-----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, LmbMPIJgNQvNPcdz1d3z0TCFxKpfl4GFRjPOxKiR8UriWbxharypBsZPhCGkER4p ne0BlTXOugemZDt/fXD5rQ== 0000037808-96-000026.txt : 19960814 0000037808-96-000026.hdr.sgml : 19960814 ACCESSION NUMBER: 0000037808-96-000026 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960813 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: 96610858 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: August 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 $400 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 recently 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 Florida's 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 January 1, 1995. Onetime merger costs have not been included in the pro forma adjustments. The merger of a wholly-owned subsidiary of FNB with and into Southwest 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 should be read in conjunction with the Form 10-Q for the period ended June 30, 1996 for FNB and Southwest. The consolidated financial statements of Southwest from their Form 10-Q for the period ended June 30, 1996 follow the unaudited pro forma condensed combined financial statements. PRO FORMA CONDENSED COMBINED BALANCE SHEET As of June 30, 1996 - Unaudited F.N.B. Pro Forma Pro Forma Corporation Southwest Adjustments Combined ----------- ---------- ----------- ---------- (Dollars in thousands) Assets Cash and due from banks $ 67,877 $ 25,305 $ 93,182 Interest bearing deposits with banks 1,556 1,556 Federal funds sold 11,917 8,000 19,917 Securities available for sale 202,538 59,700 $ (3,150)(2) 259,088 Securities held to maturity 155,239 18,456 173,695 Loans held for sale 7,273 7,273 Loans, net of unearned income 1,271,432 267,048 1,538,480 Allowance for loan losses (22,102) (1,881) (23,983) ---------- ---------- -------- ---------- Net loans 1,256,603 265,167 1,521,770 ---------- ---------- -------- ---------- Premises and equipment 24,294 14,414 38,708 Other assets 39,501 7,518 663 (2) 47,682 ---------- ---------- -------- ---------- $1,759,525 $ 398,560 $ (2,487) $2,155,598 ========== ========== ======== ========== Liabilities Deposits: Non-interest bearing $ 159,442 $ 48,497 $ 207,939 Interest bearing 1,297,693 288,829 1,586,522 ---------- ---------- -------- ---------- Total deposits 1,457,135 337,326 1,794,461 Short-term borrowings 92,801 27,563 120,364 Other liabilities 27,703 2,656 30,359 Long-term debt 32,916 32,916 ---------- ---------- -------- ---------- Total Liabilities 1,610,555 367,545 1,978,100 ---------- ---------- -------- ---------- Stockholders' Equity Preferred stock 4,263 4,263 Common stock 18,225 365 $ (365)(4) 23,928 5,703 (3) Additional paid-in capital 67,955 28,323 (28,323)(4) 89,685 64,511 (3) (41,526)(3) (1,255)(2) Retained earnings 56,683 3,162 59,845 Net unrealized securities gains 2,906 (835) (1,232)(2) 839 Treasury stock (1,062) (1,062) ---------- ---------- -------- ---------- Total Stockholders' Equity 148,970 31,015 (2,487) 177,498 ---------- ---------- -------- ---------- $1,759,525 $ 398,560 $ (2,487) $2,155,598 ========== ========== ======== ========== Common shares outstanding at period end 9,067,869 3,654,089 (172,621)(1) 11,919,191 ========== ========== ======== ========== (1) As of 6/30/96, 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 deferred taxes. (3) Issuance of 2,851,322 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. (4) Elimination of par value of $.10 per share of Southwest Common Stock. PRO FORMA CONDENSED COMBINED INCOME STATEMENT For the six months ended June 30, 1996 - Unaudited F.N.B. Pro Forma Pro Forma Corporation Southwest Adjustments Combined ----------- ---------- ----------- ---------- (Dollars in thousands) Interest Income Loans, including fees $ 58,441 $ 12,020 $ 70,461 Securities: Taxable 9,321 414 9,735 Tax exempt 800 800 Dividends 349 349 Other 647 2,408 3,055 ---------- ---------- ----------- ---------- Total Interest Income 69,558 14,842 84,400 ---------- ---------- ----------- ---------- Interest Expense Deposits 26,219 5,596 31,815 Short-term borrowings 1,841 660 2,501 Long-term debt 1,387 1,387 ---------- ---------- ----------- ---------- Total Interest Expense 29,447 6,256 35,703 ---------- ---------- ----------- ---------- Net Interest Income 40,111 8,586 48,697 Provision for loan losses 2,806 480 3,286 ---------- ---------- ----------- ---------- Net Interest Income After Provision for Loan Losses 37,305 8,106 45,411 ---------- ---------- ----------- ---------- Non-Interest Income Insurance commissions and fees 1,891 1,891 Service charges 3,226 1,738 4,964 Trust 766 766 Gain on sale of securities 566 17 583 Other 1,002 1,002 ---------- ---------- ----------- ---------- Total Non-Interest Income 7,451 1,755 9,206 ---------- ---------- ----------- ---------- 44,756 9,861 54,617 ---------- ---------- ----------- ---------- Non-Interest Expenses Salaries and employee benefits 15,511 3,953 19,464 Net occupancy 2,420 618 3,038 Amortization of intangibles 530 530 Equipment 1,745 978 2,723 Deposit insurance 615 615 Other 9,547 1,718 11,265 ---------- ---------- ----------- ---------- Total Non-Interest Expenses 30,368 7,267 37,635 ---------- ---------- ----------- ---------- Income Before Taxes 14,388 2,594 16,982 Income taxes 4,445 894 5,339 ---------- ---------- ----------- ---------- Net Income $ 9,943 $ 1,700 $ 0 $ 11,643 ========== ========== =========== ========== Net Income Per Common Share Primary $1.04 $0.43 $0.92 ===== ===== ===== Fully diluted $0.99 $0.43 $0.89 ===== ===== ===== PRO FORMA CONDENSED COMBINED INCOME STATEMENT For the six months ended June 30, 1995 - Unaudited F.N.B. Pro Forma Pro Forma Corporation Southwest Adjustments Combined ----------- ---------- ----------- ---------- (Dollars in thousands) Interest Income Loans, including fees $ 56,019 $ 9,446 $ 65,465 Securities: Taxable 8,601 405 9,006 Tax exempt 745 745 Dividends 299 299 Other 805 1,616 2,421 ---------- ---------- ----------- ---------- Total Interest Income 66,469 11,467 77,936 ---------- ---------- ----------- ---------- Interest Expense Deposits 25,010 4,281 29,291 Short-term borrowings 1,670 1,120 2,790 Long-term debt 1,522 1,522 ---------- ---------- ----------- ---------- Total Interest Expense 28,202 5,401 33,603 ---------- ---------- ----------- ---------- Net Interest Income 38,267 6,066 44,333 Provision for loan losses 2,934 315 3,249 ---------- ---------- ----------- ---------- Net Interest Income After Provision for Loan Losses 35,333 5,751 41,084 ---------- ---------- ----------- ---------- Non-Interest Income Insurance commissions and fees 2,338 2,338 Service charges 3,413 1,148 4,561 Trust 755 755 Gain on sale of securities 361 361 Other 866 866 ---------- ---------- ----------- ---------- Total Non-Interest Income 7,733 1,148 8,881 ---------- ---------- ----------- ---------- 43,066 6,899 49,965 ---------- ---------- ----------- ---------- Non-Interest Expenses Salaries and employee benefits 14,812 3,210 18,022 Net occupancy 2,253 477 2,730 Amortization of intangibles 650 650 Equipment 1,921 761 2,682 Deposit insurance 1,868 1,868 Other 9,185 1,766 10,951 ---------- ---------- ----------- ---------- Total Non-Interest Expenses 30,689 6,214 36,903 ---------- ---------- ----------- ---------- Income Before Taxes 12,377 685 13,062 Income taxes 4,048 212 4,260 ---------- ---------- ----------- ---------- Net Income $ 8,329 $ 473 $ 0 $ 8,802 ========== ========== =========== ========== Net Income Per Common Share Primary $0.87 $0.12 $0.69 ===== ===== ===== Fully diluted $0.84 $0.12 $0.68 ===== ===== ===== SOUTHWEST BANKS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET JUNE 30, DECEMBER 31, 1996 1995 ------------ ------------ (Unaudited) ------------ ------------ ASSETS Cash and Demand Balances Due from Banks $ 25,304,619 $ 25,135,628 Federal Funds Sold 8,000,000 31,724,000 ------------ ------------ Total Cash and Cash Equivalents 33,304,619 56,859,628 Securities Available for Sale at Fair Value (Cost of $61,039,084 and $50,109,434) 59,700,418 50,401,563 Securities Held to Maturity at Cost (Fair Value of $18,266,313 and $23,946,120) 18,455,820 23,834,164 Loans 267,240,680 238,509,066 Less: Allowance for loan losses (1,881,306) (1,585,285) Unearned income & deferred loan fees (192,000) (257,550) ------------ ------------ Net Loans 265,167,374 236,666,231 Premises and Equipment 14,414,159 14,413,940 Accrued Interest Receivable 2,776,571 2,594,888 Other Assets 4,741,488 1,691,377 ------------ ------------ TOTAL $398,560,449 $386,461,791 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Deposits $337,326,267 $324,830,614 Federal Funds Purchased and Securities Sold Under Agreements to Repurchase 17,563,295 18,276,769 Other Short Term Borrowings 10,000,000 10,000,000 Accrued Interest Payable 1,524,580 1,714,022 Accrued Expenses and Other Liabilities 1,130,659 1,696,483 ------------ ------------ Total Liabilities 367,544,801 356,517,888 Stockholders' Equity: Common Stock, Par Value $.10, 25,000,000 Shares Authorized, 3,654,089 Shares Issued and Outstanding 365,409 365,409 Capital Surplus 28,322,888 28,322,888 Retained Earnings 3,162,276 1,462,295 Unrealized (Loss) Gain on Securities Available for Sale (834,925) 182,201 Employee Stock Ownership Plan Obligation 0 (388,890) ------------ ------------ Total Stockholders' Equity 31,015,648 29,943,903 ------------ ------------ TOTAL $398,560,449 $386,461,791 ============ ============ See notes to consolidated financial statements. SOUTHWEST BANKS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Unaudited THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ---------------------- ------------------------ 1996 1995 1996 1995 ---------- ---------- ----------- ----------- INTEREST INCOME Interest and Fees on Loans $6,141,018 $5,026,617 $12,019,898 $ 9,446,034 Interest on Federal Funds 111,426 154,487 414,073 404,668 Sold Interest on Investment Securities and Other 1,254,577 935,896 2,408,152 1,615,899 ---------- ---------- ----------- ----------- Total Interest Income 7,507,021 6,117,000 14,842,123 11,466,601 INTEREST EXPENSE Interest Expense on Deposits 2,785,686 2,363,412 5,595,668 4,281,086 Interest on Short-Term Borrowings 312,989 520,333 660,397 1,120,297 ---------- ---------- ----------- ----------- Total Interest Expense 3,098,675 2,883,745 6,256,065 5,401,383 ---------- ---------- ----------- ----------- Net Interest Income 4,408,346 3,233,255 8,586,058 6,065,218 Provision for Loan Losses 255,000 165,000 480,000 315,000 ---------- ---------- ----------- ----------- Net Interest Income after Provision for Loan Losses 4,153,346 3,068,255 8,106,058 5,750,218 OTHER INCOME Service Charges, Commissions and Fees 888,301 613,951 1,737,955 1,147,606 Gain on Sale of Investment Securities 16,649 0 16,649 0 ---------- ---------- ----------- ----------- Total Other Income 904,950 613,951 1,754,604 1,147,606 OTHER EXPENSE Salaries and Benefits 1,997,669 1,644,292 3,952,531 3,209,969 Occupancy 324,647 253,682 617,550 476,880 Equipment Rental, Depreciation and Maintenance 495,226 405,499 978,875 760,691 General Operating 864,465 902,986 1,718,260 1,765,776 ---------- ---------- ----------- ----------- Total Other Expenses 3,682,007 3,206,459 7,267,216 6,213,316 ---------- ---------- ----------- ----------- Income Before Taxes 1,376,289 475,747 2,593,446 684,508 Provision for Income Taxes 477,050 157,057 893,464 211,495 ---------- ---------- ----------- ----------- NET INCOME $ 899,239 $ 318,690 $ 1,699,982 $ 473,013 ========== ========== =========== =========== EARNINGS PER SHARE $0.23 $0.08 $0.43 $0.12 ===== ===== ===== ===== Weighted average shares outstanding 3,970,160 3,864,524 3,970,160 3,853,668 ========= ========= ========= ========= See notes to consolidated financial statements. SOUTHWEST BANKS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited Six Months Ended June 30 1996 1995 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,699,982 $ 473,013 Adjustments to reconcile net income to cash provided by (used in) operating activities: Depreciation and Amortization 870,395 625,319 Accretion of discounts and deferred loan fees, net 35,362 (196,939) Provision for loan losses 480,000 315,000 (Increase) decrease in other assets (3,050,111) 317 Increase (decrease) in accrued expenses and other liabilities (176,935) 104,291 (Increase) decrease in accrued interest receivable (181,683) (358,621) Increase (decrease) in accrued interest payable (189,442) 288,520 ----------- ----------- Cash provided by (used in) operating activities (512,432) 1,250,900 NET CASH FLOWS FROM INVESTING ACTIVITIES Net increase in loans (28,486,318) (31,990,646) Gross loan participations sold 0 0 Loan participations purchased (510,573) (2,232,834) Purchase of held-to-maturity-securities 0 (2,208,179) Proceeds from maturing held-to-maturity securities 5,358,730 3,243,237 Purchases of available-for-sale securities (22,296,434) (19,045,615) Proceeds from available-for-sale securities 11,980,453 5,387,015 Purchases of premises and equipment (870,614) (3,438,474) ----------- ----------- Cash used in investing activities (34,824,756) (50,285,496) NET CASH FLOWS FROM FINANCING ACTIVITIES Net increase in deposits 12,495,653 61,942,384 Net increase (decrease) in securities sold under agreement to repurchase (713,474) 10,217,177 Net increase (decrease) in federal funds purchased and other short-term borrowings 0 (4,500,000) Net proceeds from sale of common stock 0 243,414 ----------- ----------- Cash provided by financing activities 11,782,179 67,902,975 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (23,555,009) 18,868,379 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 56,859,628 14,934,854 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $33,304,619 $33,803,233 =========== =========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION - Cash paid during period for: Interest $ 6,445,507 $ 5,112,863 =========== =========== Taxes $ 1,037,000 $ 353,500 =========== =========== 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 June 30, 1996 and December 31, 1995, the Consolidated Statements of Income for the three month and six month periods ended June 30, 1996 and 1995, and the Consolidated Statements of Cash Flows for the six month periods ended June 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: August 12, 1996 --------------- -----END PRIVACY-ENHANCED MESSAGE-----