments to
extend credit is dependent on the financial condition of the customer. The
Corporation has the ability to withdraw such commitments at its discretion.
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. Based on management's credit evaluation of
the customer, collateral may be deemed necessary. Collateral requirements vary
and may include accounts receivable, inventory, property, plant and equipment
and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the
Corporation which may require payment at a future date. The credit risk involved
in issuing letters of credit is essentially the same as that involved in
extending loans to customers.

STOCKHOLDERS' EQUITY

Series A - Cumulative Convertible Preferred Stock (Series A Preferred) was
issued in 1985. Holders of Series A Preferred are entitled to 5.7 votes for each
share held. The holders do not have cumulative voting

F.N.B. CORPORATION 14

<PAGE> 38

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

rights in the election of directors. Dividends are cumulative from the date of
issue and are payable at $.42 per share each quarter. Series A Preferred is
convertible at the option of the holder into shares of the Corporation's common
stock having a market value of $25.00 at time of conversion. The Corporation has
the right to require the conversion of the balance of all outstanding shares at
the conversion rate. During 1998, 600 shares of Series A Preferred were
converted to 410 shares of common stock. At December 31, 1998, 18,732 shares of
common stock were reserved by the Corporation for the conversion of the
remaining 20,718 outstanding shares.

Series B - Cumulative Convertible Preferred Stock (Series B Preferred) was
issued in 1992. Holders of Series B Preferred have no voting rights. Dividends
are cumulative from the date of issue and are payable at $.46875 per share each
quarter. Series B Preferred has a stated value of $25.00 per share and is
convertible at the option of the holder into shares of the Corporation's common
stock at a price of $11.08 per share. The Corporation has the right to require
the conversion of the balance of all outstanding shares at the conversion rate.
During 1998, 48,915 shares of Series B Preferred were converted to 108,770
shares of common stock. At December 31, 1998, 489,923 shares of common stock
were reserved by the Corporation for the conversion of the remaining 217,267
outstanding shares.

COMPREHENSIVE INCOME

The components of comprehensive income, net of related tax, are as follows (in
thousands):

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Net income $31,872 $36,200 $21,867
Other comprehensive income:
Unrealized gains on securities:
Arising during the period, net of tax expense
(benefit) of $924, $1,788 and $(86) 1,716 3,320 (159)
Less: reclassification adjustment for gains included in
net income, net of tax benefit of $436, $300 and $306 (810) (557) (568)
------- ------- -------
Other comprehensive income (expense) 906 2,763 (727)
------- ------- -------
Comprehensive income $32,778 $38,963 $21,140
======= ======= =======
</TABLE>

STOCK INCENTIVE PLANS

The Corporation has available up to 959,660 shares of common stock to be
issued under the restricted stock and incentive bonus and restricted stock bonus
plans to key employees of the Corporation. All shares of stock awarded under
these plans vest in equal installments over a five year period on each
anniversary of the date of grant. At December 31, 1998, 14,835 shares out of a
total of 68,663 shares were vested under these plans. The weighted average grant
date fair value of the restricted shares issued through December 31, 1998 was
$26.55.

The Corporation has available up to 2,360,141 shares of common stock to be
issued under both incentive and non-qualified stock option plans to key
employees of the Corporation. The options vest in equal installments over
periods ranging from three to ten years. The options are granted at a price
equal to the fair market value at the date of the grant and are exercisable
within ten years from the date of the grant. Because the exercise price of the
Corporation's stock options equals the market price of the underlying stock on
the date of grant, no compensation expense is recognized.

In accordance with FAS No. 123, pro forma information regarding net income and
earnings per share using the Black-Scholes option pricing model is as follows
(in thousands, except per share data):

F.N.B. CORPORATION 15

<PAGE> 39

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Pro forma net income before extraordinary items $31,234 $27,031 $21,669
Extraordinary items, net of tax 8,809
------- ------- -------
Pro forma net income $31,234 $35,840 $21,669
======= ======= =======

Pro forma earnings per share:
Basic:
Before extraordinary items $ 1.72 $ 1.53 $ 1.21
Extraordinary items, net of tax .50
------- ------- -------
Net income $ 1.72 $ 2.03 $ 1.21
======= ======= =======

Diluted:
Before extraordinary items $ 1.64 $ 1.46 $ 1.18
Extraordinary items, net of tax .47
------- ------- -------
Net income $ 1.64 $ 1.93 $ 1.18
======= ======= =======
</TABLE>

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period of five years.

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferrable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Corporation's employee stock options have characteristics
significantly different from those of traded options, and changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options. The following
input assumptions were utilized:

1998 1997 1996
---- ---- ----
Risk-free interest rate . . . . . . . . . 5.54% 6.53% 5.63%
Dividend yield. . . . . . . . . . . . . . 2.52% 1.66% 3.00%
Expected stock price volatility . . . . . .23% .22% .19%
Weighted average expected life
of the options (years). . . . . . . . . 5.00 5.00 5.00

Activity in the Option Plan during the past three years was as follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE PRICE
1998 PER SHARE 1997 1996
---- --------- ---- ----
<S> <C> <C> <C> <C>
Outstanding, beginning of year 1,232,409 $12.15 1,161,147 973,455
Granted during the year 280,637 29.81 182,415 206,607
Exercised during the year (249,540) 9.91 (61,179) (12,315)
Forfeited during the year (24,711) 20.09 (49,974) (6,600)
--------- ------ --------- ---------
Ending balance 1,238,795 16.45 1,232,409 1,161,147
========= ====== ========= =========
</TABLE>

The following table summarizes information about the stock options outstanding
at December 31, 1998:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------- -------------------
RANGE OF WEIGHTED AVERAGE WEIGHTED WEIGHTED
EXERCISE OPTIONS REMAINING AVERAGE OPTIONS AVERAGE
PRICES OUTSTANDING CONTRACTUAL LIFE EXERCISE PRICE EXERCISABLE EXERCISE PRICE
------ ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
$ 5.71 -$ 8.57 329,464 7.55 $ 7.11 316,959 $ 7.10
8.58 - 12.87 321,249 5.26 11.26 209,813 11.32
12.88 - 19.32 219,611 6.79 17.15 107,659 17.15
19.33 - 29.00 137,562 8.11 21.75 45,760 22.18
29.01 - 33.15 230,909 9.05 33.15 7,401 33.15
--------- -------
1,238,795 687,592
========= =======
</TABLE>

F.N.B. CORPORATION 16
<PAGE> 40

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Corporation has granted warrants to purchase common stock (at an exercise
price of $6.24 or $10.39 per share). Such warrants are exercisable and will
expire on June 19, 2001 or December 17, 2003. The Corporation has reserved
152,856 shares of common stock for issuance in connection with these warrants.

RETIREMENT AND OTHER POSTRETIREMENT BENEFIT PLANS

RETIREMENT PLANS

Following are reconciliations of the change in benefit obligation, change in
plan assets and funded status (in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997
- ----------- ---- ----
<S> <C> <C>
Benefit obligation at beginning of year $25,400 $21,632
Service cost 1,310 1,265
Interest cost 1,839 1,726
Plan amendments 549 23
Actuarial loss 2,522 1,561
Curtailments (69)
Benefits paid (727) (738)
------- -------
Benefit obligation at end of year $30,893 $25,400
======= =======

<CAPTION>
December 31 1998 1997
- ----------- ---- ----
Fair value of plan assets at beginning of year $25,228 $20,238
Actual return on plan assets 3,808 4,614
Company contribution 31 1,114
Benefits paid (727) (738)
------- -------
Fair value of plan assets at end of year $28,340 $25,228
======= =======

<CAPTION>
December 31 1998 1997
- ----------- ---- ----
Funded status of plan $(2,553) $ (172)
Unrecognized actuarial gain (2,573) (3,324)
Unrecognized prior service cost 2,043 1,771
Unrecognized net transition obligation 42 47
------- -------
Accrued pension cost $(3,041) $(1,678)
======= =======
</TABLE>

Included in the above reconciliation is the benefit obligation and fair value
of plan assets for the Basic Retirement Plan which were $5.5 million and $0,
respectively, as of December 31, 1998, and $4.1 million and $0, respectively, as
of December 31, 1997.

The amounts recognized in the Corporation's consolidated financial statements
include the following (in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997
- ----------- ---- ----
<S> <C> <C>
Prepaid pension cost $ 1,016 $ 1,506
Accrued pension cost (4,057) (3,184)
Additional minimum liability (1,475) (928)
Intangible asset 1,475 928
------- -------
Net amount recognized on balance sheet $(3,041) $(1,678)
======= =======
</TABLE>

F.N.B. CORPORATION 17
<PAGE> 41

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The pension expense for the defined benefit plans included the following
components (in thousands):

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Service costs $ 1,310 $ 1,265 $ 1,244
Interest cost 1,839 1,726 1,525
Expected return on plan assets (1,989) (1,603) (1,423)
Net amortization 233 293 291
Curtailment gain (69)
------- ------- -------
Net pension expense $ 1,393 $ 1,612 $ 1,637
======= ======= =======

<CAPTION>
Assumptions as of December 31 1998 1997 1996
- ----------------------------- ---- ---- ----
<S> <C> <C> <C>
Weighted average discount rate 6.5% 7.0% 7.5%
Rates of increase in compensation levels 4.0% 4.0% 4.0%
Expected long-term rate of return on assets 8.0% 8.0% 8.0%
</TABLE>

At December 31, 1998, plan assets include 60,528 shares of the Corporation's
common stock, having a market value of $1.7 million. Dividends received on these
shares totaled $36,000 for 1998.

Certain subsidiaries of the Corporation participate in a qualified 401(k)
defined contribution plan for the full-time employees of the subsidiary. A
percentage of employees' contributions to the plan are matched by the
Corporation. The Corporation's contribution expense amounted to $626,000 in
1998, $570,000 in 1997 and $536,000 in 1996.

Certain subsidiaries of the Corporation participate in a Salary Savings ESOP
Plan, under which eligible employees may contribute a percentage of their
salary. The Corporation matches 50 percent of an eligible employee's
contribution on the first 6 percent that the employee defers, and may make a
discretionary contribution payable either in cash or the Corporation's common
stock based upon the Corporation's profitability. Employees are generally
eligible to participate upon completing one year of service and having attained
age 21. Employer contributions become 20 percent vested when an employee has
completed two years of service, and vest at a rate of 20 percent per year
thereafter. The Corporation recognized expense of $705,000 in 1998, $468,000 in
1997 and $384,000 in 1996 related to the Salary Savings ESOP Plan.

OTHER POSTRETIREMENT BENEFIT PLANS

Following are reconciliations of the change in benefit obligation, change in
plan assets and funded status (in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997
- ----------- ---- ----
<S> <C> <C>
Benefit obligation at beginning of year $779 $816
Service cost 77 60
Interest cost 65 56
Plan participants' contributions 3 4
Actuarial loss 126 (103)
Benefits paid (85) (54)
---- ----
Benefit obligation at end of year $965 $779
==== ====
</TABLE>

F.N.B. CORPORATION 18

<PAGE> 42

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
December 31 1998 1997
- ----------- ---- ----
<S> <C> <C>
Fair value of plan assets at beginning of year $ 0 $ 0
Company contribution 81 50
Plan participants' contributions 4 4
Benefits paid (85) (54)
----- -----
Fair value of plan assets at end of year $ 0 $ 0
===== =====

<CAPTION>
December 31 1998 1997
- ----------- ---- ----
Funded status of plan $(965) $(779)
Unrecognized actuarial gain (177) (310)
Unrecognized prior service cost 5 6
Unrecognized net transition obligation 522 563
----- -----
Accrued pension cost $(615) $(520)
===== =====
</TABLE>

Net periodic postretirement benefit cost included the following components (in
thousands):

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Service cost $ 77 $ 60 $ 66
Interest cost 65 56 54
Net amortization 34 25 30
---- ---- ----
Net periodic postretirement benefit cost $176 $141 $150
==== ==== ====
</TABLE>

Discount rates of 6.5%, 7.0% and 7.5% for 1998, 1997 and 1996, respectively,
were used to determine the accumulated postretirement benefit obligation.

The assumed health care cost trend rate has a significant effect on the
amounts reported. A 5.50% annual rate of increase in the per capita costs of
covered health care benefits is assumed for 1999, gradually decreasing to 4.25%
by the year 2001. A one percentage point change in the assumed health care cost
trend rate would have had the following effects on 1998 service and interest
cost and the accumulated postretirement benefit obligation at December 31, 1998:

<TABLE>
<CAPTION>
1% 1%
Increase Decrease
-------- --------
<S> <C> <C>
Effect on service and interest components of net periodic cost $17,814 $(15,780)
Effect on accumulated postretirement benefit obligation 98,172 (88,639)
</TABLE>

RECAPITALIZATION OF SAVINGS ASSOCIATION INSURANCE FUND

On September 30, 1996, the Deposit Insurance Funds Act of 1996 was signed into
law and included a provision to recapitalize the Savings Association Insurance
Fund (SAIF). The legislation required a one-time assessment on all deposits
insured by the SAIF, including those held by chartered commercial banks as a
result of previous acquisitions. The one-time assessment paid by the Corporation
totaled $3.2 million, or $.12 per share. The legislation also included
provisions that resulted in a reduction in annual deposit insurance costs.

F.N.B. CORPORATION 19

<PAGE> 43

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

INCOME TAXES

Income tax expense consists of the following (in thousands):

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Current income taxes:
Federal taxes $19,765 $13,859 $12,685
State taxes 856 372 461
------- ------- -------
20,621 14,231 13,146
Deferred income taxes:
Federal taxes (4,577) (1,460) (2,195)
------- ------- -------
$16,044 $12,771 $10,951
======= ======= =======
</TABLE>

The tax effects of temporary differences giving rise to deferred tax assets
and liabilities are presented below (in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997
- ----------- ---- ----
<S> <C> <C>
Deferred tax assets:
Allowance for loan losses $ 10,845 $ 10,292
Deferred compensation 1,853 1,957
Deferred benefits 1,414 913
Loan fees 661
Other 365 471
-------- --------
TOTAL GROSS DEFERRED TAX ASSETS 14,477 14,294
-------- --------
Deferred tax liabilities:
Depreciation (51) (79)
Deferred gain on sale of subsidiary (3,555) (3,555)
Unrealized gains on securities available for sale (3,355) (2,881)
Leasing (9,732) (4,997)
Other (1,400) (1,347)
-------- --------
TOTAL GROSS DEFERRED TAX LIABILITIES (18,093) (12,859)
-------- --------
NET DEFERRED TAX (LIABILITIES) ASSETS $ (3,616) $ 1,435
======== ========
</TABLE>

Following is a reconciliation between tax expense using federal statutory tax
and actual effective tax:

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
Federal statutory tax 35.0% 35.0% 35.0%
Effect of nontaxable interest and dividend income (3.3) (3.6) (4.2)
State taxes 1.2 .6 .6
Goodwill .5 .3 .3
Merger related costs .9 .6 2.2
Other items (.8) (1.1) (.5)
---- ---- ----
Actual effective taxes 33.5% 31.8% 33.4%
==== ==== ====
</TABLE>

Income tax expense related to gains on the sale of securities was $484,000,
$438,000 and $276,000 for the years ended December 31, 1998, 1997 and 1996,
respectively.

F.N.B. CORPORATION 20

<PAGE> 44

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EARNINGS PER SHARE

The following tables set forth the computation of basic and diluted earnings
per share (in thousands, except per share data):

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
BASIC
Income before extraordinary items $ 31,872 $ 27,391 $ 21,867
Less: Preferred stock dividends declared (492) (588) (766)
------------ ------------ ------------
Income before extraordinary items applicable to basic common shares 31,380 26,803 21,101
Extraordinary items, net of tax 8,809
------------ ------------ ------------
Net income applicable to basic common shares $ 31,380 $ 35,612 $ 21,101
============ ============ ============

Average common shares outstanding 17,897,887 17,340,823 17,270,127
============ ============ ============

Income before extraordinary items $ 1.75 $ 1.54 $ 1.22
Extraordinary items, net of tax .51
------------ ------------ ------------
Earnings per share $ 1.75 $ 2.05 $ 1.22
============ ============ ============

DILUTED
Income before extraordinary items $ 31,872 $ 27,391 $ 21,867
Extraordinary items, net of tax 8,809
------------ ------------ ------------
Net income applicable to diluted common shares $ 31,872 $ 36,200 $ 21,867
============ ============ ============

Average common shares outstanding 17,897,887 17,340,823 17,270,127
Convertible preferred stock 567,500 662,685 947,220

Net effect of dilutive stock options based on the
treasury stock method using the average market price 547,627 566,930 213,196
------------ ------------ ------------
19,013,014 18,570,438 18,430,543
============ ============ ============

Income before extraordinary items $ 1.68 $ 1.48 $ 1.19
Extraordinary items, net of tax .47
------------ ------------ ------------
Earnings per share $ 1.68 $ 1.95 $ 1.19
============ ============ ============
</TABLE>

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). Management believes, as of December 31, 1998, that the Corporation and
each of its banking subsidiaries exceeded all capital adequacy requirements to
which they are subject.

As of September 30, 1998, the Corporation and each of its banking subsidiaries
have been categorized by the various regulators as "well capitalized" under the
regulatory framework for prompt corrective action.

F.N.B. CORPORATION 21

<PAGE> 45

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Following are the capital ratios as of December 31, 1998 for the Corporation and
its significant subsidiaries, First National Bank of Pennsylvania, First
National Bank of Naples and First National Bank of Florida (dollars in
thousands):

<TABLE>
<CAPTION>
WELL CAPITALIZED MINIMUM CAPITAL
ACTUAL REQUIREMENTS REQUIREMENTS
------ ------------ ------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
TOTAL CAPITAL (TO RISK-WEIGHTED ASSETS):
F.N.B. Corporation $292,800 12.7% $230,653 10.0% $184,522 8.0%
First National Bank of Pennsylvania 89,833 10.2 87,714 10.0 70,171 8.0
First National Bank of Naples 49,233 10.2 48,479 10.0 38,783 8.0
First National Bank of Florida 26,533 12.1 21,918 10.0 17,534 8.0

TIER 1 CAPITAL (TO RISK-WEIGHTED ASSETS):
F.N.B. Corporation $250,857 10.9% $138,392 6.0% $ 92,261 4.0%
First National Bank of Pennsylvania 78,852 9.0 52,629 6.0 35,086 4.0
First National Bank of Naples 44,816 9.2 29,087 6.0 19,391 4.0
First National Bank of Florida 23,793 10.9 13,151 6.0 8,767 4.0

TIER 1 CAPITAL (TO AVERAGE ASSETS):
F.N.B. Corporation $250,857 7.9% $158,230 5.0% $126,584 4.0%
First National Bank of Pennsylvania 78,852 6.6 59,651 5.0 47,721 4.0
First National Bank of Naples 44,816 7.0 32,075 5.0 25,660 4.0
First National Bank of Florida 23,793 7.3 16,325 5.0 13,060 4.0
</TABLE>

The Corporation and its banking subsidiaries are subject to various regulatory
capital requirements administered by the federal banking agencies. Failure to
meet minimum capital requirements can initiate certain mandatory, and possibly
additional 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.

The Corporation's banking subsidiaries were required to maintain aggregate
cash reserves with the Federal Reserve Bank amounting to $15.3 million at
December 31, 1998. The Corporation also maintains deposits for various services
such as check clearing.

Certain limitations exist under applicable law and regulations by regulatory
agencies regarding dividend payments to a parent by its subsidiaries. As of
December 31, 1998, the subsidiaries had $35.6 million of retained earnings
available for distribution as dividends without prior regulatory approval.

Under current Federal Reserve regulations, the Corporation's banking
subsidiaries are limited in the amount they may lend to non-bank affiliates,
including the Corporation. Such loans must be secured by specified collateral.
In addition, any such loans to a single non-bank affiliate may not exceed 10% of
any banking subsidiary's capital and surplus, and the aggregate of loans to all
such affiliates may not exceed 20%. The maximum amount that may be borrowed by
the parent company under these provisions approximated $41.4 million at December
31, 1998.

F.N.B. CORPORATION 22
<PAGE> 46

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BUSINESS SEGMENTS

The Corporation operates in one reportable segment: community banking. The
Corporation's community banking 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 banking subsidiaries offer various alternative investment
products, including mutual funds and annuities. The following tables provide
financial information for this segment of the Corporation (in thousands). Other
items shown in the table below represent the parent company, other non-bank
subsidiaries and eliminations, which are necessary for purposes of reconciling
to the consolidated amounts.

<TABLE>
<CAPTION>
COMMUNITY ALL
At or for the Year Ended December 31, 1998 BANKING OTHER CONSOLIDATED
- ------------------------------------------ ------- ----- ------------
<S> <C> <C> <C>
Interest income $ 218,791 $ 17,194 $ 235,985
Interest expense 99,739 3,646 103,385
Non-interest income 26,701 5,044 31,745
Non-interest expense 93,085 16,089 109,174
Intangible amortization 1,277 44 1,321
Income tax expense (credit) 16,233 (189) 16,044
Recurring net income* 34,257 1,243 35,500
Non-recurring items, net of tax* (2,510) (1,118) (3,628)
Net income 31,747 125 31,872
Total assets 3,166,833 83,862 3,250,695

<CAPTION>
COMMUNITY ALL
At or for the Year Ended December 31, 1997 BANKING OTHER CONSOLIDATED
- ------------------------------------------ ------- ----- ------------
<S> <C> <C> <C>
Interest income $ 197,857 $ 18,421 $ 216,278
Interest expense 88,250 4,414 92,664
Non-interest income 29,945 (3,967) 25,978
Non-interest expense 86,624 11,706 98,330
Intangible amortization 1,474 110 1,584
Income tax expense (credit) 15,051 (2,280) 12,771
Recurring net income* 30,364 1,592 31,956
Non-recurring items, net of tax* 737 3,507 4,244
Net income 31,101 5,099 36,200
Total assets 2,878,785 88,697 2,967,482

<CAPTION>
COMMUNITY ALL
At or for the Year Ended December 31, 1996 BANKING OTHER CONSOLIDATED
- ------------------------------------------ ------- ----- ------------
<S> <C> <C> <C>
Interest income $ 184,427 $ 17,953 $ 202,380
Interest expense 79,949 4,787 84,736
Non-interest income 19,437 3,385 22,822
Non-interest expense 86,482 11,393 97,875
Intangible amortization 997 50 1,047
Income tax expense 9,788 1,163 10,951
Recurring net income* 23,649 2,361 26,010
Non-recurring items, net of tax* (2,224) (1,919) (4,143)
Net income 21,425 442 21,867
Total assets 2,513,032 167,064 2,680,096
</TABLE>

* Recurring net income excludes merger related and other non-recurring costs of
$3.6 million in 1998, extraordinary gains on the sale of a subsidiary and
branches of $8.8 million and merger related and other non-recurring costs of
$4.6 million in 1997, and a one-time assessment of $2.1 million legislated by
Congress to recapitalize the Savings Association Insurance Fund and merger
related and other non-recurring costs of $2.0 million in 1996, all on an
after-tax basis. Such presentation is provided in order to eliminate all
items deemed by management to be of a non-recurring nature.

F.N.B. CORPORATION 23

<PAGE> 47

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CASH FLOW INFORMATION

Following is a summary of supplemental cash flow information (in thousands):

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
Cash paid during year for:
<S> <C> <C> <C>
Interest $102,625 $ 90,520 $84,115
Income taxes 8,912 11,111 11,160

Non-cash investing and financing activities:
Acquisition of real estate in settlement of loans $ 3,037 $ 3,336 $ 6,720
Loans granted in the sale of other real estate 2,396 1,557 407
</TABLE>

PARENT COMPANY FINANCIAL STATEMENTS

Below is condensed financial information of F.N.B. Corporation (parent company
only). In this information, the parent's investments in subsidiaries are stated
at cost plus equity in undistributed earnings of subsidiaries since acquisition.
This information should be read in conjunction with the consolidated financial
statements.

<TABLE>
<CAPTION>
BALANCE SHEET (in thousands)
December 31 1998 1997
- ----------- ---- ----
ASSETS
<S> <C> <C>
Cash $ 467 $ 6
Short-term investments 14,945 2,095
Advances to subsidiaries 1,621 12,122
Other assets 10,248 5,414
Investment in bank subsidiaries 235,282 230,020
Investment in non-bank subsidiaries 114,943 110,940
-------- --------
TOTAL ASSETS $377,506 $360,597
======== ========
LIABILITIES
Other liabilities $ 7,552 $ 6,555
Short-term borrowings 49,609 49,931
Long-term debt 48,187 43,860
-------- --------
TOTAL LIABILITIES 105,348 100,346
-------- --------
STOCKHOLDERS' EQUITY 272,158 260,251
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $377,506 $360,597
======== ========
</TABLE>

F.N.B. CORPORATION 24

<PAGE> 48

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
INCOME STATEMENT (in thousands)
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
INCOME
Dividend income from subsidiaries:
Bank $29,401 $31,373 $11,778
Non-bank 2,148 4,660 2,501
------- ------- -------
31,549 36,033 14,279
------- ------- -------
Gain on sale of securities 1,296 850
Interest income 452 5,423 5,394
Income from equity investment 621
Service fee income 7,776
Other income 98 95 254
------- ------- -------
TOTAL INCOME 39,875 43,468 20,777
------- ------- -------

EXPENSES
Interest expense 6,136 6,280 5,920
Salaries and personnel expense 8,264
Service fees 985 970 617
Other expenses 4,090 3,248 2,076
------- ------- -------
TOTAL EXPENSES 19,475 10,498 8,613
------- ------- -------

INCOME BEFORE TAXES AND EQUITY IN
UNDISTRIBUTED INCOME OF SUBSIDIARIES 20,400 32,970 12,164
Income tax benefit 3,880 1,156 618
------- ------- -------
24,280 34,126 12,782
------- ------- -------
Equity in undistributed income of subsidiaries:
Bank 2,188 (1,035) 8,052
Non-bank 5,404 (2,118) 1,033
------- ------- -------
7,592 (3,153) 9,085
------- ------- -------

INCOME BEFORE EXTRAORDINARY ITEM 31,872 30,973 21,867
Gain on sale of subsidiary, net of tax 5,227
------- ------- -------

NET INCOME $31,872 $36,200 $21,867
======= ======= =======
</TABLE>

F.N.B. CORPORATION 25

<PAGE> 49

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS (in thousands)
Year Ended December 31 1998 1997 1996
- ---------------------- ---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 31,872 $ 36,200 $ 21,867
Adjustments to reconcile net income to net
cash flows from operating activities:
Gain on sale of securities (1,296) (850)
Undistributed earnings of subsidiaries (7,592) 3,153 (9,085)
Extraordinary gain on sale of subsidiary (5,227)
Other, net (3,386) (2,745) (501)
-------- -------- --------
Net cash flows from operating activities 20,894 30,085 11,431
-------- -------- --------

INVESTING ACTIVITIES
Net change in short-term investments (12,493) 2,362 (1,529)
Purchase of securities (1,704) (235)
Proceeds from sale of securities 1,828 1,244
Advances from (to) subsidiaries 1,501 (2,735) (4,250)
Cash paid upon acquisition of subsidiaries (13,586)
Investment in subsidiaries 6,845 (11,700) 356
-------- -------- --------
Net cash flows from investing activities (4,147) (25,535) (4,414)
-------- -------- --------

FINANCING ACTIVITIES
Net increase in due to non-bank subsidiary 2,950
Net increase (decrease) in short-term borrowings (322) (5,270) 4,839
Decrease in long-term debt (6,510) (6,680) (12,303)
Increase in long-term debt 10,837 16,550 8,899
Net acquisition of treasury stock (7,572) (2,535) (1,560)
Cash dividends paid (12,719) (9,578) (6,889)
-------- -------- --------
Net cash flows from financing activities (16,286) (4,563) (7,014)
-------- -------- --------
NET INCREASE (DECREASE) IN CASH 461 (13) 3
Cash at beginning of year 6 19 16
-------- -------- --------
CASH AT END OF YEAR $ 467 $ 6 $ 19
======== ======== ========

CASH PAID
Interest $ 6,049 $ 6,181 $ 6,251
======== ======== ========
</TABLE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each financial instrument:

CASH AND DUE FROM BANKS:
For these short-term instruments, the carrying amount is a reasonable estimate
of fair value.

SECURITIES:
For both securities available for sale and securities held to maturity, fair
value equals quoted market price, if available. If a quoted market price is not
available, fair value is estimated using quoted market prices for similar
securities.

LOANS:
The fair value of fixed rate loans is estimated by discounting the future cash
flows using the current rates at which similar loans would be made to borrowers
with similar credit ratings and for the same remaining maturities. The fair
value of adjustable rate loans approximate the carrying amount.

DEPOSITS:
The fair value of demand deposits, savings accounts and certain money market
deposits is the amount payable on demand at the reporting date. The fair value
of fixed-maturity deposits is estimated by discounting future cash flows using
rates currently offered for deposits of similar remaining maturities.

F.N.B. CORPORATION 26

<PAGE> 50

F.N.B. CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SHORT-TERM BORROWINGS:
The carrying amounts for short-term borrowings approximate fair value for
amounts that mature in 90 days or less. The fair value of subordinated notes is
estimated by discounting future cash flows using rates currently offered.

LONG-TERM DEBT:
The fair value of long-term debt is estimated by discounting future cash flows
based on the market prices for the same or similar issues or on the current
rates offered to the Corporation for debt of the same remaining maturities.

The estimated fair values of the Corporation's financial instruments are as
follows (in thousands):

<TABLE>
<CAPTION>
1998 1997
---- ----
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
------ ----- ------ -----
<S> <C> <C> <C> <C>
FINANCIAL ASSETS
Cash and short-term investments $ 165,635 $ 165,635 $ 148,206 $ 148,206
Securities available for sale 447,005 447,005 460,419 460,419
Securities held to maturity 89,644 90,412 138,590 138,937
Net loans, including loans held for sale 2,314,781 2,357,251 2,071,534 2,083,150

FINANCIAL LIABILITIES
Deposits $2,708,572 $2,717,694 $2,467,057 $2,472,139
Short-term borrowings 150,981 150,981 127,186 127,186
Long-term debt 69,492 71,448 72,246 73,837
</TABLE>

REPORT OF INDEPENDENT AUDITORS

Stockholders and Board of Directors
F.N.B. Corporation

We have audited the consolidated balance sheets of F.N.B. Corporation and
Subsidiaries (F.N.B. Corporation) as of December 31, 1998 and 1997, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 1998. These
consolidated financial statements are the responsibility of management of F.N.B.
Corporation. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We did not audit the financial
statements of Citizens Holding Corporation and subsidiaries and Seminole Bank,
which statements reflect total assets constituting approximately 7% for 1997 and
net income constituting approximately 6% for 1997 of the related consolidated
financial statement totals. We did not audit the 1996 financial statements of
Southwest Banks, Inc. and subsidiaries, West Coast Bancorp, Inc. and subsidiary,
Seminole Bank or Citizens Holding Corporation and subsidiaries, which statements
reflect net income constituting approximately 11% of the related consolidated
financial statement totals. Those statements were audited by other auditors
whose reports have been furnished to us, and our opinion, insofar as it relates
to data included for Southwest Banks, Inc. and subsidiaries, West Coast Bancorp,
Inc. and subsidiary, Seminole Bank and Citizens Holding Corporation and
subsidiaries, is based solely on the reports of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of F.N.B. Corporation at
December 31, 1998 and 1997, and the consolidated results of their operations and
their cash flows for each of the three years in the period ended December 31,
1998 in conformity with generally accepted accounting principles.

/s/ ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
February 11, 1999

F.N.B. CORPORATION 27

<PAGE> 51

F.N.B. CORPORATION AND SUBSIDIARIES

SELECTED FINANCIAL DATA

F.N.B. CORPORATION AND SUBSIDIARIES
SELECTED FINANCIAL DATA (Dollars in thousands, except per share data)

The mergers between F.N.B. Corporation and West Coast Bank, Seminole Bank and
Citizens Holding Corporation were completed on January 20, 1998, May 29, 1998
and August 31, 1998, respectively, and accounted for as poolings-of-interests.
Accordingly, all financial information has been restated as if the companies
were combined for all periods presented.

<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---- ---- ---- ---- ----

<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31
Total interest income $ 235,985 $ 216,278 $ 202,380 $ 190,743 $ 164,346
Total interest expense 103,385 92,664 84,736 81,660 65,043
Net interest income 132,600 123,614 117,644 109,083 99,303
Provision for loan losses 7,255 11,100 9,773 7,174 9,369
Total non-interest income 31,745 25,978 22,822 21,678 19,545
Total non-interest expenses 109,174 98,330 97,875 87,155 82,550
Net income before
extraordinary items 31,872 27,391 21,867 24,310 17,929
Extraordinary items, net of tax 8,809
Net income 31,872 36,200 21,867 24,310 17,929
Recurring net income * 35,500 31,956 26,010 24,310 17,929

AT YEAR-END
Total assets $3,250,695 $2,967,482 $2,680,096 $2,487,518 $2,318,405
Net loans 2,298,834 2,064,998 1,873,050 1,685,317 1,589,684
Deposits 2,708,572 2,467,057 2,240,572 2,116,099 1,952,496
Long-term debt 69,492 72,246 58,179 50,784 56,614
Preferred stock 2,380 2,875 3,525 4,516 4,563
Total stockholders' equity 272,158 260,251 225,649 212,514 187,516

PER COMMON SHARE
Recurring earnings *
Basic $ 1.96 $ 1.81 $ 1.46 $ 1.37 $ 1.02
Diluted 1.87 1.72 1.41 1.32 1.01
Earnings
Basic 1.75 2.05 1.22 1.37 1.02
Diluted 1.68 1.95 1.19 1.32 1.01
Cash dividends .71 .60 .57 .31 .23
Book value 14.82 14.14 13.21 11.86 10.44

RATIOS
Return on average assets, based
on recurring net income * 1.15% 1.16% 1.02% 1.01% .80%
Return on average assets 1.03 1.32 .85 1.01 .80
Return on average equity, based
on recurring net income * 13.32 13.43 11.79 12.13 10.03
Return on average equity 11.96 15.21 9.91 12.13 10.03
Dividend payout ratio 38.96 25.24 29.02 14.87 15.01
Average equity to average assets 8.64 8.66 8.62 8.35 7.95
</TABLE>

F.N.B. CORPORATION 28

<PAGE> 52

F.N.B. CORPORATION AND SUBSIDIARIES

QUARTERLY EARNINGS SUMMARY

F.N.B. CORPORATION AND SUBSIDIARIES
QUARTERLY EARNINGS SUMMARY (Dollars in thousands, except per share data)

The mergers between F.N.B. Corporation and West Coast Bank, Seminole Bank and
Citizens Holding Corporation were completed on January 20, 1998, May 29, 1998
and August 31, 1998, respectively, and accounted for as poolings-of-interests.
Accordingly, the unaudited quarterly financial data has been restated as if the
companies were combined for all periods presented.

<TABLE>
<CAPTION>
QUARTER ENDED 1998 MAR. 31 JUNE 30 SEPT. 30 DEC. 31
- ------------------ ------- ------- -------- -------
<S> <C> <C> <C> <C>
Total interest income $57,650 $58,769 $59,624 $59,942
Total interest expense 25,243 25,829 26,403 25,910
Net interest income 32,407 32,940 33,221 34,032
Provision for loan losses 1,722 1,597 1,959 1,977
Total non-interest income 7,371 7,516 7,912 8,946
Total non-interest expenses 26,256 27,265 27,655 27,998
Net income 8,072 7,436 7,702 8,662
Recurring net income * 8,242 8,849 9,183 9,226

PER COMMON SHARE
Recurring earnings *
Basic $ .45 $ .49 $ .50 $ .52
Diluted .44 .46 .48 .49
Earnings
Basic .44 .41 .42 .48
Diluted .43 .39 .40 .46
Cash dividends .17 .18 .18 .18

<CAPTION>
QUARTER ENDED 1997 MAR. 31 JUNE 30 SEPT. 30 DEC. 31
- ------------------ ------- ------- -------- -------
Total interest income $52,810 $54,154 $53,384 $55,930
Total interest expense 22,219 22,898 22,957 24,590
Net interest income 30,591 31,256 30,427 31,340
Provision for loan losses 2,342 3,602 2,464 2,692
Total non-interest income 6,564 5,769 6,743 6,902
Total non-interest expenses 23,574 28,144 21,849 24,763
Net income before extraordinary items 7,549 3,637 8,832 7,373
Extraordinary items, net of tax 5,227 3,582
Net income 7,549 8,864 8,832 10,955
Recurring net income ** 7,549 7,899 8,832 7,676

PER COMMON SHARE
Recurring earnings **
Basic $ .43 $ .45 $ .50 $ .43
Diluted .41 .43 .48 .40
Earnings
Basic .43 .51 .50 .61
Diluted .41 .48 .48 .58
Cash dividends .15 .15 .15 .15
</TABLE>

* Recurring net income excludes merger related costs and other non-recurring
costs of approximately $170,000, $1.4 million, $1.5 million and $564,000
recognized during the first through fourth quarters of 1998, respectively,
all on an after-tax basis.

** Recurring net income excludes merger related costs and other non-recurring
costs of approximately $4.3 million recognized during the second quarter and
merger related costs and other non-recurring items of approximately $300,000
recognized during the fourth quarter, each on an after-tax basis.

F.N.B. CORPORATION 29

<PAGE> 53

F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

This financial review summarizes the combined financial condition and results
of operations giving retroactive effect to the mergers of West Coast Bank (West
Coast), Seminole Bank (Seminole) and Citizens Holding Corporation (Citizens)
with and into F.N.B. Corporation (the Corporation), and is intended to be read
in conjunction with the Consolidated Financial Statements and accompanying Notes
to those statements. The merger of the Corporation and West Coast was
consummated on January 20, 1998 and resulted in the Corporation issuing 585,263
shares of common stock. The merger of the Corporation and Seminole was
consummated on May 29, 1998 and resulted in the Corporation issuing 855,450
shares of common stock. The merger of the Corporation and Citizens was
consummated on August 31, 1998 and resulted in the Corporation issuing 1,052,772
shares of common stock. Each of these mergers have been accounted for on a
pooling-of-interests basis. This financial review is presented as if all mergers
had been consummated for all periods presented.

RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998

Recurring net income increased 11.1% to $35.5 million in 1998 from $32.0
million in 1997. On a recurring net income basis, basic earnings per share were
$1.96 and $1.81 for 1998 and 1997, while diluted earnings per share were $1.87
and $1.72, respectively, for those same periods. The results for 1998 include
merger related and other non-recurring costs of $3.6 million, net of tax. The
results for 1997 include $8.8 million in gains relating to the sales of a
subsidiary and branches and merger related and other non-recurring costs of $4.6
million, both net of tax. Including these items, net income was $31.9 million in
1998 versus $36.2 million in 1997, resulting in diluted earnings per share of
$1.68 and $1.95. Net interest income, on a fully taxable equivalent basis,
increased by 7.1% as net average interest earning assets increased by $38.3
million. These factors are further detailed in the discussion which follows.

Common comparative ratios for results of operations include the return on
average assets and the return on average equity. The Corporation's return on
average assets was 1.15% for 1998 compared to 1.16% for 1997, while the
Corporation's return on average equity was 13.32% for 1998 compared to 13.43%
for 1997, each calculated on a recurring net income basis. Including the
extraordinary and non-recurring items, the Corporation had a return on average
assets of 1.03% and 1.32% for 1998 and 1997, respectively, and a return on
average equity of 11.96% and 15.21% for those same periods.

[GRAPH]

F.N.B. CORPORATION 30

<PAGE> 54

F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

NET INTEREST INCOME

The following table provides information regarding the average balances and
yields and rates on interest earning assets and interest bearing liabilities
(dollars in thousands):

<TABLE>
<CAPTION>
Year Ended December 31, 1998 1997 1996
- ----------------------- ------------------------------ --------------------------- --------------------------
AVERAGE YIELD/ AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- ---- ------- -------- ---- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest earning assets:
Interest bearing deposits with banks $ 3,164 $ 145 4.58% $ 3,994 $ 236 5.91% $ 7,218 $ 394 5.46%
Federal funds sold 62,910 3,429 5.45 77,198 4,101 5.31 57,580 2,981 5.18
Taxable investment securities (1) 499,934 30,811 6.16 444,597 27,603 6.21 429,406 25,491 5.94
Non-taxable investment securities (2) 82,756 5,022 6.07 79,374 4,683 5.90 71,975 4,428 6.15
Loans (2)(3) 2,207,611 198,559 8.99 1,961,470 181,726 9.26 1,814,864 171,289 9.44
---------- ------- ---------- ------- ---------- -------
TOTAL INTEREST EARNING ASSETS 2,856,375 237,966 8.33 2,566,633 218,349 8.51 2,381,043 204,583 8.59
---------- ------- ---------- ------- ---------- -------
Cash and due from banks 94,624 86,043 91,793
Allowance for loan losses (31,025) (30,799) (27,756)
Premises and equipment 83,552 62,728 52,926
Other assets 82,365 63,769 61,841
---------- ---------- ----------
$3,085,891 $2,748,374 $2,559,847
========== ========== ==========

LIABILITIES Interest bearing liabilities:
Deposits:
Interest bearing demand $ 468,519 9,647 2.06 $ 370,624 9,002 2.43 $ 362,834 6,968 1.92
Savings 634,811 20,489 3.23 595,294 16,405 2.76 545,073 15,587 2.86
Other time 1,134,928 61,846 5.45 1,042,899 57,096 5.47 986,513 53,767 5.45
Short-term borrowings 134,789 6,813 5.05 135,089 6,415 4.75 92,444 4,030 4.36
Long-term debt 73,411 4,590 6.25 51,145 3,746 7.32 49,977 4,384 8.77
---------- ------- ---------- ------- ---------- -------
TOTAL INTEREST BEARING LIABILITIES 2,446,458 103,385 4.23 2,195,051 92,664 4.22 2,036,841 84,736 4.16
---------- ------- ---------- ------- ---------- -------
Non-interest bearing demand deposits 328,673 278,172 259,375
Other liabilities 44,243 37,222 43,062
---------- ---------- ----------
2,819,374 2,510,445 2,339,278
---------- ---------- ----------
STOCKHOLDERS' EQUITY 266,517 237,929 220,569
---------- ---------- ----------
$3,085,891 $2,748,374 $2,559,847
========== ========== ==========
Excess of interest earning assets
over interest bearing liabilities $ 409,917 $ 371,582 $ 344,202
========== ========== ==========

Net interest income $134,581 $125,685 $ 119,847
======== ======== ==========

Net interest spread 4.10% 4.29% 4.43%
==== ==== ====

Net interest margin (4) 4.71% 4.90% 5.03%
==== ==== ====
</TABLE>

(1) The average balances and yields earned on securities are based on
historical cost.

(2) The amounts are reflected on a fully taxable equivalent basis using the
federal statutory tax rate of 35%, adjusted for certain federal tax
preferences.

(3) Average balances include 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.

(4) Net interest margin is calculated by dividing the difference between total
interest earned and total interest paid by total interest earning assets.

F.N.B. CORPORATION 31

<PAGE> 55

F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

Net interest income, the Corporation's primary source of earnings, is the
amount by which interest and fees generated by earning assets, primarily loans
and securities, exceed interest expense on deposits and borrowed funds. Net
interest income, on a fully taxable equivalent basis, totaled $134.6 million in
1998 versus $125.7 million in 1997. Net interest income consisted of interest
income of $238.0 million and interest expense of $103.4 million in 1998,
compared to $218.3 million and $92.7 million for each, respectively, in 1997.
Net interest income as a percentage of average earning assets (commonly referred
to as the margin) fell to 4.71% in 1998 compared to 4.90% in 1997.

Interest income on loans, on a fully taxable equivalent basis, increased 9.3%
from $181.7 million in 1997 to $198.6 million in 1998. This increase was the
result of an increase in average loans of 12.5% as the average yield declined by
27 basis points.

Interest expense on deposits increased 11.5% to $92.0 million in 1998. This
increase was attributable to an increase in average deposits of 11.4% over the
same period. The average balance in interest bearing demand and time deposits
increased by $97.9 and $92.0 million, respectively. The average balance in
non-interest bearing demand deposits increased by $50.5 million.

The Corporation monitors interest rate sensitivity by measuring the impact
that future changes in interest rates will have on net interest income. Through
its asset/liability management and pricing policies, management has strived to
optimize net interest income while reducing the effects of changes in interest
rates. (See "Liquidity and Interest Rate Sensitivity" discussion).

The following table sets forth certain information regarding changes in net
interest income attributable to changes in the volumes of interest earning
assets and interest bearing liabilities and changes in the rates for the periods
indicated (in thousands):

Year Ended December 31, 1998 1997
---------------------------------- ------------------------------------
VOLUME RATE NET VOLUME RATE NET
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest bearing deposits with banks $ (44) $ (47) $ (91) $ (194) $ 36 $ (158)
Federal funds sold (784) 112 (672) 1,043 77 1,120
Securities 3,634 (87) 3,547 1,375 992 2,367
Loans 21,928 (5,095) 16,833 13,662 (3,225) 10,437
------- ------- ------- ------- ------- -------
24,734 (5,117) 19,617 15,886 (2,120) 13,766
------- ------- ------- ------- ------- -------
INTEREST EXPENSE
Deposits:
Interest bearing 1,523 (878) 645 152 1,882 2,034
Savings 1,145 2,939 4,084 1,318 (500) 818
Other time 4,955 (205) 4,750 3,128 201 3,329
Short-term borrowings (15) 413 398 1,998 387 2,385
Long-term debt 1,271 (427) 844 105 (743) (638)
------- ------- ------- ------- ------- -------
8,879 1,842 10,721 6,701 1,227 7,928
------- ------- ------- ------- ------- -------

Net Change $15,855 $(6,959) $ 8,896 $ 9,185 $(3,347) $ 5,838
======= ======= ======= ======= ======= =======
</TABLE>

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.

F.N.B. CORPORATION 32

<PAGE> 56

F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

PROVISION FOR LOAN LOSSES

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
decreased 34.6% to $7.3 million in 1998. This decrease reflects the
Corporation's continued strong asset quality as well as an increase in the
provision for loan losses of $1.7 million during 1997. This additional provision
resulted from applying the Corporation's allowance for loan loss policy and
methodology for evaluating the adequacy of the allowance to West Coast Bancorp,
Inc., which was merged into the Corporation in April of 1997. (See "Non-
Performing Loans and Allowance for Loan Losses" and "Mergers, Acquisitions and
Divestitures" discussions).

NON-INTEREST INCOME

Total non-interest income increased 22.2% from $26.0 million in 1997 to $31.7
million in 1998. This increase was attributable to increases in service charges
and gains on the sale of loans, primarily residential mortgages.

Service charges increased 20.7% from $13.3 million in 1997 to $16.1 million in
1998. Revenue was recognized as a result of increases in the level of deposits.

Net gains on the sale of loans increased 91.7% as the Corporation took
advantage of the strong market for mortgage refinancings.

During 1998, the Corporation recognized $1.3 million in income from its equity
investment in Sun Bancorp, Inc., a bank holding company headquartered in
Selinsgrove, Pennsylvania, as compared to $621,000 in 1997.

NON-INTEREST EXPENSES

Total non-interest expense increased from $98.3 million in 1997 to $109.2
million in 1998. The increase was attributable to a full year of operating
expenses associated with former Mercantile Bank of Southwest Florida and Indian
Rocks National Bank. Operating costs for these acquisitions were not recorded
until after the closing of each transaction during the fourth quarter of 1997.

The Corporation recognized $4.8 million and $2.4 million in 1998 and 1997,
respectively, in merger related costs. The expenses were primarily legal and
investment banking costs associated with the completion of mergers.

INCOME TAXES

The Corporation's income tax expense was $16.0 million for 1998 compared to
$12.8 million for 1997. The 1998 effective tax rate of 33.5% was lower than the
35.0% federal statutory tax rate due to the tax benefits resulting from
tax-exempt instruments and excludable dividend income. Additional information
relating to income taxes is furnished in the Notes to Consolidated Financial
Statements.

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 significant source of liquidity
provided by the available for sale securities portfolio, the Corporation
generally has sufficient sources of funds available as needed to meet its
routine, operational cash needs. Excluding mortgage-backed securities, debt
securities due to mature within one year, which will provide a source of
short-term liquidity, amounted to $52.3 million or 9.8% of the securities
portfolio.

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 $45.0 million was unused at the end of 1998. 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 uncommitted funding
sources.

The financial performance of the Corporation is subject to risk from interest
rate fluctuations. This interest rate risk arises due to differences between the
amount of interest-earning assets and the amount of interest-bearing liabilities
subject to pricing over a specified period, the amount of change in individual
interest rates and the

F.N.B. CORPORATION 33

<PAGE> 57

F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

embedded options in certain financial instruments. The principal objective of
the Corporation's asset/liability management activities is to maximize net
interest income while maintaining acceptable levels of interest rate and
liquidity risk and facilitating the funding needs of the Corporation. The
Corporation's Asset/Liability Committee (ALCO) is responsible for achieving this
objective. The Corporation uses an asset/liability model to quantify its balance
sheet strategies and their associated risks. Net interest income simulation is
the principal tool utilized for these purposes. Gap analysis is employed as a
secondary diagnostic measurement. The Corporation attempts to mitigate interest
rate risk through asset and liability pricing and matched maturity funding.

A gradual 300 basis point decrease in interest rates is estimated to cause a
decline in net interest income of 0.8% or $1.1 million for 1999 as compared to
net interest income if interest rates were unchanged during 1999. Comparatively,
a gradual 300 basis point decrease in interest rates to actual 1998 interest
rates would have decreased net interest income by 0.9% or $1.1 million in 1998.
These low levels of variation are within the Corporation's policy limits. The
simulation analyses assumed that savings and checking interest rates had a low
correlation to changes in market rates of interest and that certain asset
prepayments changed as refinancing incentives evolved. Further, in the event of
a change of such a magnitude in interest rates, the ALCO would likely take
actions to further mitigate its exposure to the change. However, due to the
greater uncertainty of other specific actions that would be taken, the analysis
assumed no change in the Corporation's asset/liability composition.

Following is the gap analysis as of December 31, 1998 (dollars in thousands):

<TABLE>
<CAPTION>
WITHIN 4-12 1-5 OVER
3 MONTHS MONTHS YEARS 5 YEARS TOTAL
-------- ------ ----- ------- -----
<S> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS
Interest bearing deposits with banks $ 3,592 $ 100 $ 3,692
Federal funds sold 33,075 33,075
Securities:
Available for sale 10,596 27,791 $ 231,474 $ 177,144 447,005
Held to maturity 5,798 18,916 47,693 17,237 89,644
Loans, net of unearned income 658,310 613,765 972,424 101,267 2,345,766
--------- -------- ---------- ---------- ----------
711,371 660,572 1,251,591 295,648 2,919,182
Other assets 331,513 331,513
--------- -------- ---------- ---------- ----------
$ 711,371 $660,572 $1,251,591 $ 627,161 $3,250,695
========= ======== ========== ========== ==========

INTEREST BEARING LIABILITIES
Deposits:
Interest checking $ 132,288 $370,839 $ 503,127
Savings 255,728 454,026 709,754
Time deposits 285,289 $572,743 $ 254,719 1,394 1,114,145
Short-term borrowings 142,861 8,030 90 150,981
Long-term debt 14,664 6,472 37,847 10,509 69,492
--------- -------- ---------- ---------- ----------
830,830 587,245 292,566 836,858 2,547,499
Other liabilities 431,038 431,038
Stockholders' equity 272,158 272,158
--------- -------- ---------- ---------- ----------
$ 830,830 $587,245 $ 292,566 $1,540,054 $3,250,695
========= ======== ========== ========== ==========
PERIOD GAP $(119,459) $ 73,327 $ 959,025 $ (912,893)
========= ======== ========== ==========
CUMULATIVE GAP $(119,459) $(46,132) $ 912,893
========= ======== ==========
CUMULATIVE GAP AS A PERCENT
OF TOTAL ASSETS (3.67)% (1.42)% 28.08%
========= ======== ==========
RATE SENSITIVE ASSETS/
RATE SENSITIVE LIABILITIES (CUMULATIVE) .86 .97 1.53 1.15
========= ======== ========== ==========
</TABLE>

F.N.B. CORPORATION 34

<PAGE> 58

F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

The preceding gap analysis is based on the amortization, maturity or repricing
of the Corporation's interest-earning assets and interest-bearing liabilities.
Non-maturity deposits have been allocated to represent their lower sensitivity
to changes in market interest rates than other variable-rate instruments. The
cumulative gap represents the difference between these assets and liabilities
over a specified time period. Based on the cumulative one year gap and assuming
no change in asset/liability composition, a decrease in interest rates would be
expected to result in a slight reduction in net interest income. This gap
position is within the Corporation's policy limits.

RESULTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997

The Corporation's recurring net income increased 22.9% to $32.0 million in
1997 from $26.0 million in 1996. Basic recurring earnings per share were $1.81
and $1.46 for 1997 and 1996, while diluted recurring earnings per share were
$1.72 and $1.41, respectively, for those same periods. The results for 1997
exclude $8.8 million in gains relating to the sales of a subsidiary and branches
and merger related and other non-recurring costs of $4.6 million, both net of
tax. The results for 1996 exclude a special one-time assessment to recapitalize
the Savings Association Insurance Fund (SAIF) of $2.1 million and merger related
costs of $2.0 million, both net of tax. Including these items, net income was
$36.2 million in 1997 versus $21.9 million in 1996. Based upon recurring
earnings, the Corporation's return on average assets was 1.16% for 1997 compared
to 1.02% for 1996, while the Corporation's return on average equity was 13.43%
for 1997 compared to 11.79% for 1996.

Net interest income, on a fully taxable equivalent basis, increased from
$119.8 million in 1996 to $125.7 million in 1997. Net interest income consisted
of interest income of $218.3 million and interest expense of $92.7 million in
1997, compared to $204.6 million and $84.7 million for each, respectively, in
1996. Net margin fell to 4.90% from 5.03% in 1996. Interest income on loans, on
a fully taxable equivalent basis, increased 6.1% from $171.3 million in 1996 to
$181.7 million in 1997. This increase is the result of loan growth. Average
loans increased 8.1% from 1996. Interest expense on deposits increased 8.1% to
$82.5 million in 1997. This increase was attributable to a $56.4 million
increase in average other time deposits as well as a 51 basis point increase in
the rate paid on interest bearing demand deposits.

The provision for loan losses was $11.1 million and represented an increase of
13.6% from 1996. This increase resulted from applying the Corporation's
allowance for loan loss policy and methodology for evaluating the adequacy of
the allowance for loan losses to acquired affiliates.

Total non-interest income increased 13.8% from $22.8 million in 1996 to $26.0
million in 1997. This increase was attributable to increases in service charges
and gains on the sale of securities as well as income from the Corporation's
equity investment. Service charges increased 6.0% from $12.6 million in 1996 to
$13.3 million in 1997 as a result of increases in the level of deposits. Net
gains on the sale of securities increased by 58.9% due to a higher level of
equity security sales in 1997. Other non-interest income included $621,000 in
income from the Corporation's equity investment during 1997.

Total non-interest expense increased from $97.9 million in 1996 to $98.3
million in 1997. The increase was primarily attributable to an increase of $4.1
million in salaries and employee benefits and an increase in merger-related
expenses from $2.1 million in 1996 to $2.4 million in 1997. Additionally, the
1996 total reflected a one-time assessment of $3.2 million to recapitalize the
SAIF.

Salaries and personnel expense increased 8.6% in 1997. This increase was due
to increases for incentive compensation, as well as normal annual salary
adjustments. The Corporation's incentive compensation plans allow for additional
compensation to be paid to employees based on the Corporation achieving various
financial and productivity goals.

On September 30, 1996, the President of the United States signed into law the
Deposit Insurance Funds Act of 1996 to recapitalize the SAIF. The legislation
included a one-time assessment on all deposits insured by the SAIF including
those held by chartered commercial banks as a result of previous acquisitions.
The Corporation was required to pay a one-time assessment of $3.2 million.

F.N.B. CORPORATION 35

<PAGE> 59

F.N.B. CORPORATION

MANAGEMENT'S DISCUSSION

Income tax expense was $12.8 million for 1997 compared to $11.0 million for
1996. The 1997 effective tax rate of 31.8% was below the 35% statutory tax rate
due to the tax benefits resulting from tax-exempt instruments and excludable
dividend income.

FINANCIAL CONDITION

LENDING ACTIVITY

Following is a summary of loans (in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997 1996 1995 1994
- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Real estate:
Residential $ 942,451 $ 905,065 $ 753,948 $ 674,920 $ 616,172
Commercial 611,027 524,006 479,041 436,578 350,740
Construction 98,942 67,216 45,532 38,803 51,744
Installment loans to individuals 286,149 295,336 410,322 396,745 384,745
Commercial, financial and agricultural 289,850 263,902 216,913 187,535 234,109
Lease financing 132,266 59,852 21,538 5,037
Unearned income (30,866) (20,473) (24,013) (27,628) (23,106)
---------- ---------- ---------- ---------- ----------
$2,329,819 $2,094,904 $1,903,281 $1,711,990 $1,614,404
========== ========== ========== ========== ==========
</TABLE>

The Corporation strives to minimize credit losses by utilizing credit approval
standards, diversifying its loan portfolio by industry and borrower and
conducting ongoing review and management of the loan portfolio.

The ratio of loans to deposits was 86.0% at December 31, 1998 and 84.9% at
December 31, 1997.

During 1998 and 1997, the Corporation sold $50.8 million and $23.9 million,
respectively, in fixed rate residential mortgages to the Federal National
Mortgage Association (FNMA). These sales allowed the Corporation to avoid the
potential interest rate risk of those fixed rate loans in a rising rate
environment. Additionally, it created liquidity for the Corporation to continue
to offer credit availability to the markets it serves.

The commercial loan portfolio consists principally of loans to small- and
medium-sized businesses within the Corporation's primary market area of western
Pennsylvania, eastern Ohio and southwest Florida.

As of December 31, 1998, no concentrations of loans exceeding 10% of total
loans existed which were not disclosed as a separate category of loans.

Following is a summary of the maturity distribution of certain loan categories
based on remaining scheduled repayments of principal (in thousands):

<TABLE>
<CAPTION>
WITHIN ONE TO AFTER
December 31, 1998 ONE YEAR FIVE YEARS FIVE YEARS TOTAL
- ----------------- -------- ---------- ---------- -----
<S> <C> <C> <C> <C>
Commercial, financial and agricultural $164,195 $101,377 $24,278 $289,850
Real estate - construction 58,923 28,185 11,834 98,942
-------- -------- ------- --------
Total $223,118 $129,562 $36,112 $388,792
======== ======== ======= ========
</TABLE>

The total amount of loans due after one year includes $51.0 million with
floating or adjustable rates of interest and $114.7 million with fixed rates of
interest.

F.N.B. CORPORATION 36

<PAGE> 60

F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

NON-PERFORMING LOANS

Non-performing loans include non-accrual loans and restructured loans.
Non-accrual loans represent loans on which interest accruals have been
discontinued. 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.

Following is a summary of non-performing loans (dollars in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997 1996 1995 1994
- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Non-accrual loans $12,103 $ 8,340 $10,279 $ 9,799 $11,756
Restructured loans 1,770 1,345 2,709 3,629 3,707
------- ------- ------- ------- -------
$13,873 $ 9,685 $12,988 $13,428 $15,463
======= ======= ======= ======= =======
Non-performing loans as a
percentage of total loans .60% .46% .68% .78% .96%
</TABLE>

Following is a table showing the amounts of contractual interest income and
actual interest income recorded on non-accrual and restructured loans (in
thousands):

<TABLE>
<CAPTION>
Year Ended December 31 1998 1997 1996 1995 1994
- ---------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Gross interest income that would have
been recorded if the loans
had been current and in
accordance with their original terms $1,563 $1,059 $1,467 $1,317 $1,864
Interest income recorded
during the year 863 477 798 694 720
</TABLE>

Following is a summary of loans 90 days or more past due, on which interest
accruals continue (dollars in thousands):

<TABLE>
<CAPTION>
December 31 1998 1997 1996 1995 1994
- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Loans 90 days or more past due $2,891 $3,218 $3,065 $4,025 $2,753
Loans 90 days or more past due as a
percentage of total loans .12% .15% .16% .24% .17%
</TABLE>

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, portfolio growth and concentrations
of credit risk.

F.N.B. CORPORATION 37

<PAGE> 61

<TABLE>
<CAPTION>
F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

Following is a summary of changes in the allowance for loan losses (dollars in
thousands):

Year Ended December 31 1998 1997 1996 1995 1994
- ---------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Balance at beginning of year $29,906 $30,231 $26,673 $24,720 $20,334

Reduction due to the sale of a subsidiary and loans (3,828)
Addition due to acquisitions 1,167

Charge-offs:
Real estate - mortgage (322) (880) (428) (736) (1,456)
Installment loans to individuals (5,787) (6,875) (5,958) (5,443) (3,837)
Lease financing (300) (106) (12)
Commercial, financial and agricultural (1,064) (2,174) (1,451) (1,226) (1,725)
------- ------- ------- ------- -------
(7,473) (10,035) (7,849) (7,405) (7,018)
------- ------- ------- ------- -------
Recoveries:
Real estate - mortgage 40 100 135 189 98
Installment loans to individuals 900 780 1,047 1,125 968
Lease financing 38 32 6
Commercial, financial and agricultural 319 359 446 870 969
------- ------- ------- ------- -------
1,297 1,271 1,634 2,184 2,035
------- ------- ------- ------- -------

Net charge-offs (6,176) (8,764) (6,215) (5,221) (4,983)
Provision for loan losses 7,255 11,100 9,773 7,174 9,369
------- ------- ------- ------- -------
Balance at end of year $30,985 $29,906 $30,231 $26,673 $24,720
======= ======= ======= ======= =======
Net charge-offs as a percent of
average loans, net of unearned income .28% .45% .34% .31% .33%
Allowance for loan losses as a percent of
total loans, net of unearned income 1.33 1.43 1.59 1.56 1.53
Allowance for loan losses as a
percent of non-performing loans 223.35 308.79 232.76 198.64 159.87
</TABLE>

The increase in the level of charge-offs and the provision for loan losses in
1997 resulted primarily from the consistent application of the Corporation's
charge-off policy and methodology for determining the adequacy of the allowance
for loan losses to acquired affiliates.

Following shows the allocation of the allowance for loan losses (dollars in
thousands):

<TABLE>
<CAPTION>
% OF % OF % OF % OF % OF
LOANS LOANS LOANS LOANS LOANS
IN EACH IN EACH IN EACH IN EACH IN EACH
CATEGORY CATEGORY CATEGORY CATEGORY CATEGORY
TO TOTAL TO TOTAL TO TOTAL TO TOTAL TO TOTAL
Year Ended December 31 1998 LOANS 1997 LOANS 1996 LOANS 1995 LOANS 1994 LOANS
- ---------------------- ---- ----- ---- ----- ---- ----- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial, financial and
agricultural $ 5,648 39% $ 5,297 38% $ 7,416 37% $ 6,722 36% $ 8,876 36%
Real estate - construction 271 4 284 3 132 2 88 2 216 3
Real estate - mortgage 6,190 40 5,963 43 4,524 40 4,068 39 4,498 38
Installment loans to
individuals 8,146 17 5,387 16 7,549 21 6,550 23 5,138 23
Unallocated portion 10,730 12,975 10,610 9,245 5,992
------- --- ------- --- ------- --- ------- --- ------- ---
$30,985 100% $29,906 100% $30,231 100% $26,673 100% $24,720 100%
======= === ======= === ======= === ======= === ======= ===
</TABLE>

F.N.B. CORPORATION 38

<PAGE> 62

F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

The Corporation has allocated the allowance according to the amount deemed to
be reasonably necessary to provide for the possibility of losses being incurred
within each of the categories of loans shown in the table above. The allocation
of the allowance should not be interpreted as an indication that loan losses in
future years will occur in the same proportions or that the allocation indicates
future loan loss trends. Furthermore, the portion allocated to each loan
category is not the sole amount available for future losses within such
categories since the total allowance is a general allowance applicable to the
entire portfolio.

INVESTMENT ACTIVITY

Investment activities serve to enhance overall yield on earning assets while
supporting interest rate sensitivity and liquidity positions. Securities
purchased with the intent and ability to retain until maturity are categorized
as securities held to maturity and carried at amortized cost. All other
securities are categorized as securities available for sale and must be marked
to market.

The relatively short average maturity of all securities provides a source of
liquidity to the Corporation and reduces the overall market risk of the
portfolio.

During 1998, securities available for sale decreased 2.9%, and securities held
to maturity decreased 35.3%, from December 31, 1997. The majority of this
decrease was utilized to purchase $60.0 million of bank owned life insurance,
which is included in other assets. Bank owned life insurance provides a
mechanism to finance the cost of employee benefit plans through the use of
higher yielding tax-exempt investments. The structure of the Corporation's
investment in bank owned life insurance although providing a higher yield than
the securities utilized to fund the purchase does not expose the Corporation to
a higher level of risk.

The following table indicates the respective maturities and weighted average
yields of securities as of December 31, 1998 (dollars in thousands):

<TABLE>
<CAPTION>
WEIGHTED
AMOUNT AVERAGE YIELD
------ -------------
<S> <C> <C>
Obligations of U.S. Treasury and
Other U.S. Government agencies:
Maturing within one year $ 41,746 5.87%
Maturing after one year within five years 167,793 6.06%
Maturing after five years within ten years 51,502 6.26%

State & political subdivisions:
Maturing within one year 9,335 5.78%
Maturing after one year within five years 26,630 6.28%
Maturing after five years within ten years 13,693 6.49%
Maturing after ten years 3,364 7.35%

Other securities:
Maturing within one year 1,256 6.11%
Maturing after one year within five years 281 6.54%
Maturing after ten years 10 2.80%

Mortgage-backed securities 193,828 6.18%
No stated maturity 27,211 7.05%
---------

TOTAL $ 536,649 6.18%
=========
</TABLE>

The weighted average yields for tax exempt securities are computed on a tax
equivalent basis.

F.N.B. CORPORATION 39

<PAGE> 63

F.N.B. CORPORATION

MANAGEMENT'S DISCUSSION

DEPOSITS AND SHORT-TERM BORROWINGS

As a commercial bank holding company, the Corporation's primary source of
funds is its deposits. Those deposits are provided by businesses and individuals
located within the markets served by the Corporation's subsidiaries.

Total deposits increased 9.8% to $2.7 billion in 1998. The majority of this
increase was due to a $144.7 million or 13.5% increase in savings and NOW
accounts. Additionally, non-interest deposits increased by $69.7 million or
22.3%.

Short-term borrowings, made up of repurchase agreements, federal funds
purchased, notes payable and subordinated notes increased 18.7% in 1998 to
$151.0 million. The primary reasons for this increase was an increase in
securities sold under repurchase agreements. Securities sold under repurchase
agreements increased $40.5 million in 1998.

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.

[GRAPH]

Capital management is a continuous process. Since December 31, 1997,
stockholders' equity has increased $19.2 million as a result of earnings
retention. Total cash dividends declared represented 39.0% of net income for
1998 compared to 25.2% for 1997. Book value per share was $14.82 at December 31,
1998, compared to $14.14 at December 31, 1997.

[GRAPH]

YEAR 2000 READINESS

The Year 2000 (Y2K) Issue is the result of computer programs being written
using year fields consisting of only two digits rather than four. Computer
programs that have time-sensitive software may recognize "00" as the year 1900
rather than year 2000. If such programs were in use and not corrected, it could
result in system failures and temporary interruptions in the processing of
transactions. The Corporation's core processing systems were written with four
digit year fields. The Y2K Issue is not only an internal issue but also affects
third parties including customers, counter parties, service providers and
vendors.

Because the Y2K Issue poses an unprecedented and profound enterprise wide
challenge for every organization, the Corporation formed a Y2K Committee. The
Y2K Committee developed a Year 2000 Enterprise Wide Project Plan (Y2K Plan),
which addresses both internal and external technology.

In accordance with the Y2K Plan, the Corporation has completed its inventory
and assessment of all internal technologies, including both software and
hardware. Each system was assigned a significance rating as to the degree of
criticality. Formal detailed test plans for systems with

F.N.B. CORPORATION 40

<PAGE> 64

F.N.B. CORPORATION AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION

significance ratings of a critical nature have been completed. Such systems
include core processing and ancillary systems required to sustain operations.

By the end of 1999, each of the Corporation's banking subsidiaries will be
processing on either of two core processing systems. The Corporation's northern
banking affiliates will continue to process transactions on their existing core
processing system. During the second quarter of 1998, the Corporation made the
strategic decision to convert each of the Florida banking affiliates to a new
core processing system. All Florida banking affiliates will be converted by May
31, 1999. The decision to convert was based in part on the number of different
systems being utilized by the Florida banking affiliates and the expiration of
the Corporation's primary Florida core processing contract.

The Corporation has received written representation from both vendors that
each system is Y2K compliant as well as third party certification of the vendors
compliance methodology. The Corporation participated in test verifications of
each core system during the fourth quarter of 1998. The Corporation also
developed a contingency plan which utilizes the two corporate wide core
processing systems as contingencies for each other.

During July of 1998, the Corporation's consumer finance subsidiary, Regency
Finance Company (Regency) selected a third party vendor to support all of its
future core application requirements. These core applications will include
loans, insurance and the Corporation's subordinated note program. Regency's
decision to select a new system was based upon the system's ability to support
new lending products as well as the operating efficiencies resulting from
real-time centralized processing. The vendor has provided a written warranty to
Regency that it is Y2K compliant. The system was tested for Y2K readiness during
the fourth quarter of 1998 and installation was completed on February 28, 1999.

With respect to external technology, the Y2K Plan provides for the evaluation
and assessment of all significant funds takers, including large borrowing
customers and bond issuers, and funds providers, including contingency lines of
credit and deposit accounts. All project plans for funds takers and providers
have been substantially completed with continued monitoring to occur. An
integral part of the Corporation's funds provider project plan includes a
Customer Awareness Program. This program was developed to assure customer
confidence and mitigate reputation and liquidity risk. The program was not only
developed to educate the Corporation's customers, but also its employees in
responding to customer inquiries.

The Y2K Plan includes due diligence procedures as it relates to the fiduciary
responsibilities of the Corporation's investment and trust departments,
including such activities as settlement transactions, remittance of bond
payments and transactions related to mutual funds and other securities. In
performing its fiduciary responsibilities, the Corporation assessed the Y2K
readiness of its safekeeping agents and broker/dealers.

The Corporation has rated each service provider, assessed their ability to be
Y2K ready and is developing a contingency plan for those in question.

The Corporation's current assessment of cost associated with the completion of
its Y2K Plan is not considered by management to be material to the Corporation's
future operations. Through December 31, 1998, the Corporation has expended
$126,000 on its Y2K Plan and anticipates additional costs of approximately
$50,000 to be incurred in 1999. The cost of completing the Corporation's Y2K
Plan and the dates on which all procedures will be completed are based on
management's best estimates. These estimates were derived utilizing various
assumptions about future events, including the continued availability of
resources, external technology modification plans and other significant factors.
However, there can be no guarantee that these estimates will be achieved and
actual results could differ materially from those anticipated.

The Corporation believes that modifications to existing systems, conversion to
new systems and vendor compliance upgrades will be resolved on a timely basis
and related costs will not have a material impact on its results of operations
or financial condition.

F.N.B. CORPORATION 41

<PAGE> 65

F.N.B. CORPORATION AND SUBSIDIARIES

MARKET FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS

INFORMATION AS TO STOCK PRICES AND DIVIDENDS

The Corporation's common stock trades on The Nasdaq Stock Market under the
symbol "FBAN." The accompanying table shows the range of the high and low bid
prices per share of the common stock as reported by Nasdaq. Also included in the
table are dividends per share paid on the outstanding common stock.

Stock prices and dividend figures have been adjusted to reflect the 5% stock
dividends declared on April 9, 1998 and April 23, 1997. As of January 31, 1999,
there were 6,180 holders of record of common stock.

Quarter Ended 1998 LOW HIGH DIVIDENDS
--- ---- ---------
March 31 $30 1/4 $37 1/8 $.17
June 30 31 3/4 39 1/4 .18
September 30 27 35 1/4 .18
December 31 24 29 1/8 .18

Quarter Ended 1997 LOW HIGH DIVIDENDS
--- ---- ---------
March 31 $20 7/8 $24 3/4 $.15
June 30 20 3/4 31 .15
September 30 27 5/8 30 5/8 .15
December 31 29 3/4 37 .15

[GRAPH]

The Corporation has historically paid cash dividends on a quarterly basis at the
discretion of the Board of Directors. The payment and amount of future dividends
on the common stock will be determined by the Board of Directors and will depend
on, among other things, earnings, financial condition and cash requirements of
the Corporation at the time such payment is considered, and on the ability of
the Corporation to receive dividends from its subsidiaries, the amount of which
is subject to regulatory limitations.

F.N.B. CORPORATION 42
<PAGE> 66

[COVER]

[LOGO] F.N.B.
CORPORATION
...........................................................
One F.N.B. Boulevard
Hermitage, PA 16148

<PAGE> 1

LIST OF SUBSIDIARIES EXHIBIT 21

Following lists the significant subsidiaries of the registrant
together with their wholly-owned subsidiaries and the state or jurisdiction of
incorporation of each:

<TABLE>
<CAPTION>
NAME INCORPORATED
<S> <C>
1) First National Bank of Pennsylvania United States

2) Reeves Bank Pennsylvania

3) First County Bank, N.A. United States

4) Metropolitan National Bank United States

5) First National Bank of Naples United States

6) Cape Coral National Bank United States

7) First National Bank of Fort Myers United States

8) First National Bank of Florida United States

9) West Coast Guaranty Bank, N.A. United States

10) Regency Finance Company Pennsylvania
</TABLE>

Regency Finance Company conducts business under five names. Business
is conducted at the fifteen offices in Butler, Clearfield, Crawford, Elk, Erie,
Fayette, Lawrence, McKean, Mercer, Somerset and Warren counties in Pennsylvania
under the name of F.N.B. Consumer Discount Company. Business is conducted in
Chataqua county in New York under the names of Citizens Financial Services of
New York, Inc. and Citizens Equity Corporation of New York. Business is
conducted in the seven offices in Columbiana, Mahoning, Lake, Summit and
Trumbull counties in Ohio under the name Citizens Financial Services, Inc.
Business is conducted in the eleven offices in Centre, Columbia, Hanover,
Lackawanna, Lehigh, Monroe, Snyder, and Union counties in Pennsylvania under the
name of Regency Finance Company.

The other subsidiaries conduct business under the names as shown
above.

<PAGE> 1

EXHIBIT 23.1

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Regarding:

1) Registration Statement on Form S-8 relating to F.N.B. Corporation 1990
Stock Option Plan (File #33-78114).

2) Registration Statement on Form S-8 relating to F.N.B. Corporation
Restricted Stock Bonus Plan (File #33-78134).

3) Registration Statement on Form S-8 relating to F.N.B. Corporation 1996
Stock Option Plan (File #333-03489).

4) Registration Statement on Form S-8 relating to F.N.B. Corporation
Restricted Stock and Incentive Bonus Plan (File #333-03493).

5) Registration Statement on Form S-8 relating to F.N.B. Corporation
Directors Compensation Plan (File #333-03495).

6) Registration Statement on Form S-8 relating to F.N.B. Corporation
401(k) Plan (File #333-03503).

7) Post-Effective Amendment No. 1 on Form S-8 to Registration Statement
on Form S-4 (File #333-01997).

8) Post-Effective Amendment No. 1 on Form S-8 to Registration Statement
on Form S-4 (File #333-22909).

9) Registration Statement on Form S-3 relating to the F.N.B. Corporation
Subordinated Notes and Daily Cash Accounts (File #333-31909).

10) Post-Effective Amendment No. 1 to Form S-3 relating to the F.N.B.
Corporation Dividend Reinvestment and Direct Stock Purchase Plan
(File #333-46581).

11) Registration Statement on Form S-8 relating to stock options assumed
in the acquisition of Mercantile Bank of Southwest Florida
(File #333-42333).

We consent to the incorporation by reference in the above listed
Registration Statements of our report dated February 11, 1999, with respect to
the consolidated financial statements of F.N.B. Corporation and subsidiaries
incorporated by reference in this Annual Report (Form 10-K) for the year ended
December 31, 1998.

/s/ ERNST & YOUNG LLP

Pittsburgh, Pennsylvania
March 15, 1999

<PAGE> 1

EXHIBIT 23.2

CONSENT OF HILL, BARTH & KING, INC., INDEPENDENT AUDITORS

We consent to the incorporation by reference in the registration
statements of F.N.B. Corporation on Forms S-3 (Registration Nos. 333- 31909 and
333-46581) and Forms S-8 (Registration Nos. 33-78114, 33-78134, 333-03489,
333-03493, 333-03495, 333-03503, 333-01997, 333-22909 and 333- 42333) and to the
use in this Annual Report of F.N.B. Corporation on Form 10-K of our report dated
January 22, 1997 relating to the consolidated financial statements of Southwest
Banks, Inc. which have been incorporated into the Audited Consolidated Financial
Statements for the year ended December 31, 1996, which is included as an exhibit
in F.N.B. Corporation's Annual Report on Form 10-K.

/s/ Hill, Barth & King, Inc.
Certified Public Accountants

Naples, Florida
March 16, 1999

<PAGE> 1

EXHIBIT 23.3

CONSENT OF INDEPENDENT ACCOUNTANTS

/s/ PRICEWATERHOUSECOOPERS LLP

Tampa, Florida
March 16, 1999

<PAGE> 1

EXHIBIT 23.4

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statement of
F.N.B. Corporation on Forms S-3 (Registration Nos. 333-31909 and 333-46581) and
Forms S-8 (Registration Nos. 33-78114, 33-78134, 333-03489, 333-03493,
333-03495, 333-03503, 333-01997, 333-22909 and 333-42333) and to the use in this
Annual Report of F.N.B. Corporation on Form 10-K of our report dated
January 9, 1998 and on our audits of the financial statements of Seminole Bank
at December 31, 1997 and 1996 and for each of the years in the three-year period
ended December 31, 1997 and of our report dated January 9, 1998 except for
Note 18, as to which the date is April 6, 1998 on our audits of the financial
statements of Citizens Holding Corporation and subsidiaries at December 31, 1997
and 1996 and for each of the years in the three-year period ended
December 31, 1997 which reports are included as exhibits in F.N.B. Corporation's
Annual Report on Form 10-K.

/s/ HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
March 17, 1999

<ARTICLE> 9

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 128,868
<INT-BEARING-DEPOSITS> 3,692
<FED-FUNDS-SOLD> 33,075
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 447,005
<INVESTMENTS-CARRYING> 89,644
<INVESTMENTS-MARKET> 90,412
<LOANS> 2,329,819
<ALLOWANCE> 30,985
<TOTAL-ASSETS> 3,250,695
<DEPOSITS> 2,708,572
<SHORT-TERM> 150,981
<LIABILITIES-OTHER> 49,492
<LONG-TERM> 69,492
0
2,380
<COMMON> 36,149
<OTHER-SE> 233,629
<TOTAL-LIABILITIES-AND-EQUITY> 3,250,695
<INTEREST-LOAN> 50,789
<INTEREST-INVEST> 8,592
<INTEREST-OTHER> 561
<INTEREST-TOTAL> 59,942
<INTEREST-DEPOSIT> 22,973
<INTEREST-EXPENSE> 25,910
<INTEREST-INCOME-NET> 34,032
<LOAN-LOSSES> 1,977
<SECURITIES-GAINS> 249
<EXPENSE-OTHER> 27,998
<INCOME-PRETAX> 13,003
<INCOME-PRE-EXTRAORDINARY> 13,003
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,662
<EPS-PRIMARY> .48
<EPS-DILUTED> .46
<YIELD-ACTUAL> 4.71
<LOANS-NON> 12,103
<LOANS-PAST> 2,891
<LOANS-TROUBLED> 1,770
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 31,522
<CHARGE-OFFS> 2,769
<RECOVERIES> 255
<ALLOWANCE-CLOSE> 30,985
<ALLOWANCE-DOMESTIC> 30,985
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0

</TABLE>

<PAGE> 1

EXHIBIT 99.1

INDEPENDENT AUDITORS' REPORT

January 22, 1997

Board of Directors and Stockholders
of Southwest Banks, Inc.
Naples, Florida

We have audited the accompanying consolidated balance sheets of Southwest Banks,
Inc. and its subsidiaries, First National Bank of Naples and Cape Coral National
Bank (collectively, the Company), as of December 31, 1996 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Southwest Banks, Inc. and its subsidiaries as of December 31, 1996 and the
consolidated results of their operations and their consolidated cash flows for
the year ended December 31, 1996 in conformity with generally accepted
accounting principles.

/s/HILL, BARTH & KING, INC.
NAPLES, FLORIDA

<PAGE> 1

EXHIBIT 99.2

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
West Coast Bancorp, Inc. and Subsidiary
Cape Coral, Florida

We have audited the accompanying consolidated balance sheets of West Coast
Bancorp, Inc. and Subsidiary at December 31, 1996 and the related consolidated
statements of income, changes in shareholders' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of West Coast
Bancorp, Inc. and Subsidiary at December 31, 1996 and the consolidated
statements of their operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles.

/s/COOPERS & LYBRAND L.L.P.
FORT MYERS, FLORIDA
January 24, 1997

<PAGE> 1

EXHIBIT 99.3

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Seminole Bank
Seminole, Florida:

We have audited the balance sheets of Seminole Bank (the "Bank") at December 31,
1997 and 1996, and the related statements of earnings, stockholders' equity and
cash flows for each of the years in the three-year period ended December 31,
1997. These financial statements are the responsibility of the Bank's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Bank at December 31, 1997
and 1996, and the results of its operations and cash flows for the each of the
years in the three-year period ended December 31, 1997, in conformity with
generally accepted accounting principles.

/s/HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
January 9, 1998

<PAGE> 1

EXHIBIT 99.4

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Citizens Holding Corporation
Clearwater, Florida:

We have audited the accompanying consolidated balance sheets of Citizens Holding
Corporation and Subsidiaries (the "Company") at December 31, 1997 and 1996, and
the related statements of earnings, comprehensive income, stockholders' equity
and cash flows for each of the years in the three-year period ended December 31,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company at December 31,
1997 and 1996, and the results of its operations and cash flows for the each of
the years in the three-year period ended December 31, 1997, in conformity with
generally accepted accounting principles.

/s/ HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
January 9, 1998, except for Note 18, as to which
the date is April 6, 1998