UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 1999

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                        For the Transition Period from to

                         Commission file number 2-94292

                               FNB BANKING COMPANY
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

           GEORGIA                                      58-1479370
   -----------------------                 ------------------------------------
  (State of Incorporation)                 (I.R.S. Employer Identification No.)

         318 South Hill Street
             GRIFFIN, GEORGIA                              30224
   --------------------------------------               ----------
  (Address of principal executive offices)              (Zip Code)

                                  770-227-2251
                                -----------------
                               (Telephone Number)


   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 such  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 /XX/ NO  /  /

              Common stock, par value $1 per share: 788,924 shares
                       outstanding as of October 26, 1999

<PAGE>



<PAGE>

<TABLE>

                                        FNB BANKING COMPANY AND SUBSIDIARY

                                                       INDEX
<CAPTION>

                                                                                                          PAGE NO.

PART I             FINANCIAL INFORMATION
<S>   <S>          <S>                                                                                          <C>
      Item 1.      Financial Statements
                   Consolidated Balance Sheet (unaudited) at September 30, 1999                                 3

                   Consolidated Statements of Earnings (unaudited) for the Three
                     Months and the Nine Months Ended September 30, 1999 and 1998                               4

                   Consolidated Statements of Comprehensive Income (unaudited) for the
                      Three Months and the Nine Months Ended September 30, 1999 and 1998                        5

                   Consolidated  Statements  of Cash Flows  (unaudited)  for the
                     Nine Months Ended September 30, 1999 and 1998                                              6-7

                   Notes to Consolidated Financial Statements (unaudited)                                       8

      Item 2.      Management's Discussion and Analysis of Financial Condition and
                     Results of Operations                                                                      9-12

PART II.           OTHER INFORMATION

      Item 1.      Legal Proceedings                                                                            13

      Item 2.      Changes in Securities                                                                        13

      Item 3.      Defaults Upon Senior Securities                                                              13

      Item 4.      Submission of Matters to a Vote of Security Holders                                          13

      Item 5.      Other Information                                                                            13

      Item 6.      Exhibits and Reports on Form 8-K                                                             13
</TABLE>

                                      -2-
<PAGE>

                                         PART I. FINANCIAL INFORMATION
Item 1.  Financial Statements
                                       FNB BANKING COMPANY AND SUBSIDIARY
                                           Consolidated Balance Sheet
                                               September 30, 1999
                                                  (Unaudited)
<TABLE>
<CAPTION>
                                                     Assets
                                                     ------

<S>                                                                                         <C>
  Cash and due from banks                                                                   $       15,034,748
  Federal funds sold                                                                                 5,161,387
  Interest-bearing deposits with other banks                                                           500,000
  Investment securities available for sale                                                          32,419,015
  Other investments                                                                                    721,600
  Mortgage loans held for sale                                                                         754,551
  Loans                                                                                            151,715,029
  Less: Unearned income                                                                               (319,206)
        Allowance for loan losses                                                                   (2,485,800)
                                                                                                 -------------
  Loans, net                                                                                       148,910,023
  Premises and equipment, net                                                                        8,122,387
  Other assets                                                                                       1,595,095
                                                                                                 -------------
                                                                                            $      213,218,806
                                                                                                 =============
                                      Li1abilities and Stockholders' Equity
                                      -------------------------------------

  Liabilities:
     Deposits:
         Noninterest-bearing                                                                $       31,092,032
         Interest-bearing                                                                          156,830,943
                                                                                                --------------
              Total deposits                                                                       187,922,975

     FHLB advances                                                                                   1,441,964
     Notes payable                                                                                     319,446
     Other liabilities                                                                                 444,366
                                                                                                --------------
              Total liabilities                                                                    190,128,751

  Stockholders' equity:
     Common stock, $1 par value; authorized 5,000,000 shares;
        issued and outstanding 789,095 shares                                                          789,095
     Retained earnings                                                                              21,994,990
     Accumulated other comprehensive income                                                            305,970
                                                                                                --------------
         Total stockholders' equity                                                                 23,090,055
                                                                                                --------------
                                                                                            $      213,218,806
                                                                                                ==============
</TABLE>

See accompanying notes to consolidated financial statements.


                                                      -3-
<PAGE>
<TABLE>

                                        FNB BANKING COMPANY AND SUBSIDIARY

                                        Consolidated Statements of Earnings
<CAPTION>

                    For the Three Months and the Nine Months Ended September 30, 1999 and 1998
                                                    (Unaudited)



                                                                   Three Months Ended              Nine Months Ended
                                                                   ------------------              -----------------
                                                                   1999          1998            1999            1998
                                                                   ----          ----            ----            ----
<S>                                                            <C>             <C>            <C>             <C>
Interest income:
   Loans                                                       $3,843,104      4,000,318      11,556,346      11,654,429
    Investment securities:
       Tax exempt                                                 108,997         90,912         305,723         268,284
       Taxable                                                    377,373        377,663       1,096,933         973,540
   Federal funds                                                   90,725         29,779         326,404         282,114
                                                               ----------      ---------      ----------      ----------

       Total interest income                                    4,420,199      4,498,672      13,285,406      13,178,367
                                                               ----------      ---------      ----------      ----------
Interest expense:
   Deposits                                                     1,562,733      1,585,666       4,725,884       4,674,643
   Federal funds purchased and FHLB advances                       21,392         24,683          85,541          71,526
   Notes payable                                                    5,933          9,403          19,459          30,273
                                                               ----------      ---------      ----------      ----------
         Total interest expense                                 1,590,058      1,619,752       4,830,884       4,776,442
                                                               ----------      ---------      ----------      ----------

       Net interest income                                      2,830,141      2,878,920       8,454,522       8,401,925
Provision for loan losses                                         250,000        124,400       1,344,868         397,975
                                                               ----------      ---------      ----------      ----------

       Net interest income after provision for loan losses      2,580,141      2,754,520       7,109,654       8,003,950
                                                               ----------      ---------      ----------      ----------
Other income:
   Service charges on deposit accounts                            394,389        386,002       1,117,506       1,096,639
   Fees for trust services                                         30,000         30,000          90,000          90,000
   Net loss on securities transactions                               --           (6,778)           --            (4,325)
   Other operating income                                         146,163        210,150         503,086         518,916
                                                               ----------      ---------      ----------      ----------

       Total other income                                         570,552        619,374       1,710,592       1,701,230
                                                               ----------      ---------      ----------      ----------
Other expense:
   Salaries and other personnel expense                         1,315,883      1,219,832       3,855,318       3,600,707
   Net occupancy and equipment expense                            424,608        388,701       1,208,194       1,098,765
   Other operating expense                                        510,342        544,853       1,674,825       1,718,186
                                                               ----------      ---------      ----------      ----------

       Total other expense                                      2,250,833      2,153,386       6,738,337       6,417,658
                                                               ----------      ---------      ----------      ----------

Earnings before income taxes                                      899,860      1,220,508       2,081,909       3,287,522
Income taxes                                                      301,986        420,089         632,563       1,120,336
                                                               ----------      ---------      ----------      ----------

       Net earnings                                            $  597,874        800,419       1,449,346       2,167,186
                                                               ==========      =========       =========       =========

Earnings per common share based on average
  outstanding shares of 789,255, 807,800, 798,294 and
  807,800, respectively:
     Net earnings per share                                    $     0.76           0.99            1.82            2.68
                                                               ==========      =========       =========       =========

     Dividends per share                                       $     --             --              0.60            0.60
                                                               ==========      =========       =========       =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                                      -4-
<PAGE>
<TABLE>
<CAPTION>

                                           FNB BANKING COMPANY AND SUBSIDIARY
                                     Consolidated Statements of Comprehensive Income
                       For the Three Months and the Nine Months Ended September 30, 1999 and 1998
                                                       (Unaudited)

                                                                         Three Months                 Nine Months
                                                                            Ended                        Ended
                                                                      1999         1998           1999            1998
                                                                      ----         ----           ----            ----

<S>                                                               <C>            <C>            <C>            <C>
Net earnings                                                      $ 597,874       800,419       1,449,346      2,167,186
Other comprehensive income, net of tax:
     Unrealized gains on securities available for sale:
       Holding gains (loss) arising during period, net of tax
          of $246,410, $101,766, $423,861 and $101,891             (402,037)     (170,240)       (691,562)       161,929
       Reclassification adjustment for losses included in
          net earnings, net of tax of $2,576 and $1,643                --           4,202            --            2,682
                                                                  ---------      --------      ----------      ---------
     Total other comprehensive income (loss)                       (402,037)     (166,038)       (691,562)       164,611
                                                                  ---------      --------      ----------      ---------
     Comprehensive income                                         $ 195,837       634,381         757,784      2,331,797
                                                                  =========      ========      ==========      =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                                          -5-
<PAGE>
<TABLE>
<CAPTION>
                                   FNB BANKING COMPANY AND SUBSIDIARY
                                 Consolidated Statements of Cash Flows
                         For the Nine Months Ended September 30, 1999 and 1998
                                              (Unaudited)

                                                                               Nine Months Ended
                                                                                   September 30,
                                                                               1999            1998
                                                                               ----            ----

<S>                                                                      <C>                 <C>
Cash flows from operating activities:
   Net earnings                                                          $  1,449,346        2,167,186
       Adjustments to reconcile net earnings to net
        cash provided by operating activities:
              Provision for loan losses                                     1,344,868          397,975
              Depreciation, amortization and accretion                        476,866          376,565
              Loss on securities transactions                                    --              4,325
              Gain on sale of repossessed collateral                          (87,596)            --
              Change in assets and liabilities:
                  Interest receivable                                          59,340           25,373
                  Interest payable                                            (32,353)          (4,934)
                  Other, net                                                 (194,693)         189,761
                  Mortgage loans held for sale                              1,794,874          (24,221)
                                                                         ------------        ---------

                       Net cash provided by operating activities            4,810,652        3,132,030
                                                                         ------------        ---------

Cash flows from investing activities:
   Proceeds from maturities and paydowns of
      investment securities held to maturity                                  548,795        1,869,470
   Proceeds from maturities and paydowns
      of investment securities available for sale                           5,698,168        2,589,300
   Proceeds from sales of investment securities available for sale               --          1,942,216
   Purchases of investment securities available for sale                  (11,137,362)     (12,024,800)
   Proceeds from sales of other investments                                   104,100             --
   Change in loans                                                         (3,294,723)      (5,685,860)
   Purchases of premises and equipment                                       (336,329)      (1,320,827)
   Proceeds from sale of premises and equipment                                14,815             --
   Change in interest-bearing deposits with other banks                          --         (2,000,000)
   Proceeds from sales of repossessed collateral                               19,633           23,477
                                                                         ------------        ---------

                       Net cash used by investing activities               (8,382,903)     (14,607,024)
                                                                         ------------        ---------

Cash flows from financing activities:
   Net change in deposits                                                  13,378,574          776,965
   Repayments of long-term debt                                              (125,000)        (125,000)
   Repayments of FHLB advances                                               (950,893)        (142,857)
   Purchase and retirement of common stock                                   (748,200)            --
   Dividends paid                                                          (1,002,729)        (969,360)
                                                                         ------------        ---------
                    Net cash provided (used) by financing activities       10,551,752         (460,252)
                                                                         ------------        ---------

Net increase (decrease) in cash and cash equivalents                        6,979,501      (11,935,246)

Cash and cash equivalents at beginning of the period                       13,216,634       21,775,498
                                                                         ------------        ---------

Cash and cash equivalents at end of period                               $ 20,196,135        9,840,252
                                                                         ============        =========
</TABLE>

                                                  -6-
<PAGE>

                                   FNB BANKING COMPANY AND SUBSIDIARY
                            Consolidated Statements of Cash Flows, continued
                         For the Nine Months Ended September 30, 1999 and 1998
                                              (Unaudited)
<TABLE>
<CAPTION>

                                                                                  Nine Months Ended
                                                                                    September 30,
                                                                               1999             1998
                                                                               ----             ----

<S>                                                                      <C>                 <C>
Supplemental cash flow information:
   Cash paid for income taxes                                            $     701,000         983,000
   Cash paid for interest                                                $   4,863,237       4,781,376
</TABLE>



See accompanying notes to consolidated financial statements.


                                                  -7-
<PAGE>

                       FNB BANKING COMPANY AND SUBSIDIARY
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

(1)  Basis of Presentation
     ---------------------
     The consolidated  financial  statements include the accounts of FNB Banking
     Company (the Company) and its wholly-owned  subsidiary,  the First National
     Bank of  Griffin  (Griffin).  All  significant  intercompany  accounts  and
     transactions have been eliminated in consolidation.

     The  consolidated  financial  information  furnished  herein  reflects  all
     adjustments which are, in the opinion of management, necessary to present a
     fair statement of the results of operations and financial  position for the
     periods covered  herein.  All such  adjustments  are of a normal  recurring
     nature.

(2)  Cash and Cash Equivalents
     -------------------------
     For  presentation  purposes in the consolidated  statements,  cash and cash
     equivalents  include cash on hand, amounts due from banks and federal funds
     sold.

(3)  Stock Repurchase and Retirement
     -------------------------------
     In May 1999 the Company  redeemed and retired  11,701  shares of its $1 par
     value common stock for a total purchase price of $468,040. Additionally, on
     July 1, 1999,  the Company  redeemed and retired 6,824 shares of its common
     stock,  and on September  20,  1999,  redeemed and retired 180 shares for a
     total  purchase price of $272,960 and $7,200,  respectively.  Subsequent to
     September 30, 1999,  the Company has redeemed and retired an additional 171
     shares of its common stock.

(4)  Implementation of Recent Accounting Pronouncements
     --------------------------------------------------
     The Company adopted  Statement of Financial  Accounting  Standards No. 133,
     "Accounting for Derivative Instruments and Hedging Activities",  ("SFAS No.
     133")  during the second  quarter of 1999.  As allowed by SFAS No.  133, an
     entity may transfer any held to maturity  security  into the  available for
     sale or trading  category without calling into question the entity's intent
     to hold other  securities  to  maturity  in the  future.  The result of the
     transfer of held to maturity  securities to the available for sale category
     was to increase  stockholders' equity  approximately  $4,000. There were no
     other financial  statement  effects  associated with the  implementation of
     SFAS No. 133.


                                      -8-
<PAGE>

Item 2.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

                    For the Nine Months in the Periods Ended
                           September 30, 1999 and 1998

FORWARD-LOOKING STATEMENTS

      This  discussion  contains  forward-looking  statements  under the private
Securities  Litigation Reform Act of 1995 that involve risks and  uncertainties.
Although   the   Company   believes   that  the   assumptions   underlying   the
forward-looking  statements  contained in the discussion are reasonable,  any of
the  assumptions  could be inaccurate,  and therefore,  no assurance can be made
that any of the  forward-looking  statements included in this discussion will be
accurate.  Factors  that  could  cause  actual  results to differ  from  results
discussed  in  forward-looking  statements  include,  but  are not  limited  to:
economic  conditions  (both  generally  and in the  markets  where  the  Company
operates); competition from other providers of financial services offered by the
Company;  government  regulation  and  legislation;  changes in interest  rates;
material  unforeseen  changes in the  financial  stability  and liquidity of the
Company's credit customers;  material  unforeseen  complications  related to the
Year 2000 issues for the Company,  its  suppliers,  customers  and  governmental
agencies,  all of which are  difficult  to  predict  and which may be beyond the
control  of  the  Company.  The  Company  undertakes  no  obligation  to  revise
forward-looking  statements to reflect  events or changes after the date of this
discussion or to reflect the occurrence of unanticipated events.

FINANCIAL CONDITION

       Total assets at September  30, 1999,  were  $213,218,806  representing  a
$10,436,891   (5.15%)  increase  from  December  31,  1998.  Deposits  increased
$13,378,574 (7.66%) from December 31, 1998. Loans increased  $2,045,824 (1.39%).
The  allowance  for loan  losses at  September  30,  1999,  totaled  $2,485,800,
representing  1.64% of total  loans  compared  to  December  31,  1998 totals of
$1,707,913  representing  1.15%  of  total  loans.  Cash  and  cash  equivalents
increased $6,979,501 from December 31, 1998.

       The total of  nonperforming  assets  which  includes  nonaccruing  loans,
repossessed  collateral  and loans for which payments are more than 90 days past
due  decreased  30.10% or  $466,000  from  $1,548,000  at  December  31, 1998 to
$1,082,000  at September  30, 1999.  The decrease is due to a reduction of loans
more than 90 days past due and still accruing interest of approximately $182,000
and the charge-off of a commercial loan of $218,000 during the first nine months
of 1999. There were no related party loans considered nonperforming at September
30, 1999.

       The Company's  subsidiary bank was most recently  examined by its primary
regulatory  authority  in  July  1999.  There  were  no  recommendations  by the
regulatory  authority that in management's opinion will have material effects on
the Company's liquidity, capital resources or operations.

RESULTS OF OPERATIONS

       For the nine months ended  September 30, 1999,  the Company  reported net
income of $1,449,346,  or $1.82 per share, compared to $2,167,186,  or $2.68 per
share for the same period in 1998. Net income for the period September 30, 1999,
decreased $717,840 or 33.12%,  compared to the same period in 1998. The decrease
was the  primary  result of the  increase  in the  provision  for loan losses of
$946,893, compared to the same period in 1998.

       Net interest income increased $52,597 (0.63%) in the first nine months of
1999  compared to the same period for 1998.  Interest  income for the first nine
months of 1999 was  $13,285,406,  representing  an increase of $107,039  (0.81%)
over the same period in 1998. Interest expense for the first nine months of 1999
increased  $54,442 (1.14%)  compared to the same period in 1998. The increase in
interest  income and  interest  expense  during  the first  nine  months of 1999
compared to the same period in 1998 is primarily attributable to the increase in
the average volume of both loans and deposits.

         The  provision  for loan  losses  for the  first  nine  months  of 1999
increased  $946,893  compared  to the same  period  for 1998.  The  increase  is
primarily   attributable  to  one  commercial   relationship  of   approximately
$1,120,000 that has been downgraded to doubtful.  A specific reserve of $400,000
has been  assigned to this  relationship.  In addition,  the finance  company (a
wholly-owned  subsidiary of the Bank) increased its provision for loan losses by
$200,000 during 1999 due to significant  losses  realized in its portfolio.  Net
loan  charge-offs  for the six months ended  September 30, 1999,  were $363,539,
compared to $739,857,  for the same period in 1998.  It is  management's  belief
that the allowance for loan losses is adequate to absorb  probable losses in the
portfolio.

                                       -9-
<PAGE>

Item 2.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

                    For the Nine Months in the Periods Ended
                           September 30, 1999 and 1998



       Other operating  income increased for the nine months ended September 30,
1999, by $9,362 or 0.55%,  compared to the same period in 1998, primarily due to
two other real estate  properties  that were sold and gains  recognized on those
sales during 1999.

       Other operating  expenses for the nine months of 1999 increased  $320,679
(5.00%)  compared  the first nine months in 1998.  The net increase is primarily
attributable to an increase in employee costs of approximately $279,000 due to a
combination  of  additional  employees  and  salary  increases  of the  existing
workforce,  and an increase in depreciation  expense of $134,000 related to Year
2000 purchases and capital improvements.


CAPITAL

The following tables present FNB Banking Company's  regulatory  capital position
at September 30, 1999:

      Risk-based Capital Ratios
      -------------------------

Tier 1 Tangible Capital, Actual                                    14.7%
Tier 1 Tangible Capital minimum requirement                         4.0%
                                                                   ----

Excess                                                             10.7%
                                                                   ====

Total Capital, Actual                                              16.3%
Total Capital minimum requirement                                   8.0%
                                                                   ----

Excess                                                              8.3%
                                                                   ====

Leverage Ratio
--------------

Tier 1 Tangible Capital to adjusted total assets
   ("Leverage Ratio")                                              10.9%
Minimum leverage requirement                                        4.0%
                                                                   ----

Excess                                                              6.9%
                                                                   ====


                                      -10-
<PAGE>

Item 2.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

                    For the Nine Months in the Periods Ended
                           September 30, 1999 and 1998


YEAR 2000 PREPAREDNESS

The use of computer  software  that  relies on a two digit  number to define the
applicable year may cause processing  problems for computer  controlled  systems
when the Year 2000 arrives. Malfunction could occur at several other noted dates
as well. In view of the potential adverse impact of the Year 2000 problem on the
Company and its  subsidiary  bank,  its customers and its ability to continue to
operate as a business,  careful  planning must be  undertaken to ensure  minimal
disruption.  The Company has  established a centralized  function to implement a
process to this end.

The Company's  subsidiary,  FNB Griffin,  performs  most of its data  processing
in-house   using   purchased   banking   software  and  hardware  for  its  main
applications,  such as loans and deposits. Included in these in-house operations
are a teller  processing  system, a check sorter system, a check imaging system,
and a trust processing  system.  Besides its main  applications,  the bank has a
number of ancillary  systems  connected to various  vendors to process  specific
work, such as automated teller machines,  credit cards,  accounts receivable and
accounts payable,  mortgage loans,  payroll and the like. In addition,  the Bank
uses  several  non-information  systems that are vital to its  operation.  These
include vault and alarm systems, communications,  postal services, utilities and
such.

The Bank is also aware of the  potential  exposure it has to its  viability as a
business  based on the Year  2000  preparedness  of  third  parties  such as its
customers and correspondent banking relationships  including the Federal Reserve
Bank.

THE BANK'S STATE OF READINESS

The Bank is under the authority of the Office of the Comptroller of the Currency
(the "OCC") who working  together with the other bank  regulatory  agencies have
released an Interagency  Statement under which guidance the Bank is managing the
Year 2000 project. This Statement describes five phases: Awareness,  Assessment,
Renovation,  Validation  and  Implementation,   and  established  timelines  for
completion of each phase.  The Bank believes its mission  critical  applications
are within those guidelines.  The Bank believes that all necessary  remediations
were completed prior to December 31, 1998.

The Bank  established  a credit risk  management  program  and a liquidity  risk
program  to  review  its  business  relationships  for Year 2000  readiness  and
determine any potential  risks or exposure.  This program  includes  letters and
questionnaires  to major  deposit  and loan  customers,  certain  suppliers  and
vendors.  The Bank  believes  that any issues  that may arise due to customer or
vendor risk will be manageable.

COSTS ASSOCIATED WITH THE BANK'S YEAR 2000 ISSUES

To date, the Bank has spent  approximately  $500 thousand on upgrading  hardware
and software.  It has spent at least $100 thousand on testing,  including  costs
for outside  reviews and  consultants.  Soft costs  including  employee time and
other resources are estimated to reach $150 thousand. Many of the upgrades would
have occurred in the normal course of business over the next several years,  but
were accelerated due to the Year 2000 issue.

RISK OF THE BANK'S YEAR 2000 ISSUES

All the  bank's  major  systems  have been  remediated  and  tested.  Testing is
complete for all other systems and review of the testing  documentation  is also
complete.  While the Bank believes it will be adequately prepared, no assurances
can be given that it will not be  exposed to  potential  losses  resulting  from
problems with its internal systems associated with the century date change.

Further,  the impact of  non-compliance  by outside parties cannot be accurately
determined.  The Year 2000  issue may have a  material  impact on the  financial
condition of the Bank if borrowers of the Bank become  insolvent  and are unable
to repay loans.


                                      -11-
<PAGE>

Item 2.
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                      AND RESULTS OF OPERATIONS, CONTINUED

                    For the Nine Months in the Periods Ended
                           September 30, 1999 and 1998

This Bank and  others  are  reliant on the  Federal  Reserve  Bank of Atlanta to
process much of its work.  While some functions,  such as wire transfers,  could
continue by telephone if the Federal Reserve's automated system does not perform
as  expected,  certain  applications,  such as check  processing  and  automated
clearing  house  transactions  are critical to the operation of the Bank, and if
disrupted, would seriously impact the Bank's ability to serve its customers. The
Bank  believes the Federal  Reserve Bank of Atlanta is  aggressively  pursuing a
Year  2000  compliance  strategy  and that the risk of their  non-compliance  is
slight, but it is beyond the control of the Bank and must be considered.

Other outsiders whose  non-compliance could severely impact the Bank include the
local power provider and telephone companies.

THE BANK'S CONTINGENCY PLANS

The Bank has a Business Disruption Contingency Plan that would be implemented in
the  event of any  internal  or  external  system  failure.  The Plan  calls for
switching to PC or manual processing,  depending on the system and the nature of
the failure.  The Bank is continually  reviewing and refining its plan. The Bank
believes it could continue to operate regardless of the failure. It has plans to
make loans and process  deposits,  receive and disperse cash and update  account
balances.


                                      -12-
<PAGE>

                           PART II. OTHER INFORMATION

                       FNB BANKING COMPANY AND SUBSIDIARY


Item 1.     Legal Proceedings
            -----------------

            None

Item 2.     Changes in Securities
            ---------------------

            None

Item 3.     Defaults Upon Senior Securities
            -------------------------------

            None

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 27 - Financial Data Schedule (for SEC use only)

            (b)  Reports on Form 8-K
                 -------------------

                 There were no Reports on Form 8-K during this reporting
                 period.





                                      -13-
<PAGE>
                       FNB BANKING COMPANY AND SUBSIDIARY

                                   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.

                                      FNB BANKING COMPANY



                                      By:_____________________________________
                                         C.A. Knowles, President and Treasurer
                                         (Principal Executive Officer)


                                      Date:___________________________________




                                      By:_____________________________________
                                         William K. Holmes
                                         Assistant Treasurer
                                         (Principal Accounting Officer)


                                      Date:___________________________________