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
March 31, 2001
OR
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934For 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:  778,400 shares
outstanding as of April 17, 2001



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FNB BANKING COMPANY AND SUBSIDIARY



INDEX





|           |         |                                                                 |         
|---------- | ------- | --------------------------------------------------------------- | --------
|           |         |                                                                 | Page No.
|           |         |                                                                 |         
|PART I     |         | FINANCIAL INFORMATION                                           |         
|           |         |                                                                 |         
|           | Item 1. | Financial Statements                                            |         
|           |         |                                                                 |         
|           |         | Consolidated Balance Sheet
(unaudited) at March 31, 2001        | 3       
|           |         |                                                                 |         
|           |         | Consolidated Statements of Earnings
(unaudited) for the Three   |         
|           |         | Months Ended March 31, 2001 and 2000                            | 4       
|           |         |                                                                 |         
|           |         | Consolidated Statements of Comprehensive Income
(unaudited)     |         
|           |         | for the Three Months Ended March 31, 2001 and 2000              | 5       
|           |         |                                                                 |         
|           |         | Consolidated Statements of Cash Flows
(unaudited)               |         
|           |         | for the Three Months Ended March 31, 2001 and 2000              | 6       
|           |         |                                                                 |         
|           |         | Notes to Consolidated Financial Statements
(unaudited)          | 7       
|           |         |                                                                 |         
|           | Item 2. | Managements Discussion and Analysis of Financial Condition and |         
|           |         | Results of Operations                                           | 8-9     
|           |         |                                                                 |         
|PART II.   |         | OTHER INFORMATION                                               |         
|           |         |                                                                 |         
|           | Item 1. | Legal Proceedings                                               | 10      
|           |         |                                                                 |         
|           | Item 2. | Changes in Securities                                           | 10      
|           |         |                                                                 |         
|           | Item 3. | Defaults Upon Senior Securities                                 | 10      
|           |         |                                                                 |         
|           | Item 4. | Submission of Matters to a Vote of Security Holders             | 10      
|           |         |                                                                 |         
|           | Item 5. | Other Information                                               | 10      
|           |         |                                                                 |         
|           | Item 6. | Exhibits and Reports on Form 8-K                                | 10      
|           |         |                                                                 |         
|Signatures | 11     



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PART I.    FINANCIAL INFORMATION

Item 1.    Financial Statements

FNB BANKING COMPANY AND SUBSIDIARY

Consolidated Balance Sheet

March 31, 2001
(Unaudited)



Assets



|                                                         |  |   |            
|-------------------------------------------------------- |  | - | -----------
|Cash and due from banks                                  |  | $ | 14,411,853 
|Federal funds sold                                       |  |   | 17,367,344 
|Cash and cash equivalents                                |  |   | 31,779,197 
|Interest-bearing deposits with other banks               |  |   | 500,000    
|Investment securities available for sale                 |  |   | 40,822,324 
|Other investments                                        |  |   | 848,200    
|Mortgage loans held for sale                             |  |   | 636,076    
|Loans                                                    |  |   | 162,339,504
|Less:       Unearned interest and fees                   |  |   | (355,895)  
|Allowance for loan losses                                |  |   | (2,248,159)
|Loans, net                                               |  |   | 159,735,450
|Premises and equipment, net                              |  |   | 7,621,470  
|Accrued interest receivable and other assets             |  |   | 1,734,295  
|                                                         |  | $ | 243,677,012
|                                                         |  |   |            
|Liabilities and Stockholders Equity                    
|                                                         |  |   |            
|Liabilities:                                             |  |   |            
|Deposits:                                                |  |   |            
|Noninterest-bearing                                      |  | $ | 31,013,864 
|Interest-bearing                                         |  |   | 169,416,473
|Total deposits                                           |  |   | 200,430,337
|                                                         |  |   |            
|Retail repurchase agreements                             |  |   | 14,617,676 
|FHLB advances                                            |  |   | 968,750    
|Notes payable                                            |  |   | 69,446     
|Accrued interest payable and accrued liabilities         |  |   | 1,280,892  
|Total liabilities                                        |  |   | 217,367,101
|                                                         |  |   |            
|Stockholders equity:                                    |  |   |            
|Common stock, $1 par value; 5,000,000 shares authorized; |  |   |            
|778,400 shares issued and outstanding                    |  |   | 778,400    
|Retained earnings                                        |  |   | 24,603,084 
|Accumulated other comprehensive income                   |  |   | 928,427    
|Total stockholders equity                               |  |   | 26,309,911 
|                                                         |  | $ | 243,677,012



See accompanying notes to consolidated financial statements.



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FNB BANKING COMPANY AND SUBSIDIARY

Consolidated Statements of Earnings

For the Three Months Ended March 31, 2001 and 2000
(Unaudited)



|                                                              |   | 2001      | 2000     
|------------------------------------------------------------- | - | --------- | ---------
|Interest income:                                              |   |           |          
|Interest and fees on loans                                    | $ | 4,232,718 | 4,081,164
|Interest on investment securities:                            |   |           |          
|Tax-exempt                                                    |   | 121,607   | 106,427  
|Taxable                                                       |   | 472,269   | 511,104  
|Interest on federal funds sold                                |   | 191,616   | 82,248   
|Total interest income                                         |   | 5,018,210 | 4,780,943
|Interest expense:                                             |   |           |          
|Deposits and repurchase agreements                            |   | 2,016,306 | 1,676,510
|Federal funds purchased and FHLB advances                     |   | 13,633    | 88,713   
|Notes payable                                                 |   | 1,866     | 4,824    
|Total interest expense                                        |   | 2,031,805 | 1,770,047
|Net interest income                                           |   | 2,986,405 | 3,010,896
|Provision for loan losses                                     |   | 174,112   | 136,986  
|Net interest income after provision for loan losses           |   | 2,812,293 | 2,873,910
|Other operating income:                                       |   |           |          
|Service charges on deposit accounts                           |   | 453,773   | 416,211  
|Fees for trust services                                       |   | 30,000    | 30,000   
|Securities losses                                             |   | (2,500)   | -        
|Other operating income                                        |   | 170,345   | 142,098  
|Total other operating income                                  |   | 651,618   | 588,309  
|Other operating expense:                                      |   |           |          
|Salaries and employee benefits                                |   | 1,341,792 | 1,341,867
|Occupancy and equipment                                       |   | 411,719   | 430,497  
|Other operating expense                                       |   | 606,932   | 580,754  
|Total other operating expense                                 |   | 2,360,443 | 2,353,118
|Earnings before income taxes                                  |   | 1,103,468 | 1,109,101
|Income taxes                                                  |   | 362,147   | 364,856  
|Net earnings                                                  | $ | 741,321   | 744,245  
|                                                              |   |           |          
|Net earnings per common share based on average outstanding    |   |           |          
|shares of 778,812 and 788,924 in 2001 and 2000, respectively: | $ | .95       | .94      
|                                                              |   |           |          





See accompanying notes to consolidated financial statements.

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FNB BANKING COMPANY AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

For the Three Months Ended March 31, 2001 and 2000
(Unaudited)

|                                                                          |   | 2001      | 2000    
|------------------------------------------------------------------------- | - | --------- | --------
|                                                                          |   |           |         
|Net earnings                                                              | $ | 741,321   | 744,245 
|Other comprehensive income (loss), net of tax:                            |   |           |         
|Unrealized holding gains (losses) on investment securities available      |   |           |         
|for sale arising during the period                                        |   | 627,760   | (54,946)
|Reclassification adjustment for losses on investment securities available |   |           |         
|for sale                                                                  |   | (2,500)   | -       
|Total other comprehensive income (loss), before tax                       |   | 625,260   | 54,946  
|Income taxes related to other comprehensive income:                       |   |           |         
|Unrealized holding gains (losses) on investment securities available      |   |           |         
|for sale arising during the period                                        |   | (238,549) | 20,555  
|Reclassification adjustment for losses on investment securities available |   |           |         
|for sale                                                                  |   | 950       | -       
|Total income taxes related to other comprehensive income (loss)           |   | (237,599) | 20,555  
|Total other comprehensive income, net of tax                              |   | 387,661   | (34,391)
|Total comprehensive income                                                | $ | 1,128,982 | 709,854 







See accompanying notes to consolidated financial statements

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FNB BANKING COMPANY AND SUBSIDIARY

Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2001 and 2000

(Unaudited)



|                                                                      |   | 2001         | 2000       
|--------------------------------------------------------------------- | - | ------------ | -----------
|Cash flows from operating activities:                                 |   |              |            
|Net earnings                                                          | $ | 741,321      | 744,245    
|Adjustments to reconcile net earnings to net                          |   |              |            
|cash provided by operating activities:                                |   |              |            
|Provision for loan losses                                             |   | 174,112      | 136,986    
|Depreciation, amortization and accretion                              |   | 114,469      | 158,416    
|Loss on sale of investment securities                                 |   | 2,500        | -          
|Change in assets and liabilities:                                     |   |              |            
|Mortgage loans held for sale                                          |   | 450,965      | 55,079     
|Interest receivable                                                   |   | 236,622      | (32,336)   
|Interest payable                                                      |   | 14,359       | 40,102     
|Other, net                                                            |   | 123,019      | 425,225    
|Net cash provided by operating activities                             |   | 1,857,367    | 1,527,717  
|Cash flows from investing activities:                                 |   |              |            
|Proceeds from sales of investment securities                          |   | 997,500      | -          
|Proceeds from maturities, calls and paydowns of investment securities |   |              |            
|available for sale                                                    |   | 10,074,941   | 582,773    
|Purchases of investment securities available for sale                 |   | (13,864,256) | (7,273,451)
|Net change in loans                                                   |   | 2,604,998    | (2,619,315)
|Purchases of premises and equipment                                   |   | (62,248)     | (83,144)   
|Net cash provided by (used by) investing activities                   |   | (249,065)    | (9,393,137)
|Cash flows from financing activities:                                 |   |              |            
|Net change in deposits                                                |   | 12,128,525   | 3,681,867  
|Net change in securities sold under repurchase agreements             |   | 3,175,276    | 2,340,795  
|Repayments of note payable                                            |   | (41,667)     | (41,667)   
|Repayments of FHLB advances                                           |   | (31,250)     | (7,531,250)
|Payment of cash dividend                                              |   | (548,733)    | (513,801)  
|Net cash provided by (used by) financing activities                   |   | 14,682,151   | (2,064,056)
|                                                                      |   |              |            
|Net change in cash and cash equivalents                               |   | 16,290,453   | (9,929,476)
|                                                                      |   |              |            
|Cash and cash equivalents at beginning of period                      |   | 15,488,744   | 23,325,087 
|Cash and cash equivalents at end of period                            | $ | 31,779,197   | 13,395,611 
|                                                                      |   |              |            
|Supplemental disclosures of cash flow information:                    |   |              |            
|Cash paid for interest                                                | $ | 2,017,446    | 1,729,945  
|Noncash investing and financing activities:                           |   |              |            
|Change in net unrealized gains (losses) on investment                 |   |              |            
|securities available for sale, net of tax                             | $ | 387,661      | (34,391)   







See accompanying notes to consolidated financial statements.

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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.







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|Item 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------
|        | For the Three Months in the Periods Ended
March 31, 2001 and 2000                    



Forward-Looking Statement



This discussion contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties.  Although the Company believes 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; and material unforeseen changes in the financial stability and liquidity of the Companys credit customers;  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 March 31, 2001, were $243.7 million, representing a $16 million (7%) increase from December 31, 2000. Deposits increased $12.1 million (6%) from December 31, 2000. Loans (gross) decreased
$2.7 million (1.6%). The allowance for loan losses at March 31, 2001, totaled $2.25 million, representing 1.4% of total loans compared to December 31, 2000 total of $2.14 million representing 1.3% of total loans. Cash and cash equivalents increased $16.3
million from December 31, 2000.



The total of nonperforming assets, which includes only non-accruing loans totaled $5.5 million at March 31, 2001, representing a decrease of $1.2 million (18%) since December 31, 2000.  The decrease was
primarily due to the application of deposit account balances totaling $680,000 against the outstanding loan balances for an account receivable financing customer.  Additionally, $333,000 of principle payments were received on loans that were classified as
non-accrual at December 31, 2000.  Specific allocations in the allowance for loan losses totaling $1.1 million have been imposed on these non-accrual loans.



The Companys subsidiary bank was most recently examined by its primary regulatory authority in January 2001. 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 three months ended March 31, 2001, the Company reported net earnings of $741,321, or $.95 per share, compared to $744,245, or $.94 per share, for the same period in 2000.



Net interest income is the primary source of the Companys operating income.  Net interest income decreased approximately $24,000 (.8%) in the first three months of 2001 compared to the same period for
2000. Interest income for the first three months of 2001 was $5.02 million, representing an increase of $237,000 (5%) over the same period in 2000. Interest expense for the first three months of 2001 increased $262,000 (15%) compared to the same period in
2000. The decrease in net interest income during the first three months of 2001 compared to the same period in 2000 is attributable to a combination of volume and rate increases, but is primarily attributable to volume decreases in loans.



The provision for loan losses for the three months of 2001 increased $37,000 compared to the same period for 2000. For the three months ended March 31, 2001, the Bank experienced net loan charge-offs of
$64,000, compared to net recoveries of $14,000 for the corresponding three-month period in 2000.  It is managements belief that the allowance for loan losses is adequate to absorb probable losses in the portfolio.



Other operating income increased for the three months ended March 31, 2001 by $63,000, or 11%, compared to the same period in 2000, primarily due to increases of approximately $30,000 in insufficient check
charges on deposit accounts and an increase of approximately $30,000 on the gain on sale of mortgage loans.

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Other operating expenses for the first three months of 2001 increased $7,000 (.3%) compared to the first three months in 2000. There were no major individual expense category increases or decreases that
account for the change.



Income tax expense, expressed as a percentage of earnings before income taxes, remained constant at 33%.

Capital

The following tables present FNB Banking Companys regulatory capital position at March 31, 2000:



| | Risk-Based Capital Ratios                        |      
| | ------------------------------------------------ | -----
| |                                                  |      
| | Tier 1 Tangible Capital, Actual                  | 15.1%
| | Tier 1 Tangible Capital minimum requirement      | 4.0% 
| | Excess                                           | 11.1%
| |                                                  |      
| | 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)                               | 11.1%
| | Minimum leverage requirement                     | 3.0% 
| | Excess                                           | 8.1% 



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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                   
|        |                                                    
|        | None                                               



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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:  /s/
C.A. Knowles                
| | C.A. Knowles, President and Treasurer
| | (Principal Executive Officer)        
| |                                      
| |                                      
| | Date:     4/27/01                    
| |                                      
| |                                      
| |                                      
| | By:   /s/
Mark Flowers               
| | Mark Flowers, Assistant Treasurer    
| | (Principal Accounting Officer)       
| |                                      
| |                                      
| | Date:     4/27/01                    
| |                                      
| |