<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 30, 1996 0-18925
- --------------------- ----------------------
For the quarter ended Commission file number
ANB CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
INDIANA 35-1612066
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 East Main Street, Muncie, Indiana 47305
----------------------------------------------
Address of principal executive offices
317-747-7575
-----------------------------------------
Registrant's telephone number & area code
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Indicate by check mark 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 such 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_____
As of November 4, 1996 there were outstanding 4,479,485 Common Shares,
$1 stated value, of the Registrant.
Page 1 of 15 Pages
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ANB CORPORATION
FORM 10-Q
September 30, 1996
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TABLE OF CONTENTS
-----------------
Part I - Financial Information:
Item 1 - Financial Statements Page
----
Consolidated Condensed Balance Sheet................. 3
Consolidated Condensed Statement of Income........... 4 - 5
Consolidated Condensed Statement of Changes in
Stockholders' Equity................................. 6
Consolidated Condensed Statement of Cash
Flows................................................ 7
Notes to Consolidated Condensed Financial
Statements........................................... 8 - 9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations......... 10 - 13
Part II - Other Information:
Item 6 - Exhibits and Reports on Form 8-K...................... 14
Signatures........................................................ 15
Page 2 of 15 Pages
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ANB CORPORATION
FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED CONDENSED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
- -------------------------------------------------------------------------------
September 30, December 31,
1996 1995
-------- -------
ASSETS:
Cash and due from banks ....................... $17,026 $23,488
Federal funds sold............................. 19,800
Interest-bearing deposit accounts.............. 9 248
-------- -------
Cash and cash equivalents.................... 17,035 43,536
Securities available for sale:
Taxable...................................... 30,219 27,409
Tax exempt................................... 44,644 43,105
-------- -------
Total securities available for sale........ 74,863 70,514
Loans:
Loans.......................................... 369,094 348,913
Less: Allowance for loan losses............... 2,875 2,897
-------- -------
Net loans.................................. 366,219 346,016
Loans held for sale ........................... 1,561 129
Premises and equipment......................... 9,405 9,577
Federal Reserve & Federal Home Loan Bank Stock 2,713 2,661
Other real estate.............................. 382 341
Interest receivable............................ 3,935 4,081
Goodwill and core deposit intangibles ......... 4,389 4,309
Other assets................................... 1,920 2,072
-------- -------
Total assets............................... $482,422 $483,236
-------- -------
-------- -------
LIABILITIES
Deposits
Noninterest bearing.......................... $47,504 $52,029
Interest bearing............................. 354,913 363,322
-------- -------
Total deposits 402,417 415,351
Short-term borrowings.......................... 13,102 7,749
Federal Home Loan Bank advances................ 11,000 2,395
Interest payable............................... 1,700 1,626
Other liabilities.............................. 3,966 6,644
-------- -------
Total liabilities.......................... 432,185 433,765
-------- -------
Commitments and contingent liabilities
STOCKHOLDERS' EQUITY
Preferred stock, without par value:
Authorized-250,000 shares, none issued
Common stock, $1 stated value:
Authorized-20,000,000 shares
Issued and outstanding-4,479,485 and
4,530,335 shares........................... 4,479 4,530
Capital surplus................................ 5,145 6,274
Capital surplus-stock options.................. 466 466
Less: Prepaid compensation expense........... (24) (68)
Retained earnings.............................. 39,188 36,358
Net unrealized gains on securities
available for sale........................... 983 1,911
-------- -------
Total stockholders' equity................. 50,237 49,471
-------- -------
Total liabilities and stockholders' equity $482,422 $483,236
-------- -------
-------- -------
Page 3 of 15 Pages
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ANB CORPORATION
FORM 10-Q
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
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Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
Interest Income
Loans, including fees:
Taxable..................... $8,208 $7,896 $24,024 $22,457
Tax exempt.................. 24 19 82 57
Securities held to maturity:
Taxable..................... 143 425
Tax exempt.................. 461 1,375
Securities available for sale:
Taxable..................... 478 302 1,361 865
Tax exempt.................. 683 191 1,997 545
Federal funds sold............ 23 129 265 386
Other interest
income...................... 53 56 167 157
------ ------ -------- -------
Total interest
income.................. 9,469 9,197 27,896 26,267
------ ------ -------- -------
Interest Expense
Deposits...................... 3,903 3,990 11,657 11,075
Short-term
borrowings.................. 131 122 320 372
Long-term debt................ 128 47 243 77
------ ------ -------- -------
Total interest
expense.................. 4,162 4,159 12,220 11,524
------ ------ -------- -------
NET INTEREST INCOME............. 5,307 5,038 15,676 14,743
Provision for loan
losses...................... 236 245 368 637
------ ------ -------- -------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES................. 5,071 4,793 15,308 14,106
Page 4 of 15 Pages
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<PAGE>
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(continued) ANB CORPORATION
FORM 10-Q
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
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Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
Other Income:
Trust fees................. 1,079 927 3,225 2,916
Service charges on
deposit accounts......... 347 348 1,008 1,012
Other customer fees........ 119 92 360 263
Securities available
for sale gains,
net...................... 12 2
Gains (losses) on
loans held for sale:
Realized............... 41 29 140 69
Unrealized............. 13 (52)
Other operating
income................... 124 150 426 508
------ ------ ------ ------
Total other
income............... 1,723 1,546 5,119 4,770
------ ------ ------ ------
Other Expenses:
Salaries and
employee benefits........ 2,449 2,374 7,365 7,206
Premises and
equipment expense........ 652 650 2,043 1,962
Advertising................ 95 134 355 352
Printing, supplies
and stationery........... 125 103 420 400
Professional fees.......... 68 109 208 266
Deposit insurance
premiums................. 328 104 798 522
Goodwill and core
deposit intangibles
amortization............. 94 90 281 270
Other operating
expenses................. 707 650 2,129 1,897
------ ------ ------ ------
Total other
expenses............. 4,518 4,214 13,599 12,875
------ ------ ------ ------
INCOME BEFORE INCOME
TAX EXPENSE................ 2,276 2,125 6,828 6,001
Income tax expense....... 714 701 2,194 1,900
------ ------ ------ ------
NET INCOME................... $1,562 $1,424 $4,634 $4,101
------ ------ ------ ------
------ ------ ------ ------
Per Share
Net income................. $0.35 $0.31 $1.03 $0.90
Cash dividends............. 0.15 0.125 0.40 0.335
AVERAGE SHARES
OUTSTANDING................ 4,487,365 4,553,928 4,507,736 4,559,084
Page 5 of 15 Pages
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<PAGE>
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ANB CORPORATION
FORM 10-Q
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in Thousands)
(Unaudited)
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1996 1995
---- -----
Balance, January 1 ............................. $49,471 $44,910
Net income...................................... 4,634 4,101
Cash dividends ($.40 and $.335 per share)....... (1,803) (1,526)
Stock reacquired ............................... (1,785) (338)
Stock issued under dividend reinvestment
and stock purchase plan....................... 317 129
Capital surplus allocation for compensatory
stock options................................. 44 64
Proceeds from stock options exercised........... 205 7
Tax benefit on stock options exercised.......... 82
Net change in unrealized gains on securities
available for sale ........................... (928) 526
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Balance, September 30 .......................... $50,237 $47,873
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------- -------
Page 6 of 15 Pages
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<PAGE>
ANB CORPORATION
FORM 10-Q
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
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Nine Months Ended
September 30,
1996 1995
-------- --------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income......................................... $4,634 $4,101
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses........................ 368 637
Depreciation..................................... 810 873
Securities amortization.......................... 44 107
Amortization of goodwill and fair value
adjustments.................................... 281 270
Net change in:
Loans held for sale............................ (1,484) (204)
Interest receivable............................ 146 (362)
Interest payable............................... 74 667
Other adjustments................................ (127) 1,873
-------- --------
Net cash provided by
operating activities......................... 4,746 7,962
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of held to maturity securities.......... (3,287)
Proceeds from held to maturity securities
maturities and calls............................ 4,187
Purchases of available for sale securities........ (18,011) (14,912)
Proceeds from available for sale securities
maturities and sales............................ 10,181 13,200
Net increase in loans............................. (20,710) (17,595)
Purchases of premises and equipment............ (665) (473)
-------- --------
Net cash used by
investing activities.......................... (29,205) (18,880)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in noninterest-bearing,
NOW, money market and savings deposits.......... (11,988) (11,721)
Net increase (decrease) in certificates of
deposits and other time deposits................ (946) 30,406
Net increase (decrease) in short-term
borrowings...................................... 5,353 (5,779)
Net increase in Federal Home Loan Bank advances... 8,605 1,995
Cash dividends.................................... (1,803) (957)
Stock sold:
Exercise of stock options....................... 205 7
Dividend reinvestment and stock purchase plan... 317 129
Stock reacquired.................................. (1,785) (338)
-------- --------
Net cash provided (used) by
financing activities.......................... (2,042) 13,742
-------- --------
NET DECREASE IN CASH and CASH EQUIVALENTS (26,501) 2,824
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD......................................... 43,536 26,950
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD............ $17,035 $29,774
-------- --------
-------- --------
Additional Cash Flows Information:
Interest paid..................................... $12,146 $10,857
Income tax paid................................... 2,370 1,680
Dividend payable at end of period................. 569
Page 7 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
September 30, 1996
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Table Dollar Amounts in Thousands)
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NOTE 1--GENERAL:
The significant accounting policies followed by ANB Corporation (Company) and
its subsidiaries, American National Bank and Trust Company of Muncie,
American National Trust and Investment Management Company and Peoples Loan &
Trust Bank, (Peoples) Winchester, for interim financial reporting, are
consistent with the accounting policies followed for annual financial
reporting. The accompanying financial statements are unaudited, however, all
adjustments, consisting only of normal recurring adjustments, which are, in
the opinion of management necessary for a fair presentation of the results
for the periods reported, have been included in the accompanying consolidated
condensed financial statements. The results of operations for the nine
months and three months ended September 30, 1996 are not necessarily
indicative of those expected for the remainder of the year.
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NOTE 2--INVESTMENT SECURITIES:
1996
-----------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
September 30 Cost Gains Losses Fair Value
- ------------------------------------------------------------------------------
Available for sale:
U.S. Treasury........ $17,448 $79 $98 $17,429
Federal agencies..... 9,047 1 136 8,912
State and municipal.. 42,787 2,088 231 44,644
Mortgage-backed
securities......... 3,275 75 3,200
Marketable equity
securities......... 479 479
Corporate obligations 200 1 199
-----------------------------------------------------
Total investment
securities.......... $73,236 $2,168 $541 $74,863
-----------------------------------------------------
-----------------------------------------------------
1995
-----------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
December 31 Cost Gains Losses Fair Value
- ------------------------------------------------------------------------------
Available for sale:
U.S. Treasury........ $17,950 $226 $3 $18,173
Federal agencies..... 4,148 8 3 4,153
State and municipal.. 40,118 3,031 44 43,105
Mortgage-backed
securities......... 3,744 49 3,695
Marketable equity
securities......... 941 941
Corporate obligations 450 3 447
-----------------------------------------------------
Total investment
securities....... $67,351 $3,265 $102 $70,514
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Page 8 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
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NOTE 3--LOANS AND ALLOWANCE:
September 30, December 31,
1996 1995
--------- ---------
Loans
Commercial and industrial loans................ $77,842 $75,083
Term federal funds sold........................ 3,500 8,784
Real estate loans:
One-to-four family properties................ 142,499 134,488
Other........................................ 99,353 91,581
Individuals' loans for household and other
personal expenditures........................ 42,298 35,736
Tax exempt loans............................... 2,441 1,630
Other loans.................................... 1,161 1,611
--------- ---------
Total loans................................ $369,094 $348,913
--------- ---------
--------- ---------
Nonperforming loans
Nonaccruing loans.............................. $1,228 $1,184
Accruing loans contractually past due
90 days or more other than nonaccruing....... 209 241
Restructured loans............................. 670 888
--------- ---------
Total nonperforming loans.................. $2,107 $2,313
--------- ---------
--------- ---------
Nine Months Ended
September 30,
1996 1995
--------- ---------
Allowance for loan losses
Balances, beginning of period.................. $2,897 $2,698
Provision for losses........................... 368 637
Recoveries on loans............................ 56 132
Loans charged off.............................. (446) (929)
--------- ---------
Balances, end of period........................ $2,875 $2,538
--------- ---------
--------- ---------
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NOTE 4--DEPOSITS:
September 30, December 31,
1996 1995
--------- ---------
Deposits
Noninterest bearing.......................... $47,504 $52,029
NOW accounts................................. 69,418 73,914
Money market deposit accounts................ 39,316 41,075
Savings deposits............................. 27,419 28,627
Certificates and other time deposits
of $100,000 or more........................ 57,156 55,193
Other certificates and time deposits......... 161,604 164,513
--------- ---------
Total deposits............................. $402,417 $415,351
--------- ---------
--------- ---------
Page 9 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
September 30, 1996
- ------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
- ------------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
---------------------
General
- -------
The following discussion and analysis is designed to provide a more
comprehensive review of the operating results and financial position than
could be obtained from an analysis of the financial statements alone. It
should, however, be read in conjunction with the financial statements and
notes inlcuded elsewhere herein. Per share amounts for 1995 have been
adjusted to give effect to the 2 for 1 stock split in December 1995.
Net Income
- ----------
Net income for the first nine months of 1996 was $4.634 million compared to
$4.101 million for the first nine months of 1995, an increase of $533
thousand or 13.0%. Net income per share for the first nine months of 1996 was
$1.03 an increase of $.13 or 14.4% from the $0.90 which was reported for the
first nine months of 1995.
Third quarter 1996 net income improved $138 thousand from the $1.424
million reported for the third quarter of 1995. Net income per share for the
third quarter of 1996 was higher by $.04 per share or 12.9% when compared to
third quarter 1995.
These record results were achieved in spite of the payment of a one-time
special assessment, part of federal legislation enacted to assist with the
recapitalization of the Savings Association Insurance Fund.
The Company's return on average assets for the first nine months of 1996
was 1.32%, an increase of 10 basis points over the first nine months of 1995
and a 15 basis point increase over the 1995 year ended return on average
assets of 1.17%.
Return on average equity for the first nine months of 1996 was 12.74%
compared to 11.88% for the same period in 1995.
Net Interest Income
- -------------------
Net interest income is the difference between interest and fees earned on
earning assets and interest paid on interest bearing liabilities. It is the
largest and most critical component of the Company's earnings and is impacted
by both rates and volume of earning assets and interest-bearing liabilities.
The Company's net interest income, reported on a full tax equivalent basis
(FTE), increased $869 thousand or 5.5% during the nine months ended
September 30, 1996 when compared to the same nine month period last year. Total
interest income, expressed on a full tax-equivalent basis, increased $1.565
million for the nine months period, while total interest expense of the
Company increased $696,000. Net internest margin (FTE), expressed as a
percent of earning assets, was 5.08% for the first nine months of 1996, a
slight increase of 4 basis points when compared to the 5.04% net interest
margin reported for the nine months ended September 30, 1995. The Company's
net interest margin (FTE) for the year ended 1995 was 5.02%.
For the third quarter of 1996 net interest income (FTE) increased $249
thousand or 4.6%, when compared to the quarter ended September 30, 1995. Net
interest margin for the third quarter 1996 was 5.04%.
Net interest income and margins have continued to benefit from growth in the
Company's loan portfolio and the conversion of federal funds sold to the loan
category of the balance sheet.
Page 10 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
September 30, 1996
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Provision for Loan Losses
- -------------------------
The Company's provision for loan losses decreased $269,000 for the nine
months ended September 30, 1996 when compared to the same period in l995. For
the third quarter of 1996 the provision expense was $236,000 compared to
$245,000 for the third quarter of 1995. The Company recorded provision for
loan loss expense based on the 1996 operating plan.
Net chargeoffs during the first nine months of 1996 were $390,000 compared
to net chargeoffs of $797,000 for the comparable period in 1995. During the
first quarter of 1995 a large commercial/mortgage loan for approximately
$1,193,000 was written down by $433,000 and the balance was transferred to
nonaccruing loans.
Other Income and Expense
- ------------------------
Other income represents income received which is not directly related to
the Company's interest-earning assets, except for gains and losses on
securities and loans held for sale. Excluding a $70 thousand tax refund
received in 1995 for prior years Indiana gross income tax, total other income
increased $419 thousand for the first nine months of 1996 when compared to
the like period in 1995. Trust revenue rose by $309 thousand or 10.6%.
Service charges on deposit accounts combined with other customer fees
increased $93 thousand, primarily as a result of higher insurance commissions
and higher fees on debit card and ATM transactions.
Realized gains on loans sold increased $71,000 for the first nine months of
1996 over the same period in 1995, however the Company's portfolio of loans
held for sale at September 30, 1996 valued at lower of cost or market
resulted in unrealized losses of $52,000 being recorded.
Security gains were $10 thousand higher and "other operating income", after
considering the previously referred to tax refund, declined $12 thousand for
the nine month period comparative ending September 30, 1996.
Total other expenses increased $724 thousand in the first nine months of
1996 compared to the same period in 1995. Salaries and employee benefits for
the nine months ending September 30, 1996 increased $159 thousand or 2.2%.
About $98 thousand of the increase relates to greater costs for the Company's
pension plan. Full time equivalent employees declined from 269 for September
1995 to 258 at September 30, 1996.
For the nine months ended September 30, 1996 deposit insurance premiums
increased $276 thousand. The Company has accrued a one-time special
assessment of $589 thousand payable to the Federal Deposit Insurance
Corporation as part of federal legislation enacted to assist with the
recapitalization of the Savings Association Insurance Fund. A portion of
this special assessment previously included in the "other operating expenses"
line total at June 30, 1996 has been reclassified at September 30, 1996.
Income Taxes
- ------------
Income tax expense, including both federal income tax and the Indiana
franchise tax increased by $294,000 for the first nine months of 1996 over
1995. Income before income tax increased $827,000 for first nine months of
1996 over 1995. The effective tax rate for the first nine months of 1996 was
32.1% compared to 31.7% for the first nine months of 1995.
Page 11 of 15 Pages
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ANB CORPORATION
FORM 10-Q
September 30, 1996
- -----------------------------------------------------------------------
Balance Sheet
- -------------
The Company's total assets decreased $814 thousand from the level reported
at year end 1995. When compared to September 30, 1995 total assets increased
$20.635 million or 4.5%.
Cash and cash equivalents decreased $26.501 million at September 30, 1996
from the level reported at December 31, 1995. Federal funds sold decreased by
$19.8 million from December 31, 1995 while cash and due from banks including
interest bearing deposit accounts, declined $6.701 million from the levels
reported at year end.
Loans and Deposits
- ------------------
Loans, excluding loans held for sale and term federal funds, were $365.594
million at September 30, 1996, an increase of $25.465 million over the year
end level of $340.129 million. At September 30, 1995 loans, excluding loans
held for sale and term federal funds, were $338.084 million. Growth in the
Company's loan portfolio from September 30, 1995 to third quarter 1996 has
been $27.510 million or 8.1%. This loan growth has occured in all major loan
categories of the portfolio, with $15.295 million, or 55.6% of the total loan
growth experienced during the past twelve months, having occured in the mortgage
loan component of the portfolio.
Real estate loans continue to be the largest asset category of the Company.
At September 30, 1996 loans made to individuals on owner occupied property
represented 29.5% of total assets and 58.9% of the Company's mortgage loan
portfolio. At September 30, 1995 loans made to individuals on owner occupied
property represented 29.3% of total assets and 59.8% of the Company's mortgage
loan portfolio. Loans made on owner occupied property have increased
$8.011 million from year end 1995 and $6.969 million from September 30, 1995,
while commercial mortgage loans have increased $7.772 million from year end
1995 and $8.326 million from September 30, 1995.
Loan growth has been achieved under the Company's strategic plan and has
been accomplished in accordance with credit policies designed to ensure
continued strong asset quality.
During the third quarter of 1996, the Company borrowed $3 million from the
Federal Home Loan Bank to take advantage of market opportunities and expand
the mortgage loan portfolio. As a member of the FHLB, the Company may
participate in various programs for the financing of 1-4 family residential
property.
Total deposits of the Company at September 30, 1996 declined $12.934 million
from levels reported at year end 1995, but were higher by $3.600 million from
total deposits as reported September 30, 1995. Noninterest bearing deposits
declined by $4.525 million at September 30, 1996 from year end 1995. Year end
1995 noninterest bearing deposits were higher due to temporary municipal funds
being deposited, and an increased level of trust deposits. Declines in balances
at September 30, 1996 for NOW accounts combined with money market deposits
accounted for most of the decrease in interest bearing deposits.
Allowance for Loan Losses and Nonperforming Loans
- -------------------------------------------------
The Company's nonperforming loans, which include nonaccrual, past due 90 days,
and restructured loans, decreased $206,000 from December 31, 1995. At
September 30, 1996 total nonperforming loans amounted to $2.107 million or .44%
of total assets, compared to .48% at year end 1995. Total non-performing loans
represented .57% of total loans at September 30, 1996 compared to .68% and .66%
at September 30, 1995 and December 31, 1995 respectively.
The allowance for loan losses at September 30, 1996 increased $22,000 from
year end 1995. Loans charged off for the period ending September 30, 1996
decreased by $483,000 when compared to the same period in 1995. A large
commercial loan, also secured with real estate, was written down in the amount
of $433,000 during the first quarter of 1995. The allowance for loan losses
equaled 136% of nonperforming loans at September 30, 1996 compared to 125% and
108% for December 31, 1995 and September 30, 1995 respectively.
Based on the components of the loan portfolio, an analysis of historical net
charge-offs, and other economic considerations, management considers the
allowance for loan losses to be adequate.
Page 12 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
September 30, 1996
- ---------------------------------------------------------------------
Liquidity and Rate Sensitivity
- ------------------------------
The Company manages liquidity by closely monitoring the funds available to
meet the financial needs and credit demands of its customer base. The Company
expects to have adequate funds available to satisfy loan demand as provided
through both deposit growth and net income. Additionally the Company has
established federal funds lines with correspondent banks and may borrow from
the Federal Reserve Bank or the Federal Home Loan Bank.
The Company's loan to deposit ratio, excluding loans which are held for sale
was 91% on September 30, 1996 compared to 86% at September 30, 1995.
The Company's interest rate sensitivity position is influenced by the various
maturities of its interest earning assets and interest bearing liabilities.
The Company monitors its maturity distribution of assets and liabilities to
ensure an adequate balance is maintained. Company policy requires management to
keep rate sensitivity positions within pre-established guidelines, so as to
control the interest rate risk exposure.
The Company is liability sensitive at the one-year time frame, indicating that
net interest income could be adversely impacted during periods of increasing
interest rates, since rate sensitive liabilities would be repricing at a more
rapid rate than interest sensitive assets. The Company measures the impact of
changes in interest rates on a regular basis. During recent years the Company
has steadily increased its net interest income and resulting net interest
margin.
Capital Resources
- -----------------
Stockholders' equity increased from $49.471 million at December 31, 1995 to
$50.237 million at September 30, 1996. Book value per share was $11.21 at
September 30, 1996, compared to $10.92 at year end 1995. Net unrealized gains
on securities available for sale declined $928 thousand or $0.20 a share from
year end 1995. Excluding net unrealized gains on securities available for sale,
per share book value increased $0.50 to $11.00 for the period ended
September 30, 1996. Tangible book value per share for the Company at
September 30, 1996 was $10.02 compared to $9.55 for year end 1995 and $9.44 on
September 30, 1995. (Tangible book value per share is defined as total
stockholders' equity less unrealized gains on securities available for sale and
goodwill; divided by total outstanding shares.)
On April 27, 1995, the Board of Directors approved a buy back program for the
Company's common stock in an aggregate amount not to exceed 200,000 shares.
During the first nine months of 1996 93,000 shares have been acquired under
this program, with the total purchase price being $1.632 million. A total of
162,302 shares have been reacquired by the Company since the buy back program
was approved.
For the quarter ended September 30, 1996 a total of 6,441 shares were issued
through the Company's Dividend Reinvestment and Stock Purchase Plan. A total of
259 shareholders or 43% of the Company's shareholders of record participate in
the Plan.
At September 30, 1996 the Company's Tier 1 risk based capital ratio was 13.68%
and its leverage capital ratio was 9.49%. The Company and each of its affiliate
banks currently exceed all capital requirements mandated by regulatory
authorities.
Page 13 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
September 30, 1996
- ---------------------------------------------------------------------
PART II. OTHER INFORMATION
--------------------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) No reports on Form 8-K were filed with respect to events
occurring during the three months ended September 30, 1996.
Page 14 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
September 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.
ANB CORPORATION
Date: November 5, 1996 BY: /s/ James R. Schrecongost
-------------------------
James R. Schrecongost
President and Chief Executive Officer
Date: November 5, 1996 BY: /s/ Larry E. Thomas
-------------------
Larry E. Thomas
Chief Financial Officer and
Principal Accounting Officer
Page 15 of 15 Pages
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<PAGE>
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
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0
0
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