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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 21, 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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ITEM 7: FINANCIAL STATEMENTS
On November 20, 1998, FCNB Corp (the "Company") completed its acquisition of
Capital Bank, N.A. ("Capital"), by means of a stock-for-stock exchange of shares
accounted for as a pooling of interests. The Securities and Exchange Commission,
in its Accounting Series Release No. 135, prohibits affiliates of all parties to
a transaction accounted for as a pooling of interests from selling any shares
received in the transaction until at least 30 days of post merger combined
results have been published.
Accordingly, attached hereto is the unaudited consolidated balance sheet
for the Company, including Capital, as of December 31, 1998 and the related
unaudited consolidated statement of income for the one-month period then ended.
Also, included in the combined entities operating results are specific one-time
merger related charges in the aggregate of $1.66 million: (1) salaries and
employee benefits associated with change-in-control payments of approximately
$632,000 or $382,000 after taxes, (2) professional and advisory fees of $607,000
which are not tax deductible, and (3) other costs of approximately $421,000.
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FCNB CORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31,
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ASSETS 1998
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<S> <C>
Cash and due from banks $ 30,500
Interest-bearing deposits in other banks 1,334
Federal funds sold 47,262
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Cash and cash equivalents 79,096
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Loans held for sale 5,087
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Investment securities held to maturity 30,045
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Investment securities available for sale-at fair value 421,176
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Loans 722,589
Less: Allowance for credit losses (7,198)
Unearned income (23)
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Net loans 715,368
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Bank premises and equipment 25,280
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Other assets 56,172
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Total assets $ 1,332,224
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LIABILITIES AND SHAREHOLDERS' EQUITY
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LIABILITIES
Deposits:
Noninterest-bearing deposits $ 139,320
Interest-bearing deposits 712,499
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Total deposits 851,819
Short-term borrowings:
Federal funds purchased and securities sold under
agreements to repurchase 92,287
Other short-term borrowings 243,155
Long term debt:
Guaranteed preferred beneficial interests in the
Company's subordinated debentures 40,250
Accrued interest and other liabilities 12,354
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Total liabilities 1,239,865
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SHAREHOLDERS' EQUITY
Common stock 10,061
Surplus 46,095
Retained earnings 32,333
Accumulated other comprehensive income 3,870
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Total shareholders' equity 92,359
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Total liabilities and shareholders' equity $ 1,332,224
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</TABLE>
<PAGE>
FCNB CORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
<TABLE>
<CAPTION>
(Dollars in thousands, except per share amounts)
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For the one month For the 12 months
ended ended
December 31, December 31,
1998 1998
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<S> <C> <C>
Interest income:
Interest and fees on loans $ 5,581 $ 62,894
Interest and dividends on investment securities:
Taxable 2,201 19,466
Tax exempt 31 326
Dividends 138 1,069
Interest on federal funds sold 38 1,590
Other interest income 21 76
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Total interest income 8,010 85,421
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Interest expense:
Interest on deposits 2,510 29,277
Interest on federal funds purchased and securities
sold under agreements to repurchase 283 2,919
Interest on other short-term borrowings 1,304 10,112
Interest on long term debt 290 1,527
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Total interest expense 4,387 43,835
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Net interest income 3,623 41,586
Provision for credit losses 255 1,770
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Net interest income after provision for credit losses 3,368 39,816
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Noninterest income:
Service fees 424 4,154
Net securities gains 321 1,481
Gain on sale of loans 104 751
Other operating income 5,822 9,279
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Total noninterest income 6,671 15,665
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Noninterest expenses:
Salaries and employee benefits 5,292 21,464
Occupancy expenses 756 4,267
Equipment expenses 583 3,218
Merger related expenses 297 1,936
Other operating expenses 1,886 9,759
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Total noninterest expenses 8,814 40,644
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Income before provision for income taxes 1,225 14,837
Income tax expense 533 5,026
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Net income 692 9,811
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Other comprehensive net income, net of tax: Unrealized gains (losses) on
securities:
Unrealized holding gains (losses) arising during period (367) 1,508
Less: reclassification adjustment for gains
included in net income 194 905
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Other comprehensive net income (561) 603
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Comprehensive income $ 131 $ 10,414
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Net income - before merger related expenses $ 919 $ 11,222
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Basic earnings per share $ 0.07 $ 0.98
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Diluted earnings per share $ 0.07 $ 0.97
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Basic earnings per share - before merger related expenses $ 0.09 $ 1.12
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Diluted earnings per share - before merger related expenses $ 0.09 $ 1.11
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Basic weighted average number of shares outstanding 10,047,545 10,024,630
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Diluted weighted average number of shares outstanding 10,103,260 10,114,648
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</TABLE>
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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 21, 1999
