-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RDNZ2KCxRG5g4iRIZ6Ij5O5RMgCstm3+qfhf8rjuATKbY7LoZS4F1o+Vk5cYTxum LV3slG1Sy/C9cfYr/h6EEA== 0000950115-96-001053.txt : 19960806 0000950115-96-001053.hdr.sgml : 19960806 ACCESSION NUMBER: 0000950115-96-001053 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960805 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: 96603761 BUSINESS ADDRESS: STREET 1: 675 OLD HARRISBURG RD STREET 2: P O BOX 3129 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 QUARTERLY REPORT 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 June 30, 1996 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 JUNE 30, 1996 ----- ---------------------------- Common Stock 5,301,182 ($2.50 par value) Page 1 of 11 ACNB CORPORATION INDEX Page No. Part I. Financial Information Consolidated Condensed Balance Sheets June 30, 1996 and December 31, 1995 and June 30, 1995 3 Consolidated Condensed Statements of Income Six Months Ended June 30, 1996 and 1995 4 Consolidated Statements of Cash Flows Six Months Ended June 30, 1996 and 1995 5 Notes to Consolidated Condensed Financial Statements 6-7 Management's Discussion and Analysis of the Financial Condition and Results of Operation 8-10 Part II. Other Information 11 Page 2 PART I FINANCIAL INFORMATION ACNB CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CONDITION June 30 December 31 June 30 1996 1995 1995 ---- ---- ---- ASSETS (000 omitted) Cash and Due from Banks $ 26,045 $ 22,900 $ 11,729 Investment Securities U.S. Treasury 43,157 47,400 67,717 U.S. Government Agencies and Corporations 62,971 54,000 43,000 State and Municipal 925 962 1,465 Other Investments 2,570 2,480 2,480 _________ _________ _________ Total Investment Securities 109,623 104,842 114,662 Federal Funds Sold 100 100 100 Loans 319,430 324,002 322,136 Less: Reserve for Loan Losses (3,242) (3,274) (3,296) _________ _________ _________ Net Loans 316,188 320,728 318,840 Premises and Equipment 5,556 5,767 5,949 Other Real Estate 813 689 769 Other Assets 6,223 4,327 4,715 _________ _________ _________ TOTAL ASSETS $ 464,548 $ 459,353 $ 456,764 ========= ========= ========= LIABILITIES Deposits Noninterest Bearing 45,183 44,318 39,569 Interest Bearing 355,156 347,925 345,456 _________ _________ _________ Total Deposits 400,339 392,243 385,025 Securities Sold Under Agreement To Repurchase 13,930 13,203 15,549 Borrowing Federal Home Loan Bank 0 0 3,550 Demand Notes U.S. Treasury 450 199 450 Other Liabilities 2,347 2,245 2,233 _________ _________ _________ TOTAL LIABILITIES 417,066 407,890 406,807 SHAREHOLDERS EQUITY Common Stock ($2.50 par value) 20,000,000 shares authorized: 5,301,182 shares issued and outstanding at 6/30/96 13,253 13,269 13,290 Surplus 4,306 4,396 4,511 Retained Earnings 29,923 33,798 32,156 _________ _________ _________ TOTAL SHAREHOLDERS EQUITY 47,482 51,463 49,957 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $ 464,548 $ 459,353 $ 456,764 ========= ========= ========= See accompanying notes to financial statements. Page 3 ACNB CORPORATION AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME Three Months Ended Six Months Ended June 30 June 30 1996 1995 1996 1995 ---- ---- ---- ---- (000 omitted) (000 omitted) INTEREST INCOME Loan Interest and Fees $ 6,579 $ 6,462 $ 13,146 $ 12,609 Interest and Dividends on Investment Securities 1,489 1,530 2,841 3,180 Interest on Federal Funds Sold 2 2 3 3 Interest on Balances with Depository Institutions 232 8 434 9 _______ _______ _______ _______ TOTAL INTEREST INCOME 8,302 8,002 16,424 15,801 INTEREST EXPENSE Deposits 3,568 3,342 7,133 6,389 Other Borrowed Funds 153 268 287 579 _______ _______ _______ _______ TOTAL INTEREST EXPENSE 3,721 3,610 7,420 6,968 NET INTEREST INCOME 4,581 4,392 9,004 8,833 Provision for Loan Losses 0 0 0 0 NET INTEREST INCOME AFTER PROVISION _____ _____ _____ _____ FOR LOAN LOSSES 4,581 4,392 9,004 8,833 OTHER INCOME Trust Department 86 85 189 152 Service Charges on Deposit Accounts 190 155 366 301 Other Operating Income 150 104 276 323 Securities Gains 0 0 0 0 _______ _______ _______ _______ TOTAL OTHER INCOME 426 344 831 776 OTHER EXPENSES Salaries and Employee Benefits 1,427 1,400 2,909 2,805 Premises and Fixed Assets 424 345 844 709 Other Expenses 691 819 1,266 1,631 _______ _______ _______ _______ TOTAL OTHER EXPENSE 2,542 2,564 5,019 5,145 INCOME BEFORE INCOME TAX 2,465 2,172 4,816 4,464 Applicable Income Tax 810 706 1,580 1,453 _______ _______ _______ _______ NET INCOME $ 1,655 $ 1,466 $ 3,236 $ 3,011 ======= ======= ======= ======= EARNINGS PER SHARE* $ 0.31 $ 0.28 $ 0.61 $ 0.57 DIVIDENDS PER SHARE* 0.17 0.16 1.34 0.32 *Based on 5,304,939 shares outstanding in 1996 and 5,316,122 in 1995. See accompanying notes to financial statements. Page 4 ACNB CORPORATION AND SUBSIDIARY STATEMENT OF CASH FLOWS Six months ended June 30 1996 1995 ---- ---- (000 omitted) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS Cash Flows from Operating Activities: Interest and Dividends Received $16,338 $16,499 Fees and Commissions Received 1,063 992 Interest Paid (7,395) (6,660) Cash Paid to Suppliers and Employees (6,453) (5,377) Income Taxes Paid (1,555) (2,296) Net Cash Provided by Operating Activities 1,998 3,158 Cash Flows from Investing Activities: Proceeds from Maturities of Investment Securities and Interest Bearing Balances with Other Banks 27,266 30,285 Purchase of Investment Securities and Interest Bearing Balances with Other Banks (32,290) (474) Principal Collected on Loans 41,592 32,573 Loans Made to Customers (37,180) (48,597) Capital Expenditures (97) (347) Net Cash Used in Investing Activities (709) 13,440 Cash Flow from Financing Activities: Net Increase in Demand Deposits, NOW Accounts, and Savings Accounts 1,434 (11,357) Proceeds from Sale of Certificates of Deposit 22,857 21,117 Payments for Maturing Certificates of Deposit (15,468) (12,597) Dividends Paid (7,111) (1,701) Increase (Decrease) in Borrowings 251 (13,250) Repurchase of Common Stock (107) 0 Net Cash Provided by Financing Activities 1,856 (17,788) Net Increase in Cash and Cash Equivalents 3,145 (1,190) Cash and Cash Equivalents: Beginning of Period 23,000 13,019 End of Period 26,145 11,829 RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net Income 3,236 3,011 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 312 276 Provision for Possible Credit Losses 0 0 Provision for Deferred Taxes 87 88 Amortization of Investment Securities Premiums 243 440 Increase (Decrease) in Taxes Payable (62) (931) (Increase) Decrease in Interest Receivable (300) 473 Increase (Decrease) in Interest Payable 25 308 Increase (Decrease) in Accrued Expenses 131 (75) (Increase) Decrease in Other Assets (1,873) (429) Increase (Decrease) in Other Liabilities 199 (3) Net Cash Provided by Operating Activities 1,998 3,158 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 June 30, 1996 and 1995 and December 31, 1995 and the results of its operations for the six months ended June 30, 1996 and 1995 and changes in financial position for the six 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 1995 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 June 30, 1996 and December 31, 1995 were as follows: 6/30/96 12/31/95 Amortized Fair Amortized Fair Cost Value Cost Value ---- ----- ---- ----- (000 omitted) U.S. Treasury $ 43,157 $ 43,281 $ 47,400 $ 47,779 U.S. Government Agencies and Corporations 62,971 62,496 54,000 53,921 State and Municipal 925 926 962 964 Other Investments 2,570 2,570 2,480 2,480 ________ ________ ________ ________ TOTAL $109,623 $109,273 $104,842 $105,144 ======== ======== ======== ======== Income earned on investment securities was as follows: Six Months Ended June 30 1996 1995 ---- ---- (000 omitted) U.S. Treasury $1,235 $1,956 U.S. Government Agencies and Corporations 1,492 1,109 State and Municipal 33 41 Other Investments 81 74 ______ ______ $2,841 $3,180 ====== ====== Page 6 3. Gross loans are summarized as follows: June 30 December 31 1996 1995 ---- ---- (000 omitted) Real Estate $283,583 $285,817 Real Estate Construction 10,813 12,951 Commercial and Industrial 9,889 9,268 Consumer 15,145 15,966 _______ _______ Gross Loans 319,430 324,002 Less: Unearned Discount -- -- ________ ________ Total Loans $319,430 $324,002 ======== ======== 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 six month periods ended June 30, 1996 and 1995 were 5,304,939 and 5,316,122 respectively. 5. Dividends per share were $1.34 and $0.32 for the six month periods ended June 30, 1996 and 1995 respectively. This represented a 220% payout of net income in 1996 and a 56% payout in 1995. The 1996 dividend includes a $1.00 special dividend paid in January 1996. 6. The results of operations for the six month periods ended June 30, 1996 and 1995 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 six months of 1996 was $3,236,000, an increase of 7.5% from $3,011,000 in 1995. Return on Average Total Assets was 1.42% for the first six months of 1996 compared with 1.32% for the same period of 1995. Return on Average Shareholders Equity was 13.68% for the six months ended June 30, 1996 compared with 12.24% for 1995. The increase of 7.5% in 1996 earnings, compared to the same period in 1995, is due to increased net interest income and decreased other expenses. Net interest income is up $171,000 for the first six months of 1996 compared to 1995, other expenses (salaries and fixed assets) are up $239,000, and other miscellaneous expenses are down $365,000. Six month expense for FDIC insurance declined from $447,000 in 1995 to $1,000 in 1996. Exclusive of that change other miscellaneous expenses would be up $82,000. The Corporation's balance sheet indicates moderate growth of 1% in total assets in 1996 compared to a 3% decline in 1995. While this is somewhat misleading because the decline in shareholders equity, caused by the special $1.00 dividend paid in January 1996, offset positive deposit growth, total growth has not been robust. Loan demand has also been more sensitive to market conditions and is down 1% from June 30, 1995 to June 30, 1996 and down almost 2% since December 31, 1995. Earnings per share was $.61 in 1996 and $.57 in 1995, while the regular dividend increased from $.32 to $.34 in 1996. INTEREST RATE SPREAD AND NET YIELD ON EARNING ASSET Six months Ended 6/30/96 6/30/95 Rate Rate ---- ---- Earning Assets 7.51% 7.17% Interest Bearing Liabilities 4.07 3.80 Interest Rate Spread 3.44 3.36 Net Yield on Earning Assets 4.11 3.98 Page 8 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 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. The Net Yield on Earning Assets, for the first six months of 1996, was up 13 basis points compared to the same period in 1995. This is a result of improved yields on government securities and lower cost of certificates of deposit. Net yield as income has improved as higher securities yields and slightly lower deposit costs have begun to work through the Corporation's asset and liability mix. PROVISION AND RESERVE FOR POSSIBLE LOAN LOSSES Reserve for Possible Loan Losses (In thousands) Six Months Ended 6/30/96 6/30/95 ------- ------- Balance at Beginning of Period $3,274 $3,370 Provision Charged to Expense 0 0 Loans Charged Off 89 86 Recoveries 37 12 Balance at End of Period 3,242 3,296 Ratios: Net Charge-offs to: Net Income .99% 2.46% Total Loans .01 .02 Reserve for Possible Loan Losses .99 2.25 Reserve for Possible Loan Losses to: Total Loans 1.01 1.02 Page 9 The Reserve for Possible Loan Losses at June 30, 1996 totaled $3,242,000 (1.01% of Total Loans), a decrease of $54,000 from $3,296,000 (1.02% of Total Loans) at the end of the first six months of 1995. Loans past due 90 days and still accruing amounted to $2,507,000 and non-accrual loans totaled $1,174,000 as of 6/30/96. The ratio of non-performing assets plus other real estate owned to total assets was .97% at 6/30/96. All 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 $2,620,000 at yearend 1995 while non-accruals stood at $1,303,000. 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 $1,239,000 in non-accrual loans, was approximately $56,000 for the first six months of 1996. CAPITAL MANAGEMENT Total Shareholders' Equity amounted to $47,482,000 at 6/30/96 compared to $49,957,000 at 6/30/95, a decrease of $2,475,000 or 5% over that period. The ratio of Total Shareholders' Equity to Total Assets was 10.94% at 6/30/95, 11.20% at 12/31/95, and 10.22% at 6/30/96. The leverage ratio was 10.36% at 6/30/96 while the total risk-based capital ratio was 19.22%. The reduction in the capital ratios from yearend 1995 to 6/30/96 was caused by the special dividend of $1.00 per share paid in january 1996. 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 15.1% of total assets at 6/30/96. This mix of assets would be readily available for funding any cash requirements. As of 3/31/96 the cumulative asset sensitive gap was 19% of total assets at one month, 21.5% at six months, and 33.9% at one year. Adjustable rate mortgages, which have an annual interest rate cap of 2%, are considered rate sensitive. Passbook savings and NOW accounts are carried in the one to five year category while half of money market deposit accounts are spread over the four to twelve month category and the other half are shown to mature in the one to three year category. 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 June 30, 1996. 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 /s/ RONALD L. HANKEY July 31, 1996 ------------------------------------ (date) Ronald L. Hankey President /s/ JOHN W. KRICHTEN ------------------------------------ John W. Krichten Secretary/Treasurer Page 11 EX-27 2 FDS
9 1,000 6-MOS DEC-31-1996 JUN-30-1996 12,721 13,324 100 0 0 109,623 109,273 319,430 3,242 464,548 400,339 0 2,347 0 0 0 13,253 34,229 464,548 13,146 2,841 437 16,424 7,133 7,420 9,004 0 0 5,019 4,816 4,816 0 0 3,236 0.61 0.61 4.11 1,303 2,620 0 0 3,274 89 37 3,242 3,242 0 0
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