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 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 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 Progress Savings
401(k) 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 Progress Savings
401(k) Plan
Hermitage, Pennsylvania
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, 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 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
Birmingham, Alabama
June 18, 2003
-1-
F.N.B. Corporation Progress Savings
401(k) Plan
Statements of Net Assets Available for Benefits
December 31,
2002 2001
--------------------------------
Assets
Investments at fair value:
Guaranteed Interest Accounts 5,521,034 1,078,914
Interest in pooled separate accounts $ 9,020,625 $ 8,169,023
F.N.B. Corporation common stock 12,338,958 7,539,949
Participant loans 239,146 148,955
--------------------------------
Net assets available for benefits $27,119,763 $16,936,841
================================
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, 2002
--------------------
Additions:
Dividend and interest income $ 1,001,482
Contributions:
Participant 3,623,439
Employer 1,242,896
Transfer from merged plan 9,012,206
--------------------
Total additions 14,880,023
Deductions:
Distributions to participants or beneficiaries 2,924,204
Administrative expenses 46,321
--------------------
Total deductions 2,970,525
Net depreciation in fair value of investments (1,726,576)
--------------------
Net increase 10,182,922
Net assets available for benefits:
Beginning of year 16,936,841
--------------------
End of year $ 27,119,763
====================
See accompanying notes.
-3-
F.N.B. Corporation Progress Savings
401(k) Plan
Notes to Financial Statements
December 31, 2002
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, 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, PA Division; First National Investment Services
Company, PA Division; F.N.B. Investment Advisors, Inc.; and The Customer
Service Center of F.N.B., LLC PA 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).
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 January 21, 2002,
the Promistar Financial Corporation 401(k) Plan was merged into the Plan. The
assets of the Promistar Financial Corporation 401(k) Plan were merged into the
Plan on March 31, 2002.
Contributions
Under the Plan, participating employees may make voluntary pretax contributions
to their accounts of up to 15% of their compensation. The Corporation, at its
discretion, may make a matching contribution equal to a percentage of
participants' pretax contributions.
-4-
F.N.B. Corporation Progress Savings
401(k) Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Contributions (continued)
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
Large Capital Stock Index Separate Account, Principal Medium Company Value
Account, Principal High Quality Long-Term Bond Separate Account, Principal
American Century Income Growth Separate Account, Principal Total Market Stock
Index Separate Account, Principal Conservative Strategy Separate Account,
Principal Moderate Strategy Separate Account, Principal Balance Strategy
Separate Account, Principal Small Company Value Separate Account, Principal
Aggressive Strategy Separate Account, Principal Mid Cap Stock Index Separate
Account, Principal Medium Company Growth Separate Account, Principal INVESCO
Small Company Growth Separate Account, Principal Small Capital Index Separate
Account, Principal Putnam Voyager Separate Account, Principal Equity Aggregate
Strategy Separate Account, Principal International Stock Separate Account,
and F.N.B. Corporation common stock.
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 discretionary 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 discretionary
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.
-5-
1. Description of the 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%
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, 2002, forfeitures totaled $18,780 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 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.
-6-
1. Description of the 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 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.
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. Certain reclassifications have been made to the prior year's
financial statements to conform to the current year's presentation.
-7-
2. Summary of Accounting Policies (continued)
Valuation of Investments
The 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 average of the bid and ask prices on the last
business 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.
3. Investments
The following presents investments that represent 5% or more of the Plan's net
assets.
December 31
2002 2001
--------------- ----------------
Guaranteed Interest Accounts $ 5,521,034 $ 1,078,914
Principal Large Capital Stock Index Account 2,492,273 2,639,819
Principal Government Security Account 1,418,472 782,075
F.N.B. Corporation common stock * 12,338,958 7,539,949
* Includes nonparticipant-directed investments of $6,760,642 and $4,871,693
at December 31, 2002 and 2001, respectively.
-8-
3. Investments (continued)
During 2002 and 2001, 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:
2002 2001
----------------- ------------------
Guaranteed interest accounts $ 104,170 $ 54,925
Pooled separate accounts (1,819,941) (676,257)
Common stock (10,805) 1,456,312
----------------- ------------------
$ (1,726,576) $ 834,980
================= ==================
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
2002 2001
-------------- -----------------
Investments at fair value:
F.N.B. Corporation common stock $ 6,760,642 $ 4,871,693
Year ended
December 31,
2002
-------------------
Changes in net assets:
Employer contributions $ 1,243,010
Net appreciation in fair value of investments 81,817
Dividends 527,896
Distributions to participants or beneficiaries (400,004)
Transfers to participant-directed investments 448,096
Administration expenses (11,866)
-------------------
$ 1,888,949
===================
-9-
5. Income Tax Status
The Plan received determination letters 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. 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.
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 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, 2002
(b) Identity of Issue, (c) Description of Investment Including Maturity
Borrower, Lessor, or Similar Date, Rate of Interest, Collateral, Par or Maturity (e)Current
(a) Party Value (d) Cost Value
------- --------------------------------- ------------------------------------------------------ ------------ ---------------
* Principal Financial Group,
Inc. Stable Value Fund ** 5,521,034
* Principal Financial Group, Government Securities Separate Account ** $ 1,418,472
Inc. High Quality Interim-Term Bond Separate Account ** 765,553
Large Capital Stock Index Separate Account ** 2,492,273
Medium Company Value Separate Account ** 923,242
High Quality Long-Term Bond Separate Account ** 416,793
American Century Income Growth Separate Account ** 282,147
Total Market Stock Index Separate Account ** 223,915
Conservative Strategy Separate Account ** 35,006
Moderate Strategy Separate Account ** 62,581
Balance Strategy Separate Account ** 165,109
Small Company Value Separate Account ** 64,359
Aggressive Strategy Separate Account ** 110,932
Mid Cap Stock Index Separate Account ** 339,158
Medium Company Growth Separate Account ** 43,264
INVESCO Small Company Growth Separate Account ** 355,326
Small Capital Stock Index Separate Account ** 245,672
Putnam Voyager Separate Account ** 482,182
Equity Aggregate Strategy Separate Account ** 15,019
International Stock Separate Account ** 579,622
---------------
9,020,625
-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, 2002
(b) Identity of Issue, (c) Description of Investment Including Maturity
Borrower, Lessor, or Similar Date, Rate of Interest, Collateral, Par or Maturity (e) Current
(a) Party Value (d) Cost Value
------- --------------------------------- ------------------------------------------------------ ------------ ---------------
* F.N.B. Corporation Common Stock-
nonparticipant directed $ 6,766,571 $ 6,760,642
Common Stock-
participant directed 5,578,316
---------------
12,338,958
* Participant Loans Interest Rates ranging from 4.75% to 6.75% maturing
through 2006 ** 239,146
---------------
Total Investments $ 27,119,763
===============
* Indicates party-in-interest to the Plan
** Column (d) has not been presented as this information is not applicable for participant directed investments.
-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, 2002
b) Description of Asset (h)Current (i)Net
(a)Identity of Including interest rate and maturity in (c) Purchase (d) Selling (g) Cost of Value of Asset on 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 1,778,930 1,778,930 1,778,930
There were no category (i), (ii) or (iv) reportable transactions during 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 Progress Savings Plan
Date: June 30, 2003 /s/Thomas E. Fahey
---------------- -----------------------------------------
Thomas E. Fahey
Executive Vice President and
Chief Financial Officer