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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 28, 1999
FCNB CORP
(Exact name of registrant as specified in its charter)
MARYLAND 52-1479635
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7200 FCNB COURT, FREDERICK, MARYLAND 21703
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (301)662-2191
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FCNB Corp (the "Company") announced today that it has restated fourth quarter
1998 and full year 1998 earnings as a result of a one-time, additional charge
for income taxes relating to its 1996 merger with Laurel Bancorp, Inc (Laurel).
The Company has been notified by the Internal Revenue Service (the Service) that
the Service has taken under review the company's treatment of an income tax
reserve for bad debts relating to the company's 1996 acquisition of Laurel and
its subsidiary thrift. As a part of its acquisition of Laurel, the Company
assumed an unrecorded deferred tax liability of approximately $1.6 million
related to the special bad debt deduction for years before December 1, 1988
which thrifts were allowed. The Company determined that recognition of the
deferred tax liability was not required as a result of the merger of Laurel and
its subsidiary into the company and its subsidiary bank. The Service has raised
issues related to the availability of an exemption from recapture of the bad
debt reserve. The Company is reviewing the Service's position. The Company
intends to vigorously contest the additional assessment, but has accrued $1.75
million as a reserve against such liability, reducing reported earnings and book
value by approximately $0.17 per share. There can be no assurance, however, that
the Company's argument will prevail. As a result of the reserve accrual,
reported earnings for the fourth quarter have been restated as a loss of
$252,000, or $0.03 per basic share; 1998 earnings have been restated as $8.06
million, or $0.80 per basic share. Core earnings of $2.8 million, or $0.28 per
basic share, and $11.2 million, or $1.12 per basic share, for the quarter and
year, respectively, remain unchanged.
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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 hereunto duly authorized.
FCNB CORP
By:
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A. Patrick Linton, President
Dated: January 28, 1999
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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 hereunto duly authorized.
FCNB CORP
By: /s/ A. Patrick Linton
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A. Patrick Linton, President
Dated: January 28, 1999
