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, 2002
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 Salary Savings 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 Salary Savings Plan
Audited Financial Statements and Supplemental Schedules
As of December 31, 2002 and 2001 and for the year ended December 31, 2002
with Report of Independent Auditors
F.N.B. Corporation Salary Savings Plan
Audited Financial Statements and Supplemental Schedules
As of December 31, 2002 and 2001 and for the year ended December 31, 2002
Contents
Report of Independent Auditors................................................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)...............11
Schedule H, Line 4j - Schedule of Reportable Transactions....................13
Report of Independent Auditors
F.N.B. Corporation Salary Savings Plan
Naples, Florida
We have audited the accompanying statements of net assets available for
benefits of F.N.B. Corporation Salary Savings Plan as of December 31, 2002 and
2001 and the related statement of changes in net assets available for benefits
for the year ended December 31, 2002. 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, 2002 and 2001, and the changes in its net assets available for
benefits for the year ended December 31, 2002, 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, 2002 and
reportable transactions for the year then ended, are presented for 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
Birmingham, Alabama
June 5, 2003
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F.N.B. Corporation Salary Savings Plan
Statements of Net Assets Available for Benefits
December 31,
2002 2001
------------------- --------------
Assets
Investments at fair value:
Guaranteed interest accounts $ 1,450,122 $ 1,344,877
Interest in pooled separate accounts 11,864,042 9,553,516
F.N.B. Corporation common stock 10,521,988 6,995,058
Participant loans 857,071 527,585
--------------------- -------------
Net assets available for benefits $ 24,693,223 $ 18,421,036
===================== =============
See accompanying notes.
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F.N.B. Corporation Salary Savings Plan
Statement of Changes in Net Assets Available for Benefits
9
Year ended
December 31,
2002
---------------------
Additions:
Interest income $ 107,028
Dividends 668,651
Contributions:
Participant 2,446,821
Employer 2,982,714
Transfer in from merged plan 2,763,536
---------------------
Total additions 8,968,750
Deductions:
Distributions to participants or beneficiaries 1,543,498
Administrative expenses 54,122
---------------------
Total deductions 1,597,620
Net depreciation in fair value of investments (1,098,943)
---------------------
Net increase 6,272,187
Net assets available for benefits:
Beginning of year 18,421,036
---------------------
End of year $ 24,693,223
=====================
See accompanying notes.
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F.N.B. Corporation Salary Savings Plan
Notes to Financial Statements
December 31, 2002
1. Description of the Plan
The following description of the F.N.B. Corporation Salary Savings 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
employees of the following subsidiaries of F.N.B. Corporation
(the "Corporation"): First National Bank of Florida; The Customer Service
Center of F.N.B., LLC FL Division; First National Trust Company, FL Division;
First National Investment Services Company, FL Division; and F.N.B. Affiliate
Services. 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).
On January 31, 2002, the Corporation completed its business combination with
Central Bank Shares, Inc. ("Central"). Central's banking affiliate, Bank
of Central Florida, was merged into First National Bank of Florida.
Concurrently, the Bank of Central Florida Salary Savings Plan was merged into
the Plan. On March 20, 2002, the net assets of the Bank of Central Florida
Salary Savings Plan were transferred into the Plan.
Contributions
Under the Plan, participants may make voluntary pretax contributions to
their accounts of up to 15% of their compensation. During 2002, the
Corporation matched 50% of each eligible participant's contributions up to
6% of the participants' savings contributions. The Corporation, at its
discretion, may also make a fixed non-elective contribution equal to 5%
of the compensation of all eligible participants and may from time to time
contribute to the Plan such additional amounts, as detailed in the Plan
agreement.
Participants' savings contributions and employer matching contributions are
designated under a qualified deferred arrangement as allowed by Sections 401(k)
and 401(m) of the Internal Revenue Code.
-4-
F.N.B. Corporation Salary Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participants may direct employee contributions into the following investment
options: Principal Guaranteed Interest Account, Principal Money Market
Separate Account, Russell Life Points Conservative Strategy Separate
Account, Principal Government Securities Separate Account, High Quality
Interim-Term Bond Separate Account, Principal High Quality Long-Term Bond
Separate Account, Principal American Century Income and Growth Separate
Account, Principal Russell Life Points Moderate Strategy Separate Account,
Principal Large Capital Stock Index Separate Account, Principal Russell Life
Points Balanced Strategy Separate Account, Principal Medium Company Value
Separate Account, Principal Russell Life Points Aggressive Strategy Separate
Account, Principal Russell Life Points Equity Aggressive Strategy Separate
Account, Principal Total Market Stock Index Separate Account, Principal
INVESCO Small Company Growth Separate Account, Principal Mid-Cap Growth
Separate Account, Principal Mid-Cap Stock Index Separate Account, Principal
Small-Cap Value Separate Account, Principal Small-Cap Stock Index Separate
Account, Principal Voyager Separate Account, Principal International
Stock Separate Account, and F.N.B. Corporation common stock.
Principal is the custodian of all the Plan's assets, with the exception of the
F.N.B. Corporation common stock.
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.
-5-
1. Description of the Plan (continued)
Vesting
Participants are immediately vested in their voluntary contribution plus actual
earnings thereon. Participants are 100% vested in the employer's contribution
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%
Forfeitures
Upon termination of a participant, the employer's contribution to which
the participant is not vested is segregated into a separate account and is
used to reduce the Plan's administrative expenses. Any remaining balance
is distributed among the participant's accounts. For the year ended
December 31, 2002, forfeitures totaled $83,393.
Payment of Benefits
Upon termination of service, a participant with a vested account balance of
less than $5,000 will receive a lump-sum equal to the vested value of the
participant's account. A participant who terminates service with a vested
account balance of greater than $5,000 has two options: the participant
may leave the account under the Plan or the participant 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, or attainment of normal
retirement age as defined by the Plan.
-6-
1. Description of the Plan (continued)
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.
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 Significant 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. Certain reclassifications have been made to the prior year's
financial statements to conform to the current year's presentation.
Investment Valuation
The Principal pooled separate accounts 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 shares of registered investment
companies and guaranteed interest accounts 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 closing price on the
last day of the Plan year. The participant loans are valued at their
outstanding balances, which approximate fair value.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
-7-
3. Investments
The fair values of individual investments that represent 5% or more of the
Plan's net assets are as follows:
December 31,
2002 2001
------------------- -------------
Principal Financial Group, Inc.:
Guaranteed Interest Account $ 1,450,122 $ 1,344,877
Money Market Separate Account 4,496,416 1,297,760
Large Capital Stock Index Separate Account 1,683,655 2,196,506
Government Securities Separate Account 1,234,865 392,605
F.N.B. Corporation common stock* 10,521,988 6,995,058
* Includes non-participant directed investments of $9,620,204 and $6,717,414 at
December 31, 2002 and 2001, respectively.
During 2002, the Plan's investments (including investments bought, sold,
as well as held during the year) appreciated (depreciated) in fair value as
determined by quoted market prices as follows:
Pooled separate accounts $ (1,327,420)
F.N.B. Corporation common stock 228,477
---------------------
$ (1,098,943)
=====================
-8-
4. Nonparticipant-Directed Investment
Information about the net assets and the significant components of the changes
in net assets relating to non-participant directed investments in F.N.B.
Corporation common stock is as follows:
December 31,
2002 2001
--------------------- -------------------
Investments at fair value:
F.N.B. Corporation Common Stock $ 9,620,204 $ 6,717,414
Year ended
December 31,
2002
---------------------
Changes in net assets:
Employer contributions $ 2,292,355
Net appreciation in fair value of investments 257,527
Dividends 626,079
Distributions to participants or beneficiaries (264,480)
Transfers from participant-directed investments 27,419
Administrative expenses (36,110)
---------------------
$ 2,902,790
=====================
5. Income Tax Status
The Plan received a determination letter from the Internal Revenue Service
dated September 4, 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. 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-
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 options in the Plan is F.N.B. Corporation common stock.
-10-
SUPPLEMENTAL SCHEDULE
F.N.B. Corporation Salary Savings Plan
Plan Number: 003
Employer Identification Number: 25-1255406
Schedule H, Line 4i
Schedule of Assets (Held at End of Year)
December 31, 2002
(c) Description of Investment
(b) Identity of Issue, Including Maturity Date, Rate of
Borrower, Lessor, or Interest, Collateral, Par or (e) Current
(a) Similar Party Maturity Value (d) Cost Value
--------- --------------------------- ----------------------------------- ------------------ -----------------
* Principal Financial
Group, Inc. Guaranteed Interest Account ** $ 1,450,122
* Principal Financial Money Market Separate Account
Group, Inc. ** 4,496,416
Russell Life Points Conservative
Strategy Separate Account
** 13,103
Government Securities Separate
Account ** 1,234,865
High Quality Interim-Term Bond
Separate Account ** 842,167
High Quality Long-Term Bond
Separate Account ** 585,793
American Century Income and
Growth Separate Account ** 308,362
Russell Life Points Moderate
Strategy Separate Account ** 96,662
Large Capital Stock Index
Separate Account ** 1,683,655
Russell Life Points Balanced
Strategy Separate Account ** 25,424
Medium Company Value Separate
Account ** 558,795
Russell Life Points Aggressive
Strategy Separate Account ** 140,144
Russell Life Points Equity
Aggressive Strategy Separate
Account ** 31,178
Total Market Stock Index Separate
Account ** 214,206
INVESCO Small Company Growth
Separate Account ** 234,279
-11-
F.N.B. Corporation Salary Savings Plan
Plan Number: 003
Employer Identification Number: 25-1255406
Schedule H, Line 4i
Schedule of Assets (Held at End of Year) (continued)
December 31, 2002
(c) Description of Investment
(b) Identity of Issue, Including Maturity Date, Rate of
Borrower, Lessor, or Interest, Collateral, Par or (e) Current
(a) Similar Party Maturity Value (d) Cost Value
--------- --------------------------- ----------------------------------- ------------------ -----------------
* Principal Financial
Group, Inc. (continued) Mid-Cap Growth Separate Account
** 13,003
Mid-Cap Stock Index Separate
Account ** 315,735
Small-Cap Value Separate Account
** 52,049
Small-Cap Stock Index Separate
Account ** 207,707
Voyager Separate Account ** 339,611
International Stock Separate
Account ** 470,888
-----------------
11,864,042
* F.N.B. Corporation Common Stock - non-participant
directed 8,772,578 9,620,204
Common Stock - participant
directed ** 901,784
-----------------
10,521,988
* Participant Loans Interest rates ranging from 4.25%
to 11.50% maturing through 2006
** 857,071
-----------------
Total Investments $ 24,693,223
=================
*Party-in-interest
**Column (d) has not been presented as this information is not applicable for participant directed transactions.
-12-
F.N.B. Corporation Salary Savings Plan
Plan Number: 003
Employer Identification Number: 25-1255406
Schedule H, Line 4j
Schedule of Reportable Transactions
December 31, 2002
(b) Description of Asset (h) Current Value of
(a) Identity of Party including interest rate (c) Purchase (d) Selling (g) Cost Asset on Transaction (i) Net Gain
Involved and maturity in case of a Price Price Of Date (Loss)
loan Asset
----------------------- --------------------- ----------------- ----------------- ---------- -------------------- ------------
Category (iii) - Series of transactions in excess of 5% of Plan assets
F.N.B. Corporation Common Stock $2,920,872 - $2,920,872 $2,920,872 -
There were no Category (i), (ii), or (iv) reportable transactions for the year ended December 31, 2002.
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 Salary Savings Plan
Date: June 30, 2003 /s/Thomas E. Fahey
--------------- --------------------------------------
Thomas E. Fahey
Executive Vice President and
Chief Financial Officer