FNB Corp. is returning to Hermitage.

The Naples, Fla.,-based holding company announced a restructuring plan Thursday under which its headquarters would be relocated to the same six-story building that had served as its base of operations until it was moved to Florida in 2001.

Under the plan targeted for completion in January, the company would be divided into two separate bank holding companies serving separate markets, mainly in Pennsylvania and Florida.

A Civil War-era company, FNB was founded in Greenville and had kept its headquarters in the local area until its Florida banking operations emerged as a growth market.

FNB said the restructuring will bring executive jobs back to the area, driving up the total local payroll. The move will also reduce the company's workforce in the Pennsylvania/Ohio market by 5 to 7 percent, though most of the job loss will be through natural attrition, the company said.

Moving the headquarters back to Hermitage also would bring back corporate auditing, finance and legal department jobs.

Currently, FNB's assets total $8.1 billion and it has 3,100 employees with about 1,800 located in Pennsylvania and Ohio and 1,300 in Florida.

The restructuring calls for a spinoff of the Florida operation. Afterward, FNB's lead affiliate, First National Bank of Pennsylvania, based in Hermitage, would have assets of about $4.5 billion and deposits of $3.4 billion with 130 offices in western Pennsylvania and northeastern Ohio. Regency Finance Co., Gelvin, Jackson & Starr Inc. insurance agency and the Pennsylvania operations of First National Trust Co. would be retained under FNB.

Florida operations would be owned by a newly created, yet-to-be-named, publicly-traded company with assets of about $3.6 billion, deposits of $2.7 billion and 61 offices in southwest and central Florida.

FNB shareholders would retain their stock in the company and get one share of the newly formed Florida holding company for each share of FNB stock they owned.

The Florida holding company would operate First National Bank of Florida and the Florida operations of First National Trust Co. and Roger Bouchard Insurance Inc. It's expected the spin-off company would be a tax-free dividend to existing FNB shareholders and the Florida company will seek to be traded on Nasdaq or the New York Stock Exchange. FNB would continue to be listed on Nasdaq under the trading symbol: FBAN. Currently, FNB has about 44 million outstanding shares.

On Thursday FNB's stock closed at $29.48, down $1.56, or 5.03 percent, from Wednesday's closing price.

Each company will have its own separate board and senior managers.

Once FNB has been relocated to Hermitage, Peter Mortensen will continue to serve as chairman of the board and Stephen Gurgovits will be its president and chief executive officer. A Sharpsville native, Gurgovits currently serves as president and chief executive officer of First National Bank. John Rose is expected to join a transition team as a financial and investment adviser and as a member of FNB's board.

The new Florida company will be led by Gary Tice who will serve as its chief executive officer and Kevin Hale as chief operating officer. Tice currently serves as FNB's president and CEO while Hale is the company's chief operating officer.

"I think it's wonderful news, we get to bring a publicly held company back to Hermitage,'' Gurgovits said.

An internal study of the plan projected that greater earnings will result by separating the organization, Gurgovits said. It's anticipated the combined cash dividend would rise by about 25 percent in 2004.

While the restructuring has to undergo regulatory approval, shareholder approval isn't required since stock values will not be diminished, Gurgovits said.

In a conference call with analysts Thursday afternoon, Tice said the restructuring has been contemplated for more than six months and has been worked on intensely for the past 2 è months.

Responding to a question, Tice also said neither FNB nor the newly spun-off company would be precluded from selling off divisions or the entire corporation after the restructuring is completed. However, tax consequences that would come into play for the first two years would make such a move "highly unlikely,'' he said.

Another nuance of the restructuring calls for FNB to maintain the two seats it currently holds on Sun Bancorp Inc., a bank holding company headquartered in Selinsgrove, Pa. However, Tice said he would resign from that board. FNB owns 15 percent of Sun Bancorp.

Along with unlocking shareholder value, Gurgovits said, a driving force behind the restructuring was that the company has two distinct markets which often caused confusion within the investment community. Florida was looked at as a growth market while Pennsylvania was viewed as an area with little growth but having valuable assets.

"The purpose of this is to let Florida be a growth company and Pennsylvania be the value play,'' Gurgovits said.

He promised a "lean'' organization which would be customer-driven.

Due to the reorganization the company will take an after-tax charge of about $20 million, mostly to cover employee severance costs. Also, the company will refinance its Federal Home Loan Bank Debt, resulting in an after-tax prepayment penalty of about $14 million. The company said it expects $12 million in after-tax savings in 2004 from the move, mostly from lower staffing and administrative expenses.

After the spin-off of the Florida operation the boards of each company will be comprised of current members with their affiliations based on their geographic origin.

No member or manager of either company will serve on the other's board of directors.

In Pennsylvania, FNB's board will include Mortensen, Gurgovits, G. Scott Baton and William Campbell, both retired executives; Henry Ekker, a local attorney; Harry Radcliffe, an investment manager, William Strimbu, president of Nick Strimbu Inc., Brookfield; Earl Wahl, principal owner of JED Corp., Johnstown, Pa.; Archie Wallace, local attorney; and R. Benjamin Wiley, chief executive officer of the Greater Erie Community Action Committee.

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