-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZVEwx2tgJRGwekjk8n1Mz4r074B7zCONXdHFissvfvWtU6h0m1LDLXEXOWqBXnyO QXgUZK3FDcJuR20Wh39Scg== 0000950109-95-001706.txt : 19950511 0000950109-95-001706.hdr.sgml : 19950511 ACCESSION NUMBER: 0000950109-95-001706 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950509 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACNB CORP CENTRAL INDEX KEY: 0000715579 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 232233457 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11783 FILM NUMBER: 95535565 BUSINESS ADDRESS: STREET 1: 675 OLD HARRISBURG RD CITY: GETTYSBURG STATE: PA ZIP: 17325 BUSINESS PHONE: 7173343161 MAIL ADDRESS: STREET 1: P O BOX 3129 STREET 2: 675 OLD HARRISBURG RD CITY: GETTYSBURG STATE: PA ZIP: 17325 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For quarter ended March 31, 1995 Commission file no. 0-11783 __________________ ACNB CORPORATION (Exact name of registrant as specified in its charter) PENNSYLVANIA 23-2233457 (state or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 675 OLD HARRISBURG ROAD, GETTYSBURG, PA 17325 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: 717-334-3161 Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes--X No--. Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the latest practicable date. CLASS OUTSTANDING AT MARCH 31, 1995 Common Stock ($2.50 par value) 5,316,122 Page 1 of 11 ACNB CORPORATION INDEX
Page No. Part I. Financial Information Consolidated Condensed Balance Sheets March 31, 1995 and December 31, 1994 and March 31, 1994 3 Consolidated Condensed Statements of Income Three Months Ended March 31, 1995 and 1994 4 Consolidated Statements of Cash Flows Three Months Ended March 31, 1995 and 1994 5 Notes to Consolidated Condensed Financial Statements 6-7 Management's Discussion and Analysis of the Financial Condition and Results of Operations 8-10 Part II.Other Information 11
Page 2 PART I FINANCIAL INFORMATION ACNB CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CONDITION
March 31 December 31 March 31 1995 1994 1994 ASSETS (000 omitted) Cash and Due from Banks 12,271 12,919 12,738 Investment Securities U.S. Treasury 77,922 96,140 109,463 U.S. Government Agencies and Corporations 43,000 45,000 37,725 State and Municipal 1,720 1,509 2,889 Other Investments 2,420 2,256 2,733 ------ ------ ------ Total Investment Securities 125,062 144,905 152,810 Federal Funds Sold 100 100 17,675 Loans 314,021 305,922 282,358 Less: Reserve for Loan Losses (3,349) (3,370) (3,415) ------- ------- ------- Net Loans 310,672 302,552 278,943 Premises and Equipment 5,943 5,874 5,526 Other Real Estate 999 1,037 663 Other Assets 5,323 4,645 5,563 -------- -------- -------- TOTAL ASSETS $460,370 $472,032 $473,918 ======== ======== ======== LIABILITIES Deposits Noninterest Bearing 38,718 38,639 35,318 Interest Bearing 346,182 350,159 379,211 ------- ------- ------- Total Deposits 384,900 388,798 414,529 Securities Sold Under Agreement To Repurchase 14,010 14,613 8,969 Borrowing Federal Home Loan Bank 8,400 16,800 - Demand Notes U.S. Treasury 272 450 450 Other Liabilities 3,446 2,724 3,189 ------- ------- ------- TOTAL LIABILITIES 411,028 423,385 427,137 SHAREHOLDERS EQUITY Common Stock ($2.50 par value) 20,000,000 shares authorized: 5,316,122 shares issued and outstanding at 3/31/95 13,290 13,290 13,370 Surplus 4,511 4,511 5,002 Retained Earnings 31,541 30,846 28,409 ------ ------ ------ TOTAL SHAREHOLDERS EQUITY 49,342 48,647 46,781 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $460,370 $472,032 $473,918 ======== ======== =======
See accompanying notes to financial statements. Page 3 ACNB CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31 1995 1994 (000 omitted) INTEREST INCOME Loan Interest and Fees 6,147 5,669 Interest and Dividends on Investment Securities 1,650 1,755 Interest on Federal Funds Sold 1 146 Interest on Balances with Depository Institutions 1 38 ----- ----- TOTAL INTEREST INCOME 7,799 7,608 INTEREST EXPENSE Deposits 3,047 3,070 Other Borrowed Funds 311 77 ----- ----- TOTAL INTEREST EXPENSE 3,358 3,147 NET INTEREST INCOME 4,441 4,461 Provision for Loan Losses 0 0 NET INTEREST INCOME AFTER PROVISION ----- ----- FOR LOAN LOSSES 4,441 4,461 OTHER INCOME Trust Department 67 65 Service Charges on Deposit Accounts 146 120 Other Operating Income 219 240 Securities Gains 0 0 ----- ----- TOTAL OTHER INCOME 432 425 OTHER EXPENSES Salaries and Employee Benefits 1,405 1,291 Premises and Fixed Assets 364 369 Other Expenses 812 749 ----- ----- TOTAL OTHER EXPENSE 2,581 2,409 INCOME BEFORE INCOME TAX 2,292 2,477 Applicable Income Tax 747 782 ----- ----- NET INCOME $1,545 $1,695 ===== ===== EARNINGS PER SHARE* $0.29 $0.32 DIVIDENDS PER SHARE* 0.16 0.15
*Based on 5,316,122 shares outstanding in 1995 and 5,347,836 in 1994. See accompanying notes to financial statements. Page 4 ACNB CORPORATION AND SUBSIDIARY STATEMENT OF CASH FLOWS
Three months ended March 31 1995 1994 (000 omitted) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Cash Flows from Operating Activities: Interest and Dividends Received 7,751 7,461 Fees and Commissions Received 521 524 Interest Paid (2,511) (2,421) Cash Paid to Suppliers and Employees (3,048) (2,575) Income Taxes Paid (764) 0 Net Cash Provided by Operating Activities 1,949 2,989 Cash Flows from Investing Activities: Proceeds from Maturities of Investment Securities and Interest Bearing Balances with other Banks 20,035 20,061 Purchase of Investment Securities and Interest Bearing Balances with Other Banks (414) (25,610) Principal Collected on Loans 16,156 20,756 Loans Made to Customers (24,239) (19,798) Capital Expenditures (205) (250) Net Cash Used in Investing Activities 11,333 (4,841) Cash Flow from Financing Activities: Net Increase in Demand Deposits, NOW Accounts, and Savings Accounts (8,727) 3,041 Proceeds from Sale of Certificates of Deposit 9,237 3,421 Payments for Maturing Certificates of Deposit (5,011) (6,452) Dividends Paid (851) (775) Increase (Decrease) in Borrowings (8,578) 0 Net Cash Provided by Financing Activities (13,930) (765) Net Increase in Cash and Cash Equivalents (648) (2,617) Cash and Cash Equivalents: Beginning of Period 13,019 33,030 End of Period 12,371 30,413 RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net Income 1,545 1,695 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 137 111 Provision for Possible Credit Losses 0 0 Provision for Deferred Taxes 88 (67) Amortization of Investment Securities Premiums 223 507 Increase (Decrease) in Taxes Payable (105) 849 (Increase) Decrease in Interest Receivable (182) (555) Increase (Decrease) in Interest Payable 847 726 Increase (Decrease) in Accrued Expenses (6) 233 (Increase) Decrease in Other Assets (597) (507) Increase (Decrease) in Deferred Loan Production Costs (1) (3) Net Cash Provided by Operating Activities 1,949 2,989
DISCLOSURE OF ACCOUNTING POLICY For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, and federal funds sold. Generally, federal funds are purchased and sold for one-day periods. Page 5 ACNB CORPORATION AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly ACNB Corporation's financial position as of March 31, 1995 and 1994 and December 31, 1994 and the results of its operations for the three months ended March 31, 1995 and 1994 and changes in financial position for the three months then ended. All such adjust-ments are of a normal recurring nature. The accounting policies followed by the company are set forth in Note A to the company's financial statements in the 1994 ACNB Corporation Annual Report and Form 10-K filed with the Securities and Exchange Commission under file no. 0-11783. 2. The book and approximate market values of securities owned at March 31, 1995 and December 31, 1994 were as follows:
3/31/95 12/31/94 Amortized Fair Amortized Fair Cost Value Cost Value (000 omitted) U.S. Treasury 77,922 76,806 96,140 93,762 U.S. Government Agencies and Corporations 43,000 41,857 45,000 43,080 State and Municipal 1,720 1,719 1,509 1,506 Other Investments 2,420 2,420 2,256 2,256 ------- ------- ------- ------- TOTAL $125,062 $122,802 $144,905 $140,604 ======= ======= ======= =======
Income earned on investment securities was as follows:
Three Months Ended March 31 1995 1994 (000 omitted) U.S. Treasury 1,040 1,321 U.S. Government Agencies and Corporations 553 373 State and Municipal 21 34 Other Investments 36 27 ------ ------ $1,650 $1,755 ====== ======
Page 6 3. Gross loans are summarized as follows:
March 31 December 31 1995 1994 (000 omitted) Real Estate 273,804 268,944 Real Estate Construction 13,091 12,632 Commercial and Industrial 10,409 10,785 Consumer 16,717 17,444 ------- ------- Gross Loans 314,021 309,805 Less: Unearned Discount --- 3,883 -------- -------- Total Loans $314,021 $305,922 ======== ========
4. Earnings per share are based on the weighted average number of shares of stock outstanding during each period. Weighted average shares out-standing for the three month periods ended March 31, 1995 and 1994 were 5,347,836 and 5,316,122 respectively. 5. Dividends per share were $0.16 and $0.15 for the three month periods ended March 31, 1995 and 1994 respectively. This represented a 55.2% payout of net income in 1995 and a 46.0% payout in 1994. 6. The results of operations for the three month periods ended March 31, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. Page 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Corporation's net income for the first three months of 1995 was $1,545,000, a decrease of 8.8% from $1,695,000 in 1994. Return on Average Total Assets was 1.34% for the first three months of 1995 compared with 1.43% for the same period of 1994. Return on Average Shareholders Equity was 12.54% for the three months ended March 31, 1995 compared with 14.55% for 1994. The decline in 1995 earnings, compared to the same period in 1994, is due to weaker net interest income and increased other expenses. Net interest income is down $20,000 for the first three months of 1995 compared to 1994 and other expenses (salaries and fixed assets) are up $172,000. The rapid rise in interest rates and increased competition for deposits along with greater personnel and other noninterest expenses have combined to continue pressure on net income. Although the corporation is asset sensitive deposit rates have risen more rapidly than loan rates. Coupled with a marked shift from savings accounts to time accounts this rise has prevented new loan growth from adding to net income during the first quarter. In addition the corporation has opened a new office in a supermarket/discount store and upgraded mortgage marketing capabilities to prepare for the future. These added costs have already begun to flow through the income statement but the benefits will be realized over the long term. Earnings per share was $.29 in 1995 and $.32 in 1994, while the dividend increased from $.15 to $.16 in 1995. INTEREST RATE SPREAD AND NET YIELD ON EARNING ASSETS (Taxable equivalent)
Three months Ended 3/31/95 3/31/94 Rate Rate Earning Assets 7.08% 6.71% Interest Bearing Liabilities 3.62 3.24 Interest Rate Spread 3.46 3.47 Interest Expense as a % of earning assets 3.04 2.76 Net Yield on Earning Assets 4.04 3.95
Net Yield on Earning Assets is the difference, stated in percentages, between the interest earned on loans and other investments and the interest paid on deposits and other sources of funds. The rate on earning assets is adjusted to a "taxable equivalent" basis to recognize the income tax savings on tax exempt items such as interest on municipal securities. The Net Yield on Earning Assets is one of the best analytical tools available to demonstrate the effect of interest rate changes on the Corporation's earning capacity. Page 8 The Net Yield on Earning Assets for the first three months of 1995 was up 9 basis points compared to the same period in 1994. This is a result of improved loan demand and a shift to loans from lower yielding government securities. Net yield as income is down due to a lower earning asset base. This was caused by a runoff in deposits during the last quarter of 1994 and continued during the first quarter of 1995. PROVISION AND RESERVE FOR POSSIBLE LOAN LOSSES Reserve for Possible Loan Losses
(In thousands) Three Months Ended 3/31/95 3/31/95 Balance at Beginning of Period 3,370 3,581 Provision Charged to Expense 0 0 Loans Charged Off 27 193 Recoveries 6 27 Balance at End of Period 3,349 3,415 Ratios: Net Charge-offs to: Net Income 1.36% 9.79% Total Loans .01 .06 Reserve for Possible Loan Losses .63 4.86 Reserve for Possible Loan Losses to: Total Loans 1.07 1.21
The Reserve for Possible Loan Losses at March 31, 1995 totaled $3,349,000 (1.07% of Total Loans), a decrease of $66,000 from $3,415,000 (1.21% of Total Loans) at the end of the first three months of 1994. Loans past due 90 days and still accruing amounted to $1,980,000 and non-accrual loans totaled $850,000 as of 3/31/95.The ratio of non-performing assets plus other real estate owned to total assets was .83% at 3/31/95. $454,000 of the bank's other real estate total of $999,000 has been sold and represents interest paying loans but are carried here for regulatory purposes. All other properties are carried at the lower of market or book value and are not considered to represent significant threat of loss to the bank. Loans past due 90 days and still accruing were $2,219,000 at yearend 1994 while non-accruals stood at $854,000. The bulk of the Corporation's real estate loans are in owner occupied dwellings but it is hoped that internal loan review procedures will be effective in recognizing and helping correct any real estate lending problems that may occur due to current economic conditions. Interest not accrued, due to an average of $852,000 in non-accrual loans, was approximately $19,000 for the first three months of 1995. Page 9 CAPITAL MANAGEMENT Total Shareholders' Equity amounted to $49,342,000 at 3/31/95 compared to $46,781,000 at 3/31/94, an increase of $2,561,000 or 5.5% over that period. The ratio of Total Shareholders' Equity to Total Assets was 9.87% at 3/31/94, 10.31% at 12/31/94, and 10.72% at 3/31/95. The leverage ratio was 10.72% at 3/31/95 while the total risk-based capital ratio was 21.86% at year end 1994. LIQUIDITY AND INTEREST RATE SENSITIVITY The Corporation's liquidity is adequate. Liquid assets (cash and due from banks, federal funds sold, money market instruments, and investment securities maturing within one year) equal 11.3% of total assets at 3/31/95. This mix of assets would be readily available for funding any cash requirements. As of 3/31/95 rate sensitive assets were 108% of rate sensitive liabilities at one month, 108% at six months, and 122% at one year. Adjustable rate mortgages, which have an annual interest rate cap of 2%, are considered rate sensitive. The core deposit portion of passbook savings and NOW accounts are carried in the over one year category while the rate sensitive amount is spread over the one month and six month categories. Page 10 PART II. OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K (b) There were no reports on Form 8-K filed for the three month period ended March 31, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ACNB CORPORATION May 1, 1995 /s/ Ronald L. Hankey (date) ------------------------------------- Ronald L. Hankey President /s/ John W. Krichten ------------------------------------- John W. Krichten Secretary/Treasurer Page 11 EX-27 2 FINANCIAL DATA SCHEDULE
9 1,000 3-MOS DEC-31-1995 MAR-31-1995 12,271 0 100 0 0 125,062 122,802 314,021 3,349 460,370 384,900 22,682 3,446 0 13,290 0 0 36,052 49,342 6,147 1,650 2 7,799 3,047 3,358 4,441 0 0 2,581 2,292 2,292 0 0 1,545 .29 .29 4.04 850 1,980 0 0 3,370 27 6 3,349 3,349 0 0
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