-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HMd7Gulp9zxfemeVnAudnBQTpUqC2tnGSA1HMWlrpjfTJcMQnO/T1R1vBU8wwEQv 7asHJx4OzoLu7iCy+j3Aow== 0000037808-96-000031.txt : 19961115 0000037808-96-000031.hdr.sgml : 19961115 ACCESSION NUMBER: 0000037808-96-000031 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960930 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FNB CORP/PA CENTRAL INDEX KEY: 0000037808 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 251255406 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-08144 FILM NUMBER: 96662089 BUSINESS ADDRESS: STREET 1: HERMITAGE SQUARE CITY: HERMITAGE STATE: PA ZIP: 16148 BUSINESS PHONE: 4129816000 MAIL ADDRESS: STREET 1: HERMITAGE SQUARE CITY: HERMITAGE STATE: PA ZIP: 16148 FORMER COMPANY: FORMER CONFORMED NAME: CITIZENS BUDGET CO DATE OF NAME CHANGE: 19750909 8-K 1 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, AS AMENDED Date of Report: November 13, 1996 F.N.B. CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Pennsylvania 0-8144 25-1255406 - ------------------------ ----------- ------------------- (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) Hermitage Square, Hermitage, Pennsylvania 16148 ----------------------------------------- ---------- (Address of principal executive offices) (Zip code) (412) 981-6000 ---------------------------------------------------- (Registrant's telephone number, including area code) INFORMATION TO BE INCLUDED IN THE REPORT ITEM 5. OTHER EVENTS On February 2, 1996, F.N.B. Corporation (FNB) signed a definitive merger agreement with Southwest Banks, Inc. (Southwest), a bank holding company headquartered in Naples, Florida, with assets of approximately $425 million. The merger agreement calls for an exchange of .819 share of FNB common stock for each share of Southwest common stock, after giving effect to the 5% stock dividend announced on April 24, 1996. FNB has reserved 3,276,700 shares to be issued in conjunction with the merger. In connection with the merger agreement, Southwest granted FNB an option to purchase, under certain circumstances, up to 727,136 shares of Southwest common stock at a price of $15.00 per share. The exchange ratio, number of shares under option and the price of the options are all subject to possible adjustment. The planned merger has been approved by both the Federal Reserve Bank of Cleveland and the Shareholders of Southwest Banks, Inc. The transaction will be accounted for as a pooling of interests, and is expected to close in early 1997, following the state of Florida's required statutory waiting period. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS The following unaudited pro forma condensed combined financial statements combine the historical unaudited consolidated financial statements of FNB and Southwest on the assumption that the merger had been effective as of September 30, 1996 and as of the beginning of each of the nine month periods ended September 30, 1996 and 1995. One time merger costs have not been included in the pro forma adjustments. The merger of Southwest into FNB will be accounted for as a pooling of interests in accordance with generally accepted accounting principles. These statements should be read in conjunction with the historical consolidated financial statements of FNB and Southwest. The pro forma statements are intended for informational purposes and may not be indicative of the combined financial position or results of operations that actually would have occurred had the transaction been consummated during the period or as of the date indicated, or which will be attained in the future. The pro forma statements do not reflect the impact of any pending business combinations or dispositions, individually or in aggregate, which are insignificant pursuant to Article 11 of Regulation S-X. The pro forma statements should be read in conjunction with the Form 10-Q for the period ended September 30, 1996 for FNB and Southwest. The consolidated financial statements of Southwest presented after the unaudited pro forma condensed combined financial statements were derived from Southwest's Form 10-Q for the period ended September 30, 1996. PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF SEPTEMBER 30, 1996 - UNAUDITED F.N.B. Southwest Corporation Banks, Inc. and and Pro Forma Pro Forma Subsidiaries Subsidiaries Adjustments Combined ------------ ------------ ----------- ---------- (Dollars in thousands) ASSETS Cash and due from banks $ 66,246 $ 24,897 $ 91,143 Interest bearing deposits with banks 1,893 1,893 Federal funds sold 9,508 4,100 13,608 Loans held for sale 6,594 6,594 Securities available for sale 179,356 60,764 $ (3,150)(2) 236,970 Securities held to maturity (pro forma combined fair value $162,654) 148,594 16,163 164,757 Loans, net of unearned income 1,292,411 299,523 1,591,934 Allowance for loan losses (21,996) (2,095) (24,091) ----------- ---------- --------- ---------- NET LOANS 1,270,415 297,428 1,567,843 ----------- ---------- --------- ---------- Premises and equipment 24,912 14,179 39,091 Other assets 40,935 7,186 663 (2) 48,784 ----------- ---------- --------- ---------- $1,748,453 $ 424,717 $ (2,487) $2,170,683 =========== ========== ========= ========== LIABILITIES Deposits: Non-interest bearing $ 159,441 $ 46,685 $ 206,126 Interest bearing 1,286,658 286,138 1,572,796 ---------- ---------- --------- ---------- Total deposits 1,446,099 332,823 1,778,922 Short-term borrowings 86,440 56,521 142,961 Other liabilities 30,885 3,086 33,971 Long-term debt 33,956 33,956 ---------- ---------- --------- ---------- TOTAL LIABILITIES 1,597,380 392,430 1,989,810 ---------- ---------- --------- ---------- STOCKHOLDERS' EQUITY Preferred stock 3,984 3,984 Common stock 18,339 365 $ (17)(2) 24,043 5,704 (3) (348)(4) Additional paid-in capital 68,127 28,332 (1,238)(2) 89,865 61,672 (3) (39,934)(3) (27,094)(4) Retained earnings 58,543 4,079 62,622 Net unrealized securities gains (losses) 3,362 (489) (1,232)(2) 1,641 Treasury stock (1,282) (1,282) ---------- ---------- --------- ---------- TOTAL STOCKHOLDERS' EQUITY 151,073 32,287 (2,487) 180,873 ---------- ---------- --------- ---------- $1,748,453 $ 424,717 $ (2,487) $2,170,683 ========== ========== ========= ========== Common shares outstanding at period end 9,116,091 3,654,803 (172,621)(1)11,967,998 ========== ========== ========= ========== (1) As of 9/30/96, FNB owned 172,621 shares of Southwest Common Stock. (2) Adjust securities by Southwest Common Stock owned by FNB with a value of $3,150,333; adjust net unrealized securities gains associated with the stock and the related net deferred taxes. (3) Issuance of 2,851,907 shares of FNB Common Stock in exchange for all the outstanding shares of Southwest Common Stock net of the book value of Southwest Common Stock owned by FNB. Market value of FNB Common Stock at 9/30/96 of $23.625. (4) Elimination of par value of $.10 per share of Southwest Common Stock. PRO FORMA CONDENSED COMBINED INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 - UNAUDITED F.N.B. Southwest Corporation Banks, Inc. and and Pro Forma Pro Forma Subsidiaries Subsidiaries Adjustments Combined ------------ ------------ ----------- --------- (Dollars in thousands) INTEREST INCOME Loans, including fees $ 88,123 $ 18,727 $ 106,850 Securities 15,281 3,611 18,892 Other 825 485 1,310 ---------- ---------- --------- --------- TOTAL INTEREST INCOME 104,229 22,823 127,052 ---------- ---------- --------- --------- INTEREST EXPENSE Deposits 39,197 8,519 47,716 Short-term borrowings 2,799 1,168 3,967 Long-term debt 1,996 1,996 ---------- ---------- --------- --------- TOTAL INTEREST EXPENSE 43,992 9,687 53,679 ---------- ---------- --------- --------- NET INTEREST INCOME 60,237 13,136 73,373 Provision for loan losses 4,196 770 4,966 ---------- ---------- --------- --------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 56,041 12,366 68,407 ---------- ---------- --------- --------- NON-INTEREST INCOME Insurance commissions and fees 3,059 3,059 Service charges 4,979 2,615 7,594 Other 3,607 17 3,624 ---------- ---------- --------- --------- TOTAL NON-INTEREST INCOME 11,645 2,632 14,277 ---------- ---------- --------- --------- 67,686 14,998 82,684 ---------- ---------- --------- --------- NON-INTEREST EXPENSES Salaries and employee benefits 23,031 6,047 29,078 Net occupancy 3,613 931 4,544 Equipment 2,582 1,496 4,078 SAIF recapitalization assessment 2,965 2,965 Other 16,118 2,528 18,646 ---------- ---------- --------- --------- TOTAL NON-INTEREST EXPENSES 48,309 11,002 59,311 ---------- ---------- --------- --------- INCOME BEFORE TAXES 19,377 3,996 23,373 Income taxes 5,931 1,378 7,309 ---------- ---------- --------- --------- NET INCOME $ 13,446 $ 2,618 $ 0 $ 16,064 ========== ========== ========= ========= NET INCOME PER COMMON SHARE PRIMARY $1.40 $0.66 $1.26 ===== ===== ===== FULLY DILUTED $1.34 $0.66 $1.22 ===== ===== ===== PRO FORMA CONDENSED COMBINED INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 - UNAUDITED F.N.B. Southwest Corporation Banks, Inc. and and Pro Forma Pro Forma Subsidiaries Subsidiaries Adjustments Combined ------------ ------------ ----------- --------- (Dollars in thousands) INTEREST INCOME Loans, including fees $ 84,916 $ 14,998 $ 99,914 Securities 14,963 2,654 17,617 Other 1,162 692 1,854 ---------- ---------- --------- --------- TOTAL INTEREST INCOME 101,041 18,344 119,385 ---------- ---------- --------- --------- INTEREST EXPENSE Deposits 38,360 6,944 45,304 Short-term borrowings 2,499 1,749 4,248 Long-term debt 2,331 2,331 ---------- ---------- --------- --------- TOTAL INTEREST EXPENSE 43,190 8,693 51,883 ---------- ---------- --------- --------- NET INTEREST INCOME 57,851 9,651 67,502 Provision for loan losses 4,300 510 4,810 ---------- ---------- --------- --------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 53,551 9,141 62,692 ---------- ---------- --------- --------- NON-INTEREST INCOME Insurance commissions and fees 3,487 3,487 Service charges 5,037 1,836 6,873 Other 2,755 2,755 ---------- ---------- --------- --------- TOTAL NON-INTEREST INCOME 11,279 1,836 13,115 ---------- ---------- --------- --------- 64,830 10,977 75,807 ---------- ---------- --------- --------- NON-INTEREST EXPENSES Salaries and employee benefits 22,185 4,972 27,157 Net occupancy 3,413 762 4,175 Equipment 2,653 1,172 3,825 Deposit insurance 2,121 214 2,335 Other 14,948 2,416 17,364 ---------- ---------- --------- --------- TOTAL NON-INTEREST EXPENSES 45,320 9,536 54,856 ---------- ---------- --------- -------- INCOME BEFORE TAXES 19,510 1,441 20,951 Income taxes 6,325 467 6,792 ---------- ---------- --------- -------- NET INCOME $ 13,185 $ 974 $ 0 $ 14,159 ========== ========== ========= ======== NET INCOME PER COMMON SHARE PRIMARY $1.38 $0.25 $1.12 ===== ===== ===== FULLY DILUTED $1.33 $0.25 $1.09 ===== ===== ===== SOUTHWEST BANKS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------- (Unaudited) ------------- ------------- ASSETS Cash and Demand Balances Due from Banks $ 24,897,073 $ 25,135,628 Federal Funds Sold 4,100,000 31,724,000 ------------- ------------- TOTAL CASH AND CASH EQUIVALENTS 28,997,073 56,859,628 Securities Available for Sale at Fair Value (Cost of $61,771,953 and $50,109,434) 60,764,051 50,401,563 Securities Held to Maturity at Cost (Fair Value of $15,936,308 and $23,946,120) 16,163,273 23,834,164 Loans 299,712,504 238,509,066 Less: Allowance for loan losses (2,095,197) (1,585,285) Unearned income & deferred loan fees (188,975) (257,550) ------------- ------------- NET LOANS 297,428,332 236,666,231 Premises and Equipment 14,178,467 14,413,940 Accrued Interest Receivable 2,712,224 2,594,888 Other Assets 4,473,440 1,691,377 ------------- ------------- TOTAL $ 424,716,860 $ 386,461,791 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Deposits $ 332,822,906 $ 324,830,614 Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 30,270,902 18,276,769 Other Short Term Borrowings 26,250,000 10,000,000 Accrued Interest Payable 1,860,293 1,714,022 Accrued Expenses and Other Liabilities 1,225,881 1,696,483 ------------- ------------- TOTAL LIABILITIES 392,429,982 356,517,888 Stockholders' Equity: Common Stock, Par Value $.10, 25,000,000 Shares Authorized, 3,654,803 and 3,654,089 Shares Issued and Outstanding 365,480 365,409 Capital Surplus 28,331,392 28,322,888 Retained Earnings 4,078,565 1,462,295 Unrealized (Loss) Gain on Securities Available for Sale (488,559) 182,201 Employee Stock Ownership Plan Obligation (388,890) ------------- ------------- TOTAL STOCKHOLDERS' EQUITY 32,286,878 29,943,903 ------------- ------------- TOTAL $ 424,716,860 $ 386,461,791 ============= ============= See notes to consolidated financial statements. SOUTHWEST BANKS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Unaudited THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------- ---------------------- 1996 1995 1996 1995 ---------- ---------- ---------- ---------- INTEREST INCOME Interest and Fees on Loans $6,707,034 $5,551,471 $18,726,932 $14,997,505 Interest on Federal Funds Sold 71,295 287,679 485,368 692,347 Interest on Investment Securities and Other 1,202,407 1,038,226 3,610,559 2,654,125 ---------- ---------- ---------- ---------- TOTAL INTEREST INCOME 7,980,736 6,877,376 22,822,859 18,343,977 INTEREST EXPENSE Interest Expense on Deposits 2,923,645 2,662,938 8,519,313 6,944,024 Interest on Short-Term Borrowings 507,700 628,937 1,168,097 1,749,234 ---------- ---------- ---------- ---------- TOTAL INTEREST EXPENSE 3,431,345 3,291,875 9,687,410 8,693,258 ---------- ---------- ---------- ---------- NET INTEREST INCOME 4,549,391 3,585,501 13,135,449 9,650,719 Provision for Loan Losses 290,000 195,000 770,000 510,000 ---------- ---------- ---------- ---------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 4,259,391 3,390,501 12,365,449 9,140,719 OTHER INCOME Service Charges, Commissions and Fees 877,275 688,642 2,615,230 1,836,248 Gain on Sale of Investment Securities 16,649 ---------- ---------- ---------- ---------- TOTAL OTHER INCOME 877,275 688,642 2,631,879 1,836,248 OTHER EXPENSE Salaries and Benefits 2,094,569 1,762,272 6,047,100 4,972,241 Occupancy 313,013 284,745 930,563 761,625 Equipment Rental, Depreciation and Maintenance 517,341 410,860 1,496,216 1,171,551 General Operating 810,043 864,827 2,528,303 2,630,603 ---------- ---------- ---------- ---------- TOTAL OTHER EXPENSES 3,734,966 3,322,704 11,002,182 9,536,020 ---------- ---------- ---------- ---------- INCOME BEFORE TAXES 1,401,700 756,439 3,995,146 1,440,947 Provision for Income Taxes 485,413 255,921 1,378,877 467,416 ---------- ---------- ---------- ---------- NET INCOME $ 916,287 $ 500,518 $2,616,269 $ 973,531 ========== ========== ========== ========== EARNINGS PER SHARE $0.23 $0.13 $0.66 $0.25 ===== ===== ===== ===== Weighted average shares outstanding 3,973,901 3,877,961 3,973,541 3,870,598 ========= ========= ========= ========= See notes to consolidated financial statements. SOUTHWEST BANKS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited Nine Months Ended September 30 1996 1995 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,616,269 $ 973,531 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and Amortization 1,314,018 1,003,775 Accretion of discounts and deferred loan fees, net (229,970) (330,336) Provision for loan losses 770,000 510,000 (Increase) decrease in other assets (2,782,063) 318,754 Increase (decrease) in accrued expenses and other liabilities (81,712) 449,489 (Increase) decrease in accrued interest receivable (117,336) (863,612) Increase (decrease) in accrued interest payable 146,271 781,644 ------------ ------------ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 1,635,477 2,843,245 NET CASH FLOWS FROM INVESTING ACTIVITIES Net increase in loans (60,669,362) (45,728,254) Gross loan participations sold 448,845 Loan participations purchased (610,573) (3,125,828) Purchase of held-to-maturity-securities (2,208,179) Proceeds from maturing held-to-maturity securities 7,648,695 6,357,843 Purchases of available-for-sale securities (24,987,534) (34,399,123) Proceeds from available-for-sale securities 13,954,286 10,559,090 Purchases of premises and equipment (1,078,545) (4,201,371) ------------ ------------ CASH USED IN INVESTING ACTIVITIES (65,743,033) (72,296,977) NET CASH FLOWS FROM FINANCING ACTIVITIES Net increase in deposits 7,992,292 79,942,071 Net increase (decrease) in securities sold under agreement to repurchase 8,372,133 7,934,562 Net increase (decrease) in federal funds purchased and other short-term borrowings 19,872,000 (3,287,000) Net proceeds from sale of common stock 8,576 243,414 ----------- ------------ CASH PROVIDED BY FINANCING ACTIVITIES 36,245,001 84,833,047 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (27,862,555) 15,379,315 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 56,859,628 14,934,854 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $28,997,073 $30,314,169 ============ ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION - Cash paid during period for: Interest $ 9,541,139 $ 7,911,614 ============ ============ Taxes $ 1,552,000 $ 515,500 ============ ============ See notes to consolidated financial statements. SOUTHWEST BANKS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - ------------------------------------------------------ Note 1: Basis of Presentation - ------------------------------ The Consolidated Balance Sheets for Southwest Banks, Inc. and Subsidiaries (the Company) as of September 30, 1996 and December 31, 1995, the Consolidated Statements of Income for the three month and nine month periods ended September 30, 1996 and 1995, and the Consolidated Statements of Cash Flows for the nine month periods ended September 30, 1996 and 1995 included in this form 10-Q have been prepared by the Company which is responsible for their integrity and objectivity pursuant to the rules and regulations of the Securities and Exchange Commission. The statements are unaudited except for the Balance Sheet as of December 31, 1995 and have not been compiled, reviewed or audited by outside accountants. The accounting policies followed for interim financial reporting are set forth in Note A of the Company's latest Annual Report to Shareholders, which is incorporated by reference in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission. The Company maintains a system of internal accounting control designed to provide reasonable assurance that assets are safeguarded and the transactions are properly executed, recorded and summarized to produce reliable records and reports. To the best of management's knowledge and belief, the statements and related information were prepared in conformity with generally accepted accounting principles and are based on recorded transactions and management's best estimates and judgments. The interim results of operations are not necessarily indicative of the results which may be expected for the full year. The consolidated financial statements included herein include, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the financial condition and results of operations of the Company for the periods indicated. Note 2: Pending Merger Transaction - ----------------------------------- In February, 1996, the Company entered into an Agreement and Plan of Merger with F.N.B. Corporation ("FNB"), Hermitage, Pennsylvania, which provides for the merger of the Company into FNB. Upon effectiveness of the merger, the Company's shareholders will become entitled to receive, 0.819 shares of FNB common stock in exchange for each share of common stock of the Company then held by them. In connection with this agreement, the Company has granted FNB an option to purchase 727,163 shares of the Company's common stock for $15 per share, which becomes exercisable upon the occurrence of certain events, as defined. The proposed merger is expected to be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code and shall be treated as a pooling-of-interests for accounting purposes. In this connection, the Company is deferring expenses associated with the merger until such time as all conditions precedent to the merger are met or the merger agreement is otherwise terminated. Costs incurred in connection with the merger aggregate approximately $235,295. The merger is expected to be completed in January, 1997. Signatures ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized. F.N.B. CORPORATION (Registrant) By: /s/John D. Waters -------------------------- Name: John D. Waters Title: Vice President and Chief Financial Officer Dated: November 13, 1996 -----END PRIVACY-ENHANCED MESSAGE-----