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): October 14, 1999
FCNB Corp
(Exact name of registrant as specified in its charter)
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MARYLAND 52-1479635
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
7200 FCNB COURT, FREDERICK, MARYLAND 21703
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (301)662-2191
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On August 19, 1999 FCNB Corp (the "Company") completed its acquisition
of First Frederick Financial Corporation and its wholly-owned subsidiary First
Bank of Frederick ("First"), 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 First, as of September 30, 1999 and the related
unaudited consolidated statements of income and comprehensive income for the
one-month and nine-month periods then ended. Also, included in the combined
entities operating results for the nine month period ended September 30, 1999
are specific one-time merger related charges in the aggregate of $4.37 million
or $2.97 million net of taxes: (1) adjustment to align the accounting
assumptions used in analyzing the allowance for credit losses of $2.9 million or
$1.75million net of taxes, (2) salaries and employee benefits associated with
change-in-control payments of approximately $306,000 or $185,000 net of taxes,
(3) data processing costs of approximately $438,000 or $265,000 net of taxes,
(4) professional fees of $246,000 which are not tax deductible and (4) other
costs of approximately $480,000.
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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/ William R. Talley, Jr.
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William R. Talley, Jr., Comptroller
Dated: October 14, 1999
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FCNB CORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
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(Dollars in thousands)
SEPTEMBER 30,
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ASSETS 1999
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Cash and due from banks $32,601
Interest-bearing deposits in other banks 4,045
Federal funds sold 26,042
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Cash and cash equivalents 62,688
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Loans held for sale 3,159
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Investment securities held to maturity 21,768
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Investment securities available for sale-at fair value 416,251
Loans 874,485
Less: Allowance for credit losses (9,648)
Unearned income (10)
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Net loans 864,827
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Bank premises and equipment 25,975
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Other assets 68,583
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Total assets $1,463,251
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LIABILITIES AND SHAREHOLDERS' EQUITY
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LIABILITIES
Deposits:
Noninterest-bearing deposits $158,069
Interest-bearing deposits 845,734
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Total deposits 1,003,803
Short-term borrowings:
Federal funds purchased and securities sold under
agreements to repurchase 60,958
Other short-term borrowings 252,270
Long term debt:
Guaranteed preferred beneficial interests in the
Company's subordinated debentures 40,250
Accrued interest and other liabilities 14,551
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Total liabilities 1,371,832
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SHAREHOLDERS' EQUITY
Common stock 11,904
Capital surplus 52,064
Retained earnings 33,011
Accumulated other comprehensive income (5,560)
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Total shareholders' equity 91,419
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Total liabilities and shareholders' equity $1,463,251
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FCNB CORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
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(Dollars in thousands, except per share amounts)
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One month ended For nine months ended
September 30, 1999 September 30, 1999
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Interest income:
Interest and fees on loans $6,078 $55,329
Interest and dividends on investment securities:
Taxable 2,113 19,005
Tax exempt 43 421
Dividends 134 1,145
Interest on federal funds sold 112 647
Other interest income 17 131
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Total interest income 8,497 76,678
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Interest expense:
Interest on deposits 2,917 25,187
Interest on federal funds purchased and securities
sold under agreements to repurchase 276 2,301
Interest on other short-term borrowings 1,095 9,650
Interest on long term debt 290 2,533
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Total interest expense 4,578 39,671
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Net interest income 3,919 37,007
Provision for credit losses:
Operating activities 130 1,278
Merger related - 2,900
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Total provision for credit losses 130 4,178
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Net interest income after provision for credit losses 3,789 32,829
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Noninterest income:
Service fees 484 3,971
Insurance commissions 509 4,457
Net securities gains 58 805
Gain on sale of loans 2 832
Income from bank-owned life insurance 125 1,164
Other operating income 293 2,823
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Total noninterest income 1,471 14,052
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Noninterest expenses:
Salaries and employee benefits 2,018 19,246
Occupancy expenses 523 4,348
Equipment expenses 370 3,002
Merger related expenses 12 1,688
Other operating expenses 969 8,371
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Total noninterest expenses 3,892 36,655
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Income before provision for income taxes 1,368 10,226
Income tax expense 282 3,257
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Net income 1,086 6,969
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Other comprehensive net income, net of tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period
net of taxes of $304 and ($6,287), respectively 464 (8,971)
Less: reclassification adjustment for gains (losses)
included in net income, net of taxes of $23 and $311,respectively 35 494
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Other comprehensive income, net of taxes of $281 and
($5,976), respectively 429 (9,465)
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Comprehensive income $1,515 ($2,496)
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Net income - before merger related expenses $1,137 $9,943
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Basic earnings per share $0.09 $0.60
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Diluted earnings per share $0.09 $0.58
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Basic earnings per share - before merger related expenses $0.10 $0.85
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Diluted earnings per share - before merger related expenses $0.10 $0.83
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Basic weighted average number of shares outstanding 11,903,159 11,655,706
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Diluted weighted average number of shares outstanding 11,931,516 11,915,845
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