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, 2003
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 offices:
F.N.B. Corporation
One F.N.B. Boulevard
Hermitage, PA 16148
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, thereunto duly authorized.
F.N.B. Corporation Progress Savings 401(k) Plan
Date: June 28, 2004 /s/ Tito L. Lima
-------------------- ------------------------------------------------
Tito L. Lima
Corporate Controller
AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
F.N.B. Corporation Progress Savings 401(k) Plan
Years ended December 31, 2003 and 2002
with Report of Independent Registered Public Accounting Firm
F.N.B. Corporation
Progress Savings 401(k) Plan
Audited Financial Statements
and Supplemental Schedules
Years ended December 31, 2003 and 2002
CONTENTS
Report of Independent Registered Public Accounting Firm................. 1
Audited Financial Statements
Statements of Net Assets Available for Benefits......................... 2
Statement 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)......... 12
Schedule H, Line 4j -- Schedule of Reportable Transactions.............. 14
Report of Independent Registered Public Accounting Firm
Board of Directors
F.N.B. Corporation Progress Savings
401(k) Plan
We have audited the accompanying statements of net assets available for benefits
of F.N.B. Corporation Progress Savings 401(k) Plan as of December 31, 2003 and
2002, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2003. 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 the standards of the Public Company
Accounting Oversight Board (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, 2003 and 2002, and the changes in its net assets available for
benefits for the year ended December 31, 2003, in conformity with U.S. generally
accepted accounting principles.
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, 2003, 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 17, 2004
1
F.N.B. Corporation
Progress Savings 401(k) Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2003 2002
----------- -----------
ASSETS
Investments at fair value:
Guaranteed interest account $ 5,238,471 $ 5,521,034
Interest in pooled separate accounts 12,894,072 9,020,625
F.N.B. Corporation common stock 17,239,950 12,338,958
Participant loans 397,203 239,146
----------- -----------
Net assets available for benefits $35,769,696 $27,119,763
=========== ===========
See accompanying notes.
2
F.N.B. Corporation
Progress Savings 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2003
ADDITIONS
Investment income:
Dividend and interest income $ 1,161,662
Net appreciation in fair value of investments 6,200,766
-----------
Total investment income 7,362,428
Contributions:
Participant 3,668,390
Employer 1,275,867
-----------
Total contributions 4,944,257
-----------
Total additions 12,306,685
DEDUCTIONS
Distributions to participants or beneficiaries 3,358,244
Plan transfers 264,695
Administrative expenses 33,813
-----------
Total deductions 3,656,752
-----------
Net increase 8,649,933
Net assets available for benefits:
Beginning of year 27,119,763
-----------
End of year $35,769,696
===========
See accompanying notes.
3
F.N.B. Corporation
Progress Savings 401(k) Plan
Notes to Financial Statements
Years ended December 31, 2003 and 2002
1. DESCRIPTION OF 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, covering all employees of F.N.B.
Corporation (the Corporation), including the following subsidiaries: First
National Bank of Pennsylvania; Regency Finance Company; First National Trust
Company (Pennsylvania division); First National Investment Services Company
(Pennsylvania division); F.N.B. Investment Advisors, Inc.; and Customer Service
Center of F.N.B., LLC (Pennsylvania division). Employees 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
Beginning in 2003, participating employees may make voluntary pretax
contributions to their accounts of up to 50% of their compensation. Prior to
2003, participating employees were limited to contributions of 20% of their
compensation. The Corporation makes a matching contribution of 50% of the first
6% of a participant's salary deferral contribution. The amount of matching
contributions is a discretionary percentage and may be changed.
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 21 investment
options: Principal Stable Value Fund, Principal Government Securities Separate
Account, Principal High Quality Interim-Term Bond Separate Account, Principal
High Quality Long-Term Bond Separate Account, American Century Income Growth
Separate Account, Principal Large Capital Stock Index Separate Account,
Principal Medium Company Value Separate Account, Principal Total Market Stock
Index Separate Account, Russell LifePoints Conservative Strategy Separate
4
F.N.B. Corporation
Progress Savings 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
Account, Russell LifePoints Moderate Strategy Separate Account, Russell
LifePoints Balance Strategy Separate Account, Russell LifePoints Aggressive
Strategy Separate Account, Russell LifePoints Equity Aggregate Strategy Separate
Account, INVESCO Small Company Growth Separate Account, Principal Mid Cap Stock
Index Separate Account, Principal Medium Company Growth Separate Account,
Principal Small Company Value Separate Account, Principal Small Capital Stock
Index Separate Account, Putnam Voyager Separate Account, Principal International
Stock Separate Account and F.N.B. Corporation common stock.
Principal Financial Group, Inc. (Principal) is the trustee and custodian of
all of the Plan's assets, with the exception of the F.N.B. Corporation common
stock. The First National Trust Company is the custodian for the F.N.B.
Corporation common stock.
The employer's discretionary contributions are used to purchase the
Corporation's common stock. Beginning in 2003, participants who have attained
age 55 are permitted to direct the trustee to invest the Corporation's
discretionary portion of their account into any other investment that may be
permitted under the Plan. Prior to 2003, participants who had attained the age
of 59-1/2 were permitted to invest the Corporation's discretionary portion of
their account into any other investment that may be permitted under the Plan.
DIVIDENDS ON F.N.B. CORPORATION COMMON STOCK
Dividends on F.N.B. Corporation common stock are automatically re-invested in
the Plan for all participants. However, beginning in 2003, participants may make
a special request to receive a cash distribution of dividend payments on F.N.B.
Corporation common stock.
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.
5
F.N.B. Corporation
Progress Savings 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
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%
Cash dividends paid on F.N.B. Corporation common stock declared after March 1,
2003 are 100% vested regardless of years of service performed.
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. Forfeited amounts are used to reduce the Plan's
administrative expenses. Any remaining balance is used by the employer to reduce
future matching contributions. For the year ended December 31, 2003, forfeitures
totaled $32,951 and were used to reduce plan expenses.
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 account. 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 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.
6
F.N.B. Corporation
Progress Savings 401(k) Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF PLAN (CONTINUED)
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
one to five 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.
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 U.S. generally accepted accounting principles, except for
distributions which are recorded when paid by the trustee. Certain
reclassifications have been made to the prior year's financial statements to
conform to the current year's presentation.
VALUATION OF INVESTMENTS
The pooled separate account investments are valued 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 the guaranteed interest account 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 New York Stock Exchange
under the trading symbol "FNB" and is valued using last trading price on the
last business day of the Plan year. The participant loans are valued at their
outstanding balances, which approximate fair value.
7
F.N.B. Corporation
Progress Savings 401(k) Plan
Notes to Financial Statements (continued)
2. SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
ADMINISTRATIVE EXPENSES
All administrative expenses of the Plan not absorbed by forfeitures, 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.
INVESTMENT INCOME
Interest income from investments and loans to participants is recorded on an
accrual basis. Dividend income is recorded an on accrual basis.
CONTRIBUTIONS
Participant contributions are recorded in the month withheld from participants'
wages. Company contributions are recorded in the same month.
DISTRIBUTIONS TO PARTICIPANTS
Distributions to participants are recorded when paid by the trustee.
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates that affect
the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
3. INVESTMENTS
All investment information disclosed in the accompanying financial statements
and schedules, including investments held at December 31, 2003 and 2002,
interest and dividend income, and net appreciation in fair value of investments
for the year ended December 31, 2003 and reportable transactions for the year
ended December 31, 2003, were obtained or derived from information supplied to
the Plan Administrator and certified as complete and accurate by the trustee.
8
F.N.B. Corporation
Progress Savings 401(k) Plan
Notes to Financial Statements (continued)
3. INVESTMENTS (CONTINUED)
The following presents investments that represent 5% or more of the Plan's net
assets.
DECEMBER 31
2003 2002
----------- -----------
Guaranteed Interest Account $ 5,238,471 $ 5,521,034
Principal Large Capital Stock Index Account 3,454,797 2,492,273
Principal Government Securities Separate Account 1,382,619 1,418,472
F.N.B. Corporation common stock* 17,239,950 12,338,958
*Includes nonparticipant-directed investments of $9,582,882 and $6,340,653
at December 31, 2003 and 2002, respectively.
During 2003, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value as
follows:
2003
----------
Guaranteed Interest Accounts $ 192,210
Pooled separate accounts 2,215,967
Common stock 3,792,589
----------
$6,200,766
==========
4. NONPARTICIPANT-DIRECTED INVESTMENT
Information about the net assets and the significant components of the changes
in net assets relating to the non participant-directed F.N.B. Corporation common
stock is as follows:
DECEMBER 31
2003 2002
---------- ----------
Investments at fair value:
F.N.B. Corporation common stock $9,582,882 $6,340,653
9
F.N.B. Corporation
Progress Savings 401(k) Plan
Notes to Financial Statements (continued)
4. NONPARTICIPANT-DIRECTED INVESTMENT (CONTINUED)
YEAR ENDED
DECEMBER 31
2003
-----------
Beginning balance $ 6,340,653
Changes in net assets:
Employer contributions 1,275,867
Net appreciation in fair value of investments 2,037,658
Dividends 610,529
Distributions to participants or beneficiaries (547,006)
Transfers to participant-directed investments (118,155)
Administrative expenses (16,664)
-----------
Ending balance $ 9,582,882
===========
5. INCOME TAX STATUS
The Plan received a determination letter from the Internal Revenue Service dated
September 12, 2002, 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. Subsequent to this determination by the Internal Revenue Service,
the Plan was amended. 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, as amended, is
qualified and the related trust is tax-exempt.
6. PARTIES-IN-INTEREST TRANSACTIONS
The First National Trust Company is the custodian for the F.N.B. Corporation
common stock. All administrative expenses of the Plan not absorbed by
forfeitures are paid by the Corporation. Such expenses have historically been
comprised of fees for audit, custody and recordkeeping services.
One of the investment options in the Plan is F.N.B. Corporation common stock. At
December 31, 2003 and 2002, the Plan held an aggregate of 486,317 and 448,363
shares of F.N.B. Corporation common stock valued at $17,239,950 and $12,338,958,
respectively.
10
F.N.B. Corporation
Progress Savings 401(k) Plan
Notes to Financial Statements (continued)
7. SUBSEQUENT EVENTS
Effective January 1, 2004, F.N.B. Corporation spun-off its Florida operations
into a separate, independent public company, First National Bankshares of
Florida, Inc. (FLB). As a result of the spin-off, F.N.B. Corporation
stockholders received one share of FLB common stock for each share of the
Corporation's common stock owned. FLB common stock became an approved investment
option in the Plan, however no further contributions may be made into this
investment option.
Also as a result of the spin-off, Customer Service Center of F.N.B., L.L.C.
was dissolved and its Pennsylvania division employees were transferred to
First National Bank of Pennsylvania.
11
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, 2003
(B) IDENTITY OF ISSUE,
BORROWER, LESSOR, OR SIMILAR (C) DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE (E) CURRENT
(A) PARTY OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE (D) COST VALUE
--- ----- ---------------------------------------------- -------- -----
* Principal Financial Group, Inc. Stable Value Fund ** $ 5,238,471
* Principal Financial Group, Inc. Government Securities Separate Account ** 1,382,619
High Quality Interim-Term Bond Separate Account ** 849,142
High Quality Long-Term Bond Separate Account ** 426,119
American Century Income Growth Separate Account ** 573,348
Large Capital Stock Index Separate Account ** 3,454,797
Medium Company Value Separate Account ** 1,407,960
Total Market Stock Index Separate Account ** 478,358
Russell LifePoints Conservative Strategy Separate Account ** 43,690
Russell LifePoints Moderate Strategy Separate Account ** 153,318
Russell LifePoints Balance Strategy Separate Account ** 218,494
Russell LifePoints Aggressive Strategy Separate Account ** 133,424
Russell LifePoints Equity Aggregate Strategy Separate Account ** 50,267
INVESCO Small Company Growth Separate Account ** 603,988
Mid Cap Stock Index Separate Account ** 549,333
Medium Company Growth Separate Account ** 176,949
Small Company Value Separate Account ** 221,059
Small Capital Stock Index Separate Account ** 494,839
Putnam Voyager Separate Account ** 721,245
International Stock Separate Account ** 955,123
-----------
12,894,072
12
Schedule H, Line 4i--Schedule of Assets
(Held at End of Year) (continued)
(B) IDENTITY OF ISSUE,
BORROWER, LESSOR, OR SIMILAR (C) DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, RATE (E) CURRENT
(A) PARTY OF INTEREST, COLLATERAL, PAR OR MATURITY VALUE (D) COST VALUE
--- ----- ---------------------------------------------- -------- -----
* F.N.B. Corporation Common stock--nonparticipant directed $8,016,116 $ 9,582,882
Common stock--participant directed ** 7,657,068
-----------
17,239,950
* Participant Loans Interest rates ranging from 4.00% to 6.75% maturing
through 2008 0 397,203
-----------
Total Assets $35,769,696
===========
* Indicates party-in-interest to the Plan
** Column (d) has not been presented as this information is not applicable for
participant directed investments.
13
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, 2003
(B) DESCRIPTION OF ASSET (H) CURRENT
(A) IDENTITY OF INCLUDING INTEREST RATE AND (C) PURCHASE (D) SELLING (G) COST OF VALUE OF ASSET ON (I) NET GAIN
PARTY INVOLVED MATURITY IN 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 $ 1,945,282 $ -- $ 1,945,282 $ 1,945,282 $ --
There were no category (i), (ii) or (iv) reportable transactions during 2003.
Columns (e) and (f) are not presented as this information is not applicable.
14