<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 September 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)
404-227-2251
(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 shorterperiod 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 November 4, 1995
<PAGE> INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet (unaudited) at September 30, 1995 2
Consolidated Statements of Earnings (unaudited) for the Three
Months and the Nine Months Ended September 30, 1995 and 1994 3
Consolidated Statements of Cash Flows (unaudited) for the Nine
Months Ended September 30, 1995 and 1994 4-5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
FNB BANKING COMPANY AND SUBSIDIARY
Consolidated Balance Sheet
September 30, 1995
(Unaudited)
Assets
<S> <C>
Cash and due from banks $ 6,700,657
Investment securities held to maturity
(approximate market value of $16,622,244) 16,436,870
Investment securities available for sale
(amortized cost of $7,146,250) 7,019,195
Other investments 1,120,510
Mortgage loans held for sale 90,950
Loans 105,679,485
Less:Unearned income (263,051)
Allowance for loan losses (1,311,355)
Loans, net 104,105,079
Premises and equipment, net 5,508,331
Other real estate owned 301,963
Other assets 1,303,931
$ 142,587,486
Liabilities and Stockholders' Equity
Liabilities:
Deposits:
Noninterest-bearing $ 22,068,938
Interest-bearing 101,899,328
Total deposits 123,968,266
Federal funds purchased 100,000
Notes payable 986,112
Other liabilities 963,003
Total liabilities 126,017,381
Stockholders' equity:
Common stock, $1 par value; authorized
5,000,000 shares; issued and outstanding
807,800 shares 807,800
Retained earnings 15,846,161
Unrealized loss on investment securities, net of tax (83,856)
Total stockholders' equity 16,570,105
$ 142,587,486
</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 Nine Months Ended September 30, 1995 and 1994
(Unaudited)
<CAPTION>
Three Months Nine Months
Ended Ended
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest income:
Loans $ 2,783,633 2,551,582 8,183,456 7,146,654
Investment securities:
Tax exempt 117,740 213,663 402,933 506,941
Taxable 275,324 173,950 843,946 709,581
Federal funds sold 55,282 69,049 82,099 130,302
Total interest income 3,231,979 3,008,244 9,512,434 8,493,478
Interest expense:
Deposits 1,097,708 921,207 3,147,396 2,703,807
Federal funds purchased 490 122 15,576 3,037
Notes payable 19,310 18,646 59,788 51,752
Total interest expense 1,117,508 939,975 3,222,760 2,758,596
Net interest income 2,114,471 2,068,269 6,289,674 5,734,882
Provision for loan losses 22,000 - 25,500 85,000
Net interest income after
provision for loan losses 2,092,471 2,068,269 6,264,174 5,649,882
Other income:
Service charges on deposit accounts 418,856 368,647 1,176,208 1,060,939
Fees for trust services 45,000 56,250 135,000 128,750
Net gain (loss) on securities
transactions (23,750) - (23,750) 88,743
Other operating income 61,759 58,444 261,848 181,204
Total other income 501,865 483,341 1,549,306 1,459,636
Other expense:
Salaries and other personnel expense 958,915 986,108 2,908,223 2,971,168
Net occupancy and equipment expense 247,171 271,697 765,110 786,796
Other operating expense 445,017 456,365 1,420,781 1,540,257
Total other expense 1,651,103 1,714,170 5,094,114 5,298,221
Earnings before income taxes 943,233 837,440 2,719,366 1,811,297
Income taxes 259,300 240,000 788,600 510,000
Net earnings $ 683,933 597,440 1,930,766 1,301,297
Earnings per common share based on average outstanding
shares of 807,800 in 1995 and 1994:
Net earnings per share $ .85 .74 2.39 1.61
Dividends per share $ - - .25 .15
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE> Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1995 and 1994
(Unaudited)
<CAPTION>
Nine Months Ended September 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,930,766 1,301,297
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Provision for loan losses 25,500 85,000
Writedowns and losses on sales of repossessed
collateral 8,913 117,320
Depreciation, amortization and accretion 227,618 308,597
Loss (gain) on securities transactions 23,750 (88,743)
Loss on disposal of premises and equipment 3,374 40,112
Change in assets and liabilities:
Interest receivable 110,548 (15,623)
Interest payable 69,312 98,029
Prepaid expenses and other assets 28,140 (105,181)
Accrued expenses and other liabilities 44,766 520,107
Mortgage loans held for sale (48,312) 25,383
Net cash provided by operating
activities 2,424,375 2,286,298
Cash flows from investing activities:
Proceeds from sales, maturities and paydowns of
investment securities held to maturity 3,060,911 5,831,057
Proceeds from sales, maturities and paydowns
of investment securities available for sale 1,096,452 2,272,414
Purchases of investment securities held to
maturity (698,370) (5,108,906)
Purchases of investment securities available
for sale (1,000,000) (992,500)
Proceeds from sales, maturities and paydowns
of other investments 9,800 -
Change in loans (4,591,013) (1,833,543)
Purchases of premises and equipment (169,873) (276,194)
Proceeds from sales of repossessed collateral 16,342 411,453
Net cash provided (used) by investing
activities (2,275,751) 303,781
Cash flows from financing activities:
Net change in deposits (4,306,255) 6,622,942
Net change in federal funds purchased (1,400,000) (800,000)
Repayments of long-term debt (125,000) (125,000)
Dividends paid (686,630) (565,460)
Net cash provided (used) by
financing activities (6,517,885) 5,132,482
Net increase (decrease) in cash and cash
equivalents (6,369,261) 7,722,561
Cash and cash equivalents at beginning
of the period 13,069,918 6,999,936
Cash and cash equivalents at end of period $ 6,700,657 14,722,497
</TABLE>
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows, continued
Nine Months Ended September 30, 1995 and 1994
(Unaudited)
Nine Months Ended September 30,
1995 1994
<S> <C> <C>
Supplemental cash flow information:
Cash paid for income taxes $ 716,000 284,000
Cash paid for interest $ 3,153,448 2,660,567
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
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 intercompany
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 Nine Months in the Periods Ended
September 30, 1995 and 1994
Financial Condition
Total assets at September 30, 1995 were $142,587,486, representing a
$5,247,886 (3.6%) decrease from December 31, 1994. Deposits decreased
$4,306,255 (3.4%) from December 31, 1994. Loans increased $4,244,924 (4.3%).
The allowance for loan losses at September 30, 1995 totalled $1,311,355,
representing 1.3% of total loans compared to December 31,1994 totals of
$1,245,314 representing 1.2% of total loans. Cash and cash equivalents
decreased $6,369,261 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 28.8% or $513,000 from $1,784,000 at December 31, 1994
to $1,271,000 at September 30, 1995. The decrease is primarily due to
payments of $480,000 received by the Company on loans. There were no
related party loans which were considered nonperforming at September 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 $554,792 (9.7%) in the first nine
months of 1995 compared to the same period for 1994. Interest income for the
first nine months of 1995 was $9,512,433, representing a increase of
$1,018,955 (12.0%) over the same period in 1994. Interest expense for the
first nine months of 1995 increased $464,164 (16.8%) compared to the same
period in 1994.
The provision for loan losses for the first nine months of 1995 decreased
$59,500 compared to the same period for 1994. The decrease is primarily
attributable to net recoveries of $65,862 for the first nine months in
1995 compared to net charge-offs of $8,978 for the first nine months 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 first nine months of 1995 decreased $204,106(3.9%)
compared to the first nine months in 1994. This decrease is primarily
attributable to an FDIC deposit assessment refund received in the amount of
approximately $80,000 and a decrease in profit sharing contributions
(expense) of $198,084 for the first nine months in 1995 compared to the
first nine months in 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 Each of the Nine Months in the Periods Ended
September 30, 1995 and 1994
Capital
The following tables present FNB Banking Company's regulatory capital
position at September 30, 1995:
Risk-Based Capital Ratios
Tier 1 Tangible Capital, Actual 15.4%
Tier 1 Tangible Capital minimum requirement 4.0%
Excess 11.4%
Total Capital, Actual 16.7%
Total Capital minimum requirement 8.0%
Excess 8.7%
Leverage Ratio
Tier 1 Tangible Capital to adjusted total assets
("Leverage Ratio") 11.3%
Minimum leverage requirement 3.0%
Excess 8.3%
<PAGE>
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>
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 Treasurer
(Principal Executive Officer)
Date:______________________
By:\s\ William K. Holmes
-------------------------
William K. Holmes
Assistant Treasurer
(Principal Accounting Officer)
Date:______________________
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<CASH> 6,700,657
<INT-BEARING-DEPOSITS> 101,899,328
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,019,195
<INVESTMENTS-CARRYING> 16,436,870
<INVESTMENTS-MARKET> 16,622,244
<LOANS> 104,105,079
<ALLOWANCE> 1,311,355
<TOTAL-ASSETS> 142,587,486
<DEPOSITS> 123,968,266
<SHORT-TERM> 0
<LIABILITIES-OTHER> 963,003
<LONG-TERM> 986,112
<COMMON> 807,800
0
0
<OTHER-SE> 15,762,305
<TOTAL-LIABILITIES-AND-EQUITY> 142,587,486
<INTEREST-LOAN> 8,183,456
<INTEREST-INVEST> 1,246,879
<INTEREST-OTHER> 82,099
<INTEREST-TOTAL> 9,512,434
<INTEREST-DEPOSIT> 3,147,396
<INTEREST-EXPENSE> 3,222,760
<INTEREST-INCOME-NET> 6,289,674
<LOAN-LOSSES> 25,500
<SECURITIES-GAINS> (23,750)
<EXPENSE-OTHER> 5,094,114
<INCOME-PRETAX> 2,719,366
<INCOME-PRE-EXTRAORDINARY> 2,719,366
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,930,766
<EPS-PRIMARY> 2.39
<EPS-DILUTED> 0
<YIELD-ACTUAL> 6.49
<LOANS-NON> 1,031,000
<LOANS-PAST> 240,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,245,314
<CHARGE-OFFS> 293,365
<RECOVERIES> 333,906
<ALLOWANCE-CLOSE> 1,311,355
<ALLOWANCE-DOMESTIC> 1,311,355
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
