<PAGE> 1
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Quarterly report Under Section 13 or 15(d)
of the Securities and Exchange Act of 1934
For Quarter Ended: June 30, 1996
-------------
Commission File Number: 0-13086
-------
FNB FINANCIAL SERVICES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
North Carolina 56-1382275
------------------------------ -------------------
(State or other jurisdiction (I.R.S. Employer
incorporation of organization) Identification No.)
202 S. Main St., Reidsville, N. C. 27320
----------------------------------------
(Address of principal executive offices)
(Zip Code)
910-342-3346
---------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
--------------------------------------------------------
(Former name, former address, and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
1,380,247 common shares were outstanding as of June 30, 1996, with a par value
of $1.00.
<PAGE> 2
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I FINANCIAL INFORMATION:
Item 1 Financial Statements
Consolidated Balance Sheet 1
June 30, 1996, and December 31,
1995
Consolidated Statement of Income 2
Six months ended June 30, 1996,
and 1995
Consolidated Statement of changes in 3
Shareholder's Equity June 30, 1996,
and December 31, 1995
Regulatory Capital Ratio Requirements 3a
Consolidated Statement of Cash Flows 4 - 4a
Three months ended June 30, 1996, and
1995
Notes to Consolidated Financial Statements 5 - 9
Item 2 Management's Discussion and Analysis of 10 - 11
Financial Condition and Results of Operations
PART II OTHER INFORMATION:
Item 3 Exhibits and Reports on Form 8-K 12
Item 4 Submission of Matters to a Vote of
Security Holders 13 - 13a
</TABLE>
<PAGE> 3
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
Consolidated Balance Sheet
<TABLE>
<CAPTION>
(In Thousands)
June 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS:
Cash and due from banks $ 5,233 $ 4,647
Federal funds sold - -
------- -------
Total cash and cash equivalents 5,233 4,647
Securities available for sale 56,595 56,436
Other equity securities 643 1,059
Loans 131,199 111,708
Less unearned income - -
Less allowance for credit losses (1,461) (1,258)
------- -------
Net loans 129,738 110,450
Property and equipment, net 3,852 3,434
Intangible assets 812 -
Accrued income and other assets 2,467 1,871
------- -------
TOTAL ASSETS $199,340 $177,897
======= =======
LIABILITIES AND SHAREHOLDER'S EQUITY
Deposits
Non Interest Bearing $ 22,416 $ 19,329
Interest Bearing
Savings Accounts 17,867 15,413
NOW Accounts 17,473 16,634
Money Market Investment 13,288 12,355
Other time deposits 104,289 90,669
------- -------
Total deposits 175,333 154,400
Federal funds purchased and securities
sold under repurchase agreements 4,181 3,152
Accrued expenses and other liabilities 626 1,363
------- -------
TOTAL LIABILITIES $180,140 $158,915
======= =======
SHAREHOLDERS EQUITY:
Common stock, $1.00 par value; authorized
3,000,000 shares, 1,378,580 shares
issued in 1996; 1,098,450 shares
issued in 1995 1,380 1,098
Paid-In Capital 2,666 2,580
Net unrealized holding gain/(loss) on
available for sale securities (143) 467
Retained Earnings 15,297 14,837
------- -------
TOTAL SHAREHOLDER'S EQUITY 19,200 18,982
------- -------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $199,340 $177,897
======= =======
</TABLE>
1
<PAGE> 4
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
Consolidated Statement of Income
(In thousands, except per share data)
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ----- ----
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 2,980 $ 2,174 $5,742 $4,120
Interest on federal funds sold - 38 6 68
Interest on federal home loan bank deposits 10 - 10 -
Interest and dividends on investments:
U.S. Treasury securities 244 11 359 38
Federal Agency Securities 419 915 935 1,871
State, County and municipal Secur. 164 222 363 443
Other securities 8 20 31 39
------ ------ ----- -----
TOTAL INTEREST INCOME $ 3,825 $ 3,380 $7,446 $6,579
------ ------ ----- -----
INTEREST EXPENSE
Interest on savings deposits $ 100 $ 89 187 179
Interest on other time deposits 1,511 1,290 2,925 2,424
Interest on federal funds purchased and
securities sold under repur. agreements 70 3 135 6
Interest on long term debt - 282 - 589
------ ------ ----- -----
TOTAL INTEREST EXPENSE $ 1,681 $ 1,664 $3,247 $3,198
------ ------ ----- -----
NET INTEREST INCOME $ 2,144 $ 1,716 $4,199 $3,381
Provision for possible loan losses 101 48 202 80
------ ------ ----- -----
Net Interest Income after possible loan
loss provision $ 2,043 $ 1,668 $3,997 $3,301
------ ------ ----- -----
NON INTEREST INCOME
Deposit Service Charges $ 187 $ 172 $ 368 $ 336
Insurance Commissions 18 16 36 33
Net Securities Gains 55 98 58 61
Net Gain/(Loss) on sale of mortgages 20 102 15 169
Other Operating Income 22 26 49 55
------ ------ ---- -----
TOTAL NON INTEREST INCOME $ 302 $ 414 $ 526 $ 654
------ ------ ----- -----
NON INTEREST EXPENSE
Salaries and employee benefits $ 868 $ 697 $1,698 $1,391
Net occupancy expense 84 72 160 147
Furniture and equipment expense 116 110 226 221
Insurance, including FDIC assessment 8 83 17 167
Director fees 33 40 88 72
Printing and supplies 46 47 91 85
Other operating expense 318 230 609 468
------ ------ ----- ----
TOTAL NON INTEREST EXPENSE $ 1,473 $ 1,279 $2,889 $2,551
------ ------ ----- -----
Income Before Income Taxes $ 872 $ 803 $1,634 $1,403
Applicable Income Taxes ( 269) ( 241) ( 488) ( 401)
------ ------ ----- -----
NET INCOME $ 603 $ 562 $1,146 $1,002
====== ====== ===== =====
PER SHARE DATA
Net Income .44 .41 .83 .73
Cash Dividends .15 .13 .29 .26
Weighted average shares outstanding 1,379,692 1,372,900 1,377,908 1,372,691
</TABLE>
2
<PAGE> 5
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
Consolidated Statements of Changes in Shareholder's Equity
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended Twelve Months Ended
June 30, December 31,
1996 1995
---------------- -------------------
<S> <C> <C>
COMMON STOCK
Balances at beginning of years $ 1,098 $ 1,097
Stock dividend (Note 2) 275 -
Exercise stock options 7 -
Employee stock awards - 1
------------ -----------
BALANCES AT END OF YEARS $ 1,380 $ 1,098
------------ -----------
PAID-IN CAPITAL
Balances at beginning of years $ 2,580 $ 2,562
Exercise stock options 83 -
Employee stock awards 3 18
----------- -----------
BALANCES AT END OF YEARS $ 2,666 $ 2,580
----------- -----------
RETAINED EARNINGS
Balances at beginning of years $ 14,837 $ 13,403
Net income for years 1,146 2,170
Cash dividend paid ( 405) ( 736)
Stock dividend (Note 2) ( 275) -
Cash paid for fractional
shares (Note 2) ( 6) -
----------- ------------
BALANCES AT END OF YEARS $ 15,297 $ 14,837
----------- ------------
NET UNREALIZED HOLDING GAINS
(LOSSES) ON AVAILABLE-FOR-SALE
SECURITIES $ (143) $ 467
----------- ------------
TREASURY STOCK
Balances at beginning of years - -
- -
----------- ------------
BALANCES AT END OF YEARS - -
----------- ------------
TOTAL SHAREHOLDER'S EQUITY $ 19,200 $ 18,982
=========== ============
</TABLE>
3
<PAGE> 6
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
Regulatory Capital Ratio Requirements
<TABLE>
<CAPTION>
Six Months Ended
Minimum June 30, 1996
Standard Current Ratio
-------- ------------------
<S> <C> <C>
CAPITAL ADEQUACY-RISK BASED
Tier I 4.0 % 13.6%
Total Capital 8.0 % 14.6%
LEVERAGE RATIO
Tier I 3.0 % 9.21%
</TABLE>
3A
<PAGE> 7
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
Consolidated Statement of Cash Flows
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
------ ------
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND
Cash Equivalents
- -------------------------------
Cash flows from operating activities:
Interest received $ 6,769 $ 6,735
Fees and Commission received 686 544
Interest paid ( 3,210) ( 3,253)
Non Interest expense paid ( 2,650) ( 2,322)
Income taxes paid ( 727) ( 441)
------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 868 $ 1,263
Cash flows from investing activities:
Acquisitions, net of cash used 537 -
Proceeds from sale of securities 18,380 25,975
Proceeds from maturities of securities 3,601 4,711
Purchase in investment securities (23,616) ( 5,605)
Purchase of asset ( 342) -
Capital expenditures ( 678) ( 16)
(Incr)/decr in other real estate owned 115 74
Net (increase)/decr in loans to customers (19,196) (16,040)
Proceeds (paydown) on mortgage loans held
for sale ( 465) 1,547
------ ------
NET CASH USED IN INVESTING ACTIVITIES (21,664) 10,678
Cash flows from financing activities:
Incr(Decrease) in demand, savings, and
interest checking accounts 7,090 3,808
Increase/(Decrease) in time deposits 13,581 7,024
Dividends Paid ( 405) ( 351)
Proceeds from issuance of common stock 93 17
Purchase of common stock fractional shares ( 6) -
Decrease in long term debt (20,000)
Incr/(Decrease) in repurchase agreements 1,029 2,657
------ ------
NET CASH PROVIDED BY FINANCING ACTIVITIES 21,382 ( 6,845)
Net increase (decrease) in cash equivalents 586 5,096
Cash and cash equivalents on January 1 4,647 6,352
------ ------
CASH AND CASH EQUIVALENTS ON JUNE 30 $ 5,233 $11,448
====== ======
Schedule on noncash investing and financing
activities NONE NONE
====== ======
</TABLE>
4
<PAGE> 8
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
Consolidated Statement of Cash Flows
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
------ ------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net Income $ 1,146 $ 1,002
ADJUSTMENTS TO RECONCILE NET INCOME
TO CASH:
Provision for loan losses 202 80
(Gain)/Loss on sale of securities ( 58) ( 61)
(Gain)/Loss on sale of assets 38 22
Increase/(Decrease) in taxes payable ( 429) ( 40)
Increase/(Decrease) in interest payable 37 ( 55)
(Increase)/Decrease in interest receivable ( 303) ( 63)
Increase/(Decrease) in accrued expenses 7 88
Increase in prepaid income 11 13
(Increase)/Decrease in prepaid expenses ( 17) ( 66)
(Increase)/Decrease in accrued income ( 2) ( 16)
Increase/(Decrease) in miscellaneous
liabilities 50 151
Accretion and amortization 127 209
Depreciation 188 185
(Increase)/Decrease in miscellaneous
assets ( 122) ( 17)
(Gain)/Loss on mortgages sold ( 7) ( 169)
------ ------
NET CASH PROVIDED BY OPERATIONS $ 868 $ 1,263
</TABLE>
4A
<PAGE> 9
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended are
not necessarily indicative of the results that may be expected for the
year ended December 31, 1996.
2. On February 8, 1996, the Board of Directors declared a one-for-four
split of the common stock in the form of a 25% stock dividend to
holders of record on March 8, 1996 to be issued on March 29, 1996. As
a result $275,194 ($1 for each share issued pursuant to the stock
split) was transferred from retained earnings to the common stock
account. Cash was paid in lieu of fractional shares from retained
earnings of $5,344.98. All per share data in the financial statements
have been adjusted to reflect the split.
5
<PAGE> 10
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
Notes to Consolidated Balance Sheet
<TABLE>
<CAPTION>
(In Thousands) (In Thousands)
Six Months Ended Twelve Months Ended
June 30, 1996 December 31, 1995
----------------- -------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
---- ----- ---- -----
<S> <C> <C> <C> <C>
2. INVESTMENT SECURITIES*
A) SECURITIES AVAILABLE FOR SALE
U.S. Treasury Securities $20,309 $20,198 $ 4,220 $ 4,226
Obligations of other U.S.
Government agencies and
corporations 26,373 25,784 38,386 38,218
Obligations of states and
political sub-divisions 10,148 10,613 13,064 13,992
------ ------ ------ ------
TOTAL AVAILABLE FOR SALE $56,830 $56,595 $55,670 $56,436
====== ====== ====== ======
B) OTHER EQUITY SECURITIES $ 643 $ 643 $ 1,059 $ 1,059
------ --- ------ ------
</TABLE>
6
<PAGE> 11
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
Notes to Consolidated Balance Sheet
<TABLE>
<CAPTION>
(In Thousands)
Six Months Ended Twelve Months Ended
June 30, 1996 December 31, 1995
----------------- -------------------
<S> <C> <C>
3. LOANS:
Home Equity $ 11,490 $ 9,579
Commercial/Agricultural 21,437 17,327
Credit Line 572 445
Consumer Installment 6 6
Simple Interest 15,267 14,540
Mortgage Loans 81,281 69,028
Overdrafts 1,146 783
------- -------
TOTAL LOANS (*) $131,199 $111,708
======= =======
</TABLE>
(*) The bank has no foreign loan activity.
7
<PAGE> 12
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
4. ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------
1996 1995
------ ------
<S> <C> <C>
BALANCE AT BEGINNING OF PERIOD 1,258 1,052
CHARGE-OFFS:
Commercial, Financial and Agricultural - -
Real Estate-Construction - -
Real Estate-Mortgage - -
Consumer 29 55
----- -----
29 55
RECOVERIES:
Commercial, Financial and Agricultural - 1
Real Estate-Construction - -
Real Estate-Mortgage - -
Consumer 30 36
----- -----
30 37
NET CHARGE-OFFS (1) 18
----- -----
Additions Charged to Operations 202 80
----- -----
BALANCE AT END OF PERIOD 1,461 1,114
===== =====
Ratio of net charge-offs during the
period to average loans outstanding
during the period .00 .04
===== =====
Ratio of allowance for loan losses to
month end loans 1.11 1.18
===== =====
</TABLE>
8
<PAGE> 13
FNB FINANCIAL SERVICES CORPORATION
AND SUBSIDIARY
5. ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
------------------- ------------------
Percent of Percent of
Loans in Loans in
Each Category Each Category
Amt. to Total Loans Amt. to Total Loans
---- --------------- ---- --------------
<S> <C> <C> <C> <C>
BALANCE AT END OF PERIOD
APPLICABLE TO:
Commercial 616 18% 532 12%
Real Estate-Construction 10 6% 5 1%
Real Estate-Mortgage 146 56% 119 62%
Consumer 327 20% 364 25%
Unallocated 338 0% 80 0%
--- ---- ----- ----
TOTAL BALANCE SHEET
ALLOCATION 1,437 100% 1,110 100%
Off balance sheet
commitments 24 - 14 -
----- ---- ----- ----
TOTAL ALLOCATION 1,461 100% 1,114 100%
===== ==== ===== ====
</TABLE>
6. NON-PERFORMING ASSETS:
(In Thousands)
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, June 30,
1996 1995
------------------ -------------------
<S> <C> <C>
Nonaccrual (1) $ 47 $ 240
Past due 90 days or more - 3
Other real estate 77 117
Renegotiated troubled debt - -
</TABLE>
(1) Other than amounts listed above, there were no other loans which (a)
represent or result from trends or uncertainties which management reasonably
expects will materially impact future operating results, liquidity, or capital
resources, or (b) represent material credits about which management is aware of
any information which causes management to have serious doubts as to the
ability of such borrowers to comply with the loan repayment terms.
9
<PAGE> 14
PART I - ITEM 2
Management's Analysis of Financial Condition
and Results of Operations
Summary
Net income for the quarter ended June 30, 1996 was 7.2% more than the same
quarter last year, while earnings for the six months to date were 14.3% higher
than 1995. The annualized return on average assets was 1.21% in 1996, compared
with 1.15% last year. The improved earnings for both the quarter and year to
date are principally the result of higher net interest income, fueled by the
explosive growth in loans.
Interest Income and Interest Expense
Total second quarter interest income on a fully tax equivalent basis
increased 13.2%, on a 10.7% increase in average earning assets. The second
quarter earning asset yield was 8.42%, up from 8.32% in 1995, even as loan
yields fell by 29 basis points and bond yields were down 46 basis points.
Interest rates were generally lower in the 1996 second quarter, evidenced by a
75 basis point reduction in the prime rate. The higher earning asset yield
this year was caused solely by the significant change in the mix of assets. In
1995, loans equaled 53.5% of total earning assets, while in 1996 that ratio
jumped to 68.2%. Bonds fell from 45.0% of earning assets last year to 31.3%
in 1996. For the full six months this year, tax equivalent interest income was
up 12.1%, on a 9.5% increase in average earning assets.
Total interest expense in the second quarter this year was just 1%
more than the comparable quarter in 1995, while average interest bearing
liabilities increased 9.8% The average cost of funds decreased 40 basis
points, with lower interest rates in effect together with an elevated level of
higher cost purchased funds last year, in connection with a capital leveraging
plan which was discontinued. For the six month period this year, interest
expense increased 1.5%, on a 21.3% increase in average interest bearing
liabilities.
Comparable net interest margins were as follows:
Second Quarter, 1996 8.42% - 3.80% = 4.62%
Second Quarter, 1995 8.32% - 4.20% = 4.12%
Year to Date, 1996 8.45% - 3.84% = 4.61%
Year to Date, 1995 8.24% - 4.11% = 4.13%
Non Interest Income and Expense
Non interest income in the second quarter this year was down $111,600
or 26.9% from 1995, with $81,300 less recorded in mortgage banking activity and
$43,800 less in securities gains; service charges on deposits were 8.6% higher.
For the six months to date, income was down $128,200 or 19.6%, which included
$153,900 less in mortgage banking, but $31,600 more in deposit service charges.
10
<PAGE> 15
Non interest expenses in the second quarter this year were up $194,900
or 15.3% over 1995. Personnel expense was $170,900 or 24.5% higher, including
$149,600 in salaries and wages. Other compensation accounted for $111,200 of
the variance because of funding for profit-based short and long term management
incentive plans, while regular salaries and wages were up $41,700 (7.5%)
principally because of beginning of year salary increases. Employee benefits
were $21,300 higher, mainly due to increased funding of the retirement plan and
additional payroll taxes. Other line items increasing significantly were
occupancy expense, telephone, checkbook expense and amortization of deposit
premium on a branch purchase. Expenses declining included FDIC insurance and
marketing. Year to date expenses were $337,700 or 13.2% higher including
$307,300 more in personnel expense for the reasons stated earlier. Other
substantial expense increases were experienced in net cash shortages, directors
fees, telephone, conventions and deposit premiums, which FDIC insurance,
marketing and miscellaneous were all lower.
The provision for loan losses was increased by 152% to $201,600, in
order to maintain reserve levels on a much greater amount of loans outstanding.
Both net charge offs and the percentage of past due loans are at their lowest
recorded levels in memory.
11
<PAGE> 16
FNB FINANCIAL SERVICES CORPORATIONS
AND SUBSIDIARY
ITEM 3. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
EX-27 Financial Data Schedule (for SEC use only)
12
<PAGE> 17
PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
FNB Financial Services Corporation Annual Meeting of Shareholders was held
April 9, 1996. The proposals voted upon and the results of the voting were as
follows:
1. Fix the total number of directors at eleven.
Broker
For Against Abstentions Withheld Non-votes
2. To approve Articles of Amendment to the Company's Articles of
Incorporation to eliminate preemptive rights.
Broker
For Against Abstentions Withheld Non-votes
3. Election of Class III Directors for a three-year term.
Broker
For Against Abstentions Withheld Non-votes
P. J. Lambeth
J. H. Kinnarney
E. H. Trent, Jr.
K. C. Wright
4. Ratify the selection by the Board of Directors of Cherry, Bekaert &
Holland as the Company's independent auditors for the 1996 fiscal year.
Broker
For Against Abstentions Withheld Non-votes
13
<PAGE> 18
SHAREHOLDER VOTE, 1996
To fix the number of directors at eleven:
FOR 833,417 AGAINST 11,454 ABSTAIN 4,803
Election of Directors:
WITH 842,970 WITHOUT 6,704 Authority to vote
for the four nominees
P. J. Lambeth, J. H. Kinnarney, E. H. Trent, Jr., K. C. Wright
Class III (three year term)
E. H. Trent, Jr. had 4,717 shares withholding authority to vote for him.
K. C. Wright had 1,987 to withhold.
To approve Articles of Amendment to the Company's Article of Incorporation to
eliminate preemptive rights.
FOR 806,083 AGAINST 40,329 ABSTAIN 3,262
To ratify the selection by the Board of Cherry Bekaert & Holland as the
Corporation's independent auditor for the year ending December 31, 1996.
FOR 846,814 AGAINST 1,894 ABSTAIN 966
TOTAL SHARES VOTED 849,674
PERCENTAGE 77%
13a
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FNB FINANCIAL SERVICES CORPORATION
-------------------------------------
(Registrant)
Date August 13, 1996 /s/ ERNEST J. SEWELL
----------------- -------------------------------------
ERNEST J. SEWELL
(PRESIDENT & CHIEF EXECUTIVE OFFICER)
Date August 13, 1996 /s/ ROBERT F. ALBRIGHT
----------------- -------------------------------------
ROBERT F. ALBRIGHT
(SENIOR VICE PRESIDENT)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF FNB FINANCIAL SERVICES CORPORATION FOR THE SIX MONTHS
ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 5,233
<INT-BEARING-DEPOSITS> 152,917
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 56,595
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 131,199
<ALLOWANCE> (1,461)
<TOTAL-ASSETS> 199,340
<DEPOSITS> 175,333
<SHORT-TERM> 4,181
<LIABILITIES-OTHER> 626
<LONG-TERM> 0
0
0
<COMMON> 1,380
<OTHER-SE> 17,820
<TOTAL-LIABILITIES-AND-EQUITY> 199,340
<INTEREST-LOAN> 5,742
<INTEREST-INVEST> 1,688
<INTEREST-OTHER> 16
<INTEREST-TOTAL> 7,446
<INTEREST-DEPOSIT> 3,112
<INTEREST-EXPENSE> 3,247
<INTEREST-INCOME-NET> 4,199
<LOAN-LOSSES> 202
<SECURITIES-GAINS> 58
<EXPENSE-OTHER> 2,889
<INCOME-PRETAX> 1,639
<INCOME-PRE-EXTRAORDINARY> 1,634
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,146
<EPS-PRIMARY> 0.83
<EPS-DILUTED> 0.83
<YIELD-ACTUAL> 8.45
<LOANS-NON> 47
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,114
<CHARGE-OFFS> 29
<RECOVERIES> 30
<ALLOWANCE-CLOSE> 1,461
<ALLOWANCE-DOMESTIC> 1,123
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 338
</TABLE>
