<PAGE> UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission file number 2-94292
FNB Banking Company
(Exact name of registrant as specified in its charter)
Georgia 58-1479370
(State of Incorporation) (I.R.S. Employer Identification No.)
318 South Hill Street
Griffin, Georgia 30224
(Address of principal executive (Zip Code)
offices)
770-227-2251
(Telephone Number)
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 XX NO
Common stock, par value $1 per share: 807,800 shares
outstanding as of July 24, 1995
<PAGE>
FNB BANKING COMPANY AND SUBSIDIARY
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet (unaudited) at June 30, 1995 2
Consolidated Statements of Earnings (unaudited) for the Three
Months and the Six Months Ended June 30, 1995 and 1994 3
Consolidated Statements of Cash Flows (unaudited) for the Six
Months Ended June 30, 1995 and 1994 4
Notes to Consolidated Financial Statements (unaudited) 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 6-7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
FNB BANKING COMPANY AND SUBSIDIARY
Consolidated Balance Sheet
June 30, 1995
(Unaudited)
Assets
<S> <C>
Cash and due from banks $ 10,838,903
Federal funds sold 2,250,000
Investment securities held to maturity (approximate
market value of $18,102,202) 17,987,786
Investment securities available for sale (amortized
cost of $7,195,376) 7,104,360
Other investments 1,120,510
Mortgage loans held for sale 114,945
Loans 105,606,227
Less:Unearned income (238,724)
Allowance for loan losses (1,210,557)
Loans, net 104,156,946
Premises and equipment, net 5,479,383
Other assets 1,465,007
$ 150,517,840
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing $ 26,179,327
Interest-bearing 105,988,926
Total deposits 132,168,253
Notes payable 1,027,779
Other liabilities 1,411,850
Total liabilities 134,607,882
Stockholders' equity:
Common stock, $1 par value; authorized
5,000,000 shares; issued and outstanding
807,800 shares 807,800
Retained earnings 15,162,229
Unrealized loss on investment securities, net of tax (60,071)
Total stockholders' equity 15,909,958
$ 150,517,840
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE> FNB BANKING COMPANY AND SUBSIDIARY
Consolidated Statements of Earnings
For the Three Months and the Six Months Ended June 30, 1995 and 1994
(Unaudited)
<CAPTION>
Three Months Six Months
Ended Ended
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest income:
Loans $ 2,722,514 2,315,949 5,399,822 4,595,072
Investment securities:
Tax exempt 144,986 144,920 285,193 293,278
Taxable 287,321 279,640 568,622 535,631
Federal funds sold 19,319 46,763 26,817 61,253
Total interest income 3,174,140 2,787,272 6,280,454 5,485,234
Interest expense:
Deposits 1,057,165 874,692 2,049,688 1,782,600
Federal funds purchased 7,471 - 15,086 2,915
Notes payable 20,456 17,126 40,478 33,106
Total interest expense 1,085,092 891,818 2,105,252 1,818,621
Net interest income 2,089,048 1,895,454 4,175,202 3,666,613
Provision for loan losses 3,500 - 3,500 85,000
Net interest income after provision for loan losses
2,085,548 1,895,454 4,171,702 3,581,613
Other income:
Service charges on deposit accounts 397,217 366,295 757,352 692,292
Fees for trust services 45,000 46,250 90,000 72,500
Net gain on securities transactions - 101,300 - 88,743
Other operating income 139,719 60,722 200,089 122,760
Total other income 581,936 574,567 1,047,441 976,295
Other expense:
Salaries and other personnel expense 990,351 1,004,454 1,949,308 1,985,060
Net occupancy and equipment expense 233,635 262,019 517,939 515,099
Other operating expense 509,252 470,279 975,764 1,083,892
Total other expense 1,733,238 1,736,752 3,443,011 3,584,051
Earnings before income taxes 934,246 733,269 1,776,132 973,857
Income taxes 297,120 219,000 529,300 270,000
Net earnings $ 637,126 514,269 1,246,832 703,857
Earnings per common share based on average outstanding
shares of 807,800 in 1995 and 1994:
Net earnings per share $ .79 .64 1.54 .87
Dividends per common share $ .25 .15 .25 .15
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE> FNB BANKING COMPANY AND SUBSIDIARY
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1995 and 1994
(Unaudited)
<CAPTION>
Six Months Ended June 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net earnings $1,246,833 703,857
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Provision for loan losses 3,500 85,000
Writedowns and losses on sales of repossessed
collateral 5,658 117,320
Depreciation, amortization and accretion 149,989 208,728
Loss (gain) on securities transactions - (88,743)
Loss on disposal of premises and equipment - 40,112
Change in assets and liabilities:
Interest receivable (21,144) (21,595)
Interest payable 55,792 (25,604)
Other, net 309,684 779,131
Mortgage loans held for sale (72,307) 60,880
Net cash provided by operating activities 1,678,005 1,859,086
Cash flows from investing activities:
Proceeds from sales, maturities and paydowns of
investment securities held to maturity 1,004,245 3,600,057
Proceeds from sales, maturities and paydowns of
investment securities available for sale 76,304 2,218,750
Proceeds from sales and maturities of other investments 9,800 -
Purchases of investment securities held to maturity (198,370) (3,806,485)
Purchases of investment securities available for sale - (992,500)
Change in loans (4,333,661) (1,227,199)
Purchases of premises and equipment (59,399) (232,987)
Proceeds from sales of repossessed collateral 16,342 411,453
Net cash used by investing activities (3,484,739) (28,911)
Cash flows from financing activities:
Net change in deposits 3,893,732 5,765,035
Net change in federal funds purchased (1,500,000) (800,000)
Repayments of long-term debt (83,333) (83,333)
Dividends paid (484,680) (444,290)
Net cash provided by financing
activities 1,825,719 4,437,412
Net increase (decrease) in cash and cash equivalents 18,985 6,267,587
Cash and cash equivalents at beginning of period 13,069,918 6,999,936
Cash and cash equivalents at end of period $13,088,903 13,267,523
Supplemental cash flow information:
Cash paid for income taxes $ 501,000 103,000
Cash paid for interest $ 2,050,207 1,844,225
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
FNB BANKING COMPANY AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation
The consolidated financial statements include the accounts of FNB
Banking Company (the Company) and its wholly-owned subsidiary, the
First National Bank of Griffin (Griffin). All significant inter-
company accounts and transactions have been eliminated in consolidation.
The consolidated financial information furnished herein reflects all
adjustments which are, in the opinion of management, necessary to
present a fair statement of the results of operations and financial
position for the periods covered herein. All such adjustments are of
a normal recurring nature.
(2) Change in Accounting Principle
Effective January 1, 1995, the Company changed its method of accounting
for impaired loans and adopted Statement of Financial Accounting
Standards No. 114 "Accounting by Creditors for Impairment of a Loan"
(SFAS 114). SFAS 114 requires that impaired loans be measured on the
present value of expected future cash flows discounted at the loan's
effective interest rate, which is the contractual interest rate
adjusted for any deferred loan fee or cost, premium or discount
existing at the inception or acquisition of the loan, or at the
loan's observable market price, or the fair value of the collateral
of the loan if the loan is collateral dependent. The impact of the
adoption of SFAS 114 as of January 1, 1995 is immaterial to the
consolidated financial statements.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For Each of the Six Months in the Periods Ended
June 30, 1995 and 1994
Financial Condition
Total assets at June 30, 1995 were $150,517,840, representing a
$3,865,918 (2.6%) increase from December 31, 1994. Deposits increased
$3,893,732 (3.0%) from December 31, 1994. Loans increased $4,320,698
(4.3%). The allowance for loan losses at June 30, 1995 totalled
$1,210,557, representing 1.1% of total loans compared to December 31, 1994
totals of $1,245,314 representing 1.2% of total loans. Cash and cash
equivalents increased $18,985 from December 31, 1994.
The total of nonperforming assets which includes nonaccruing loans,
repossessed collateral and loans for which payments are more than 90 days
past due decreased 4.2% or $74,000 from $1,783,000 at December 31, 1994
to $1,709,000 at June 30, 1995. There were no related party loans which
were considered nonperforming at June 30, 1995.
The Company's subsidiary bank was most recently examined by its
primary regulatory authority in November 1994. There were no
recommendations by the regulatory authority that in management's opinion
will have material effects on the Company's liquidity, capital resources
or operations.
Results of Operations
Net interest income increased $508,589 (13.9%) in the first six months
of 1995 compared to the same period for 1994. Interest income for the first
six months of 1995 was $6,280,454, representing an increase of $795,220
(14.5%) over the same period in 1994. Interest expense for the first six
months of 1995 increased $286,631 (15.8%) compared to the same period in 1994.
The provision for loan losses for the six months of 1995 decreased
$81,500 compared to the same period for 1994. The decrease is
attributable to a $3,500 provision made for the first six months of 1995
compared to a $85,000 provision made for the same period in 1994. It is
management's belief that the allowance for loan losses is adequate to
absorb probable losses in the portfolio.
Other expenses for the six months of 1995 decreased $141,040 (3.9%)
compared to the first six months in 1994. The decrease is primarily
attributable to a loss on the sale of repossessed collateral of $110,000
and a loss on the disposal of premises and equipment of $40,000 that
occurred during the first six months of 1994. Income tax expense
expressed as a percentage of earnings before income taxes increased
primarily as a result of the decrease in tax-exempt income as a percentage
of total income.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, continued
For the Six Months Ended June 30, 1995
Capital
The following tables present FNB Banking Company's regulatory capital
position at June 30, 1995:
Risk-Based Capital Ratios
Tier 1 Tangible Capital, Actual 14.7%
Tier 1 Tangible Capital minimum requirement 4.0%
Excess 10.7%
Total Capital, Actual 15.8%
Total Capital minimum requirement 8.0%
Excess 7.8%
Leverage Ratio
Tier 1 Tangible Capital to adjusted total assets
("Leverage Ratio") 10.7%
Minimum leverage requirement 3.0%
Excess 7.7%
<PAGE>
PART II. OTHER INFORMATION
FNB BANKING COMPANY AND SUBSIDIARY
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
<PAGE>
FNB BANKING COMPANY AND SUBSIDIARY
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 BANKING COMPANY
By: \S\ C.A. Knowles
--------------------------------
C.A. Knowles, President and Tres.
(Principal Executive Officer)
Date:_____________________________
By:\S\ William K. Holmes
-------------------------------
William K. Holmes
Assistant Treasurer
(Principal Accounting Officer)
Date:__________________________
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000757262
<NAME> FNB BANKING CO.
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994
<PERIOD-END> MAR-31-1995 JUN-30-1995
<CASH> 10,313,994 10,838,903
<INT-BEARING-DEPOSITS> 103,444,675 105,988,926
<FED-FUNDS-SOLD> 1,200,000 2,250,000
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 6,903,933 7,104,360
<INVESTMENTS-CARRYING> 17,948,097 17,987,786
<INVESTMENTS-MARKET> 18,335,071 18,102,202
<LOANS> 103,242,659 104,156,946
<ALLOWANCE> 1,262,315 1,210,557
<TOTAL-ASSETS> 147,835,372 150,517,840
<DEPOSITS> 130,417,585 132,168,253
<SHORT-TERM> 0 0
<LIABILITIES-OTHER> 1,033,188 1,411,850
<LONG-TERM> 1,069,445 1,027,779
<COMMON> 807,800 807,800
0 0
0 0
<OTHER-SE> 14,507,354 15,102,158
<TOTAL-LIABILITIES-AND-EQUITY> 147,835,372 150,517,840
<INTEREST-LOAN> 2,677,308 5,399,822
<INTEREST-INVEST> 429,006 853,815
<INTEREST-OTHER> 0 26,817
<INTEREST-TOTAL> 3,106,314 6,280,454
<INTEREST-DEPOSIT> 992,523 2,049,688
<INTEREST-EXPENSE> 1,020,160 2,105,252
<INTEREST-INCOME-NET> 2,086,154 4,175,202
<LOAN-LOSSES> 0 3,500
<SECURITIES-GAINS> 0 0
<EXPENSE-OTHER> 1,709,773 3,443,011
<INCOME-PRETAX> 841,886 1,776,132
<INCOME-PRE-EXTRAORDINARY> 841,886 1,776,132
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 609,706 1,246,832
<EPS-PRIMARY> .75 1.54
<EPS-DILUTED> 0 0
<YIELD-ACTUAL> 6.4 6.29
<LOANS-NON> 1,654,000 1,645,000
<LOANS-PAST> 307,000 124,000
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 1,245,314 1,245,314
<CHARGE-OFFS> 60,422 165,469
<RECOVERIES> 77,423 127,212
<ALLOWANCE-CLOSE> 1,262,315 1,210,557
<ALLOWANCE-DOMESTIC> 1,262,315 1,210,557
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
