FNB CORPORATION


                          ANNUAL REPORT TO STOCKHOLDERS


                                       1999
<PAGE>

                      INDEX TO ANNUAL REPORT TO STOCKHOLDERS

                                                                         Page

Selected Consolidated Financial Information..................................1


Management's Discussion and Analysis of Financial Condition and Results of
Operations...................................................................2


Market Price and Dividend Data...............................................7


Market Risks Related to Financial Instruments ...............................7


Independent Auditors' Report on Consolidated Financial Statements ..........10


Consolidated Balance Sheets ................................................11


Consolidated Statements of Income ..........................................12


Consolidated Statements of Comprehensive Income ............................13


Consolidated Statements of Cash Flows ......................................14


Consolidated Statements of Changes in Stockholders' Equity .................16


Notes to Consolidated Financial Statements .................................17
<PAGE>
<TABLE>
<CAPTION>

SELECTED CONSOLIDATED FINANCIAL INFORMATION
                                           Years Ended December 31,

                                  1999      1998     1997     1996      1995

Selected income statement data
   (in thousands):
<S>                          <C>         <C>      <C>       <C>       <C>
     Interest income          $  38,570    35,653   33,114    30,526    28,330
     Interest expense            17,610    17,249   16,764    15,016    14,081

     Net interest income         20,960    18,404   16,350    15,510    14,249

     Provision for loan losses    1,445     1,135      550       595       300

     Noninterest income           3,174     3,001    2,291     2,034     1,869
     Noninterest expense         14,416    12,682   11,602    10,254     9,695
     Income tax expense           1,946     1,657    1,324     1,491     1,449
   Net income                 $   6,327     5,931    5,165     5,204     4,674

Per share data:
   Net income                 $    1.59      1.50     1.32      1.34      1.23
   Cash dividends declared          .63       .57      .35       .50       .45
   Book value per share           11.93     11.20    10.26      9.21      8.38

Average number of shares
   outstanding               3,982,147 3,959,084 3,917,654 3,878,209 3,827,075

Selected balance sheet data at year end
   (in thousands):
    Total securities          $ 101,375   95,584   105,276    97,975    87,962
    Loans, net of unearned
         income                 382,272  328,599   291,058   273,324   252,293
    Allowance for loan losses     5,173    4,640     4,291     4,179     3,988
    Total assets                516,906  461,916   428,174   395,324   360,533
    Deposits                    398,871  386,257   352,545   335,402   315,777
    Subordinated capital notes        -        -         -         -       937
    Stockholders' equity         47,579   44,401    40,213    35,828    32,191

Selected ratios (in percentages):
    Return on average assets       1.30     1.34      1.26      1.41      1.38
    Return on average equity      13.75    14.00     13.59     15.20     15.64
    Dividend pay-out ratio        39.89    38.44     26.08     36.99     37.27
    Average equity to average
          assets                   9.44     9.60      9.31      9.26      8.82
</TABLE>

NOTES: All share and per share data have been adjusted retroactively to
       reflect the 2 for 1 stock split effected in the form of a 100% stock
       dividend in 1997 and a 10% stock dividend in 1998 and 1999.
<PAGE>



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

The following is a discussion of factors that significantly affected the
financial condition and results of operations of FNB Corporation, a bank
holding company, and its wholly owned subsidiaries (collectively, the
"Corporation").  The primary subsidiary of FNB Corporation is First National
Bank (the "Bank").  This discussion should be read in connection with the
consolidated financial statements, statistical disclosures and other financial
information presented herein.  All amounts presented are denoted in thousands
except per share and percentage data.

Net Income
Net income for 1999 was $6,327 compared to $5,931 for 1998 and $5,165 for
1997.  This amounted to an increase of 6.7% for 1999 compared to an increase
of 14.8% for 1998.  Earnings per share for 1999 were $1.59 compared to $1.50
for 1998 and $1.32 for 1997.  The increase in earnings for 1999 and 1998 was
primarily the result of higher net interest income due to growth.

The per share earnings for prior years has been restated to reflect the effect
of a 10% stock dividend declared in the third quarter of 1999.

Net Interest Income
The principal source of earnings for the Corporation is net interest income.
Net interest income is the amount of interest earned on loans and investments
(Fed funds sold, securities and mortgage loans held for sale) less the amount
of interest paid on deposits and other interest-bearing liabilities.  Net
interest income before provision for loan losses for 1999 was $20,960, up
13.9% from $18,404 for 1998, which was up 12.6% from $16,350 for 1997.  The
increases in net interest income in both 1999 and 1998 were primarily the
result of growth in loans and deposits.  Average loans grew $47,800 or 15.4%
in 1999 and $34,573 or 12.5% in 1998.  This growth occurred primarily in the
commercial sector.  Investments declined slightly in both years in order to
partially fund the increased loan demand.  Average investments dropped $3,500
in 1999 and $2,063 in 1998.

The increase in loan demand was funded primarily by an increase in deposits.
Total average deposits increased $26,400 or 7.2% in 1999 and $26,559 or 7.8%
in 1998.  Average deposit growth occurred primarily in lower-cost transaction
account balances in 1999 as opposed to higher cost certificate of
deposit/individual retirement account balances.  In 1998, average growth was
spread among all deposit categories.  Average other borrowed funds increased
$16,000 in 1999 to fund the excess in loan growth over deposit growth.  These
borrowings primarily represented an increase in advances from the Federal Home
Loan Bank of Atlanta.
<PAGE>

The net interest margin increased to 4.84% in 1999 from 4.74% in 1998.  This
follows a strong increase from 4.59% to 4.74% from 1997 to 1998.  This
increase in both years was largely due to loan growth.  Loans, with their
higher yields relative to investments, expanded as a percent of earning assets
in 1998 and 1999.  In addition, management was able to control funding costs
as the yield on earning assets declined.  Cost of funds as a percent of
earning assets declined 32 basis points in 1999, whereas the yield on earning
assets only declined 21 basis points.  In 1998 the total cost of funds
declined 19 basis points and the yield on earning assets only declined four
basis points.  Management attempts to match the maturities and repricing
intervals of its earning assets and liabilities in order to avoid material
fluctuations in earnings if interest rates change.  This is covered under the
heading of "Market Risks Related to Financial Instruments".

Provision for Loan Losses
The provision for loan losses was $1,445 for 1999, $1,135 for 1998 and $550
for 1997.  Net charge-offs amounted to $913, $786 and $438 for 1999, 1998 and
1997, respectively.  The provision for loan losses increased in 1999 and 1998,
from the respective prior years, due to higher net charge-offs and to provide
an adequate reserve on outstanding loans.  Loans grew at an annual rate of
16.3% in 1999 and 12.9% in 1998.  The allowance for loan losses increased $533
to $5,173 or 1.35% of outstanding loans, net of unearned income at December
31, 1999, from $4,640 or 1.41% of outstanding loans, net of unearned income at
December 31, 1998.  The decline in the allowance as a percentage of loans is
attributable primarily to a higher overall loan portfolio quality which has
resulted in part from the high recent rate of loan growth.

Noninterest Income
Noninterest income, which includes service charges on deposit accounts, loan
origination and service release fees on mortgage loans sold, other service
charges, sundry income and net securities gains (losses) was $3,174, $3,001
and $2,291 for 1999, 1998 and 1997, respectively.  The increase in noninterest
income for 1999 resulted primarily from new mortgage loan underwriting fees,
service charge income due to volume and pricing, insurance revenue on consumer
loans and revenue from sales of investment products.  These favorable items
were partially offset by lower net securities gains.  The increase in
noninterest income in 1998 over 1997 was due primarily to mortgage origination
fees on loans sold due to higher volume, service charges on deposit accounts,
securities gains, a full year of ATM usage fees and higher trust/investment
revenue.

Noninterest Expense
Noninterest expense, consisting of salaries and employee benefits, occupancy
costs, credit card processing, supplies and other expense was $14,416 for
1999, $12,682 for 1998 and $11,602 for 1997.  The 1999 increase in noninterest
expense in most categories resulted primarily from new initiatives including
the opening of two new full service branches, offering online banking and
investment in new technology to streamline operations.  These are investments
in the future, which should enable the Corporation to contain costs and
provide customers with more convenient locations and up-to-date services.  In
addition, salary expense was up due to staff additions for new branches and
merit increases, and credit card expense was up due to volume.  The growth in
expenses in 1998 over 1997 was due in part to additions to staff and merit
increases, a new 401(K) plan, higher sales volume, and occupying the new
headquarters building for a full year in 1998 vs. a partial year in 1997.

Income Taxes
Income tax expense as a percentage of pre-tax income was 23.5%, 21.8%, and
20.4% in 1999, 1998 and 1997, respectively.  The increase in 1999 was due in
part to a reduction in the dividends paid deduction, and the decline in both
years was also attributable to reductions in nontaxable interest as a percent
of pre-tax income.

Balance Sheet
Total assets of the Corporation at December 31, 1999, were $516,528, up 11.8%
compared to $461,916 at December 31, 1998 due to loan growth.  Total loans
were $382,272 at December 31, 1999, an increase of $53,673 or 16.3% over
December 31, 1998.  Loan growth was concentrated in the commercial, real
estate-commercial and real estate-mortgage portfolios.  Investments (Fed funds
sold, securities and mortgage loans held for sale) declined $6,382 to
partially fund loan growth.

Total deposits at December 31, 1999, were $398,871, an increase of $12,614 or
3.3% over December 31, 1998.  Lower-cost transaction account balances rose a
strong $19,851 or 12.0% over last year; however, certificate of
deposit/individual retirement account balances declined $7,237.  Competition
for deposits among local financial institutions and from mutual funds
continues to be strong.  The Corporation is responding with new products such
as the high-yield money market account and business sweep product, offering
free checking and pricing certain certificate of deposit categories
aggressively.  Additionally, the Corporation has opened a second full-service
branch in the growing Town of Blacksburg (the location of Virginia Tech) and
expanded the loan production office in Wytheville, VA to a full-service
branch.

Borrowed funds at December 31, 1999 increased $38,666 over December 31, 1998.
These borrowings consist of advances from the Federal Home Loan Bank of
Atlanta, purchases of Fed funds and securities sold under agreements to
repurchase.  Such borrowings were used to fund the excess growth in loans over
deposits and Y2K cash needs.

Stockholders' Equity
Stockholders' equity was $47,579 at December 31, 1999, compared to $44,401 at
December 31, 1998.  This increase of $3,178 was the result of earnings
retention net of dividends paid to shareholders; a decrease of $990 in net
unrealized gains net of tax on securities available-for-sale and principal
repayments on ESOP debt.  In the third quarter of 1999, the Corporation
declared and paid a 10% stock dividend.  This resulted in a transfer of $8,142
from retained earnings to capital stock and surplus.  There was no effect on
total stockholders' equity.

All financial institutions are required to maintain minimum levels of
regulatory capital.  The Federal Reserve and the Office of the Comptroller of
the Currency (OCC) have established substantially similar risk-based and
leveraged capital standards for financial institutions they regulate.  Under
the risk-based capital requirements of these regulatory agencies, the
Corporation is required to maintain a minimum ratio of total capital to risk-
<PAGE>

weighted assets of at least 8%.  At least half of the total capital is
required to be "Tier 1 capital", which consists principally of common and
certain qualifying preferred shareholders' equity, less certain intangibles
and other adjustments. The remainder, "Tier 2 capital", consists of a limited
amount of subordinated and other qualifying debt and a limited amount of the
general loan loss reserve.  Tier 1 and total capital to risk-weighted assets
ratios on a consolidated basis as of December 31, 1999, were 11.6% and 12.9%,
respectively, exceeding the minimums required.

In addition, the federal regulatory agencies have established a minimum
leveraged capital ratio (Tier 1 capital to tangible assets).  These guidelines
provide for a minimum leveraged capital ratio of 3% for banks and their
respective holding companies that meet certain specified criteria, including
that they have the highest regulatory examination rating and are not
contemplating significant growth or expansion.  All other institutions are
expected to maintain a leverage ratio of at least 100 to 200 basis points
above that minimum.  The guidelines also provide that banking organizations
experiencing internal growth or making acquisitions will be expected to
maintain strong capital positions substantially above the minimum supervisory
levels, without significant reliance on intangible assets.  The leverage ratio
of the Corporation on a consolidated basis as of December 31, 1999 was 9.5% as
compared to a minimum requirement of 4.0%.

As of December 31, 1999, the most recent notification from the OCC categorized
the Bank as "well capitalized" under the regulatory framework for prompt
corrective action.  To be categorized as well capitalized, minimum total risk-
based capital, Tier 1 risk-based capital, and Tier 1 leverage ratios of 10.0%,
6.0% and 5.0%, respectively, must be maintained.  The Bank exceeded all three
of these minimums as of December 31, 1999.  There are no conditions or events
that management believes have changed the institution's category.

Past Due Loans and Nonperforming Assets
Loans past due 90 days and over at December 31, 1999, totaled $25 compared to
$161 at December 31, 1998.  Nonaccrual loans and other real estate owned
totaled $4,646 at December 31, 1999, compared to $1,139 at December 1998.  The
increase in nonaccrual loans can be largely attributed to one large health
care provider.  Signed agreements have been reached with an unrelated party to
acquire all of the major assets of the borrower.  If the details of the
agreement transpire as planned, FNB should not incur a significant loss.

Liquidity and Capital Resources
Liquidity is the ability to provide sufficient cash flow to meet financial
commitments and to fund additional loan demand or withdrawal of existing
deposits.  Liquidity remains adequate as assets are maintained on a short-term
basis to meet the liquidity demands anticipated by management.  Funding
sources primarily include customer-based core deposits and cash generated by
operations.  Another source of liquidity is additional borrowings from the
Federal Home Loan Bank of Atlanta.  The Corporation has additional borrowing
capacity of $12,000 under an existing agreement with the FHLB as of December
31, 1999, based on the level of qualifying portfolio mortgage loans available
for securitization.  Secondary sources of liquidity are available should the
need arise, including approximately $25,000 in unused Federal Funds lines of
credit and the ability to liquidate assets held for sale, especially
investment securities.
<PAGE>

The only significant source of cash for the holding company is transfers from
its bank subsidiary in the form of dividends, loans, or advances.  The most
restrictive regulatory limitation placed on the amount of funds that may be
transferred from the Bank to the holding company is that placed on dividends.
Specifically, the maximum amount of dividends that may be paid by the Bank in
any calendar year without prior regulatory approval is the net profits of that
year, as defined, combined with the retained net profits for the two preceding
years.  In effect, this limits 2000 dividends (unless prior regulatory
approval is obtained) to $2,100 plus year-to-date 2000 net profits as of the
declaration date.  This limitation had no effect on the liquidity of the
holding company in 1999 and it is not expected to have any material impact in
2000.  During 1999, the Bank paid $2,692 in dividends to the holding company.

Effects of Inflation
The income statement generally reflects the effects of inflation.  Since
interest rates, loan activities and deposit levels are related to inflation,
the resulting changes are included in net income.  The most significant item
that does not reflect the effects of inflation is depreciation expense because
historically presented dollar values used to determine this expense do not
reflect the effect of inflation on the market value of depreciable assets.

Year 2000 (Y2K) Readiness Disclosure
The Corporation encountered no problems relating to Y2K.  Even though
considerable resources were expended to ensure that FNB's automated systems
would be ready, the investment in much of the new technology will result in
more efficient processing, and the contingency plans developed and tested for
potential Y2K problems are in place to be used in the event of other emergency
situations.
<PAGE>

Market Price and Dividend Data
The following information reflects per share data for the periods indicated
relative to Common Stock trading values and dividends.  FNB Corporation Common
Stock began appearing on the Nasdaq Stock Market? under the symbol FNBP on
July 7,1998.  The information below, prior to July 7, 1998, relating to the
trading values for the stock is based upon information furnished to FNB
Corporation by one or more parties involved in certain purchases and sales of
the stock.  No attempt was made to verify or determine the accuracy of the
representations made.  Both the trading values and per share dividends in the
tables below have been adjusted to retroactively reflect the effects of a 10%
stock dividend in August 1999.  As of December 31, 1999, there were 1,058
holders of record of FNB Corporation Common Stock.
<TABLE>
<CAPTION>

                                Trading Value         Dividends
1999                           High        Low        Per Share
<S>                        <C>           <C>         <C>
First Quarter              $  22.27       19.35         0.15
Second Quarter                21.82       18.18         0.15
Third Quarter                 23.00       20.46         0.16
Fourth Quarter                22.50       17.00         0.17
</TABLE>
<TABLE>
<CAPTION>

                               Trading Value         Dividends
1998                           High       Low        Per Share
<S>                        <C>          <C>         <C>
First Quarter              $  22.95      20.00         0.14
Second Quarter                24.55      21.82         0.14
Third Quarter                 26.14      20.66         0.14
Fourth Quarter                22.73      21.03         0.16
</TABLE>

Market Risks Related to Financial Instruments
The Corporation is not a party to any derivative financial instruments such as
futures, forward interest rate agreements, swaps or option contracts.
Commitments to lend are entered into in the ordinary course of business as
discussed more fully in the notes to the financial statements, but the
majority of these commitments reflect interest rates that vary with certain
indexes such as the prime rate.  As a result, those commitments normally do
not expose the Corporation to market interest rate risks prior to funding the
loan.

In general, the Corporation does not enter into financial instruments for
trading purposes.  That is, obtaining short-term profits by buying and selling
instruments is not an objective pursued by management.  The turnover frequency
associated with financial instruments is, in general, greater when trading is
a short-term objective, and market risks can be enhanced or reduced by such
trading.

The Corporation is a party to a variety of financial instruments in the
ordinary course of business, including loans, investments and deposits.  Most
financial instruments by their nature carry associated market risks.  The only
substantial market risk associated with the Corporation's financial
instruments is interest rate risk; that is, the risk that the fair values or
future cash flows from an instrument could change as a result of changes in
market interest rates.  For example, a decline in market interest rates will
<PAGE>

generally have the effect of reducing the expected future interest to be
received on a loan with a variable contractual interest rate.  However, such a
decline will normally have the effect of increasing the fair value of a fixed
contractual rate investment security.  Management does not expect significant
changes in its market risk exposure positions in the near term.

The Corporation seeks to manage its interest rate risk by establishing
asset/liability management policies and by continually monitoring the
characteristics of its asset and liability portfolios that bear on interest
rate risk.  Interest rate management is conducted in coordination with
management of liquidity and capital adequacy.  The monitoring of interest rate
risk is supervised by an Asset Liability Management Committee comprised of
certain senior officers and certain members of the board of directors.
Management seeks to minimize the risks to earnings and equity associated with
movements in market interest rates.  To achieve this objective management
monitors such factors as:

    - Relative volumes of fixed-rate vs. variable-rate loans and deposits
    - Average interest rate spreads between interest bearing assets and
      liabilities
    - Maturity and repricing schedules of loans, investment securities and
      deposits, including the extent to which expected maturities of interest
      sensitive assets align with that of interest sensitive liabilities
      ("sensitivity gap")

Techniques used by management to adjust exposure to interest rate risk include
but are not limited to selling certain types of loans (especially fixed rate
loans); periodically changing stated interest rates charged on loans and
offered on deposits in conjunction with market trends; promoting, changing the
pricing of or developing new products to emphasize/de-emphasize different
maturity and/or fixed vs. variable loans and deposits; redirecting funds upon
maturities of investment securities and loan repayments and careful selection
among choices of sources of borrowed funds other than deposits.  The
Corporation has not entered into derivative financial instruments such as
futures, forward interest rate agreements, swaps or option contracts in order
to manage interest rate risk.

A key analytical technique used by management in its efforts to manage
interest rate risk is interest rate shock simulation.  This method seeks first
to estimate the current market value of the Corporation's assets and
liabilities by applying present value techniques (discounting) to the
Corporation's assets and liabilities at current market interest rates.  The
difference between the market value of assets and liabilities is market value
of the Corporation's equity.  The current market value of assets and
liabilities is then recalculated assuming a hypothetical, immediate (shock)
increase or decrease in market interest rates of 200 basis points.  The table
below reflects the outcome of this analysis.  This information is presented at
December 31, 1999 and December 31, 1998.  Market value of equity would decline
8.48% if market rates were to immediately rise by 200 basis points and
increase 9.58% if market rates were to immediately drop by 200 basis points at
December 31, 1999.  These percentages are greater than last year, but the
maximum decline in market value of equity is still less than 10%.  In
management's opinion, this is acceptable, given the unlikely occurrence of
this scenario.
<PAGE>

                  Percentage Increase (Decrease) in Market Value of Equity
                  200 Basis Point Increase        200 Basis Point Decrease

December 31, 1999         (8.48%)                          9.58%

December 31, 1998         (6.33%)                          6.51%

The outcome reflects management estimates on loan prepayments, which vary
depending on the relationship between the change in rates scenarios and
current book yields.  Investment securities are assumed to remain in the
Corporation's portfolio until maturity unless called by the issuer.  Non-
maturity deposits such as checking and savings are assumed to mature over a
60-month period.  Rates on accounts that are interest bearing are increased or
decreased, according to the bank's pricing expectations, before the cash flows
are discounted.  As a result, while the rates on these accounts change, they
do not change to the same degree as market rates.  This captures the value of
the optionality in the pricing of these deposits.  Discount rates for loans
are based upon the bank's loan pricing spreads and discount rates for term
deposits are based upon the cost of wholesale funding.
<PAGE>

INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholders
FNB Corporation


We have audited the accompanying consolidated balance sheets of FNB
Corporation and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of income, comprehensive income, changes in
stockholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1999.  These consolidated financial statements are
the responsibility of the Corporation's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of FNB
Corporation and subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the years in the three-
year period ended December 31, 1999, in conformity with generally accepted
accounting principles.


                                            McLEOD & COMPANY



Roanoke, Virginia
January 31, 2000
<PAGE>
<TABLE>
<CAPTION>

                                             December 31, 1999 and 1998
CONSOLIDATED BALANCE SHEETS     in thousands, except share and per share data)

ASSETS                                                  1999           1998
<S>                                                <C>             <C>
Cash and due from banks                             $  18,363         11,875
Federal funds sold                                          -         10,600
Securities available-for-sale, at fair value           68,154         57,232
Securities held-to-maturity, at amortized cost         33,221         38,352
Mortgage loans held for sale                               73          1,646
Loans:
   Commercial                                         113,321         85,536
   Consumer                                            69,312         66,526
   Real estate- commercial                             74,113         65,165
   Real estate - construction                          18,772         16,686
   Real estate - mortgage                             106,754         94,686

            Total loans                               382,272        328,599

            Loans, net of unearned income             382,272        328,599
Less allowance for loan losses                          5,173          4,640

            Loans, net                                377,099        323,959
Bank premises and equipment, net                       13,480         12,977
Other real estate owned                                   129             30
Other assets                                            6,387          5,245
            Total assets                            $ 516,906        461,916

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits
   Noninterest-bearing demand deposits              $  43,365         39,141
   Interest-bearing demand and savings deposits       141,831        126,204
   Time deposits                                      167,162        172,368
   Certificates of deposit of $100,000 and over        46,513         48,544

           Total deposits                             398,871        386,257

   Federal funds purchased                             13,635              -
   Securities sold under agreements to repurchase       7,031          6,650
   Other borrowed funds                                46,262         21,612
   Other liabilities                                    3,528          2,996

   Total liabilities                                  469,327        417,515

Stockholders' equity:
   Common stock, $5.00 par value. Authorized 10,000,000
      shares; issued and outstanding 4,093,996
      shares in 1999 and 3,722,139 in 1998             20,470         18,611
   Surplus                                             25,595         19,320
   Unearned ESOP shares (106,013 and 129,426 shares
      in 1999 and 1998, respectively)                  (1,747)       (2,120)
   Retained earnings                                    3,968          8,307
   Accumulated other comprehensive income (loss)         (707)           283

      Total stockholders' equity                       47,579         44,401

      Total liabilities and stockholders' equity    $ 516,906        461,916
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>

                                  Years Ended December 31,1999, 1998 and 1997
CONSOLIDATED STATEMENTS OF INCOME       (in thousands, except per share data)
                                             1999      1998       1997
<S>                                      <C>         <C>       <C>
Interest income:
    Interest and fees on loans            $ 32,977     29,786    26,754
   Interest on securities:
      Taxable                                3,157      3,082     3,642
      Nontaxable                             2,253      2,278     2,374
   Interest on federal funds sold              183        507       344

            Total interest income           38,570     35,653    33,114

Interest expense:
   Interest on interest-bearing demand
     and savings deposits                    3,400      2,958     2,823
   Interest on time deposits                 8,905      9,801    10,070
   Interest on certificates of deposit of
     $100,000 and over                       2,931      2,870     2,148
   Interest on securities sold under
     agreements to repurchase                  380        261       250
   Interest on other borrowed funds          1,994      1,283     1,385
   Interest on ESOP debt                         -         76        88

            Total interest expense          17,610     17,249    16,764

            Net interest income             20,960     18,404    16,350
Provision for loan losses                    1,445      1,135       550
            Net interest income after
               provision for loan losses    19,515     17,269    15,800
Noninterest income:
   Service charges on deposit accounts       1,263      1,156       990
   Loan origination fees                       359        393       205
   Other service charges and fees              671        481       375
   Other income                                877        813       740
   Securities gains (losses), net                4        158       (19)

            Total noninterest income         3,174      3,001      2,291
Noninterest expense:
   Salaries and employee benefits            7,309      6,570     6,193
   Occupancy and equipment expense, net      2,497      2,166     1,786
   Credit card expense                         857        613       560
   Supplies expense                            448        503       456
   Other expenses                            3,305      2,830     2,607

            Total noninterest expense       14,416     12,682    11,602

Income before income tax expense             8,273      7,588     6,489
Income tax expense                           1,946      1,657     1,324

Net income                               $   6,327      5,931     5,165

            Net income per share         $    1.59       1.50      1.32
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>

                                 Years Ended December 31,1999, 1998 and 1997
                                                              (in thousands)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                             1999       1998       1997
<S>                                     <C>           <C>        <C>
Net income                               $   6,327      5,931      5,165

Other comprehensive income, before tax:
   Unrealized holding gains (losses)
     arising during period on
     securities                             (1,453)       227        382
   Less:  reclassification adjustment
     for (gains) losses included in
     net income                                  -       (142)        20

Other comprehensive income (loss)
     before tax                             (1,453)        85        402

Income tax effect of items of other
     comprehensive income                      463        (29)      (137)

Other comprehensive income (loss),
    net of tax                                (990)        56        265

Comprehensive Income                     $   5,337      5,987      5,430
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF        Years Ended December 31, 1999, 1998 and 1997
CASH FLOWS                                                      (in thousands)

                                              1999        1998        1997
<S>                                      <C>            <C>        <C>
Cash flows from operating activities:
   Net income                             $   6,327       5,931      5,165
   Adjustments to reconcile net income
      to net cash provided by
      operating activities:
         Provision for loan losses            1,445       1,135        550
         Depreciation and amortization of
            bank premises and
            equipment                         1,259       1,098        902
         ESOP compensation                      373         488        302
         Deferred income tax expense (benefit) (378)        132        130
         Loss (gain) on sales of securities
           available-for-sale, net                -        (142)        20
         Amortization of premiums and
           accretion of discounts, net          537         230         71
         Gain on calls of securities
           held-to-maturity, net                 (4)        (16)        (1)
         Loss (gain) on sale of other
           real estate and fixed asset s          1         (34)       (32)
         Proceeds from sales of mortgage
           loans held for sale               22,035      33,298     13,751
         Origination of mortgage loans
           held for sale                    (20,462)    (33,785)   (14,580)
         Decrease (increase) in other
           assets                            (1,142)       (795)       179
         (Decrease) increase in other
           liabilities                          532          34       (681)

               Net cash provided by
                  operating activities       10,523       7,574      5,776

Cash flows from investing activities:
   Net decrease (increase) in federal
     funds sold                              10,600      (7,100)    (1,000)
   Proceeds from sales of securities
     available-for-sale                           -         617      6,060
   Proceeds from calls and maturities of
     securities available-for-sale           14,400      39,232     13,269
   Proceeds from calls and maturities of
     securities held-to-maturity              5,141       4,066      2,640
   Purchases of securities available-
     for-sale                               (27,297)    (34,196)   (26,963)
   Purchases of securities held-to-maturity     (17)        (15)    (1,994)
   Net increase in loans                    (54,056)    (40,535)   (18,673)
   Proceeds from sale of other real estate
     owned                                      139         228        155
   Recoveries on loans previously charged off   221         184        190
   Bank premises and equipment expenditures  (1,479)     (1,561)    (3,130)

               Net cash used in investing
                 activities                 (52,348)    (39,080)   (29,446)

Cash flows from financing activities:
   Net increase in demand deposits           19,851      30,343      8,603
   Net (decrease) increase in time
     deposits and certificates of deposit    (7,237)      3,369      8,540
   Net increase in federal funds purchased   13,635           -          -
   Net increase in securities sold under
     agreements to repurchase                   381       1,190        665
   Net increase (decrease) in other
     borrowed funds                          24,650      (4,481)    11,689
   Principal payments on ESOP debt             (373)       (488)      (302)
   Sale of stock to ESOP                          -       1,400          -
   Dividends paid                            (2,524)     (2,280)    (1,347)
   Dividends on unallocated ESOP shares          (70)       (78)       (49)

            Net cash provided by financing
              activities                      48,313     28,975     27,799

Net increase (decrease) in cash and due
   from banks                                  6,488     (2,531)     4,129
Cash and due from banks at beginning of year  11,875     14,406     10,277

Cash and due from banks at end of year    $   18,363     11,875     14,406
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF
CHANGES IN STOCKHOLDERS' EQUITY
                               Years Ended December 31, 1999, 1998 and 1997
                               (in thousands, except share and per share data)

                                                                 Accumulated
                                                              Other
                                            Unearned          Compre-
                            Common          ESOP    Retained  hensive
                            Stock  Surplus  Shares  Earnings  Income  Total
<S>                      <C>       <C>     <C>     <C>       <C>     <C>
Balances at
   December 31, 1996     $  8,310   10,782  (1,511)   18,285    (38)  35,828

Net income                      -        -       -     5,165      -    5,165
Cash dividends, $0.35
   per share                    -        -       -    (1,348)     -   (1,348)
ESOP shares allocated
   upon loan
   repayment                    -        -     303         -      -      303
Two for one stock
   split effected in
   form of 100%
   stock dividend           8,309        -       -    (8,309)     -        -
Change in net
   unrealized gains
   (losses) on securities
   available-for-sale,
   net of tax effect
   of $136                      -       -        -         -    265      265

Balances at
   December 31, 1997        16,619 10,782   (1,208)   13,793    227   40,213

Net income                       -      -        -     5,931      -    5,931
Cash dividends, $0.57
   per share                     -      -        -    (2,280)     -   (2,280)
ESOP shares allocated
   upon loan
   repayment                     -      -      488         -      -      488
10% stock dividend           1,691  7,439        -    (9,137)     -       (7)
Change in net unrealized
   gains (losses) on
   securities available-
   for-sale, net of tax
   effect of $29                 -      -       -          -     56       56
Sale of 60,215 shares
   of stock to ESOP            301  1,099  (1,400)         -      -        -

Balances at
   December 31, 1998        18,611 19,320  (2,120)     8,307    283   44,401

Net income                       -      -       -      6,327      -    6,327
Cash dividends, $0.63
   per share                     -      -       -     (2,524)     -   (2,524)
ESOP shares allocated
   upon loan
   repayment                     -      -     373          -      -      373
10% stock dividend           1,859  6,275       -     (8,142)     -       (8)
Change in net
   unrealized gains
   (losses) on securities
   available-for-sale,
   net of tax effect
    of $463                      -      -       -          -   (990)    (990)


Balances at
   December 31, 1999      $ 20,470 25,595  (1,747)     3,968   (707)   47,579
</TABLE>

See accompanying notes to consolidated financial statements
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                                   December31, 1999
                                  (in thousands, except share data)


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The reporting entity is comprised of FNB Corporation, a bank
      holding company, and its wholly owned subsidiaries
      (collectively the "Corporation").  The primary subsidiary of
      FNB Corporation is First National Bank (the "Bank").  The
      accounting and reporting policies of the Corporation conform
      to generally accepted accounting principles and general
      practices within the banking industry.  In preparing the
      financial statements, management is required to make estimates
      and assumptions that affect the reported amounts of assets and
      liabilities as of the date of the balance sheet and revenues
      and expenses for the year.  Actual results could differ
      significantly from those estimates.

      Material estimates that are particularly susceptible to
      significant changes in the near term relate to the
      determination of the allowance for loan losses and the
      valuation of other real estate owned acquired in connection
      with foreclosures or in satisfaction of loans.  In connection
      with the determination of the allowance for loan losses and
      the valuation of other real estate owned, management obtains
      independent appraisals for significant properties.

      Management believes that the allowance for loan losses and the
      valuation of other real estate owned are adequate.  While
      management uses available information to recognize loan losses
      and write-downs of other real estate owned, future additions
      to the allowance and write-downs of other real estate owned
      might be necessary based on changes in economic conditions.
      In addition, various regulatory agencies, as an integral part
      of their examination process, periodically review the
      allowance for loan losses and valuation of other real estate
      owned.  Such agencies may require the Bank to recognize
      additions to the allowance for loan losses and additional
      write-downs of other real estate owned based on their
      judgments of information available to them at the time of
      their examination.

      The following is a summary of the more significant accounting
      policies.

     (a)  Consolidation
          The consolidated financial statements include the
          accounts of FNB Corporation, a bank holding company, and
          its wholly owned subsidiaries.

     (b)  Cash and Cash Equivalents
          For purposes of reporting cash flows, cash and cash
          equivalents include those amounts in the balance sheet
          caption, cash and due from banks.  Generally, cash and
          cash equivalents are considered to have maturities of
          three months or less.  The Bank maintains amounts due
          from banks, which, at times, may exceed federally
          insured limits.  No losses have been experienced in such
          accounts.

    (c)   Securities
          The Corporation follows the provisions of Statement of
          Financial Accounting Standards No. 115, "Accounting for
          Certain Investments in Debt and Equity Securities."
          Under Statement 115, investments in debt and equity
          securities are required to be classified in three
          categories and accounted for as follows:

          -  Debt securities which the Corporation has the
             positive intent and ability to hold to maturity are
             classified as held-to-maturity securities and reported
             at amortized cost, computed by the level yield method.

          -  Debt and equity securities that are bought and held
             principally for the purpose of selling them in the
             near term are classified as trading securities and
             reported at fair value, with unrealized gains and
             losses included in income.  The Corporation has no
             trading securities.

          -  Debt and equity securities not classified as either
             held-to-maturity or trading securities are classified
             as available-for-sale securities and reported at fair
             value, with unrealized gains and losses excluded from
             income and reported as a separate component of
             stockholders' equity, net of the related income tax
             effect.

          Gains and losses on sales of securities are based on the
          net proceeds and adjusted carrying amount of the
          security sold using the specific identification method.
          Declines in fair values of individual securities below
          their cost that are other  than temporary are charged to
          income resulting in a new cost basis for the security.

    (d)   Loans
          Loans are stated at the amount of funds disbursed plus
          the applicable amount, if any, of unearned interest and
          deferred fees and costs less payments received.
          Interest on commercial and real estate mortgage loans is
          accrued based on the average loans outstanding times the
          applicable interest rates.  Interest on installment
          loans is recognized on methods which approximate the
          level yield method.  Loan origination and commitment
          fees and certain costs are deferred, and the net amount
          is amortized over the contractual life of the related
          loans as an adjustment of the yield.

          Interest related to nonaccrual loans is recognized on
          the cash basis.  Loans are generally placed on
          nonaccrual status when the collection of principal or
          interest is 90 days or more past due, unless the
          obligation is both well-secured and in the process of
          collection.

          Mortgage loans held for sale are carried at the lower of
          aggregate cost or market value.  Loans sold are removed
          from the accounts and any realized gain or loss is
          recorded.

    (e)   Bank Premises and Equipment, Net
          Bank premises and equipment are stated at cost less
          accumulated depreciation and amortization.  Depreciation
          and amortization is charged to expense over the
          estimated useful lives of the assets, principally on the
          straight-line method.  Costs of maintenance and repairs
          are charged to expense as incurred and improvements are
          capitalized.

    (f)   Other Real Estate Owned
          Other real estate owned represents properties acquired
          through foreclosure or deed taken in lieu of
          foreclosure.  At the time of acquisition, these
          properties are recorded at the lower of the recorded
          investment in the loan or fair value less estimated
          costs to sell.  Expenses incurred in connection with
          operating these properties and subsequent write-downs,
          if any, are charged to expense.  Gains and losses on the
          sales of these properties are credited or charged to
          income in the year of the sale.

    (g)   Income Taxes
          Deferred tax assets and liabilities are recognized for
          the future tax consequences attributable to differences
          between the financial statement carrying amounts of
          existing assets and liabilities and their respective tax
          bases and operating loss and tax credit carryforwards.
          Deferred tax assets and liabilities are measured using
          enacted tax rates expected to apply to taxable income in
          the years in which those temporary differences are
          expected to be recovered or settled. The effect on
          deferred tax assets and liabilities of a change in tax
          rates is recognized in income in the period that
          includes the enactment date.

    (h)   Net Income Per Share
          Net income per share computations are based on the
          weighted average number of shares outstanding during
          each year (3,982,147, 3,959,084, and 3,917,654 in 1999,
          1998 and 1997, respectively, as restated). The weighted
          average shares outstanding do not include average
          unearned shares held by the Employee Stock Ownership
          Plan (ESOP) totaling 112,433, 126,466 and 104,144 shares
          for 1999, 1998 and 1997, respectively.  The shares held
          by the ESOP are not considered outstanding for net
          income per share calculations until the shares are
          released.

          During the second quarter of 1997, the Corporation
          declared a two for one stock split effected in the form
          of a 100% stock dividend.  As a result, the total number
          of shares outstanding doubled.  Par value per share did
          not change. During the third quarter of 1998 and 1999,
          the Corporation declared a 10% stock dividend.  Earnings
          per share, dividends per share and weighted average
          shares for periods prior to the split and the stock
          dividends have been restated to reflect the change in
          shares outstanding as though the split and the stock
          dividends had occurred at the beginning of the earliest
          period presented.

    (i)   Trust Assets
          Assets held by the Bank's trust department in a
          fiduciary or agency capacity are not included in the
          consolidated financial statements as they are not assets
          of the Corporation.

    (j)   Reclassifications
          Certain reclassifications have been made to prior year
          amounts to conform to the 1999 presentation.

(2)  RESTRICTIONS ON CASH
     Federal reserve regulations require the Bank to maintain
     certain average balances as cash reserves.  The reserve
     requirements approximated $2,121 and $1,113 at December 31,
     1999 and 1998, respectively.

(3)  SECURITIES AVAILABLE-FOR-SALE
     The following sets forth the composition of securities
     available-for-sale, which are reported at fair value, at
     December 31, 1999 and 1998:
<TABLE>
<CAPTION>

                                         Gross       Gross         Approximate
                              Amortized  Unrealized  Unrealized    Fair
December 31, 1999             Costs      Gains       Losses        Values
<S>                       <C>           <C>         <C>           <C>
U.S. Treasury              $  4,018           8           -          4,026
U.S. Government agencies
   and corporations          15,035          10        (221)        14,824
States and political
   subdivisions              15,173          40        (460)        14,753
Other securities             34,952           1        (402)        34,551

Totals                     $ 69,178          59      (1,083)        68,154

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                         Gross       Gross         Approximate
                             Amortized   Unrealized  Unrealized    Fair
December 31, 1998            Costs       Gains       Losses        Values
<S>                      <C>            <C>         <C>           <C>
U.S. Treasury             $  7,062          102           -         7,164
U.S. Government agencies
   and corporations         19,511          120          (7)       19,624
States and political
   subdivisions             11,436          231         (19)       11,648
Other securities            18,794           16         (14)       18,796

Totals                    $ 56,803          469         (40)       57,232
</TABLE>

      The amortized costs and approximate fair values of securities
      available-for-sale by contractual maturity are shown below.
      Expected maturities may differ from contractual maturities
      because borrowers may have the right to call or prepay
      obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
                                                            Approximate
                                          Amortized         Fair
December 31, 1999                         Costs             Values
<S>                                    <C>                 <C>
Due in one year or less                $  27,251            27,052
Due after one year through five years     34,041            33,285
Due after five years through ten years     4,500             4,434
Due after ten years                        3,386             3,383

Totals                                 $  69,178            68,154
</TABLE>

      Realized gains and losses on securities available-for-sale
      were not material in 1999 or 1997.  In 1998, realized gains
      and losses totaled $147 and $5, respectively.

      The carrying value of securities available-for-sale pledged to
      secure public and trust deposits and securities sold under
      agreements to repurchase, and for other purposes as required
      or permitted by law, was $49,033 at December 31, 1999 and
      $17,887 at December 31, 1998.

(4)   SECURITIES HELD-TO-MATURITY
      The amortized costs, gross unrealized gains and losses, and
      approximate fair values of securities held-to-maturity at
      December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>

                                         Gross       Gross       Approximate
                              Amortized  Unrealized  Unrealized  Fair
December 31, 1999             Costs      Gains       Losses      Values
<S>                          <C>         <C>        <C>         <C>
States and political
   subdivisions              $  33,221      367        (96)       33,492

Totals                       $  33,221      367        (96)       33,492
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                         Gross       Gross       Approximate
                              Amortized  Unrealized  Unrealized  Fair
December 31, 1998             Costs      Gains       Losses      Values
<S>                         <C>         <C>         <C>         <C>
States and political
   subdivisions              $  38,322    1,289           -       39,611
Other securities                    30        -           -           30

Totals                       $  38,352    1,289           -       39,641
</TABLE>

      The amortized costs and approximate fair values of securities
      held-to-maturity at December 31, 1999 by contractual maturity
      are shown below.  Expected maturities may differ from
      contractual maturities because borrowers may have the right to
      call or prepay obligations with or without call or prepayment
      penalties.
<TABLE>
<CAPTION>

                                                              Approximate
                                             Amortized        Fair
December 31, 1999                            Costs            Values
<S>                                        <C>               <C>
Due in one year or less                     $   4,432            4,460
Due after one year through five years          28,789            9,032
Due after five years through ten years              -                -
Due after ten years                                 -                -

Totals                                      $  33,221           33,492
</TABLE>

      Realized gains and losses on calls and maturities of
      securities held-to-maturity were not material in 1999, 1998 or
      1997. The carrying value of securities held-to-maturity
      pledged to secure public and trust deposits and securities
      sold under agreements to repurchase, and for other purposes as
      required or permitted by law, was $18,073 and $18,386 at
      December 31, 1999 and 1998, respectively.

(5)   LOANS
      At December 31, 1999 and 1998, there were direct loans to
      officers and directors of $3,672 and $6,167, respectively.
      During 1999, new direct loans to officers and directors
      amounted to $1,105 and repayments amounted to $3,600.  In
      addition, there were loans of $3,423 and $6,324 at December
      31, 1999 and 1998, respectively, which were endorsed by
      directors or had been made to companies in which directors had
      an equity interest.

      At December 31, 1999 and 1998, the Corporation had sold
      without recourse to financial institutions and other customers
      of the Corporation participations in various loans in the
      amount of $39,969 and $38,704 respectively.

(6)   ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS
      Impaired loans are measured based on the present value of
      expected future cash flows discounted at the loan's effective
      interest rate or, as a practical expedient, at the loan's
      observable market price or the fair value of the collateral if
      the loan is collateral dependent.  A loan is considered
      impaired when, based on management's judgment, it is probable
      that the Corporation will not be able to collect on all
      amounts due according to the contractual terms of the loan.
      In making such assessment, management considers the individual
      strength of borrowers, the strength of particular industries,
      the payment history of individual loans, the value and
      marketability of collateral and general economic conditions.
      Management's methodology for evaluating the collectibility of
      a loan after it is deemed to be impaired does not differ from
      the methodology used for nonimpaired loans.
<PAGE>

      As of December 31, 1999 and 1998, the investment in impaired
      loans approximated $4,575 and $2,252, respectively.  The
      December 31, 1999 and 1998 allowances for loan losses includes
      allowances of $539 and $338, respectively, for these loans.
      Impaired loans averaged $3,414, $1,754 and $1,694 during 1999,
      1998 and 1997, respectively.  Interest on impaired loans is
      recognized in the same manner as loans that are not considered
      impaired; that is, interest is generally recognized on the
      cash basis once the collection of principal or interest is 90
      days or more past due.

      A summary of the changes in the allowance for loan losses
      (including allowances for impaired loans) follows:
<TABLE>
<CAPTION>

Years Ended December 31,            1999        1998        1997
<S>                           <C>            <C>         <C>
Balance at beginning of year   $   4,640       4,291       4,179
Provisions for loan losses         1,445       1,135         550
Loan recoveries                      221         184         190
Loan charge-offs                  (1,133)       (970)       (628)

Balance at end of year         $   5,173       4,640       4,291
</TABLE>

Nonperforming assets consist of the following:
<TABLE>
<CAPTION>

December 31,                        1999        1998        1997
<S>                           <C>             <C>          <C>
Nonaccrual loans               $   4,517       1,109         893
Other real estate owned              129          30          98

Total nonperforming assets     $   4,646       1,139         991
</TABLE>

      There were no material commitments to lend additional funds to
      customers whose loans were classified as nonperforming at
      December 31, 1999.

      The following table shows the pro forma interest that would
      have been earned on impaired loans if interest had been
      recorded using the cash basis and the recorded interest that
      was included in income on these loans:
<TABLE>
<CAPTION>

Years Ended December 31,                    1999      1998      1997
<S>                                    <C>           <C>       <C>
Cash basis interest - impaired loans   $     134        50        64

Recorded interest - impaired loans     $     120        48         7
</TABLE>

(7)   BANK PREMISES AND EQUIPMENT, NET
      Bank premises and equipment are stated at cost less
      accumulated depreciation and amortization as follows:
<TABLE>
<CAPTION>

December 31,                                1999        1998
<S>                                    <C>           <C>
Land                                    $  1,515       1,515
Buildings                                 10,450       9,355
Furniture and equipment                    8,354       7,641
Leasehold improvements                       507         428
Construction in progress                       -         613
                                          20,826      19,552
Less accumulated depreciation and
   Amortization                           (7,346)     (6,575)

Totals                                  $ 13,480      12,977
</TABLE>
<PAGE>

(8)   DEPOSITS
      At December 31, 1999 and 1998, there were deposits from
      officers and directors of $1,872 and $2,338, respectively.
      Time deposits and certificates of deposit of $100,000 and over
      as of December 31, 1999 mature as follows:

         2000         $ 152,055
         2001            29,420
         2002             9,924
         2003            10,539
         2004            11,716
         Thereafter          21
                      $ 213,675

(9)   SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND
      OTHER BORROWED FUNDS
      Advances from the Federal Home Loan Bank of Atlanta were $46.3
      million and $21.3 million on December 31, 1999 and 1998,
      respectively.  The fixed interest rates on the advances as of
      December 31, 1999 range from 5.3 to 6.7 percent.  The advances
      are collateralized under a blanket floating lien agreement
      whereby the Corporation gives a blanket pledge of residential
      first mortgage loans for 1-4 units.  Of the total balance at
      December 31, 1999, $10 million  matures in 2000 and $10
      million matures in 2004. The remainder matures after 2004.

      Securities sold under agreements to repurchase (repurchase
      agreements) at December 31, 1999 were collateralized by
      investment securities controlled by the Corporation with a
      book value of approximately $11.5 million.  The maximum amount
      of repurchase agreements outstanding during 1999 was $7.9
      million, and the average amount outstanding during 1999 was
      $6.4 million.

(10)  EMPLOYEE BENEFIT PLAN
      The Corporation sponsors a leveraged Employee Stock Ownership
      Plan (ESOP), which covers all employees following the
      completion of one year of service and attainment of age 21.
      The ESOP invests substantially in stock of the Corporation.
      The purchase of some of the shares held by the ESOP has been
      financed  by borrowings by the ESOP.  In February 1998, the
      Corporation sold 60,215 shares to the ESOP for $23.25 per
      share.  The ESOP borrowed $1,400 from another financial
      institution to finance the purchase.  The ESOP's obligation to
      repay these and prior borrowings is guaranteed   by the
      Corporation and secured by the stock acquired.  During the
      third quarter of 1998, First National Bank purchased all ESOP
      loans from the outside financial institution, which had
      originally financed them.  Consequently, in the December 31,
      1999 and 1998 consolidated balance sheets, the loans and the
      related liability have been eliminated.

      The amounts representing unearned employee benefits have been
      recorded as reductions in stockholders' equity as unearned
      ESOP shares.  These amounts are reduced and compensation
      expense is recorded as the ESOP debt is curtailed and shares
      are released from collateral.  Shares released are allocated
      to plan participants as of the end of the Plan's year based on
      an allocation formula specified in the Plan.  The ESOP is
      repaying the loans (plus interest) using employer
      contributions and dividends received on the shares of common
      stock held by the ESOP.  Dividends on allocated ESOP shares
      are recorded as a reduction of retained earnings.  Dividends
      on unallocated shares are recorded as a reduction of ESOP debt
      to the extent used for debt service, and as compensation
      expense to the extent expected to be allocated to
      participants' accounts as additional compensation.  ESOP
      compensation expense of $373, $488 and $302 was recorded for
      1999, 1998 and 1997, respectively.
<PAGE>

      ESOP shares as of December 31, 1999 consisted of 722,787
      allocated shares and 106,013   unreleased and unearned shares.
      Based on quoted trading and bid prices, the fair value of the
      unreleased and unearned shares at December 31, 1999 was $20.50
      per share.

      In 1997, the Corporation instituted a 401(k) plan that covers
      substantially all employees who work at least 1,000 hours per
      year.  Participants have the option to have up to 12% of their
      salary withheld on a pre-tax basis to be contributed to the
      plan.  The Corporation matches 100% of the first 3% of the
      participants' contributions.  Participants may choose among
      several investment options comprised primarily of mutual
      funds, but there is no stock of the Corporation in the plan.
      Matching contributions totaled $147, $121 and $26 for 1999,
      1998 and 1997, respectively.

(11)  INCOME TAXES
      Total income taxes are allocated as follows:
<TABLE>
<CAPTION>

Years Ended December 31,                            1999     1998     1997
<S>                                            <C>         <C>      <C>
Income                                          $  1,946    1,657    1,324
Stockholders' equity, for net unrealized gains
  and losses on securities available-for-sale
  recognized for financial reporting purposes       (463)      30      136

Totals                                           $  1,483   1,687    1,460
</TABLE>

      The components of federal income tax expense (benefit) are as
      follows:
<TABLE>
<CAPTION>

Years Ended December 31,                        1999    1998    1997
<S>                                        <C>        <C>     <C>
Current                                     $  2,324   1,525   1,194
Deferred                                        (378)    132     130

Total                                       $  1,946   1,657   1,324
</TABLE>

      The reconciliation of expected income tax expense at the
      statutory federal rate with the reported tax expense at the
      effective rate is as follows:
<TABLE>
<CAPTION>

Years Ended December 31,           1999            1998            1997

                                   Percent         Percent         Percent
                                   of              of              of
                                   Pretax          Pretax          Pretax
                           Amount  Income  Amount  Income  Amount  Income
<S>                      <C>      <C>     <C>     <C>     <C>     <C>
Expected tax expense at
   statutory rate         $ 2,813   34.0%   2,580   34.0%   2,206   34.0%
Increase (decrease) in
  taxes resulting from:
    Tax-exempt interest    (1,007) (12.2)    (979) (12.9)    (970)  (15.0)
    Nondeductible interest
      expense                 124    1.5      135    1.8      142     2.2
    Other, net                 16    0.2      (79)  (1.1)     (54)   (0.8)
Reported tax expense at
  effective rate          $ 1,946   23.5%   1,657   21.8%   1,324    20.4%
</TABLE>
<PAGE>

      The tax effects of temporary differences that give rise to
      significant portions of deferred tax assets and deferred tax
      liabilities are as follows:
<TABLE>
<CAPTION>

December  31,                                                1999       1998
<S>                                                     <C>          <C>
Deferred tax assets:
   Loans, principally due to allowance for loan losses
     and unearned fees                                   $  1,535      1,232
  Securities, due principally to valuation allowance          316          -
  Accrued employee benefits due to accrual for financial
     reporting purposes in excess of actual contributions     237        160
  Other                                                        16         17

         Total gross deferred tax assets                    2,104      1,409

Less valuation allowance                                        -          -

         Net deferred tax assets                            2,104      1,409

Deferred tax liabilities:
  Bank premises and equipment, due to differences in
    depreciation                                              359        251
  Securities, due principally to valuation allowance            -        146
  Investment securities, due to differences in discount
    accretion                                                  85        107
  Prepaids, due to advance payments                            27        113

         Total gross deferred tax liabilities                 471        617

         Net deferred tax asset, included in other
           assets                                        $  1,633        792
</TABLE>

      The Corporation has determined that a valuation allowance for
      gross deferred tax assets is not necessary at December 31,
      1999 or 1998 since deferred tax assets can be recognized
      during the carryback period available under current tax laws.

(12)  DIVIDEND RESTRICTIONS AND CAPITAL REQUIREMENTS
      The holding company's principal asset is its investment in the
      Bank, a wholly owned consolidated subsidiary.  The primary
      source to date of income for the holding company has been
      dividends from the Bank.  Regulatory agencies limit the amount
      of funds that may be transferred from the Bank to the holding
      company in the form of dividends, loans, or advances.

      Under applicable federal laws, the Comptroller of the Currency
      restricts, without prior approval, the total dividend payments
      of the Bank in any calendar year to the net profits of that
      year, as defined, combined with the retained net profits for
      the two preceding years.  The total dividends that may be
      declared in 2000 without the approval of the Comptroller
      totals $2,100 plus year-to-date 2000 net profits as of the
      declaration date.

      The Corporation is subject to various regulatory capital
      requirements administered by the federal banking agencies.
      Failure to meet minimum capital requirements can initiate
      certain mandatory--and possibly additional discretionary--
      actions by regulators that, if undertaken, could have a direct
      material effect on the Corporation's financial statements.
      Under capital adequacy guidelines and the regulatory framework
      for prompt corrective action, established by Section 38 of the
      Federal Deposit Insurance Act (FDI Act), the Corporation must
      meet specific capital guidelines that involve quantitative
      measures of assets, liabilities, and certain off-balance-sheet
      items as calculated under regulatory accounting practices.
      The Corporation's capital amounts and classification are also
      subject to qualitative judgments by the regulators about
      components, risk weightings, and other factors.
<PAGE>
      Quantitative measures established by regulation to ensure
      capital adequacy require the Corporation to maintain minimum
      amounts and ratios of total and Tier 1 capital (as defined in
      the regulations) to risk-weighted assets (as defined), and of
      Tier 1 capital to average assets (as defined).  Management
      believes, as of December 31, 1999, that the Corporation meets
      all capital adequacy requirements to which it is subject.  The
      table below sets forth the ratios for the Bank and on a
      consolidated basis for December 31, 1999 and 1998.

      As of December 31, 1999, the most recent notification from the
      Office of the Comptroller of the Currency categorized the Bank
      as well capitalized under the regulatory framework for prompt
      corrective action (Section 38 of the FDI Act).  To be
      categorized as well capitalized, minimum total risk-based
      capital, Tier 1 risk-based capital, and Tier 1 leverage ratios
      as set forth in the table below must be maintained.  There are
      no conditions or events since that notification that
      management believes have changed the institution's category.
<TABLE>
<CAPTION>

As of December 31, 1999:
                                          Minimum Requirements
                                                     Section 38 of
                                      For Capital   Federal Deposit
                          Actual       Adequacy       Insurance Act

                       Amount  Ratio  Amount  Ratio  Amount  Ratio
<S>                <C>        <C>    <C>     <C>    <C>     <C>
Total Capital
  (to Risk Weighted
   Assets)
  Consolidated      $  53,459  12.9%  33,192   8.0%      N/A
  Bank                 47,646  11.5%  33,160   8.0%   41,450  10.0%
Tier 1 Capital
  (to Risk Weighted
   Assets)
  Consolidated         48,286  11.6%  16,596   4.0%       N/A
  Bank                 42,473  10.3%  16,580   4.0%   24,870   6.0%
Tier 1 Capital
  (to Average
   Assets)
  Consolidated         48,286   9.5%  20,270   4.0%       N/A
  Bank                 42,473   8.5%  20,107   4.0%    25,134  5.0%
</TABLE>
<TABLE>
<CAPTION>

As of December 31, 1998:
                                          Minimum Requirements
                                                     Section 38 of
                                      For Capital   Federal Deposit
                          Actual      Adequacy       Insurance Act

                      Amount  Ratio  Amount  Ratio  Amount Ratio
<S>                  <C>     <C>    <C>     <C>    <C>    <C>
Total Capital
  (to Risk Weighted
   Assets)
  Consolidated      $ 48,620  13.5%  28,801  8.0%      N/A
  Bank                43,236  12.0%  28,856  8.0%   36,070  10.0%
Tier 1 Capital
  (to Risk Weighted
   Assets)
  Consolidated        44,118  12.3%  14,400  4.0%      N/A
  Bank                38,726  10.7%  14,428  4.0%   21,642   6.0%
Tier 1 Capital
  (to Average
   Assets)
  Consolidated        44,118   9.7%  18,214  4.0%      N/A
  Bank                38,726   8.5%  18,138  4.0%   22,673   5.0%
</TABLE>
<PAGE>

(13)  SUPPLEMENTAL CASH FLOW INFORMATION
      The Corporation paid $17,652, $17,090 and $16,325 for interest
      and $1,999, $1,604, and $1,057 for income taxes in 1999, 1998
      and 1997, respectively.  Noncash investing activities included
      $190, $30, and $98 of loans transferred to other real estate
      owned in 1999, 1998 and 1997, respectively, and $599 of non-
      operating real estate transferred from bank premises and
      equipment to other assets in 1998.

(14)  COMMITMENTS AND CONTINGENCIES
      The Corporation is involved from time to time in litigation
      arising in the normal course of business.  Management believes
      that any resulting settlements and disposition of these
      matters will not have a material effect on the Corporation's
      consolidated results of operations or financial position.

(15)  FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
      The Corporation is a party to financial instruments with  off-
      balance-sheet risk in the normal course of business to meet
      the financing needs of its customers.  The financial
      instruments include commitments to extend credit and standby
      letters of credit.  Those instruments involve, to varying
      degrees, elements of credit risk in excess of the amount
      recognized in the balance sheets.  The contract amounts of
      those instruments reflect the extent of involvement the
      Corporation has in particular classes of financial
      instruments.  Exposure to credit loss in the event of
      nonperformance by the other party to the financial instrument
      for commitments to extend credit and standby letters of credit
      is represented by the contractual amount of these instruments.
      The Corporation uses the same credit policies in making
      commitments and conditional obligations as it does for on-
      balance-sheet instruments.

      Except for unused home equity lines totaling $26,872 at
      December 31, 1999, and $27,008 at December 31, 1998 (included
      in the amounts below), the Corporation may not require
      collateral or other security to support the following
      financial instruments with credit risk:
<TABLE>
<CAPTION>

                                                      Contract Amounts

December 31,                                           1999      1998
<S>                                              <C>           <C>
Financial instruments whose contract amounts
  represent credit risk:
   Commitments to extend credit                   $   88,046     86,583
   Standby letters of credit                           5,905      6,252
</TABLE>

      Commitments to extend credit are agreements to lend to a
      customer as long as there is no violation of any condition
      established in the contract.  Commitments generally have fixed
      expiration dates or other termination clauses and may require
      payment of a fee.  Since many of the commitments are expected
      to expire without being drawn upon, the total commitment
      amounts do not necessarily represent future cash requirements.
      The Corporation evaluates each customer's creditworthiness on
      a case-by-case basis.  The amount of collateral obtained, if
      deemed necessary by the Corporation upon extension of credit,
      is based on management's credit evaluation of the customer.
      Collateral held varies but may include securities, accounts
      receivable, inventory, property, plant and equipment, and
      income-producing commercial properties.

      Standby letters of credit are conditional commitments issued
      by the Corporation to guarantee the performance of a customer
      to a third party.  Those guarantees are primarily issued to
      support public and private borrowing arrangements, including
      commercial paper, bond financing and similar transactions.
      The credit risk involved in issuing letters of credit is
      essentially the same as that involved in extending loans to
      customers.  Collateral held varies but may include securities,
      accounts receivable, inventory, property, plant and equipment,
      and income-producing properties.
<PAGE>

      Commitments to extend credit, standby letters of credit and
      financial guarantees written are not reflected in the
      financial statements except to the extent of fees collected,
      which are generally reflected in income.  The fulfillment of
      these commitments would normally result in the recording of a
      loan at the time the funds are disbursed.

      The Corporation originates mortgage loans for sale to
      secondary market investors subject to contractually specified
      and limited recourse provisions.  In 1999, the Corporation
      originated $20,462 and sold $22,035 to investors, compared to
      $33,785 originated and $33,298 sold in 1998. Every contract
      with each investor contains certain recourse language.  In
      general, the Corporation may be required to repurchase a
      previously sold mortgage loan if there is major noncompliance
      with defined loan origination or documentation standards,
      including fraud, negligence or material misstatement in the
      loan documents.  Repurchase may also be required if necessary
      governmental loan guarantees are canceled or never issued, or
      if an investor is forced to buy back a loan after it has been
      resold as a part of a loan pool.  In addition, the Corporation
      may have an obligation to repurchase a loan if the mortgagor
      has defaulted early in the loan term.  This potential default
      period ranges from six to twelve months after sale of a loan
      to the investor.  Historically, repurchases under these
      recourse provisions have been minimal.

(16)  CONCENTRATIONS OF CREDIT RISK
      The Corporation does a general banking business, serving the
      commercial, agricultural and personal banking needs of its
      customers in its trade territory, commonly referred to as the
      New River Valley, which consists of Montgomery County,
      Virginia and portions of adjacent counties.   Operating
      results are closely correlated with the economic trends within
      this area, which are, in turn, influenced by the area's three
      largest employers - Virginia Polytechnic Institute and State
      University, Radford University and the Radford Arsenal.  Other
      industries include a wide variety of manufacturing concerns
      and agriculture-related enterprises.  The ultimate
      collectibility of the loan portfolios and the recovery of the
      carrying amounts of repossessed property are susceptible to
      changes in the market conditions of this area.  The commercial
      portfolio is diversified with no significant concentrations of
      credit within a single industry.  The consumer loan portfolio
      included approximately $50 million of loans to individuals for
      household, family and other personal expenditures at December
      31, 1999 and 1998.  The real estate mortgage portfolio
      consists primarily of loans secured by 1-4 family residential
      properties.

(17)  DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL
      INSTRUMENTS
      Statement of Financial Accounting Standards No. 107,
      "Disclosures about Fair Value of Financial Instruments,"
      requires the Corporation to disclose estimated fair values of
      its financial instruments.  The following methods and
      assumptions were used to estimate the approximate fair value
      of each class of financial instrument for which it is
      practicable to estimate that value:

      (a)  Cash and Due from Banks and Federal Funds Sold
           The carrying amounts in the consolidated balance sheets
           are reasonable estimates of fair values.

      (b)  Securities
           The fair value of securities, except certain state and
           municipal securities, is estimated based on bid prices
           published in financial newspapers or bid quotations
           received from securities dealers.  The fair value of
           certain state and municipal securities is not readily
           available through market sources other than dealer
           quotations, so fair value estimates are based on quoted
           market prices of similar instruments, adjusted for
           differences between the quoted instruments and the
           instruments being valued.
<PAGE>
      (c)  Loans
           Fair values are estimated for portfolios of loans with
           similar financial characteristics.  Loans are segregated
           by type (commercial, mortgage, consumer, etc.), by
           interest rate terms (fixed and adjustable rate) and by
           performing and nonperforming categories.  The fair value
           of performing loans is calculated by discounting
           scheduled cash flows through the estimated maturity
           using estimated market discount rates that reflect the
           credit and interest rate risk inherent in the loan as
           well as estimates for operating expenses and
           prepayments.  The estimate of maturity is based on the
           Corporation's historical experience with repayments for
           each loan classification modified, as required, by an
           estimate of the effect of current economic and lending
           conditions.

           Fair value for significant nonperforming loans is based
           on estimated cash flows that are discounted using a rate
           commensurate with the risk associated with the estimated
           cash flows.  Assumptions regarding credit risk, cash
           flows and discount rates are judgmentally determined
           using available market information and specific borrower
           information.

      (d)  Deposits
           The fair value of fixed maturity time deposits and
           certificates of deposit is estimated using the rates
           currently offered for deposits of similar remaining
           maturities. For 1998, the fair value of demand and
           savings deposits is the amount payable on demand.
           However, for 1999, a five-year maturity was assumed for
           demand and savings deposits and the fair values were
           estimated in a manner similar to deposits with fixed
           contractual maturities.

      (e)  Federal Funds Purchased, Securities Sold Under Agreements
           to Repurchase and Other Borrowed Funds
           Rates currently available  for debt with similar terms
           and remaining maturities are used to estimate fair value
           of existing debt.

      (f)  Commitments to Extend Credit and Standby Letters of
           Credit
           The only amounts recorded for commitments to extend
           credit and standby letters of credit are the deferred
           fees arising from these unrecognized financial
           instruments.  These deferred fees are not deemed
           significant at December 31, 1999 and 1998, and as such,
           the related fair values have not been estimated.

      The carrying amounts and approximate fair values of the
      Corporation's financial instruments are as follows:
<TABLE>
<CAPTION>

December 31,                               1999                  1998

                                               Approximate           Approximate
                                    Carrying   Fair        Carrying  Fair
                                    Amounts    Values      Amounts   Values
<S>                               <C>        <C>          <C>       <C>
Financial assets:
    Cash and due from banks       $  18,363    18,363       11,875    11,875
    Federal funds sold                    -         -       10,600    10,600
    Securities available-for-sale    68,154    68,154       57,232    57,232
    Securities held-to-maturity      33,221    33,492       38,352    39,641
    Loans, net of unearned income   382,272   378,825      328,599   332,239

          Total financial assets  $ 502,010   498,834      446,658   451,587
Financial liabilities:
    Deposits                      $ 398,871   381,072      386,257   387,931
    Federal funds purchased,
      securities sold under
      agreements to repurchase
      and other borrowed funds       66,928    66,507       28,262    28,498

          Total financial
             liabilities          $ 465,799   447,579      414,519   416,429
</TABLE>
<PAGE>

      Fair value estimates are made at a specific point in
      time, based on relevant market information and
      information about the financial instrument.  These
      estimates do not reflect any premium or discount that
      could result from offering for sale at one time the
      Corporation's entire holdings of a particular financial
      instrument.  Because no market exists for a significant
      portion of the Corporation's financial instruments, fair
      value estimates are based on judgments regarding future
      expected loss experience, current economic conditions,
      risk characteristics of various financial instruments
      and other factors.  These estimates are subjective in
      nature and involve uncertainties and matters of
      significant judgment and therefore cannot be determined
      with precision.  Changes in assumptions could
      significantly affect the estimates.

      Fair value estimates are based on existing on and off-
      balance sheet financial instruments without attempting
      to estimate the value of anticipated future business and
      the value of assets and liabilities that are not
      considered financial instruments.  In addition, the tax
      ramifications related to the realization of the
      unrealized gains and losses can have a significant
      effect on fair value estimates and have not been
      considered in the estimates.

(18)  PARENT COMPANY FINANCIAL INFORMATION

      Condensed financial information of FNB Corporation (the parent
      or holding company) is presented below:
<TABLE>
<CAPTION>

                             Condensed Balance Sheets

Assets                            December 31, 1999    December 31, 1998
<S>                               <C>                  <C>
Securities available for sale,
    at fair value                     $   5,279               5,369
Investment in bank subsidiary            41,921              39,016
Receivable from bank subsidiary           1,703               1,682
Other assets                                114                  88

     Total  Assets                    $  49,017              46,155

Liabilities

ESOP debt                             $   1,438               1,754

     Total Liabilities                    1,438               1,754
Stockholders' Equity
Common stock and surplus                 46,065              37,931
Retained earnings                         3,968               8,307
Other                                    (2,454)             (1,837)
     Total Stockholders' Equity          47,579              44,401

     Total Liabilities &
         Stockholders' Equity         $  49,017              46,155
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                        Condensed Statements of Income

                                       1999          1998          1997
<S>                               <C>             <C>            <C>
Net interest income                $    228            24             -
Non interest income                      92           465             -
Non interest expense                   (432)         (489)            -
Equity in earnings of bank
    subsidiary                        6,439          5,931        5,165
Income before income taxes            6,327          5,931        5,165
Income tax expense                        -              -            -
Net income                         $  6,327          5,931        5,165
</TABLE>
<TABLE>
<CAPTION>

                        Condensed Statements of Cash Flows

                                       1999          1998          1997
<S>                              <C>              <C>           <C>
Dividends paid                    $  (2,524)       (2,280)       (1,348)
Dividends received from
    subsidiary bank                   2,692         7,578         1,911
Issuance of new ESOP debt                 -         1,400             -
Principal repayments on ESOP debt      (316)         (488)            -
Purchase of securities
    available for sale                 (233)       (5,380)            -
Proceeds from sales &
    maturities of securities            100             -             -
Net change in receivable from
    subsidiary bank                     (21)       (1,168)         (514)
Other,  net                             302           338           (49)
                                          -             -             -
Cash at beginning of year                 -             -             -
Cash at end of year               $       -             -             -
</TABLE>

NOTES:  (1) The ESOP loan is held by the Bank and as such is eliminated
            in consolidation.

(19)  INTERIM FINANCIAL INFORMATION (Unaudited)

      Consolidated quarterly results of operations were as follows:
<TABLE>
<CAPTION>
                                                  1999
                                          Three Months Ended
                              March 31  June 30  September 30  December 31
<S>                         <C>        <C>       <C>           <C>
Interest income              $  9,025    9,401       9,852        10,292
Interest expense                4,199    4,283       4,529         4,599
Provision for loan losses         289      300         300           556
Noninterest income                913      758         724           779
Noninterest expense             3,375    3,577       3,637         3,827
Income before income
    tax expense                 2,075    1,999       2,110         2,089
Income tax expense                484      465         503           494
Net income                   $  1,591    1,534       1,607         1,595

Net income per share         $   0.40     0.39        0.40          0.40
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                  1998
                                          Three Months Ended
                              March 31  June 30  September 30  December 31
<S>                          <C>       <C>      <C>           <C>
Interest income              $  8,583    8,777       9,230        9,063
Interest expense                4,358    4,270       4,391        4,230
Provision for loan losses         110      210         390          425
Noninterest income                669      689         735          908
Noninterest expense             2,971    3,038       3,157        3,516
Income before income
   tax expense                  1,813    1,948       2,027        1,800
Income tax expense                404      445         456          352
Net income                   $  1,409    1,503       1,571        1,448

Net income per share         $   0.36     0.38        0.39         0.37
</TABLE>

     Net income per share in the above tables has been restated to
     reflect retroactively 10% stock dividends declared in the
     third quarter of 1998 and 1999.