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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(MARK ONE)

   [X]   Annual Report under Section 13 or 15(d) of the Securities Exchange Act
         of 1934 (Fee required) For the fiscal year ended December 31, 2000

         OR

   [ ]   Transition Report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934 (No fee required)

              For the transition period from          to
                                             --------    --------

                          Commission file no. 000-22505

                              FNB BANCSHARES, INC.
                              --------------------
                 (Name of Small Business Issuer in Its Charter)

              South Carolina                              57-1033165
        --------------------------                      --------------
       (State or Other Jurisdiction                    (I.R.S. Employer
     of Incorporation or Organization)               Identification No.)

         217 North Granard Street
          Gaffney, South Carolina                          29341
  ---------------------------------------                ----------
 (Address of Principal Executive Offices)                (Zip Code)

                                 (864) 488-2265
                                 --------------
                 Issuer's Telephone Number, Including Area Code

        Securities registered pursuant to Section 12(b) of the Act: None

    Securities registered pursuant to Section 12(g) of the Act: Common Stock

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 past 90 days. Yes [X] No [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

         The issuer's income for its most recent fiscal year was $281,164. As of
March 15, 2001, 616,338 shares of Common Stock were issued and outstanding.

         The aggregate market value of the Common Stock held by non-affiliates
of the Company on March 1, 2001 was $4,379,380. This calculation is based upon
an estimate of the fair market value of the Common Stock by the Company's Board
of Directors of $10.00 per share. There is not an active trading market for the
Common Stock and it is not possible to identify precisely the market value of
the Common Stock.

         Transitional Small Business Disclosure Format. (Check one):
Yes [ ] No [X]

                       DOCUMENTS INCORPORATED BY REFERENCE

The Company's Annual Report to Shareholders for the year ended December 31, 2000
is incorporated by reference in this Form 10-KSB in Part II, Items 6 and 7. The
Company's Proxy Statement for the Annual Meeting of Shareholders to be held on
April 24, 2001 is incorporated by reference in this Form 10-KSB in Part III,
Items 9 through 12.

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ITEM 1. DESCRIPTION OF BUSINESS

         This Report contains statements which constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These statements are based
on many assumptions and estimates and are not guarantees of future performance.
Our actual results may differ materially from those projected in any
forward-looking statements, as they will depend on many factors about which we
are unsure, including many factors which are beyond our control. The words
"may," "would," "could," "will," "expect," "anticipate," "believe," "intend,"
"plan," and "estimate," as well as similar expressions, are meant to identify
such forward-looking statements. Potential risks and uncertainties include, but
are not limited to:

         -        significant increases in competitive pressure in the banking
                  and financial services industries;

         -        changes in the interest rate environment which could reduce
                  anticipated or actual margins;

         -        changes in political conditions or the legislative or
                  regulatory environment;

         -        general economic conditions, either nationally or regionally
                  and especially in primary service area, becoming less
                  favorable than expected resulting in, among other things, a
                  deterioration in credit quality;

         -        changes occurring in business conditions and inflation;

         -        changes in technology;

         -        changes in monetary and tax policies;

         -        changes in the securities markets; and

         -        other risks and uncertainties detailed from time to time in
                  our filings with the Securities and Exchange Commission.

GENERAL

         FNB Bancshares, Inc. was incorporated in South Carolina on September
27, 1995 for the purpose of operating as a bank holding company. The Company's
wholly owned subsidiary, First National Bank of the Carolinas, commenced
business on October 18, 1996 and is primarily engaged in the business of
accepting savings and demand deposits and providing mortgage, consumer, and
commercial loans to the general public. Our bank has a main office in Gaffney
and a branch office in Blacksburg, South Carolina. The bank is organized as a
national banking association under the laws of the United States, with deposits
insured by the FDIC. The bank is a member of the Federal Reserve System.

LOCATION AND SERVICE AREA

         The bank engages in a general commercial and retail banking business,
emphasizing the needs of small- to medium-sized businesses, professional
concerns, and individuals, primarily in Gaffney, South Carolina and the
surrounding area, including Cherokee County. The principal executive offices of
both the company and the bank are located at 217 North Granard Street, Gaffney,
South Carolina 29342. The address of the Blacksburg office is 207 West Cherokee
Street, Blacksburg, South Carolina 29702. The company's telephone number is
(864) 488-2265. See "Item 2. Description of Property."


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         Our primary service area is Cherokee County, South Carolina. Blacksburg
and Gaffney are approximately eight miles from each other and are the two
largest municipalities in Cherokee County. Cherokee County is part of a
five-county metropolitan statistical area covering the "upstate" area of South
Carolina, including Greenville, Spartanburg, Pickens, Cherokee, and Laurens
Counties. Cherokee County is located between the major metropolitan statistical
areas of Greenville-Spartanburg-Anderson of South Carolina and
Charlotte-Gastonia-Rock Hill of North Carolina. The counties from
Greenville-Spartanburg-Anderson to Charlotte-Gastonia-Rock Hill and Cherokee and
Laurens make up an area that is known to many as the "I-85 Business Belt." The
presence of I-85 enhances the economic potential of the area by linking the
seven counties to other major southeastern markets, including the Charlotte and
Atlanta markets, which are easily accessible to this area by I-85.

         Cherokee County's economy is dominated by manufacturing and
agriculture. With over 60 manufacturing plants, including the Nestle Frozen
Foods Company, Milliken & Co. - Magnolia Finishing Plant, and the Timken
Company, Cherokee County enjoys a diversified manufacturing community.
Manufacturing companies employ approximately 50% of the county's workforce, and
the textile mills products sector accounts for nearly 50% of this manufacturing
employment.

MARKETING FOCUS

         Most of the banks in the Cherokee County area are now local branches of
large regional banks. Although size gives the larger banks certain advantages in
competing for business from large corporations, including higher lending limits
and the ability to offer services in other areas of South Carolina and the
Cherokee County area, management believes there has been a void in the community
banking market in the Cherokee County area and believe that the bank is
successfully filling this void. As a result, we generally do not attempt to
compete for the banking relationships of large corporations, but we concentrate
our efforts on small- to medium-sized businesses and on individuals.

BANKING SERVICES

         The bank offers a full range of deposit services that are typically
available in most banks and savings and loan associations, including checking
accounts, NOW accounts, savings accounts, and other time deposits of various
types, ranging from daily money market accounts to longer-term certificates of
deposit. The transaction accounts and time certificates are tailored to the
bank's principal market area at rates competitive to those offered in the
Cherokee County area. In addition, we offer certain retirement account services,
such as Individual Retirement Accounts (IRAs). All deposit accounts are insured
by the FDIC up to the maximum amount allowed by law (generally, $100,000 per
depositor, subject to aggregation rules). The bank solicits these accounts from
individuals, businesses, associations and organizations, and governmental
authorities.

LENDING ACTIVITIES

         General. The bank emphasizes a range of lending services, including
real estate, commercial and consumer loans, to individuals and small- to
medium-sized businesses and professional concerns that are located in or conduct
a substantial portion of their business in the bank's market area.

         Real Estate Loans. One of the primary components of the bank's loan
portfolio is loans secured by first or second mortgages on real estate. These
loans generally consist of commercial real estate loans, construction and
development loans, and residential real estate loans (but exclude home equity
loans, which are classified as consumer loans). Loan terms generally are limited
to five years or less, although


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payments may be structured on a longer amortization basis. Interest rates are
fixed or adjustable. The bank generally charges an origination fee. Management
attempts to reduce credit risk in the commercial real estate portfolio by
emphasizing loans on owner-occupied office and retail buildings where the
loan-to-value ratio, established by independent appraisals, does not exceed 80%.
In addition, the bank typically requires personal guarantees of the principal
owners of the property backed with a review by the bank of the personal
financial statements of the principal owners. The principal economic risk
associated with each category of loans, including real estate loans, is the
creditworthiness of the bank's borrowers. The risks associated with real estate
loans vary with many economic factors, including employment levels and
fluctuations in the value of real estate. The bank competes for real estate
loans with a number of bank competitors which are well established in the
Cherokee County area. Most of these competitors have substantially greater
resources and lending limits than the bank. As a result, the bank occasionally
must charge a lower interest rate to attract borrowers. See "--Competition". The
bank also originates loans for sale into the secondary market. The bank attempts
to limit interest rate risk and credit risk on these loans by locking the
interest rate for each loan with the secondary investor and receiving the
investor's underwriting approval prior to originating the loan.

         Commercial Loans. The bank makes loans for commercial purposes in
various lines of businesses. Equipment loans typically are made for a term of
five years or less at fixed or variable rates, with the loan fully amortized
over the term and secured by the financed equipment and with a loan-to-value
ratio of 80% or less. Working capital loans typically have terms not exceeding
one year and are usually secured by accounts receivable, inventory, or personal
guarantees of the principals of the business. For loans secured by accounts
receivable or inventory, principal is typically repaid as the assets securing
the loan are converted into cash, and in other cases principal is typically due
at maturity. The principal economic risk associated with each category of loans,
including commercial loans, is the creditworthiness of the bank's borrowers. The
risks associated with commercial loans vary with many economic factors,
including the economy in the Cherokee County area, especially the tourist
economy. The well-established banks in the Cherokee County area will make
proportionately more loans to medium- to large-sized businesses than the bank.
Many of the bank's commercial loans are made to small- to medium-sized
businesses which may be less able to withstand competitive, economic, and
financial conditions than larger borrowers.

         Consumer Loans. The bank makes a variety of loans to individuals for
personal and household purposes, including secured and unsecured installment and
term loans, home equity loans and lines of credit, and revolving lines of credit
such as credit cards. These loans typically carry balances of less than $25,000
and, in the case of non-revolving loans, are amortized over a period not
exceeding 48 months. The revolving loans typically bear interest at a fixed rate
and require monthly payments of interest and a portion of the principal balance.
The underwriting criteria for home equity loans and lines of credit is generally
the same as applied by the bank when making a first mortgage loan, as described
above, and home equity lines of credit typically expire fifteen years or less
after origination. As with the other categories of loans, the principal economic
risk associated with consumer loans is the creditworthiness our borrowers, and
the principal competitors for consumer loans is the established banks in the
Cherokee County area.

         Loan Approval and Review. The bank's loan approval policies provide for
various levels of officer lending authority. When the amount of aggregate loans
to a single borrower exceeds an individual officer's lending authority, the loan
request is considered and approved by an officer with a higher lending limit. We
have established a management loan committee that must approve to its limit any
loan over the President's lending limit. The bank's loan committee approves any
loan over the management loan committee authority. We do not make any loans to
directors, officers, or employees of the bank unless the loan is approved by our
board of directors and is made on terms not more favorable to such


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person than would be available to a person not affiliated with us (excluding
consumer loans less than $20,000 which are available at employee rates).

         Lending Limits. The bank's lending activities are subject to a variety
of lending limits imposed by federal law. While differing limits apply in
certain circumstances based on the type of loan or the nature of the borrower
(including the borrower's relationship to us), in general we are subject to a
loan-to-one-borrower limit. This limit will increase or decrease as the bank's
capital increases or decreases. Unless we are able to sell participations in our
loans to other financial institutions, we will not be able to meet all of the
lending needs of loan customers requiring aggregate extensions of credit above
these limits.

OTHER BANKING SERVICES

         Other bank services include cash management services, safe deposit
boxes, travelers checks, direct deposit of payroll and social security checks,
and automatic drafts for various accounts. The bank is associated with a shared
network of automated teller machines that may be used by our customers
throughout South Carolina and other regions. We also offer MasterCard and VISA
credit card services through a correspondent bank as an agent for the bank.

COMPETITION

         The banking business is highly competitive. The bank competes as a
financial intermediary with other commercial banks, savings and loan
associations, credit unions, and money market mutual funds operating in the
Cherokee County area and elsewhere. As of December 31, 2000, there were four
commercial banks (none of which are headquartered in Cherokee County), one
savings bank, and one credit union operating in Cherokee County. A number of
these competitors are well established in the Cherokee County area. Most of them
have substantially greater resources and lending limits than our bank and offer
certain services, such as extensive and established branch networks and trust
services, that we either do not expect to provide or do not currently provide.
As a result of these competitive factors, the bank may have to pay higher rates
of interest to attract deposits.

EMPLOYEES

         We have 24 full-time employees as of December 31, 2000.

                           SUPERVISION AND REGULATION

         We are subject to extensive state and federal banking laws and
regulations which impose specific requirements or restrictions on, and provide
for general regulatory oversight of, virtually all aspects of our operations.
These laws and regulations are generally intended to protect depositors, not
shareholders. The following summary is qualified by reference to the statutory
and regulatory provisions discussed. Changes in applicable laws or regulations
may have a material effect on our business and prospects. Our operations may be
affected by legislative changes and the policies of various regulatory
authorities. We cannot predict the effect that fiscal or monetary policies,
economic control, or new federal or state legislation may have on our business
and earnings in the future.

GRAMM-LEACH-BLILEY ACT

         The Gramm-Leach-Bliley Act, previously known as the Financial Services
Modernization Act of 1999, was signed into law on November 12, 1999. Among other
things, the Act repeals the


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restrictions on banks affiliating with securities firms contained in sections 20
and 32 of the Glass-Steagall Act. The Act also permits bank holding companies to
engage in a statutorily provided list of financial activities, including
insurance and securities underwriting and agency activities, merchant banking,
and insurance company portfolio investment activities. The Act also authorizes
activities that are "complementary" to financial activities.

         The Act is intended, in part, to grant to community banks certain
powers as a matter of right that larger institutions have accumulated on an ad
hoc basis. Nevertheless, the Act may have the result of increasing the amount of
competition that we face from larger institutions and other types of companies.
In fact, it is not possible to predict the full effect that the Act will have on
us. From time to time other changes are proposed to laws affecting the banking
industry, and these changes could have a material effect on our business and
prospects.

         The Gramm-Leach-Bliley Act also contains provisions regarding consumer
privacy. These provisions require financial institutions to disclose their
policy for collecting and protecting confidential information. Customers
generally may prevent financial institutions from sharing personal financial
information with nonaffiliated third parties except for third parties that
market an institution's own products and services. Additionally, financial
institutions generally may not disclose consumer account numbers to any
nonaffiliated third party for use in telemarketing, direct mail marketing, or
other marketing to the consumer.

FNB BANCSHARES, INC.

         Because our holding company, FNB Bancshares, Inc., owns the outstanding
capital stock of our bank, our holding company is a bank holding company under
the federal Bank Holding Company Act of 1956 and the South Carolina Banking and
Branching Efficiency Act.

         The Bank Holding Company Act. Under the Bank Holding Company Act, our
holding company is subject to periodic examination by the Federal Reserve and
required to file periodic reports of its operations and any additional
information that the Federal Reserve may require. Our activities at the holding
company level are limited to:

         -        banking and managing or controlling banks;
         -        furnishing services to or performing services for our
                  subsidiaries; and
         -        engaging in other activities that the Federal Reserve
                  determines to be so closely related to banking and managing or
                  controlling banks as to be a proper incident thereto.

         Investments, Control, and Activities. With certain limited exceptions,
the Bank Holding Company Act requires every bank holding company to obtain the
prior approval of the Federal Reserve before:

         -        acquiring substantially all the assets of any bank;
         -        acquiring direct or indirect ownership or control of any
                  voting shares of any bank if after the acquisition it would
                  own or control more than 5% of the voting shares of such bank
                  (unless it already owns or controls the majority of such
                  shares); or
         -        merging or consolidating with another bank holding company.


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         In addition, and subject to certain exceptions, the Bank Holding
Company Act and the Change in Bank Control Act require Federal Reserve approval
prior to any person or company acquiring "control" of a bank holding company.
Control is conclusively presumed to exist if an individual or company acquires
25% or more of any class of voting securities of a bank holding company. Control
is rebuttably presumed to exist if a person acquires 10% or more, but less than
25%, of any class of voting securities and either the company has registered
securities under Section 12 of the Securities Exchange Act of 1934 or no other
person owns a greater percentage of that class of voting securities immediately
after the transaction. Our common stock is registered under the Securities
Exchange Act of 1934. The regulations provide a procedure for challenge of the
rebuttable control presumption.

         Under the Bank Holding Company Act, a bank holding company is generally
prohibited from engaging in, or acquiring direct or indirect control of more
than 5% of the voting shares of any company engaged in, nonbanking activities
unless the Federal Reserve Board has found those activities to be so closely
related to banking or managing or controlling banks as to be a proper incident
thereto. Some of the activities that the Federal Reserve Board has determined by
regulation to be proper incidents to the business of a bank holding company
include:

         -        making or servicing loans and certain types of leases;
         -        engaging in certain insurance and discount brokerage
                  activities;
         -        performing certain data processing services;
         -        acting in certain circumstances as a fiduciary or investment
                  or financial adviser;
         -        owning savings associations; and
         -        making investments in certain corporations or projects
                  designed primarily to promote community welfare.

         The Federal Reserve Board imposes certain capital requirements on our
holding company under the Bank Holding Company Act, including a minimum leverage
ratio and a minimum ratio of "qualifying" capital to risk-weighted assets. These
requirements are described below under "Capital Regulations." Subject to capital
requirements and certain other restrictions, our holding company is able to
borrow money to make a capital contribution to our bank, and these loans may be
repaid from dividends paid from our bank to our company. Our ability to pay
dividends is subject to regulatory restrictions as described below in "First
National Bank of the Carolinas - Dividends." Our holding company is also able to
raise capital for contribution to our bank by issuing securities without having
to receive regulatory approval, subject to compliance with federal and state
securities laws.

         Source of Strength; Cross-Guarantee. In accordance with Federal Reserve
Board policy, our holding company is expected to act as a source of financial
strength to our bank and to commit resources to support our bank in
circumstances in which our holding company might not otherwise do so. Under the
Bank Holding Company Act, the Federal Reserve Board may require a bank holding
company to terminate any activity or relinquish control of a nonbank subsidiary,
other than a nonbank subsidiary of a bank, upon the Federal Reserve Board's
determination that such activity or control constitutes a serious risk to the
financial soundness or stability of any subsidiary depository institution of the
bank's holding company. Further, federal bank regulatory authorities have
additional discretion to require a bank holding company to divest itself of any
bank or nonbank subsidiary if the agency determines that divestiture may aid the
depository institution's financial condition.

         South Carolina State Regulation. As a South Carolina bank holding
company under the South Carolina Banking and Branching Efficiency Act, we are
subject to limitations on sale or merger and to regulation by the South Carolina
Board of Financial Institutions. Prior to acquiring the capital stock of


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a national bank, we are not required to obtain the approval of the Board, but we
must notify them at least 15 days prior to doing so. We must receive the Board's
approval prior to engaging in the acquisition of a South Carolina state
chartered bank or another South Carolina bank holding company.

FIRST NATIONAL BANK OF THE CAROLINAS

         Our bank, First National Bank of the Carolinas, operates as a national
banking association incorporated under the laws of the United States and subject
to examination by the Office of the Comptroller of the Currency. Deposits in the
bank are insured by the FDIC up to a maximum amount, which is generally $100,000
per depositor subject to aggregation rules.

         The Office of the Comptroller of the Currency and the FDIC regulate or
monitor virtually all areas of our bank's operations, including:

         -        security devices and procedures;
         -        adequacy of capitalization and loss reserves;
         -        loans;
         -        investments;
         -        borrowings;
         -        deposits;
         -        mergers;
         -        issuances of securities;
         -        payment of dividends;
         -        interest rates payable on deposits;
         -        interest rates or fees chargeable on loans;
         -        establishment of branches;
         -        corporate reorganizations;
         -        maintenance of books and records; and
         -        adequacy of staff training to carry on safe lending and
                  deposit gathering practices.

         The Office of the Comptroller of the Currency requires banks to
maintain specified capital ratios and imposes limitations on banks' aggregate
investment in real estate, bank premises, and furniture and fixtures. The Office
of the Comptroller of the Currency also requires banks to prepare quarterly
reports on their financial condition and to conduct annual audits of their
financial affairs in compliance with its minimum standards and procedures.

         Under the FDIC Improvement Act, all insured institutions must undergo
regular on-site examinations by their appropriate banking agency. The cost of
examinations of insured depository institutions and any affiliates may be
assessed by the appropriate agency against each institution or affiliate as it
deems necessary or appropriate. Insured institutions are required to submit
annual reports to the FDIC, their federal regulatory agency, and their state
supervisor when applicable. The FDIC Improvement Act directs the FDIC to develop
a method for insured depository institutions to provide supplemental disclosure
of the estimated fair market value of assets and liabilities, to the extent
feasible and practicable, in any balance sheet, financial statement, report of
condition or any other report of any insured depository institution. The FDIC
Improvement Act also requires the federal banking regulatory agencies to
prescribe, by regulation, standards for all insured depository institutions and
depository institution holding companies relating, among other things, to the
following:


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         -        internal controls;
         -        information systems and audit systems;
         -        loan documentation;
         -        credit underwriting;
         -        interest rate risk exposure; and
         -        asset quality.

         National banks and their holding companies which have been chartered or
registered or have undergone a change in control within the past two years or
which have been deemed by the Office of the Comptroller of the Currency or the
Federal Reserve Board to be troubled institutions must give the Office of the
Comptroller of the Currency or the Federal Reserve Board 30 days' prior notice
of the appointment of any senior executive officer or director. Within the 30
day period, the Office of the Comptroller of the Currency or the Federal Reserve
Board, as the case may be, may approve or disapprove any such appointment.

         Deposit Insurance. The FDIC has adopted a risk-based assessment system
for determining an insured depository institutions' insurance assessment rate.
The system that takes into account the risks attributable to different
categories and concentrations of assets and liabilities. An institution is
placed into one of three capital categories: (1) well capitalized; (2)
adequately capitalized; or (3) undercapitalized. The FDIC also assigns an
institution to one of three supervisory subgroups, based on the FDIC's
determination of the institution's financial condition and the risk posed to the
deposit insurance funds. Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In addition, the FDIC imposes assessments to help pay off the $780 million in
annual interest payments on the $8 billion Financing Corporation bonds issued in
the late 1980s as part of the government rescue of the thrift industry.

         The FDIC may terminate its insurance of deposits if it finds that the
institution has engaged in unsafe and unsound practices, is in an unsafe or
unsound condition to continue operations, or has violated any applicable law,
regulation, rule, order, or condition imposed by the FDIC.

         Transactions With Affiliates and Insiders. Our bank is subject to the
provisions of Section 23A of the Federal Reserve Act, which places limits on the
amount of loans or extensions of credit to, or investments in, or certain other
transactions with, affiliates and on the amount of advances to third parties
collateralized by the securities or obligations of affiliates. The aggregate of
all covered transactions is limited in amount, as to any one affiliate, to 10%
of our bank's capital and surplus and, as to all affiliates combined, to 20% of
the bank 's capital and surplus. Furthermore, within the foregoing limitations
as to amount, each covered transaction must meet specified collateral
requirements. Compliance is also required with certain provisions designed to
avoid the taking of low quality assets.

         Our bank is also subject to the provisions of Section 23B of the
Federal Reserve Act which, among other things, prohibits an institution from
engaging in certain transactions with certain affiliates unless the transactions
are on terms substantially the same, or at least as favorable to such
institution or its subsidiaries, as those prevailing at the time for comparable
transactions with nonaffiliated companies. Our bank is subject to certain
restrictions on extensions of credit to executive officers, directors, certain
principal shareholders, and their related interests. Such extensions of credit
(i) must be made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
third parties and (ii) must not involve more than the normal risk of repayment
or present other unfavorable features.


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         Dividends. A national bank may not pay dividends from its capital. All
dividends must be paid out of undivided profits then on hand, after deducting
expenses, including reserves for losses and bad debts. In addition, a national
bank is prohibited from declaring a dividend on its shares of common stock until
its surplus equals its stated capital, unless there has been transferred to
surplus no less than one-tenth of the bank's net profits of the preceding two
consecutive half-year periods (in the case of an annual dividend). The approval
of the Office of the Comptroller of the Currency is required if the total of all
dividends declared by a national bank in any calendar year exceeds the total of
its net profits for that year combined with its retained net profits for the
preceding two years, less any required transfers to surplus.

         Branching. National banks are required by the National Bank Act to
adhere to branch office banking laws applicable to state banks in the states in
which they are located. Under current South Carolina law, the bank may open
branch offices throughout South Carolina with the prior approval of the Office
of the Comptroller of the Currency. In addition, with prior regulatory approval,
the bank will be able to acquire existing banking operations in South Carolina.
Furthermore, federal legislation permits interstate branching, including
out-of-state acquisitions by bank holding companies, interstate branching by
banks if allowed by state law, and interstate merging by banks. South Carolina
law, with limited exceptions, currently permits branching across state lines
through interstate mergers.

         Community Reinvestment Act. The Community Reinvestment Act requires
that, in connection with examinations of financial institutions within their
respective jurisdictions, the Federal Reserve, the FDIC, or the Office of the
Comptroller of the Currency shall evaluate the record of each financial
institution in meeting the credit needs of its local community, including low
and moderate income neighborhoods. These factors are also considered in
evaluating mergers, acquisitions, and applications to open a branch or facility.
Failure to adequately meet these criteria could impose additional requirements
and limitations on our bank. Under the Gramm-Leach-Bliley Act, banks with
aggregate assets of not more than $250 million will be subject to a Community
Reinvestment Act examination only once every 60 months if the bank receives an
outstanding rating, once every 48 months if it receives a satisfactory rating,
and as needed if the rating is less than satisfactory. Additionally, under the
Gramm-Leach-Bliley Act, banks are required to publicly disclose the terms of
various Community Reinvestment Act-related agreements.

         Other Regulations. Interest and other charges collected or contracted
for by the bank are subject to state usury laws and federal laws concerning
interest rates. The bank's loan operations are also subject to federal laws
applicable to credit transactions, such as:

         -        the federal Truth-In-Lending Act, governing disclosures of
                  credit terms to consumer borrowers;
         -        the Home Mortgage Disclosure Act of 1975, requiring financial
                  institutions to provide information to enable the public and
                  public officials to determine whether a financial institution
                  is fulfilling its obligation to help meet the housing needs of
                  the community it serves;
         -        the Equal Credit Opportunity Act, prohibiting discrimination
                  on the basis of race, creed or other prohibited factors in
                  extending credit;
         -        the Fair Credit Reporting Act of 1978, governing the use and
                  provision of information to credit reporting agencies;
         -        the Fair Debt Collection Act, governing the manner in which
                  consumer debts may be collected by collection agencies; and


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         -        the rules and regulations of the various federal agencies
                  charged with the responsibility of implementing such federal
                  laws.

The deposit operations of the bank also are subject to:

         -        the Right to Financial Privacy Act, which imposes a duty to
                  maintain confidentiality of consumer financial records and
                  prescribes procedures for complying with administrative
                  subpoenas of financial records; and
         -        the Electronic Funds Transfer Act and Regulation E issued by
                  the Federal Reserve Board to implement that act, which governs
                  automatic deposits to and withdrawals from deposit accounts
                  and customers' rights and liabilities arising from the use of
                  automated teller machines and other electronic banking
                  services.

         Capital Regulations. The federal bank regulatory authorities have
adopted risk-based capital guidelines for banks and bank holding companies that
are designed to make regulatory capital requirements more sensitive to
differences in risk profiles among banks and bank holding companies and account
for off-balance sheet items. The guidelines are minimums, and the federal
regulators have noted that banks and bank holding companies contemplating
significant expansion programs should not allow expansion to diminish their
capital ratios and should maintain ratios in excess of the minimums. We have not
received any notice indicating that either our holding company or our bank is
subject to higher capital requirements. The current guidelines require all bank
holding companies and federally-regulated banks to maintain a minimum risk-based
total capital ratio equal to 8%, of which at least 4% must be Tier 1 capital.
Tier 1 capital includes common shareholders' equity, qualifying perpetual
preferred stock, and minority interests in equity accounts of consolidated
subsidiaries, but excludes goodwill and most other intangibles and excludes the
allowance for loan and lease losses. Tier 2 capital includes the excess of any
preferred stock not included in Tier 1 capital, mandatory convertible
securities, hybrid capital instruments, subordinated debt and intermediate
term-preferred stock, and general reserves for loan and lease losses up to 1.25%
of risk-weighted assets.

         Under these guidelines, banks' and bank holding companies' assets are
given risk-weights of 0%, 20%, 50%, or 100%. In addition, certain off-balance
sheet items are given credit conversion factors to convert them to asset
equivalent amounts to which an appropriate risk-weight applies. These
computations result in the total risk-weighted assets. Most loans are assigned
to the 100% risk category, except for first mortgage loans fully secured by
residential property and, under certain circumstances, residential construction
loans, both of which carry a 50% rating. Most investment securities are assigned
to the 20% category, except for municipal or state revenue bonds, which have a
50% rating, and direct obligations of or obligations guaranteed by the United
States Treasury or United States Government agencies, which have a 0% rating.

         The federal bank regulatory authorities have also implemented a
leverage ratio, which is equal to Tier 1 capital as a percentage of average
total assets less intangibles, to be used as a supplement to the risk-based
guidelines. The principal objective of the leverage ratio is to place a
constraint on the maximum degree to which a bank holding company may leverage
its equity capital base. The minimum required leverage ratio for top-rated
institutions is 3%, but most institutions are required to maintain an additional
cushion of at least 100 to 200 basis points.

         The FDIC Improvement Act established a new capital-based regulatory
scheme designed to promote early intervention for troubled banks which requires
the FDIC to choose the least expensive resolution of bank failures. The new
capital-based regulatory framework contains five categories of


                                       10
<PAGE>   12

compliance with regulatory capital requirements, including "well capitalized,"
"adequately capitalized," "undercapitalized," "significantly undercapitalized,"
and "critically undercapitalized." To qualify as a "well capitalized"
institution, a bank must have a leverage ratio of no less than 5%, a Tier 1
risk-based ratio of no less than 6%, and a total risk-based capital ratio of no
less than 10%, and the bank must not be under any order or directive from the
appropriate regulatory agency to meet and maintain a specific capital level.
Currently, we qualify as "well capitalized."

         Under the FDIC Improvement Act regulations, the applicable agency can
treat an institution as if it were in the next lower category if the agency
determines (after notice and an opportunity for hearing) that the institution is
in an unsafe or unsound condition or is engaging in an unsafe or unsound
practice. The degree of regulatory scrutiny of a financial institution
increases, and the permissible activities of the institution decreases, as it
moves downward through the capital categories. Institutions that fall into one
of the three undercapitalized categories may be required to do some or all of
the following:

         -        submit a capital restoration plan;
         -        raise additional capital;
         -        restrict their growth, deposit interest rates, and other
                  activities;
         -        improve their management;
         -        eliminate management fees; or
         -        divest themselves of all or a part of their operations.

         These capital guidelines can affect us in several ways. If we grow at a
rapid pace, our capital may be depleted too quickly, and a capital infusion from
our holding company may be necessary which could impact our ability to pay
dividends. Our capital levels currently are adequate; however, rapid growth,
poor loan portfolio performance, poor earnings performance, or a combination of
these factors could change our capital position in a relatively short period of
time. If we fail to meet these capital requirements, our bank would be required
to develop and file a plan with the Office of the Comptroller of the Currency
describing the means and a schedule for achieving the minimum capital
requirements. In addition, our bank would generally not receive regulatory
approval of any application that requires the consideration of capital adequacy,
such as a branch or merger application, unless our bank could demonstrate a
reasonable plan to meet the capital requirement within a reasonable period of
time. Bank holding companies controlling financial institutions can be called
upon to boost the institutions' capital and to partially guarantee the
institutions' performance under their capital restoration plans.

         Enforcement Powers. The Financial Institutions Reform, Recovery and
Enforcement Act expanded and increased civil and criminal penalties available
for use by the federal regulatory agencies against depository institutions and
certain "institution-affiliated parties." Institution-affiliated parties
primarily include management, employees, and agents of a financial institution,
as well as independent contractors and consultants such as attorneys and
accountants and others who participate in the conduct of the financial
institution's affairs. These practices can include the failure of an institution
to timely file required reports or the filing of false or misleading information
or the submission of inaccurate reports. Civil penalties may be as high as
$1,000,000 a day for such violations. Criminal penalties for some financial
institution crimes have been increased to 20 years. In addition, regulators are
provided with greater flexibility to commence enforcement actions against
institutions and institution-affiliated parties. Possible enforcement actions
include the termination of deposit insurance. Furthermore, banking agencies'
power to issue cease-and-desist orders were expanded. Such orders may, among
other things, require affirmative action to correct any harm resulting from a
violation or practice, including restitution, reimbursement, indemnification or
guarantees against loss. A financial institution


                                       11
<PAGE>   13

may also be ordered to restrict its growth, dispose of certain assets, rescind
agreements or contracts, or take other actions as determined by the ordering
agency to be appropriate.

         Effect of Governmental Monetary Policies. Our earnings are affected by
domestic economic conditions and the monetary and fiscal policies of the United
States government and its agencies. The Federal Reserve Bank's monetary policies
have had, and are likely to continue to have, an important impact on the
operating results of commercial banks through its power to implement national
monetary policy in order, among other things, to curb inflation or combat a
recession. The monetary policies of the Federal Reserve Board have major effects
upon the levels of bank loans, investments and deposits through its open market
operations in United States government securities and through its regulation of
the discount rate on borrowings of member banks and the reserve requirements
against member bank deposits. It is not possible to predict the nature or impact
of future changes in monetary and fiscal policies.

         Proposed Legislation and Regulatory Action. New regulations and
statutes are regularly proposed that contain wide-ranging proposals for altering
the structures, regulations, and competitive relationships of the nation's
financial institutions. We cannot predict whether or in what form any proposed
regulation or statute will be adopted or the extent to which our business may be
affected by any new regulation or statute.

ITEM 2. DESCRIPTION OF PROPERTY

         Gaffney Property. Our principal place of business and the main office
of the bank is located at the corner of Granard Street and West Meadow Street in
Gaffney, South Carolina. The banking facility is approximately 11,000 square
feet and costs approximately $1,500,000, including furniture, fixtures, and
equipment. We completed construction of these facilities in late 1998 and
commenced operations from these new facilities in January 1999.

         Blacksburg Property. We also operate a branch of the bank out of a
Blacksburg office facility at 207 West Cherokee Street, Blacksburg, South
Carolina 29702. The Blacksburg site is on approximately one acre of land. We
have constructed a permanent banking facility of 2,550 square feet on the site
at an approximate cost of $600,000 which was paid out of funds from operations
of the bank and, to the extent necessary, remaining proceeds of the offering.

         We believe that these facilities will adequately serve our needs for
the next 12 months of operation.

ITEM 3. LEGAL PROCEEDINGS.

         Neither the company nor the bank is a party to, nor is any of their
property the subject of, any material pending legal proceedings incidental to
the business of the company or the bank.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.


                                       12
<PAGE>   14

         In response to this Item, the information contained on page 38 of the
company's Annual Report to Shareholders for the year ended December 31, 2000 is
incorporated herein by reference.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         In response to this Item, the information contained on pages 4 through
16 of the company's Annual Report to Shareholders for the year ended December
31, 2000 is incorporated herein by reference.

ITEM 7. FINANCIAL STATEMENTS

         In response to this Item, the information contained on pages 17 through
36 of the company's Annual Report to Shareholders for the year ended December
31, 2000 is incorporated herein by reference.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

         None.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT

         In response to this Item, the information contained on page 10 of the
company's Proxy Statement for the Annual Meeting of Shareholders to be held on
April 24, 2001 is incorporated herein by reference.

ITEM 10. EXECUTIVE COMPENSATION

         In response to this Item, the information contained on pages 5 through
7 of the company's Proxy Statement for the Annual Meeting of Shareholders to be
held on April 24, 2001 is incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         In response to this Item, the information contained on page 8 of the
company's Proxy Statement for the Annual Meeting of Shareholders to be held on
April 24, 2001 is incorporated herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In response to this Item, the information contained on page 10 of the
company's Proxy Statement for the Annual Meeting of Shareholders to be held on
April 24, 2001 is incorporated herein by reference.


                                       13
<PAGE>   15

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a)      The following documents are filed as part of this report:

<TABLE>
<CAPTION>
Exhibit
Number            Description
------            -----------

<S>               <C>
13                Annual Report to Shareholders for the year ended December 31, 2000.

21.1              Subsidiaries of the Company
</TABLE>

(b)      Reports on Form 8-K

         No reports on Form 8-K were filed during the fourth quarter of the year
ended December 31, 2000.


                                       14
<PAGE>   16

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"), the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                     FNB BANCSHARES, INC.


Date: March 23, 2001             By:  /s/ V. Stephen Moss
                                     -------------------------------------------
                                          V. Stephen Moss
                                          President and Chief Executive Officer

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints V. Stephen Moss, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments to this Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto attorney-in-fact and agent
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant in the capacities and on
the dates indicated.

<TABLE>
<CAPTION>
Signature                                                  Title                                    Date
---------                                                  -----                                    ----
<S>                                                       <C>                                  <C>


/s/ Richard D. Gardner                                                                         March 23, 2001
------------------------------------
Richard D. Gardner                                        Director


/s/ Barry Hamrick                                                                              March 23, 2001
------------------------------------
Barry Hamrick                                             Director


/s/ Haskell D. Mallory                                                                         March 23, 2001
------------------------------------
Haskell D. Mallory                                        Director


/s/ Bill Mason                                                                                 March 23, 2001
------------------------------------
Bill Mason                                                Director
</TABLE>


<PAGE>   17

<TABLE>
<CAPTION>
Signature                                                  Title                                    Date
---------                                                  -----                                    ----
<S>                                        <C>                                                 <C>


/s/ V. Stephen Moss                                                                            March 23, 2001
------------------------------------
V. Stephen Moss                                          Director;
                                                     President and CEO

/s/ Harold D. Pennington, Jr.                                                                  March 23, 2001
------------------------------------
Harold D. Pennington, Jr.                                 Director


/s/ Harold D. Pennington, Sr.                                                                  March 23, 2001
------------------------------------
Harold D. Pennington, Sr.                                 Director


/s/ Heyward W. Porter                                                                          March 23, 2001
------------------------------------
Heyward W. Porter                                         Director


/s/ John W. Hobbs                          Chief Financial Officer and Principal               March 23, 2001
------------------------------------                 Accounting Officer
John W. Hobbs
</TABLE>


<PAGE>   18

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit
Number            Description
------            -----------

<S>               <C>
13                Annual Report to Shareholders for the year ended December 31, 2000

21.1              Subsidiaries of the Company
</TABLE>