UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS AND
SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
F.N.B. Corporation Progress Savings 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
F.N.B. Corporation
2150 Goodlette Road North
Naples, Florida 34102
F.N.B. Corporation Progress Savings
401(k) Plan
Audited Financial Statements
As of December 31, 2001 and 2000 and for the year ended December 31, 2001
CONTENTS
Report of Independent Auditors .............................................1
Audited Financial Statements
Statements of Net Assets Available for Benefits.............................2
Statements of Changes in Net Assets Available for Benefits .................3
Notes to Financial Statements ..............................................4
Supplemental Schedules
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)..............11
Schedule H, Line 4j--Schedule of Reportable Transactions ..................13
Report of Independent Auditors
F.N.B. Corporation Progress Savings
401(k) Plan
Hermitage, Pennsylvania
We have audited the accompanying statements of net assets available for benefits
of the F.N.B. Corporation Progress Savings 401(k) Plan as of December 31, 2001
and 2000, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2001. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
(held at end of year) as of December 31, 2001, and reportable transactions for
the year then ended, are presented for the purpose of additional analysis and
are not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in our audits of the financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
June 18, 2002
1
F.N.B. Corporation Progress Savings
401(k) Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2001 2000
----------------------------------
ASSETS
Investments at fair value:
Interest in pooled separate accounts $ 8,169,023 $ 7,957,978
F.N.B. Corporation common stock 7,539,949 5,411,387
Interest in common/collective trusts 1,078,914 842,946
Participant loans 148,955 -
----------------------------------
Net assets available for benefits $16,936,841 $14,212,311
==================================
See accompanying notes.
2
F.N.B. Corporation Progress Savings
401(k) Plan
Statements of Changes in Net Assets Available for Benefits
YEAR ENDED
DECEMBER 31
2001
--------------
Additions:
Dividend and interest income $ 543,084
Demutualization compensation 237,318
Contributions:
Participant 1,851,394
Employer 641,521
--------------
2,492,915
--------------
Total additions 3,273,317
Deductions:
Distributions to participants or beneficiaries 1,346,896
Administrative expenses 36,871
--------------
Total deductions 1,383,767
Net appreciation in fair value of investments 834,980
--------------
Net increase 2,724,530
Net assets available for benefits:
Beginning of year 14,212,311
--------------
End of year $ 16,936,841
==============
See accompanying notes.
3
F.N.B. Corporation Progress Savings
401(k) Plan
Notes to Financial Statements
December 31, 2001
1. DESCRIPTION OF THE PLAN
The following description of the F.N.B. Corporation Progress Savings 401(k) Plan
(the "Plan") provides only general information. Participants should refer to the
summary plan description for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution 401(k) plan, substantially covering all
salaried employees of F.N.B. Corporation (the "Corporation"), including the
following subsidiaries: First National Bank of Pennsylvania; Metropolitan
National Bank; Regency Finance Company; and The Customer Service Center of
F.N.B., LLC PA Division. Participants who have completed 90 days of service and
are age twenty-one or older are eligible to participate in the Plan. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
CONTRIBUTIONS
Under the Plan, participating employees may make voluntary pretax and after-tax
contributions to their accounts of up to 15% of annual base compensation. The
Corporation, at its discretion, may make a matching contribution equal to a
percentage of participants' savings contributions and/or after-tax voluntary
contributions.
Participants' savings contributions and employer matching contributions are
designated under a qualified deferral arrangement as allowed by Sections 401(k)
and 401(m) of the Internal Revenue Code.
Participants may direct employee contributions in the following 20 investment
options: Principal Stable Value Fund, Principal Government Securities Account,
Principal Bond Emphasis Balanced Account, Principal Stock Emphasis Balanced
Account, Principal Large Capital Stock Index Account, Principal Medium Company
Value Account, Principal Small Company Blend Account, Principal International
Stock Account, Principal High Quality Intermediate-Term Account, Principal High
Quality Long-Term Account, Principal Large Company Blend Account, Principal
Putnam Voyager Account, Principal Total Market Stock Index Account, Principal
Medium Company Growth Account, Principal Mid-Cap Stock Index Account, Principal
Small Cap Stock Index Account, Principal Small Company Value Account, Principal
American Century Income & Growth Account, INVESCO Small Company Growth Account,
and F.N.B. Corporation common stock.
4
F.N.B. Corporation Progress Savings
401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
CONTRIBUTIONS (CONTINUED)
Principal Financial Group ("Principal") is the custodian of all of the Plan's
assets, with the exception of the F.N.B. Corporation common stock.
The employer's matching contributions are used to purchase the Corporation's
common stock. Participants who have attained age 59 1/2 are permitted to direct
the trustee to invest the Corporation's matched portion of their account into
any other investment that may be permitted under the Plan.
PARTICIPANT ACCOUNTS
Each participant's account is credited with their voluntary contribution and the
employer's matching contribution and an allocation of the Plan's net earnings as
defined by the Plan.
VESTING
Participants are immediately vested in their voluntary contributions plus actual
earnings thereon. Participants are 100% vested in the employer's matching
contributions and actual earnings thereon after five years of service (see
vesting schedule below):
VESTING SCHEDULE
----------------
YEARS OF SERVICE PERCENTAGE
---------------- ----------
1 20%
2 40%
3 60%
4 80%
5 100%
5
F.N.B. Corporation Progress Savings
401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
FORFEITURES
Upon termination of a participant, the employer's matching contribution to which
the participant is not vested is segregated into a separate account until the
participant incurs a five-year break in service upon which time such nonvested
amount will be forfeited and may be used by the employer to reduce future
matching contributions.
PAYMENT OF BENEFITS
Upon termination of service, a participant with a vested account balance of less
than $5,000 will receive a lump-sum amount equal to the vested value of his or
her accounts. A participant who terminates service with a vested account balance
of greater than $5,000 has two options: he or she may leave his or her account
under the Plan or he or she may request a lump-sum distribution of the vested
account balance. The benefit to which a participant is entitled is the benefit
that can be provided from the participant's account. The Plan also permits
distributions in the event of the participant's permanent disability, death,
early retirement (age 55), or attainment of normal retirement age as defined in
the Plan.
PARTICIPANT LOANS
Participants may borrow from their fund accounts up to a maximum equal to the
lesser of $50,000 or 50% of their vested account balance. Loan terms range from
1-5 years. The loans are secured by the balance in the participant's account and
bear interest at a rate commensurate with local prevailing rates as determined
by the Plan Administrator. Principal and interest are paid ratably through
payroll deductions.
ADMINISTRATIVE EXPENSES
All administrative expenses of the Plan, except for investment fees, are paid by
the Corporation. Such expenses have historically been comprised of fees of
audit, custody and recordkeeping services and have been immaterial in relation
to the Corporation and the Plan.
6
F.N.B. Corporation Progress Savings
401(k) Plan
Notes to Financial Statements (continued)
PLAN TERMINATION
Although it has not expressed any intent to do so, the Corporation has the right
under the Plan to discontinue its contribution at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination, the
participants will become 100% vested in their accounts.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements have been prepared on the accrual basis of accounting
in accordance with accounting principles generally accepted in the United
States.
VALUATION OF INVESTMENTS
The Principal pooled separate accounts investments are valued using accumulation
units and are stated at fair value. The dividends, interest, and realized and
unrealized gains for the underlying funds are factored into the value of the
separate account funds. The dollar value per unit of participation is determined
by dividing the total value of the separate account by the total number of units
of participation held in the separate account. Investments in shares of
registered investment companies and common/collective trusts are stated at their
net asset value, based on the quoted market prices of the securities held in
such funds. The Corporation's common stock is traded on the Nasdaq Stock Market
under the trading symbol "FBAN" and is valued using the average of the bid and
ask prices on the last business day of the Plan year.
DEMUTUALIZATION
On March 31, 2001, the Board of Directors of Principal Mutual Holding Company
adopted a plan for converting Principal Mutual Holding Company from a mutual
insurance holding company to a stock company. The plan was approved by policy
and contract holders on July 24, 2001 and by the Iowa Insurance Commissioner on
August 28, 2001. The demutualization became effective upon the closing of the
IPO on October 26, 2001. In demutualization, membership interests of eligible
policy and contract holders are exchanged for compensation, which may be in the
form of stock, cash or policy/contract enhancements. The compensation was
distributed over a five-day period beginning on December 10, 2001.
7
F.N.B. Corporation Progress Savings
401(k) Plan
Notes to Financial Statements (continued)
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
3. INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets.
DECEMBER 31
2001 2000
-----------------------------------
Principal stable value fund $ 1,078,914 $ 842,946
Principal large capital stock index separate account 2,639,819 2,884,474
F.N.B. Corporation common stock * 7,539,949 5,411,387
* Nonparticipant-directed
During 2001 and 2000, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in value as follows:
2001 2000
-----------------------------------
Interest in common/collective trusts $ 54,925 $ 42,766
Pooled separate accounts (676,257) (318,024)
Common stock 1,456,312 (250,744)
----------------- ------------------
$ 834,980 $ (526,002)
================= ==================
8
F.N.B. Corporation Progress Savings
401(k) Plan
Notes to Financial Statements (continued)
4. NONPARTICIPANT-DIRECTED INVESTMENT
Information about the net assets and the significant components of the changes
in net assets relating to the F.N.B. Corporation common stock is as follows:
DECEMBER 31
2001 2000
----------------------------------
Investments at fair value:
F.N.B. Corporation common stock $ 7,539,949 $ 5,411,387
YEAR ENDED
DECEMBER 31
2001
------------------
Changes in net assets:
Participant contributions $ 201,153
Employer contributions 641,521
Net depreciation in fair value of investments 1,456,312
Dividends 541,162
Distributions to participants or beneficiaries (588,043)
Transfers to participant-directed investments (88,065)
Administration expenses (35,478)
------------------
$ 2,128,562
==================
5. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated May 25, 1999, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax-exempt.
9
F.N.B. Corporation Progress Savings
401(k) Plan
Notes to Financial Statements (continued)
6. PARTIES-IN-INTEREST TRANSACTIONS
The First National Trust Company is the custodian for the F.N.B. Corporation
Common Stock only. Certain plan investments are units of pooled separate
accounts managed by Principal Life Insurance Company. The majority of
administrative expenses of the Plan are paid by the Corporation. Such expenses
have historically been comprised of fees for audit, custody and recordkeeping
services and have been immaterial in relation to the Corporation and the Plan.
One of the investment vehicles in the Plan is F.N.B. Corporation common stock.
7. SUBSEQUENT EVENTS
On January 18, 2002, the company completed its affiliation with Promistar
Financial Corporation ("Promistar"). Promistar's banking affiliate, Promistar
Bank, was merged into First National Bank of Pennsylvania. On March 31, 2002,
the Promistar Financial Corporation 401(k) Plan was merged into the Plan.
10
SUPPLEMENTAL SCHEDULES
F.N.B. Corporation Progress Savings
401(k) Plan
EIN: 25-1255406
Plan Number: 002
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)
December 31, 2001
(c) DESCRIPTION OF INVESTMENT
(b) IDENTITY OF ISSUE, INCLUDING MATURITY DATE, RATE OF
BORROWER, LESSOR, OR SIMILAR INTEREST, COLLATERAL, PAR OR MATURITY (e) CURRENT
(a) PARTY VALUE (d) COST VALUE
-----------------------------------------------------------------------------------------------------------------
Pooled Separate Accounts:
* Principal Financial Group, Government Securities Separate
Inc. Account ** 782,075
Bond Emphasis Balanced Separate
Account ** 335,227
Stock Emphasis Balance Separate Account ** 485,375
Large Capital Stock Index Separate
Account ** 2,639,819
Medium Company Value Separate
Account ** 832,273
Small Company Blend Separate Account ** 567,880
International Stock Separate Account ** 436,982
High Quality Intermediate-Term Bond
Separate Account ** 164,319
Large Company Blend Separate Account ** 267,528
American Century Income and Growth
Separate Account ** 150,890
High Quality Long-Term Bond
Separate Account ** 146,937
Small Company Value Separate Account ** 106,432
Small Cap Stock Index Separate Account ** 146,863
Mid Cap Stock Index Separate Account ** 184,394
Medium Company Growth Separate Account ** 170,053
INVESCO Small Company Growth
Separate Account ** 254,797
Total Market Stock Index Separate
Account ** 49,023
Putnam Voyager Separate Account ** 448,156
-----------------
8,169,023
11
F.N.B. Corporation Progress Savings
401(k) Plan
EIN: 25-1255406
Plan Number: 002
Schedule H, Line 4i--Schedule of Assets (Held at End of Year) (continued)
December 31, 2001
(c) DESCRIPTION OF INVESTMENT
(b) IDENTITY OF ISSUE, INCLUDING MATURITY DATE, RATE OF
BORROWER, LESSOR, OR SIMILAR INTEREST, COLLATERAL, PAR OR MATURITY (e) CURRENT
(a) PARTY VALUE (d) COST VALUE
-----------------------------------------------------------------------------------------------------------------
Common Stocks:
* F.N.B. Corporation Common stock $ 5,425,574 $ 7,539,949
Common/Collective Trusts:
Principal Financial Group, Inc. Stable Value Fund ** 1,078,914
Loans:
* Participant Loans Interest Rates ranging from 4.75% to
6.75% maturing through 2006 ** 148,955
----------------
Total Investments $ 16,936,727
================
* Indicates party-in-interest to the Plan
** Column (d) has not been presented as this information is not applicable.
12
F.N.B. Corporation Progress Savings
401(k) Plan
EIN: 25-1255406
Plan Number: 002
Schedule H, Line 4j--Schedule of Reportable Transactions
Year ended December 31, 2001
(b) DESCRIPTION OF ASSET
INCLUDING INTEREST (h)CURRENT
(a)IDENTITY OF RATE AND MATURITY IN (c) PURCHASE (d) SELLING (g) COST OF VALUE OF ASSET ON (i) NET GAIN
PARTY INVOLVED CASE OF A LOAN PRICE PRICE ASSET TRANSACTION DATE (LOSS)
------------------------------------------------------------------------------------------------------------------------------------
Category (iii)--series of transactions in excess of 5% of plan assets
---------------------------------------------------------------------
F.N.B. Corporation common stock $ 1,019,812 $ - $1,019,812 $1,019,812 $ -
There were no category (i), (ii) or (iv) reportable transactions during 2001.
Columns (e) and (f) are not presented as this information is not applicable.
13
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
F.N.B. Corporation Progress Savings 401(k) Plan
Date: June 28, 2002 /s/John D. Waters
---------------------- -----------------
John D. Waters
Vice President and Chief Financial
Officer