Page 13 of 32
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 2005
--------------
Commission file number: 33-66014
--------
FNB Financial Corporation
-------------------------
(Exact name of registrant as specified in its charter)
Commonwealth of Pennsylvania 23-2466821
- ------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
101 Lincoln Way West, McConnellsburg, PA 17233
- ------------------------------------------ -----
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 717/485-3123
------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at March 31, 2005
- -------------------------------- -----------------------------
(Common stock, $0.315 par value) 800,000
Page 1 of 23
FNB FINANCIAL CORPORATION
INDEX
Page
PART I - FINANCIAL INFORMATION
Condensed consolidated balance sheets -
March 31, 2005 and December 31, 2004 4
Condensed consolidated statements of income -
Three months ended March 31, 2005 and 2004 5
Condensed consolidated statements of comprehensive
income-Three months ended March 31, 2005 and 2004 6
Condensed consolidated statements of cash flows -
Three months ended March 31, 2005 and 2004 7
Notes to condensed consolidated financial
statements 8-9
Management's discussion and analysis of financial
condition and results of operations 10-13
PART II - OTHER INFORMATION 14
Signatures 16
Exhibits 17-23
Page 2 of 23
PART I - FINANCIAL INFORMATION
Page 3 of 23
FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31,
2005 2004
(unaudited) (audited*)
ASSETS:
Cash and Due from banks $ 3,451,523 $ 5,612,686
Interest-bearing deposits with banks 937,988 195,131
Investment Securities
Held-to-maturity (Market value - 2005
$ 239,675; 2004 $ 253,216) 241,908 255,170
Available-for-sale 38,225,239 39,831,248
Federal Reserve, Atlantic Central Banker's
Bank and Federal Home Loan Bank Stock 1,695,600 1,746,700
Loans 118,476,525 113,639,286
Less: Allowance for loan losses ( 1,117,529) ( 1,087,755)
--------------- ---------------
Loans, net 117,358,996 112,551,531
Bank building, equipment, furniture and
Fixtures, net 3,135,130 3,205,810
Accrued interest receivable 660,772 589,724
Deferred income taxes 247,940 130,783
Cash surrender value of life insurance 2,840,696 2,823,035
Intangible assets 1,153,913 1,153,913
Other assets 941,245 784,923
--------------- ---------------
Total Assets $ 170,890,950 $ 168,880,654
=============== ===============
LIABILITIES :
Deposits:
Demand deposits $ 19,516,536 $ 19,025,816
Savings deposits 38,887,699 39,624,814
Time certificates 69,690,179 69,214,188
Other time deposits 490,380 283,521
--------------- ---------------
Total deposits 128,584,794 128,148,339
Accrued interest payable & other liabilities 1,075,179 811,837
Liability for other borrowed funds 25,833,039 24,434,759
Dividends payable 144,000 280,000
--------------- ---------------
Total Liabilities 155,637,012 153,674,935
--------------- ---------------
STOCKHOLDERS' EQUITY:
Capital stock, Common, par value $ 0.315;
6,000,000 shares authorized; 800,000
Outstanding 252,000 252,000
Additional paid-in capital 1,789,833 1,789,833
Retained earnings 13,264,139 13,034,620
Accumulated other comprehensive income (loss) ( 52,034) 129,266
--------------- ---------------
Total Stockholders' Equity 15,253,938 15,205,719
--------------- ---------------
Total Liabilities & Stockholders' Equity $ 170,890,950 $ 168,880,654
=============== ===============
*Condensed from audited financial statements.
The accompanying notes are an integral part of these
condensed financial statements.
Page 4 of 23
FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 2005 and 2004
(UNAUDITED)
2005 2004
Interest & Dividend Income
Interest & fees on loans $ 1,835,614 $ 1,729,245
Interest on investment securities:
Obligations of other U.S. Government 294,712 195,497
Agencies
Obligations of State & Political 101,656 103,249
Subdivisions
Interest on deposits with banks 3,973 3,425
Dividends on Equity Securities 14,920 9,492
Interest on federal funds sold 0 37
------------- -------------
Total Interest & Dividend Income 2,250,875 2,040,945
------------- -------------
Interest Expense
Interest on deposits 658,961 669,863
Interest on other borrowed money 211,790 123,076
------------- -------------
Total Interest Expense 870,751 792,939
------------- -------------
Net interest income 1,380,124 1,248,006
Provision for loan losses 36,000 98,000
------------- -------------
Net interest income after provision
for loan losses 1,344,124 1,150,006
------------- -------------
Other income
Service charges on deposit accounts 103,640 81,144
Other service charges, collection &
exchange
charges, commissions and fees 121,533 108,713
Other income 62,986 29,060
Net securities gains/(losses) 0 79,417
------------- -------------
Total other income 288,159 298,334
------------- -------------
Other expenses 1,143,584 1,077,708
------------- -------------
Income before income taxes 488,699 370,632
Applicable income taxes 115,181 102,649
------------- -------------
Net income $ 373,518 $ 267,983
============= =============
Earnings per share of Common Stock:
Net income per share $ 0.47 $ 0.33
Cash dividend declared per share $ 0.18 $ 0.14
Weighted average number of shares outstanding 800,000 800,000
The accompanying notes are an integral part of these
condensed financial statements.
Page 5 of 23
FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended March 31, 2005 and 2004
(UNAUDITED)
2005 2004
Net Income $ 373,518 $ 267,983
--------- ---------
Other Comprehensive:
Gross unrealized holding gains (losses) ( 274,697) 159,659
Reclassification adjustment for (gains) losses
realized
in net income 0 ( 79,417)
--------- ---------
Net unrealized holding gains (losses) before ( 274,697) 80,242
taxes
Tax effect 93,397 ( 27,283)
--------- ---------
Other comprehensive income (loss) ( 181,300) 52,959
--------- ---------
Comprehensive income (loss) $ 192,218 $ 320,942
========= =========
The accompanying notes are an integral part of these
condensed financial statements.
Page 6 of 23
FNB FINANCIAL CORPORATION AND ITS WHOLLY-OWNED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2005 and 2004
(UNAUDITED)
2005 2004
Cash flows from operating activities:
Net income $ 373,519 $ 267,983
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation & amortization 83,075 80,081
Provision for loan losses 36,000 98,000
Increase in Cash Surrender value
of Life Insurance ( 17,661) ( 19,360)
Net (gain)/loss on sales of investments 0 ( 79,417)
(Increase) decrease in accrued
interest receivable ( 71,048) 17,934
Increase (decrease) in accrued interest
payable and other liabilities 263,342 279,652
(Increase) decrease in other assets ( 180,082) ( 393,533)
------------ ------------
Net cash provided (used) by operating activities: 487,145 251,340
------------ ------------
Cash flows from investing activities:
Net (increase) decrease in interest-
bearing deposits with banks ( 742,857) 1,308,384
Purchases of Available-for-sale securities 0 ( 2,434,865)
Proceeds from maturities and calls of securities 1,323,770 9,135
Proceeds from sale of available-for-sale 20,804 5,986,028
securities
Net (increase) decrease in loans ( 4,843,465) ( 127,920)
Purchases of bank premises & equipment (net) ( 12,395) ( 6,177)
(Purchase) sale of other bank stock 51,100 ( 54,300)
------------ ------------
Net cash provided (used) by investing activities ( 4,203,043) 4,680,285
------------ ------------
Cash flows from financing activities:
Net increase (decrease) in deposits 436,455 ( 267,480)
Net increase (decrease) in other borrowings 1,398,280 ( 4,084,662)
Cash dividends paid ( 280,000) ( 272,000)
------------ ------------
Net cash provided (used) by financing activities 1,554,735 ( 4,624,142)
------------ ------------
Net increase (decrease) in cash & cash equivalents ( 2,161,163) 307,483
Cash & cash equivalents, beginning balance 5,612,686 3,495,604
------------ ------------
Cash & cash equivalents, ending balance $ 3,451,523 $ 3,803,087
============ ============
The accompanying notes are an integral part of these
condensed financial statements.
FNB FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2005
(UNAUDITED)
REVIEW OF INTERIM FINANCIAL STATEMENTS
The condensed consolidated financial statements as of and for the three
month periods ended March 31, 2005 and 2004 have been reviewed by
independent certified public accountants. Their report on their review is
attached as Exhibit 99 to this 10-Q.
NOTE 1 - BASIS OF PRESENTATION
The financial information presented at and for the three months ended March
31, 2005 and March 31, 2004 is unaudited. Information presented at
December 31, 2004, is condensed from audited year-end financial statements.
However, this unaudited information reflects all adjustments, consisting
solely of normal recurring adjustments, that are, in the opinion of
management, necessary for a fair presentation of the financial position,
results of operations and cash flows for the interim period.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
corporation and its wholly-owned subsidiaries, The First National Bank of
McConnellsburg and FNB Mortgage Brokers, Inc. All significant intercompany
transactions and accounts have been eliminated.
NOTE 3 - CASH FLOWS
For purposes of the statements of cash flows, the Corporation has defined
cash and cash equivalents as those amounts included in the balance sheet
captions "cash and due from banks" and "federal funds sold". As permitted
by Statement of Financial Accounting Standards No. 104, the Corporation has
elected to present the net increase or decrease in deposits in banks, loans
and deposits in the statement of cash flows.
NOTE 4 - FEDERAL INCOME TAXES
For financial reporting purposes the provision for loan losses charged to
operating expense is based on management's judgment, whereas for federal
income tax purposes, the amount allowable under present tax law is
deducted. Additionally, certain expenses are charged to operating expense
in the period the liability is incurred for financial reporting purposes,
whereas for federal income tax purposes, these expenses are deducted when
paid. As a result of these timing differences, deferred taxes were
computed after reducing pre-tax accounting income for nontaxable municipal
and loan income.
NOTE 5 - OTHER COMMITMENTS
In the normal course of business, the bank makes various commitments and
incurs certain contingent liabilities, which are not reflected in the
accompanying financial statements. These commitments include various
guarantees and commitments to extend credit. The bank does not anticipate
any losses as a result of these transactions.
FNB FINANCIAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
SUMMARY
Net income for the first three months of 2005 was $ 373,518 compared to
$ 267,983, for the first three months of 2004. This represents an increase of
$ 105,535 or 39.38% from 2004. Net income on an adjusted per share basis for
the first three months of 2005 was $ 0.47, which is an increase of $ 0.14 from
the $ 0.33 per share for the three months ended March 31, 2004.
NET INTEREST INCOME
Total interest and dividend income for the first three months of 2005 was
$ 2,250,875 compared to $ 2,040,945 for the first three months of 2004, an
increase of $ 209,930.
This increase was due primarily to an increase in income from investments and
interest and fees on loans. Investments in held-to-maturity securities and
available-for-sale securities increased 32.80% from March 31, 2004 to March 31,
2005. Total loans increased 15.83% from March 31, 2004 to March 31, 2005.
Effective yields on earning assets continue to be below yields realized in the
first three months of 2004. However, the effect of volume increases has been
greater than the effect of reduced interest margins, resulting in the increase
total interest and dividend income.
Interest expense for the three months ended March 31, 2005, was $ 870,751, an
increase of $ 77,812 from the $ 792,939 for the same period in 2004. Total
deposits increased $ 12,130,365, or 10.41%, from totals at March 31, 2004.
Interest-bearing accounts increased during this period by $ 9,328,296, or 9.33%.
Despite the increase in deposits, interest expense on deposits decreased by
$ 10,902, or 1.63%, during the first three months of 2005 compared to the first
three months of 2004. Borrowed funds were $ 25,833,039 at March 31, 2005. This
is an increase of $15,236,709 over borrowed funds of $ 10,596,330 at March 31,
2004. This resulted in an increase of $ 88,714, or 72.08%, in interest expense
on borrowed funds during the first three months of 2005, compared to the first
three months of 2004. Overall, net interest income increased from $ 1,248,006
for the three months ended March 31, 2004, to $ 1,380,124 for the three months
ended March 31, 2005. This is an increase of 10.59%.
The bank continued to add to its allowance for loan losses during the first
three months ended March 31, 2005 but by a smaller amount than during the first
three months ended March 31, 2004. The provision for loan losses was $ 36,000
during the first three months of 2005, compared to $ 98,000 for the first three
months of 2004. The net interest margin has decreased 16 basis points to 3.56%
for the first three months of 2005 from that of the first three months of 2004,
which was 3.72%. Management will continue to competitively price its loan and
deposit products to maintain desired net interest spreads.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses is summarized as follows:
2005 2004
(000 Omitted)
Allowance for loan losses beginning of the year $1,088 $ 893
Loans charged-off during the year
Real estate mortgages 0 0
Installment loans 15 35
Commercial and all other 0 0
------ ------
Total charge offs 15 35
------ ------
Recoveries of loans previously charged-off:
Real estate mortgages 0 0
Installment loans 9 11
Commercial and all other 0 0
------ ------
Total recoveries 9 11
------ ------
Net loans charged-off (recovered) 6 24
Provision for loan losses charged to operations 36 98
------ ------
Allowance for loan losses, March 31 $1,118 $ 967
======= =======
We utilize a comprehensive systematic review of our loan portfolio on a
quarterly basis in order to determine the adequacy of the Allowance for Loan
losses. Each quarter the loan portfolio is categorized into various Pools as
follows:
POOL #1 Specific allowances for any individually identified
trouble loans
POOL #2 Commercial and Industrial
POOL #3 Commercial and Industrial - Real Estate Secured
POOL #4 Consumer Demand and Installment
POOL #5 Consumer Mortgage and Home Equity
Lines of credit and non-secured commercial loans with balances of $ 100,000 and
over are individually reviewed. Also, loans that are 90 days or more past due
or have been previously classified as substandard are individually reviewed.
Allocations to the Allowance for Loan Losses are based upon classifications
assigned to those loans.
Loan classifications utilized are consistent with OCC regulatory guidelines and
are as follows:
Allowance Factors
Loss Charge-off
Doubtful 20% - 50%
Substandard 10% - 20%
Special Mention 5% - 10%
Watch 1% - 5%
The remaining portion of the Pools are evaluated as groups with allocations made
to the Allowance based on historical loss experience, current and anticipated
trends in delinquencies, and general economic conditions within the bank's
trading area.
Delinquencies are well below peer group averages and management is not aware of
any problem loans that are indicative of trends, events, or uncertainties that
would significantly impact operations, liquidity or capital.
NON-INTEREST INCOME AND EXPENSES
Total noninterest income for the first three months of 2005 decreased $ 10,175
over totals for the first three months of 2004. This was due primarily to a
decrease in net securities gains from $ 79,417 for the three months ended March
31, 2004, to $ 0 for the three months ended March 31, 2005. Operating expenses
for the period ended March 31, 2005, were $ 1,143,583, a $ 65,875, or 6.11%,
increase from the operating expenses incurred for the same period in 2004 of $
1,077,708.
Our income tax provision for the first three months of 2005 was $ 115,181
compared to $ 102,649 for the first three months of 2004. We continue to operate
with a marginal tax rate of 34% during the first three months of 2005. The
effective income tax rate for the first three months of 2005 was 23.57% compared
to 27.70% for the first three months of 2004.
BALANCE SHEET AND EQUITY CHANGES
Total assets as of March 31, 2005, were $ 170,890,950, an increase of
$ 27,852,200 from the period ended March 31, 2004, representing an increase of
19.47%. This increase was primarily due to an increase in investment securities
of $ 9,510,341 from $ 28,956,806 as of March 31, 2004, to
$ 38,467,147 as of March 31, 2005. The increase is also due to an increase in
total loans of $ 16,194,186 from $ 102,282,339 as of March 31, 2004, to
$ 118,476,525 as of March 31, 2005.
Total deposits as of March 31, 2005, were $ 128,584,794, an increase of
$ 12,130,365 from the period ended March 31, 2004, representing an increase of
10.41%. This increase was primarily due to the acquisition of $10,016,872 in
deposits which FNB Financial Corporation's wholly-owned subsidiary, The First
National Bank of McConnellsburg, purchased from Farmers and Merchants Bank on
July 16, 2004.
Total equity as of March 31, 2005, was $ 15,253,938, 8.93% of total assets, as
compared to $ 14,928,084, 10.44% of total assets as of March 31, 2004. The
decline was due to the $ 27,852,200 increase in total assets discussed above.
The Company's risk based capital ratios continue to exceed regulatory minimum
requirements.
CONTROLS AND PROCEDURES
The company's Chief Executive Officer and Chief Financial Officer have evaluated
the effectiveness of the company's disclosure controls and procedures (as such
term is defined in Rules 13a-14(c) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) as of March 31, 2005. Based on such evaluation,
such officers have concluded that, as of March 31, 2005, the company's
disclosure controls and procedures are effective in alerting them on a timely
basis to material information relating to the company (including its
consolidated subsidiaries) required to be included in the company's periodic
filings under the Exchange Act.
CHANGES IN INTERNAL CONTROLS
There have not been any significant changes in the company's internal control
over financial reporting or in other factors that could significantly affect
such control during the first quarter of 2005.
PART II - OTHER INFORMATION
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults Upon Senior Securities
Not Applicable
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
a. Exhibits:
Exhibit Number Referred to
Item 601 of Regulation S-K: Description of Exhibit:
31.1 Certification of Chief Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
31.2 Certification of Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1 Certification of Chief Executive Officer
pursuant to 18 U.S.C. Section 1350.
32.2 Certification of Chief Financial Officer
pursuant to 18 U.S.C. Section 1350.
99 Report of Independent
Accountant's on interim
financial statements.
b. Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date May 13, 2005 /s/John C. Duffey
- ------------------------ ----------------------------------
John C. Duffey, President
and Director of the Company and
President/CEO of the Bank
(Duly Authorized Officer)
Date May 13, 2005 /s/Brian F. McNamara
- ------------------------ ----------------------------------
Brian F. McNamara, Treasurer
(Principal Financial &
Accounting Officer)
Exhibit 31.1
CERTIFICATION
I, John C. Duffey, President/CEO, certify, that:
1. I have reviewed this quarterly report on Form 10-Q of FNB Financial
Corporation.
2. Based on my knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and we have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this quarterly report based on such evaluation; and
(c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
function):
(a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 13, 2005 By: /s/John C. Duffey
--------------- -----------------------
John C. Duffey,
President/CEO
(Principal Executive
Officer)
Exhibit 31.2
CERTIFICATION
I, Brian F. McNamara, Treasurer, certify, that:
1. I have reviewed this quarterly report on Form 10-Q of FNB Financial
Corporation.
2. Based on my knowledge, the quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and we have:
(a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this quarterly report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this quarterly report based on such evaluation; and
(c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
function):
(a) all significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: May 13, 2005 By: /s/Brian F. McNamara
--------------- -----------------------
Brian F. McNamara
Treasurer
(Principal Financial
Officer)
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of FNB Financial Corporation (the
"Company") on Form 10-Q for the period ending March 31, 2005 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, John C.
Duffey, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002, that:
1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ John C. Duffey
--------------------------------
Chief Executive Officer
May 13, 2005
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of FNB Financial Corporation (the
"Company") on Form 10-Q for the period ending March 31, 2005 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Brian
F. McNamara, Treasurer of the Company, certify, pursuant to 18 U.S.C. section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002,
that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Brian F. McNamara
--------------------------------
Treasurer
May 13, 2005
Exhibit 99
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of DirectorsFNB Financial Corporation
McConnellsburg, Pennsylvania
We have reviewed the accompanying condensed consolidated balance sheet of
FNB Financial Corporation and Subsidiaries as of March 31, 2005 and the related
condensed consolidated statements of income for the three months ended March 31,
2005 and 2004 and condensed consolidated statements of comprehensive income for
the three months ended March 31, 2005 and 2004 and condensed consolidated
statements of cash flows for the three months ended March 31, 2005 and 2004.
These financial statements are the responsibility of the corporation's
management.
We conducted our review in accordance with the standards of the Public
Company Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures and
making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board (United States), the
objective of which is the expression of an opinion regarding the condensed
consolidated financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying interim financial statements referred to
above for them to be in conformity with accounting principles generally accepted
in the United States of America.
We have previously audited, in accordance with auditing standards of the
Public Company Accounting Oversight Board (United States), the balance sheet of
FNB Financial Corporation and Subsidiaries as of December 31, 2004, and the
related statements of income, changes in stockholders' equity, and cash flows
for the year then ended (not presented herein); and in our report dated
March 12, 2005, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 2004, is fairly stated,
in all material respects, in relation to the balance sheet from which it has
been derived.
/s/ Smith Elliott Kearns & Company, LLC
SMITH ELLIOTT KEARNS & COMPANY, LLC
Chambersburg, Pennsylvania
May 13, 2005