<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31,
1997; OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
______________ to ______________.
Commission file number: 0-13086
-------
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
FNB FINANCIAL SERVICES CORPORATION EMPLOYEES' SAVINGS
PLUS AND PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
FNB FINANCIAL SERVICES CORPORATION
202 South Main Street
Reidsville, North Carolina 27320
<PAGE> 2
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT
SHARING PLAN
Financial Statements
for the three years ended
December 31, 1997
<PAGE> 3
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT
SHARING PLAN
Contents
Page
Independent Auditors' Report 2
Statements of Net Assets Available for Benefits 3
Statements of Changes in Net Assets Available for Benefits with
Fund Information 4 - 6
Notes to Financial Statements 7 - 9
<PAGE> 4
[Cherry, Bekaert & Holland, L.L.P. letterhead]
INDEPENDENT AUDITORS' REPORT
To the Plan Administrator of
the FNB Financial Services Corporation Employees'
Savings Plus and Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of the FNB Financial Services Corporation Employees' Savings Plus and Profit
Sharing Plan as of December 31, 1997 and 1996, and the related statements of
changes in net assets available for benefits with fund information for the three
years ended December 31, 1997. These financial statements are the responsibility
of the Plan'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 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 provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of FNB Financial
Services Corporation Employees' Savings Plus and Profit Sharing Plan as of
December 31, 1997 and 1996, and the changes in net assets available for benefits
with fund information for the three years ended December 31, 1997 in conformity
with generally accepted accounting principles.
Cherry, Bekaert & Holland, L.L.P.
Greensboro, North Carolina
May 21, 1998
<PAGE> 5
3
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Statements of Net Assets Available for Benefits
December 31, 1997 and 1996
Assets
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Cash and cash equivalents $ 24,292 $ 23,860
Investments
At fair value
Shares of registered investment companies
Vanguard Wellesley Income Fund (Balanced Fund) 208,199 251,231
Fidelity Financial Trust Retirement
Growth Fund (Equity Fund) 694,608 719,721
T. Rowe Price International Stock Fund
(International Fund) 68,067 --
FNB Financial Services Corporation Common stock 681,541 149,339
At contract value
Due from Provident Mutual Investment Contract
(Income Fund) 55,316 79,843
---------- ----------
Total assets 1,732,023 1,223,994
Liabilities
Accrued expenses 1,316 8,973
---------- ----------
Net assets available for benefits $1,730,707 $1,215,021
========== ==========
</TABLE>
See notes to financial statements.
<PAGE> 6
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Statements of Changes in Net Assets Available for
Benefits with Fund Information
Year Ended December 31, 1997
<TABLE>
<CAPTION>
Participant Directed
----------------------------------------------
Income Balanced Equity
Fund Fund Fund
-------- --------- ---------
<S> <C> <C> <C>
Additions to net assets
attributed to
Investment income
Net appreciation
(depreciation) in fair
value of investments $ 107 $ 15,791 $ 91,691
Capital gains (losses) (464) 11,398 87,700
Investment income 4,466 13,689 6,693
-------- --------- ---------
4,109 40,878 186,084
-------- --------- ---------
Contributions
Participants' 3,112 27,078 97,816
Employer's -- -- --
-------- --------- ---------
3,112 27,078 97,816
-------- --------- ---------
Total additions 7,221 67,956 283,900
-------- --------- ---------
Deductions from net assets
attributed to
Benefits paid to participants 12,685 25,585 53,129
Administrative expenses 2,062 7,078 20,451
-------- --------- ---------
Total deductions 14,747 32,663 73,580
-------- --------- ---------
Net increase (decrease) prior to
interfund transfers (7,526) 35,293 210,320
Interfund transfers (17,135) (79,725) (240,765)
-------- --------- ---------
Net increase (decrease) (24,661) (44,432) (30,445)
Net assets available for benefits
Beginning of year 80,405 253,644 727,858
-------- --------- ---------
End of year $ 55,744 $ 209,212 $ 697,413
======== ========= =========
</TABLE>
See notes to financial statements.
<PAGE> 7
4
<TABLE>
<CAPTION>
Non-Participant
Participant Directed Directed
------------------------------ ---------------
FNB FNB
International Common Stock Common Stock
Fund Fund Fund Total
-------- -------- -------- ----------
<S> <C> <C> <C> <C>
$(10,918) $ 23,993 $155,400 $ 276,064
(1,092) -- -- 97,542
61 3,313 3,896 32,118
-------- -------- -------- ----------
(11,949) 27,306 159,296 405,724
-------- -------- -------- ----------
8,737 52,906 -- 189,649
-- -- 69,091 69,091
-------- -------- -------- ----------
8,737 52,906 69,091 258,740
-------- -------- -------- ----------
(3,212) 80,212 228,387 664,464
-------- -------- -------- ----------
-- 18,392 -- 109,791
1,477 4,456 3,463 38,986
-------- -------- -------- ----------
1,477 22,848 3,463 148,777
-------- -------- -------- ----------
(4,689) 57,364 224,924 515,686
73,445 264,180 -- --
-------- -------- -------- ----------
68,756 321,544 224,924 515,686
-- -- 153,114 1,215,021
-------- -------- -------- ----------
$ 68,756 $321,544 $378,038 $1,730,707
======== ======== ======== ==========
</TABLE>
<PAGE> 8
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Statements of Changes in Net Assets Available for
Benefits with Fund Information
Year Ended December 31, 1996
<TABLE>
<CAPTION>
Participant Directed
------------------------------------------------
Balanced
Income Fund Fund Equity Fund
----------- --------- -----------
<S> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation (depreciation)
in fair value of investments $ -- $ 2,684 $ (34,466)
Capital gains -- 395 78,536
Investment income 5,527 13,380 10,108
--------- -------- ---------
5,527 16,459 54,178
--------- -------- ---------
Contributions
Participants' 6,909 28,277 96,708
Employer's -- -- --
--------- -------- ---------
6,909 28,277 96,708
--------- -------- ---------
Total additions 12,436 44,736 150,886
--------- -------- ---------
Deductions from net assets attributed to
Benefits paid to participants 272 11,276 32,612
Administrative expenses 1,776 3,591 12,077
--------- -------- ---------
Total deductions 2,048 14,867 44,689
--------- -------- ---------
Net increase prior to interfund
transfers 10,388 29,869 106,197
Interfund transfers (30,553) 88,933 (58,380)
--------- -------- ---------
Net increase (decrease) (20,165) 118,802 47,817
Net assets available for benefits
Beginning of year 100,570 134,842 680,041
--------- -------- ---------
End of year $ 80,405 $253,644 $ 727,858
========= ======== =========
</TABLE>
See notes to financial statements.
<PAGE> 9
5
<TABLE>
<CAPTION>
Non-Participant Directed
------------------------------
FNB
Common Stock Contribution
Fund Account Total
-------- --------- -----------
<S> <C> <C> <C>
$ 31,177 $ -- $ (605)
417 -- 78,348
3,848 -- 32,863
-------- --------- -----------
35,442 -- 111,606
-------- --------- -----------
-- -- 131,894
48,525 -- 48,525
-------- --------- -----------
48,525 -- 180,419
-------- --------- -----------
83,967 -- 292,025
-------- --------- -----------
6,448 5,980 56,588
-- -- 17,444
-------- --------- -----------
6,448 5,980 74,032
-------- --------- -----------
77,519 (5,980) 217,993
-- -- --
-------- --------- -----------
77,519 (5,980) 217,993
75,595 5,980 997,028
-------- --------- -----------
$153,114 $ -- $ 1,215,021
======== ========= ===========
</TABLE>
<PAGE> 10
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Statements of Changes in Net Assets Available for
Benefits with Fund Information
Year Ended December 31, 1995
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------
Balanced
Income Fund Fund Equity Fund
-------- -------- --------
<S> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation in fair value
of investments $ 2,246 $ 15,698 $ 39,846
Capital gains -- 490 527
Investment income 3,916 5,618 59,174
-------- -------- --------
6,162 21,806 99,547
-------- -------- --------
Contributions
Participants' 16,240 16,602 90,344
Employer's -- -- --
-------- -------- --------
16,240 16,602 90,344
-------- -------- --------
Total additions 22,402 38,408 189,891
-------- -------- --------
Deductions from net assets attributed to
Benefits paid to participants 99 1,540 6,126
Administrative expenses 1,104 899 3,770
-------- -------- --------
Total deductions 1,203 2,439 9,896
-------- -------- --------
Net increase (decrease) prior to interfund
transfers 21,199 35,969 179,995
Interfund transfers 79,371 98,873 500,046
-------- -------- --------
Net increase (decrease) 100,570 134,842 680,041
Net assets available for benefits
Beginning of year -- -- --
-------- -------- --------
End of year $100,570 $134,842 $680,041
======== ======== ========
</TABLE>
See notes to financial statements.
<PAGE> 11
<TABLE>
<CAPTION>
Participant Directed Non-Participant Directed
---------------------------------------------- -----------------------------
Investment Cash FNB
Company of Bond Fund Management Common Stock Contribution
America of America Fund Fund Account Total
--------- --------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
$ -- $ -- $ -- $ 12,301 $ -- $ 70,091
-- -- -- -- 19,381 20,398
-- -- -- 1,622 7,617 77,947
--------- --------- -------- -------- --------- --------
-- -- -- 13,923 26,998 168,436
--------- --------- -------- -------- --------- --------
-- -- -- -- -- 123,186
-- -- -- 44,063 -- 44,063
--------- --------- -------- -------- --------- --------
-- -- -- 44,063 -- 167,249
--------- --------- -------- -------- --------- --------
-- -- -- 57,986 26,998 335,685
--------- --------- -------- -------- --------- --------
-- -- -- -- 67,456 75,221
-- -- -- -- 199 5,972
--------- --------- -------- -------- --------- --------
-- -- -- -- 67,655 81,193
--------- --------- -------- -------- --------- --------
-- -- -- 57,986 (40,657) 254,492
(433,123) (284,462) (6,103) (1,239) 46,637 --
--------- --------- -------- -------- --------- --------
(433,123) (284,462) (6,103) 56,747 5,980 254,492
433,123 284,462 6,103 18,848 -- 742,536
--------- --------- -------- -------- --------- --------
$ -- $ -- $ -- $ 75,595 $ 5,980 $997,028
========= ========= ======== ======== ========= ========
</TABLE>
<PAGE> 12
7
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1997, 1996 and 1995
Note 1 - Description of plan
The following description of the FNB Financial Services Corporation Employees'
Savings Plus and Profit Sharing Plan (Plan) is provided for general information
purposes only. Participants should refer to the Plan agreement for more complete
information.
General - The Plan is a defined contribution plan covering all full-time
employees of the Company who have one year of service and are age twenty-one or
older. It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Contributions - Each year, participants may contribute up to 15 percent of
pretax annual compensation, as defined in the Plan. Participants may also
contribute amounts representing distributions from other qualified plans. The
Company makes matching contributions of 50 percent of the first 6 percent of
base compensation that a participant contributes to the Plan. Discretionary
contributions may be contributed at the option of the Company's Board of
Directors. The Company's Board of Directors has not elected to make a
discretionary contribution in any of the plan years since existence.
Contributions are subject to certain limitations.
Participant accounts - Each participant's account is credited with the
participant's contribution and allocations of (a) the Company's contribution and
(b) Plan earnings, and charged with an allocation of administrative expenses.
Allocations are based on participant earnings or account balances, as defined.
The benefit to which a participant is entitled is the benefit that can be
provided from the participant's vested account.
Vesting - Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching and discretionary
contribution portion of their accounts plus actual earnings thereon is based on
years of continuous service. A participant vests 20 percent per year until 100
percent vested after 5 years of credited service for both the matching and
discretionary contributions.
Investment options - Upon enrollment in the Plan, a participant may direct their
contributions in 10 percent increments in any of five investment options.
Income Fund - fund typically invested in U.S. Government obligations,
certificates of deposits, investment grade corporate bonds of reasonably
short maturity, money market investments, and in guaranteed investment
contract with an insurance company.
Balanced Fund - mutual fund typically invested in various instruments such as
cash equivalents, bonds, convertible securities and stocks.
Equity Fund - mutual fund typically invested in diversified portfolio of
common stock and similar equities, pooled equity funds, and money market
investments.
<PAGE> 13
8
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Notes to Financial Statements (continued)
December 31, 1997, 1996 and 1995
Note 1 - Description of plan (continued)
International Fund - mutual fund invested in diversified securities from
throughout the world, emphasizing companies in major world markets.
FNB Financial Services Corporation Common Stock Fund - funds invested
principally in FNB Financial Services Corporation common stock purchased at
current market prices.
The employer matching contribution is invested in the FNB Financial Services
Corporation Common Stock Fund. The participants may not direct or redirect
investments of employer matching contributions.
Participant loans - Participants may not borrow from the Plan.
Payment of benefits - On termination of service due to death, disability or
retirement, a participant may elect to receive either a lump-sum amount equal to
the value of the participant's vested interest in his or her account, or annual
installments over a reasonable period not to exceed the participants life
expectancy. For termination of service due to other reasons, a participant may
receive the value of the vested interest in his or her account as a lump-sum
distribution.
Forfeited accounts - Forfeited nonvested employer matching accounts will be used
to reduce future employer matching contributions. Forfeited nonvested employer
profit sharing accounts shall be reallocated to remaining eligible participants
profit sharing accounts. Forfeited nonvested accounts totaled $3,283 at December
31, 1997, $1,096 at December 31, 1996 and $244 at December 31, 1995.
Note 2 - Summary of accounting policies
Basis of accounting
The financial statements of the Plan are prepared using the accrual method of
accounting.
Investment valuation and income recognition
The Plan's investments are stated at fair value except for its investment
contract which is valued at contract value. Shares of registered investment
companies are valued at quoted market prices which represent the net asset value
of shares held by the Plan at year-end. The Company stock is valued at its
quoted market price.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
<PAGE> 14
9
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Notes to Financial Statements (continued)
December 31, 1997, 1996 and 1995
Note 2 - Summary of significant accounting policies (continued)
Payment of benefits
Benefits are recorded when paid.
Cash equivalents
The Plan considers highly liquid debt instruments purchased with maturity dates
of three months or less to be cash equivalents.
Use of estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the administrator to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Note 3 - Plan termination
Although it has not expressed any intent to do so, the Company has the right
under the plan to discontinue contributions at any time and to terminate the
plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.
Note 4 - Tax status
The Internal Revenue Service has determined and informed the Company by a letter
dated February 11, 1996 that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). The Plan
has been amended since receiving the determination letter. However, the Plan
administrator and the Plan's tax counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of
the IRC.
<PAGE> 15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND
PROFIT SHARING PLAN
Date: June 29, 1998 By: /s/ Robert F. Albright
--------------------------
<PAGE> 1
EXHIBIT 23.1
[CHERRY, BEKAERT & HOLLAND, L.L.P. LETTERHEAD]
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
FNB Financial Services Corporation on Form S-8 relating to the FNB Financial
Services Corporation Employees' Savings Plus and Profit Sharing Plan of our
report dated May 21, 1998, relating to the statements of net assets available
for benefits of the FNB Financial Services Corporation Employees' Savings Plus
and Profit Sharing Plan as of December 31, 1997 and 1996, and the related
statements of changes in net assets available for benefits with fund
information for each of the years in the three-year period ended December 31,
1997, which report appears in the 1997 Annual Report on Form 11-K of FNB
Financial Services Corporation Employees' Savings Plus and Profit Sharing Plan.
CHERRY, BEKAERT & HOLLAND, L.L.P.
Greensboro, North Carolina
June 29, 1998
