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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,
1999; 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
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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
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FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT
SHARING PLAN
Financial Statements
for the three years ended
December 31, 1999
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FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT
SHARING PLAN
Contents
Page
Report of Independent Accountants 2
Statements of Net Assets Available for Benefits 3
Statements of Changes in Net Assets Available for Benefits with
Fund Information 4
Notes to Financial Statements 5 - 7
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[PRICEWATERHOUSECOOPERS LLP]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
FNB Financial Services Corporation
Employees' Savings Plus and Profit Sharing Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of FNB Financial Services Corporation Employees' Savings Plus and Profit Sharing
Plan (the "Plan") at December 31, 1999 and 1998, and the changes in net assets
available for benefits for the years then ended in conformity with accounting
principles generally accepted in the United States. 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 of these statements in accordance with auditing standards
generally accepted in the United States, which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above. The financial statements of the Plan for the year ended December 31, 1997
were audited by other independent accountants whose report dated May 21, 1998
expressed an unqualified opinion on those statements.
PricewaterhouseCoopers LLP
Raleigh, North Carolina
June 30, 2000
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3
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Cash and Cash Equivalents $ 1,080 $ 16,803
Investments
At fair value
Shares of registered investment companies
Capital Preservation Fund (Income Fund) 3,672 shares in
1999 and 6,319 shares in 1998 36,721 63,185
Vanguard Wellesley Income Fund (Balanced Fund),
10,398 shares in 1999 and 10,548 shares in 1998 196,007 233,327
Fidelity Disciplined Equity Fund (Equity Fund),
33,160 shares in 1999 and 31,091 shares in 1998 1,011,709 911,578
T. Rowe Price International Stock Fund (International
Fund) 6,557 shares in 1999 and 5,493 shares in 1998 124,772 82,342
FNB Financial Services Corporation Common stock
(FNB Common Stock Fund), 39,669 shares in 1999 and
35,574 shares in 1998 433,657 595,863
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Net assets available for benefits $1,803,946 $1,903,098
========== ==========
</TABLE>
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4
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
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<S> <C> <C> <C>
Additions to net assets attributed to:
Investment Income:
Net appreciation (depreciation) in fair value of investments $ (209,507) $ (171,618) $ 276,063
Capital gains (losses) 165,961 64,461 97,542
Investment Income 29,699 49,306 32,118
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Total investment income (13,847) (57,851) 405,723
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Contributions
Participants' 221,581 229,263 189,649
Employers' 84,924 73,702 69,091
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Total contributions 306,505 302,965 258,740
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Total additions 292,658 245,114 664,463
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Deductions from net assets attributed to:
Benefits paid to participants 347,635 48,328 109,791
Administrative expenses 44,175 24,395 38,986
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Total deductions 391,810 72,723 148,777
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Net increase (decrease) (99,152) 172,391 515,686
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Net assets available for benefits
Beginning of year 1,903,098 1,730,707 1,215,021
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End of Year $1,803,946 $1,903,098 $1,730,707
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</TABLE>
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5
FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 1999, 1998 and 1997
Note 1 - Description of plan
The following description of the FNB Financial Services Corporation Employees'
Savings Plus and Profit Sharing Plan (The 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 FNB Financial Services Corporation (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.
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FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Notes to Financial Statements (continued)
December 31, 1999, 1998 and 1997
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 $8,990 at December
31, 1999, $3,039 at December 31, 1998 and $3,283 at December 31, 1997.
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. 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.
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FNB FINANCIAL SERVICES CORPORATION
EMPLOYEES' SAVINGS PLUS AND PROFIT SHARING PLAN
Notes to Financial Statements (continued)
December 31, 1999, 1998 and 1997
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.
New Accounting Pronouncements
The Plan has adopted the provisions of SOP 99-3, "Accounting for and Reporting
of Certain Employee Benefit Plan Investments and Other Disclosure Matters."
Under the provisions of this statement, a defined contribution plan that allows
participant-directed investment programs is no longer required to disclose
amounts relating to those individual programs as a separate fund in the
financial statements in columnar form, or in the related disclosures, or by
separate financial statements for each program as required by Practice Bulletin
12, "Reporting Separate Investment Fund Option Information of Defined
Contribution Pension Plans." Additionally, defined contribution plans are no
longer required to present participant-directed plan investments in the
statement of net assets available for benefits by general type. Accordingly,
amounts as of December 31, 1998 and for the years ended December 31, 1998 and
1997 have been reclassified to conform to the current year presentation.
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.
Note 5 - Subsequent event
The Board of Directors approved a plan to merge the Black Diamond Bank Profit
Sharing Plan into the FNB Financial Services Corporation Employees' Savings Plus
and Profit Sharing Plan as of January 1, 2000. The Black Diamond Savings Plan
had net assets of $1,729,343 at December 31, 1999.
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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: July 12, 2000 By: /s/ Richard L. Powell
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