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 June 30, 2001OR
[    ] 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





|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

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: 772,716 shares
outstanding as of July 20, 2001.









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FNB BANKING COMPANY AND SUBSIDIARY



INDEX

Page No.PART I
    FINANCIAL INFORMATIONItem 1.
    Financial StatementsConsolidated Balance Sheet(Unaudited) at June 30, 2001
    3Consolidated Statements of Earnings (Unaudited) for the
      ThreeMonths and the Six Months Ended June 30, 2001 and 2000
    4Consolidated Statements of Comprehensive Income (Unaudited)for the Three Months and the Six Months Ended June 30,
      2001 and 2000
    5Consolidated Statements of Cash Flows (Unaudited) for
      the SixMonths Ended June 30, 2001 and 2000
    6Notes to Consolidated Financial Statements (Unaudited)
    7Item 2.
    Managements Discussion and Analysis of Financial
      Condition andResults of Operations
    8-9PART II.
    OTHER INFORMATIONItem 1.
    Legal Proceedings
    10Item 2.
    Changes in Securities
    10Item 3.
    Defaults Upon Senior Securities
    10Item 4.
    Submission of Matters to a Vote of Security Holders
    10Item 5.
    Other Information
    10Item 6.
    Exhibits and Reports on Form 8-K
    10








PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

FNB BANKING COMPANY AND SUBSIDIARY

Consolidated Balance Sheet

June 30, 2001
(Unaudited)

Assets



Cash and due from banks
    $
    12,698,177Federal funds sold
    
    12,952,107Cash and cash equivalents
    
    25,650,284Interest-bearing deposits with other banks
    
    500,000Investment securities available for sale
    
    40,024,521Other investments
    
    848,200Mortgage loans held for sale
    
    1,704,200Loans
    
    165,922,682Less:    Unearned income
    
    (369,800)Allowance for loan losses
    
    (2,397,947)Loans, net
    
    163,154,935Premises and equipment, net
    
    7,521,457Other assets
    
    1,720,793$
    241,124,390Liabilities and Stockholders EquityLiabilities:Deposits:Noninterest-bearing
    $
    32,870,325Interest-bearing
    
    165,915,884Total deposits
    
    198,786,209Retail repurchase agreements
    
    13,148,779FHLB advances
    
    937,500Notes payable
    
    27,779Other liabilities
    
    1,910,428Total liabilities
    
    214,810,695Stockholders equity:Common stock, $1 par value; authorized5,000,000 shares; issued and outstanding772,716 shares
    
    772,716Retained earnings
    
    24,589,778Accumulated other comprehensive income
    
    951,201Total stockholders equity
    
    26,313,695$
    241,124,390






See accompanying notes to unaudited consolidated financial
statements.



-3-

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FNB BANKING COMPANY AND SUBSIDIARY

Consolidated Statements of Earnings

For the Three Months and the Six Months Ended June 30, 2001
and 2000
(Unaudited)



Three Months
      Ended
    Six Months
      Ended2001
    2000
    2001
    2000Interest income:Loans
    $
    4,023,073
    4,298,913
    8,255,791
    8,380,077Investment securities:Tax exempt
    
    130,026
    113,535
    251,633
    219,962Taxable
    
    472,751
    489,225
    945,020
    1,000,329Federal funds sold
    
    210,038
    47,655
    401,654
    129,903Total interest income
    
    4,835,888
    4,949,328
    9,854,098
    9,730,271Interest expense:Deposits and retail purchase agreements
    
    1,965,190
    1,685,371
    3,981,496
    3,361,881Federal funds purchased and FHLB advances
    
    13,510
    78,183
    27,143
    166,896Notes payable
    
    941
    4,318
    2,807
    9,142Total interest expense
    
    1,979,641
    1,767,872
    4,011,446
    3,537,919Net interest income
    
    2,856,247
    3,181,456
    5,842,652
    6,192,352Provision for loan losses
    
    160,420
    162,600
    334,532
    299,586Net interest income after provision for loan losses
    
    2,695,827
    3,018,856
    5,508,120
    5,892,766Other operating income:Service charges on deposit accounts
    
    496,562
    443,391
    950,335
    859,602Fees for trust services
    
    30,000
    45,000
    60,000
    75,000Securities losses
    
    -
    -
    (2,500)
    -Other operating income
    
    171,803
    149,137
    342,148
    291,235Total other operating income
    
    698,365
    637,528
    1,349,983
    1,225,837Other operating expense:Salaries and other personnel expense
    
    1,412,200
    1,314,335
    2,753,992
    2,656,202Net occupancy and equipment expense
    
    409,995
    442,261
    821,714
    872,758Other operating expense
    
    495,235
    603,158
    1,102,167
    1,183,912Total other operating expense
    
    2,317,430
    2,359,754
    4,677,873
    4,712,872Earnings before income taxes
    
    1,076,762
    1,296,630
    2,180,230
    2,405,731Income taxes
    
    337,381
    433,396
    699,528
    798,252Net earnings
    $
    739,381
    863,234
    1,480,702
    1,607,479Earnings per common share based on average outstandingshares of 775,523, 786,643, 777,157 and 787,783,respectively:Net earnings per share
    $
    .95
    1.10
    1.91
    2.04Dividends declared per common share
    $
    .65
    .65
    .65
    .65




See accompanying notes to unaudited consolidated financial
statements.



-4-

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FNB BANKING COMPANY AND SUBSIDIARY

Consolidated
Statements of Comprehensive Income

For the Three Months and the Six Months Ended June 30, 2001
and 2000

(Unaudited)





Three Months
      Ended
    Six Months
      Ended2001
    2000
    2001
    2000Net earnings
    $
    739,381
    863,234
    1,480,702
    1,607,479Other comprehensive income (loss), net of tax:Unrealized holding gains (losses) on investment securitiesavailable for sale arising during the period
    
    36,732
    (324,316)
    664,492
    (379,785)Reclassification adjustment for losses on investment
      securitiesavailable for sale
    
    -
    -
    (2,500)
    -Total other comprehensive income (loss), before tax
    
    36,732
    (324,316)
    661,992
    (379,785)Income taxes related to other comprehensive income:Unrealized holding gains (losses) on investment securitiesavailable for sale arising during the period
    
    (13,958)
    123,240
    (252,507)
    144,318Reclassification adjustment for losses on investment
      securitiesavailable for sale
    
    -
    -
    950
    -Total income taxes related to other comprehensive income
      (loss)
    
    (13,958)
    123,240
    (251,557)
    144,318Total other comprehensive income, net of tax
    
    22,774
    (201,076)
    410,435
    (235,467)Comprehensive income
    $
    762,155
    662,158
    1,891,137
    1,372,012






See accompanying notes to unaudited consolidated financial
statements.



-5-

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FNB BANKING COMPANY AND SUBSIDIARY

Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2001 and 2000

(Unaudited)



|                                                                       |   | Six Months Ended June 30,
|---------------------------------------------------------------------- | - | -------------------------
|                                                                       |   |                          
|                                                                       |   | 2001                     
|                                                                       |   |                          
|                                                                       |   |                          
|Cash flows from operating activities:                                  |   |                          
|                                                                       |   |                          
|Net earnings                                                           | $ | 1,480,702                
|Adjustments to reconcile net earnings to net                           |   |                          
|cash provided by operating activities:                                 |   |                          
|Provision for loan losses                                              |   | 334,532                  
|Loss on sale of investment securities                                  |   | 2,500                    
|Depreciation, amortization and accretion                               |   | 254,540                  
|Change in assets and liabilities:                                      |   |                          
|Interest payable                                                       |   | (29,357)                 
|Other, net                                                             |   | 562,255                  
|Mortgage loans held for sale                                           |   | (617,159)                
|                                                                       |   |                          
|Net cash provided by operating activities                              |   | 1,988,013                
|                                                                       |   |                          
|Cash flows from investing activities:                                  |   |                          
|Proceeds from sales of investment securities                           |   | 997,500                  
|Proceeds from maturities and paydowns of investment
      securities   |   |                          
|available for sale                                                     |   | 14,266,287               
|Purchases of investment securities available for sale                  |   | (17,219,365)             
|Net change in loans                                                    |   | (974,907)                
|Purchases of premises and equipment                                    |   | (103,987)                
|                                                                       |   |                          
|Net cash used by investing activities                                  |   | (3,034,472)              
|                                                                       |   |                          
|Cash flows from financing activities:                                  |   |                          
|Net change in federal funds purchased                                  |   | -                        
|Net change in deposits                                                 |   | 10,484,397               
|Net change in securities sold under retail repurchase
      agreements |   | 1,706,379                
|Repayments of note payable                                             |   | (83,334)                 
|FHLB advances                                                          |   | -                        
|Repayments of FHLB advances                                            |   | (62,500)                 
|Purchase and retirement of common stock                                |   | (288,210)                
|Dividends paid                                                         |   | (548,733)                
|                                                                       |   |                          
|Net cash provided by financing activities                              |   | 11,207,999               
|                                                                       |   |                          
|Net change in cash and cash equivalents                                |   | 10,161,540               
|Cash and cash equivalents at beginning of period                       |   | 15,488,744               
|                                                                       |   |                          
|Cash and cash equivalents at end of period                             | $ | 25,650,284               
|                                                                       |   |                          
|Supplemental cash flow information:                                    |   |                          
|Cash paid for income taxes                                             | $ | 348,500                  
|Cash paid for interest                                                 | $ | 4,040,803                
|Noncash investing and financing activities:                            |   |                          
|Change in net unrealized (gains) losses on investment
      securities |   |                          
|available for sale, net of tax                                         | $ | 410,435                  



See accompanying notes to unaudited consolidated financial
statements.



-6-

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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.

(2)Stock Repurchase and Retirement

> During 2001 the Company redeemed and retired 6,438 shares of
> its $1 par value common stock for a total purchase price of $288,210.







> -7-



Item 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS



For the Six Months in the Periods Ended
June 30, 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 June 30, 2001, were $241,124,390 representing
a $13,460,000 (5.91%) increase from December 31, 2000. Deposits, including
retail repurchase agreements, increased $12,190,776 (6.10%) from December 31,
2000. Gross loans increased $896,453 (.54%). The allowance for loan losses at
June 30, 2001, totaled $2,397,947, representing 1.45% of total loans compared to
the December 31, 2000, total of $2,137,165 representing 1.30% of total loans.
Cash and cash equivalents increased $10,161,540 from December 31, 2000.

The total of nonperforming assets which includes nonaccruing
loans, repossessed collateral and loans for which payments are more than 90 days
past due decreased 24% or $1,608,000 from $6,827,000 at December 31, 2000, to
$5,219,000 at June 30, 2001. The decrease is primarily the result of $333,000 of
principal payments received on nonaccrual loans and the application of $680,000
of deposit account balances against the loan balances of an accounts receivable
financing customer. The Bank has imposed $1.1 million of specific allocations
for these loans in the allowance for loan losses. There were no related party
loans which were considered nonperforming at June 30, 2001.

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

Net interest income decreased $349,700 (5.65%) in the first
six months of 2001 compared to the same period for 2000. Interest income for the
first six months of 2001 was $9,854,098, representing an increase of $123,827
(1.27%) over the same period in 2000. Interest expense for the first six months
of 2001 increased $473,527 (13.38%) compared to the same period in 2000. The
primary reasons for the decline in net interest income for the six month period
ended June 30, 2001, versus the same period of 2000 was a 100 basis point
decrease in net interest margin and a $264,000 decrease in discount fees
associated with the accounts receivable lending program. Net interest margin
decreased as the general rate environment dropped rapidly and the Banks
variable rate loans repriced faster than the Banks deposits.

The provision for loan losses for the six months of 2001
increased $34,946 compared to the same period for 2000. Net loan charge-offs for
the six months ended June 30, 2001, were $74,000, compared to $471,000, for the
same period in 2000. It is managements belief that the allowance for loan
losses is adequate to absorb probable losses in the portfolio.



-8-

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Item 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, continued



For the Six Months in the Periods Ended
June 30, 2001 and 2000





Other operating income increased for the six months ended
June 30, 2001, by $124,146 or 10.13%, compared to the same period in 2000,
primarily due to an increase of $50,000 in insufficient check charges and a
$60,000 increase on the gains on sales of mortgage loans.

Other operating expenses for the six months of 2001decreased
$34,999 (1%) compared to the first six months in 2000. The net decrease is
primarily attributable to decreases of $40,000 in depreciation expense included
in occupancy expenses and decreases in a variety of other expenses totaling
approximately $80,000 offset by a $98,000 (4%) increase in personnel costs due
primarily to merit pay increases.





Capital

The following tables present FNB Banking Companys regulatory
capital position at June 30, 2001:



|                                                 |        | 
|------------------------------------------------ | ------ | 
|Risk-Based Capital Ratios                        |        | 
|                                                 |        | 
|Tier 1 Tangible Capital, Actual                  | 14.83% | 
|Tier 1 Tangible Capital minimum requirement      | 4.00%  | 
|                                                 |        | 
|                                                 |        | 
|Excess                                           | 10.83% | 
|                                                 |        | 
|                                                 |        | 
|Total Capital, Actual                            | 16.23% | 
|Total Capital minimum requirement                | 8.00%  | 
|                                                 |        | 
|                                                 |        | 
|Excess                                           | 8.23%  | 
|                                                 |        | 
|                                                 |        | 
|Leverage Ratio                                   |        | 
|                                                 |        | 
|Tier 1 Tangible Capital to adjusted total assets |        | 
|("Leverage Ratio")                               | 10.86% | 
|                                                 |        | 
|Minimum leverage requirement                     | 3.00%  | 
|                                                 |        | 
|                                                 |        | 
|Excess                                           | 7.86%  | 
|                                                 |        | 



-9-

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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
|        | (a)                                                
|        | (b)                                                
|        |                                                    
|        |                                                    





DirectorElectionShares voted by proxy in favor
    562,738Shares voted in person in favor
    64,108Shares voted in person against
    -Shares abstained from voting
    -Total shares represented
    626,846Total shares outstanding
    778,400* - Directors were elected by slate, not individually.
      Vote tabulation is therefore by slate.




|Item 5. | Other Information               
|------- | --------------------------------
|        | None                            
|Item 6. | Exhibits and Reports on Form 8-K
|        | None                            



-10-

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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:    August 14,
      2001             
| |                                            
| |                                            
| |                                            
| | By:   /s/
      Mark Flowers               
| | Mark
      Flowers, Assistant Treasurer    
| | (Principal
      Accounting Officer)       
| |                                            
| |                                            
| | Date:    August 14,
      2001             
| |                                            
| |                                            



-11-

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