<PAGE>
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
March 31, 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
- - -----------------------------------------------------------------------------
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 May 1, 1996 there were outstanding 4,513,354 Common Shares,
$1 stated value, of the Registrant.
Page 1 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
March 31, 1996
- - -----------------------------------------------------------------------------
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
<PAGE>
ANB CORPORATION
FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED CONDENSED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
<S> <C> <C>
ASSETS: ------- --------
Cash and due from banks ...................... $12,961 $23,488
Federal funds sold............................ 5,000 19,800
Interest-bearing deposit accounts............. 251 248
-------- --------
Cash and cash equivalents................... 18,212 43,536
Securities available for sale:
Taxable..................................... 32,783 27,409
Tax exempt.................................. 43,166 43,105
-------- --------
Total securities available for sale....... 75,949 70,514
Loans:
Loans....................................... 348,172 348,913
Less: Allowance for loan losses............ 2,904 2,897
-------- --------
Net loans................................. 345,268 346,016
Loans held for sale (approximate market
value $1,802 and $129) 1,802 129
Premises and equipment........................ 9,541 9,577
Federal Reserve & Federal Home Loan Bank Stock 2,661 2,661
Other real estate............................. 267 341
Interest receivable........................... 3,778 4,081
Goodwill and core deposit intangibles ........ 4,456 4,309
Other assets.................................. 2,155 2,072
-------- --------
Total assets.............................. $464,089 $483,236
-------- --------
-------- --------
LIABILITIES
Deposits
Noninterest bearing......................... $41,212 $52,029
Interest bearing............................ 356,423 363,322
-------- --------
Total deposits 397,635 415,351
Short-term borrowings......................... 8,135 7,749
Federal Home Loan Bank advances............... 2,395 2,395
Interest payable.............................. 1,722 1,626
Other liabilities............................. 4,484 6,644
-------- --------
Total liabilities......................... 414,371 433,765
-------- --------
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-4,520,954 and
4,530,335 shares.......................... 4,521 4,530
Capital surplus............................... 6,057 6,274
Capital surplus-stock options................. 466 466
Less: Prepaid compensation expense.......... (49) (68)
Retained earnings............................. 37,318 36,358
Net unrealized gains on securities
available for sale.......................... 1,405 1,911
-------- --------
Total stockholders' equity................ 49,718 49,471
-------- --------
Total liabilities and stockholders' equity $464,089 $483,236
-------- --------
-------- --------
</TABLE>
Page 3 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Interest Income ---- ----
Loans, including fees:
Taxable...................................... $7,856 $7,054
Tax exempt................................... 23 18
Securities held to maturity:
Taxable...................................... 144
Tax exempt................................... 453
Securities available for sale:
Taxable...................................... 417 247
Tax exempt................................... 645 171
Federal funds sold............................. 187 135
Other interest
income....................................... 62 53
Total interest ------ ------
income................................... 9,190 8,275
------ ------
Interest Expense
Deposits....................................... 3,938 3,374
Short-term
borrowings................................... 88 109
Long-term debt................................. 41 21
Total interest ------ ------
expense.................................. 4,067 3,504
------ ------
NET INTEREST INCOME.............................. 5,123 4,771
Provision for loan
losses....................................... 66 117
------ ------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES.................................. 5,057 4,654
Page 4 of 15 Pages
<PAGE>
(continued) ANB CORPORATION
FORM 10-Q
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
- - -------------------------------------------------------------------------------
<CAPTION>
Three Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
Other Income:
Trust fees..................................... 1,037 925
Service charges on
deposit accounts............................. 324 318
Other customer fees............................ 102 77
Securities available
for sale gains,
net.......................................... 12 2
Gains (losses) on
loans held for sale:
Realized................................... 64 18
Unrealized................................. (43)
Other operating
income....................................... 166 152
Total other ------ ------
income................................... 1,662 1,492
------ ------
Other Expenses:
Salaries and
employee benefits............................ 2,424 2,305
Premises and
equipment expense............................ 696 675
Advertising.................................... 116 112
Printing, supplies
and stationery............................... 169 131
Professional fees.............................. 60 69
Deposit insurance
premiums..................................... 231 209
Goodwill and core
deposit intangibles
amortization................................. 89 90
Other operating
expenses..................................... 683 640
Total other ------ ------
expenses.................................. 4,468 4,231
------ ------
INCOME BEFORE INCOME
TAX EXPENSE.................................... 2,251 1,915
Income tax expense........................... 726 585
------ ------
NET INCOME....................................... $1,525 $1,330
------ ------
------ ------
Per Share
Net income..................................... $0.34 $0.29
Cash dividends................................. 0.125 0.105
AVERAGE SHARES
OUTSTANDING.................................... 4,523,506 4,560,530
</TABLE>
Page 5 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in Thousands)
(Unaudited)
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Balance, January 1 .............................. $49,471 $44,910
Net income....................................... 1,525 1,330
Cash dividends ($.125 and $.105 per share)....... (565) (479)
Stock reacquired ................................ (367)
Stock issued under dividend reinvestment
and stock purchase plan........................ 106
Capital surplus allocation for compensatory
stock options.................................. 19 26
Proceeds from stock options exercised............ 35
Net change in unrealized gains on securities
available for sale ............................ (506) 315
------- -------
Balance, March 31 ............................... $49,718 $46,102
------- -------
------- -------
</TABLE>
Page 6 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income...................................... $1,525 $1,330
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses..................... 66 117
Depreciation.................................. 285 299
Securities amortization....................... 22 12
Amortization of goodwill and fair value
adjustments................................. 89 90
Net change in:
Loans held for sale......................... (1,673) 128
Interest receivable......................... 303 323
Interest payable............................ 96 243
Other adjustments............................. (1,372) 942
Net cash provided (used) by ------ -----
operating activities...................... (659) 3,484
------ -----
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of held to maturity securities...... (3,081)
Proceeds from held to maturity securities
maturities and calls........................ 2,055
Purchases of available for sale securities.... (10,129) (9,930)
Proceeds from available for sale securities
maturities and sales........................ 3,621 6,517
Net increase in loans......................... 589 (1,146)
Purchases of premises and equipment........... (250) (142)
Acquisition costs, net of cash acquired....... (375)
Net cash used by ------ -----
investing activities...................... (6,544) (5,727)
------ -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in noninterest-bearing,
NOW, money market and savings deposits...... (10,895) (12,418)
Net increase (decrease) in certificates of
deposits and other time deposits............ (6,821) 16,915
Net increase (decrease) in short-term
borrowings.................................. 386 (7,097)
Cash dividends................................ (565)
Stock sold:
Exercise of stock options................... 35
Dividend reinvestment and stock purchase plan 106
Stock reacquired.............................. (367)
Net cash used by ------- -------
financing activities...................... (18,121) (2,600)
------- -------
NET DECREASE IN CASH and CASH EQUIVALENTS (25,324) (4,843)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD..................................... 43,536 26,950
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD........ $18,212 $22,107
------- -------
------- -------
Additional Cash Flows Information:
Interest paid................................. $3,970 $3,262
Income tax paid............................... 190 130
Dividend payable at end of period............. 479
</TABLE>
Page 7 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
March 31, 1996
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Table Dollar Amounts in Thousands)
- - -----------------------------------------------------------------------------
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 three months ended March 31, 1996 are not necessarily indicative of
those expected for the remainder of the year.
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOTE 2--INVESTMENT SECURITIES:
1996
--------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
March 31 Cost Gains Losses Fair Value
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Available for sale:
U.S. Treasury....... $20,663 $159 $32 $20,790
Federal agencies.... 7,647 1 84 7,564
State and municipal. 40,820 2,644 298 43,166
Mortgage-backed
securities........ 3,604 65 3,539
Marketable equity
securities........ 691 691
Corporate obligation 200 1 199
-------------------------------------------------
Total investment
securities...... $73,625 $2,804 $480 $75,949
-------------------------------------------------
-------------------------------------------------
<CAPTION>
1995
--------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized
December 31 Cost Gains Losses Fair Value
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 obligation 450 3 447
-------------------------------------------------
Total investment
securities...... $67,351 $3,265 $102 $70,514
-------------------------------------------------
-------------------------------------------------
</TABLE>
Page 8 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
- - -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOTE 3--LOANS AND ALLOWANCE:
March 31, December 31,
1996 1995
---- ----
<S> <C> <C>
Loans
Commercial and industrial loans............... $76,671 $75,083
Term federal funds sold....................... 5,134 8,784
Real estate loans:
One-to-four family properties............... 132,817 134,488
Other....................................... 92,391 91,581
Individuals' loans for household and other
personal expenditures....................... 36,648 35,736
Tax exempt loans.............................. 1,623 1,630
Other loans................................... 2,888 1,611
-------- --------
Total loans.............................. $348,172 $348,913
-------- --------
-------- --------
Nonperforming loans
Nonaccruing loans............................. $1,233 $1,184
Accruing loans contractually past due
90 days or more other than nonaccruing...... 155 241
Restructured loans............................ 878 888
------ ------
Total nonperforming loans................ $2,266 $2,313
------ ------
------ ------
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Allowance for loan losses ------ ------
Balances, beginning of period................. $2,897 $2,698
Provision for losses.......................... 66 117
Recoveries on loans........................... 31 39
Loans charged off............................. (90) (524)
------ ------
Balances, end of period....................... $2,904 $2,330
------ ------
------ ------
- - -----------------------------------------------------------------------------
<CAPTION>
NOTE 4--DEPOSITS:
March 31, December 31,
1996 1995
---- ----
<S> <C> <C>
Deposits
Noninterest bearing......................... $41,212 $52,029
NOW accounts................................ 72,268 73,914
Money market deposit accounts............... 42,082 41,075
Savings deposits............................ 29,188 28,627
Certificates and other time deposits
of $100,000 or more....................... 48,649 55,193
Other certificates and time deposits........ 164,236 164,513
-------- --------
Total deposits........................... $397,635 $415,351
-------- --------
-------- --------
</TABLE>
Page 9 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
March 31, 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 included 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 three months of 1996 was $1,525,000 compared to
$1,330,000 for the first three months of 1995, an increase of $195,000 or
14.7%. Net income per share for the first three months of 1996 was $.34
an increase of $.05 or 17.2% from the $.29 which was reported for the
first three months in 1995.
The Company's return on average assets for the first three months of 1996
was 1.32%, an increase of 10 basis points over the first three 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 three months of 1996 was 12.80%
compared to 11.90% 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 liabililties. 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 $327,000 or 6.44% during the three months
ended March 31, 1996 when compared to the same three month period last year.
Total interest income, expressed on a full tax-equivalent basis, increased
by $890,000 for the three month period, and total interest expense of the
Company increased by $563,000.
Net interest income (FTE) expressed as a percentage of earning assets
was 5.05% for the first three months of 1996, compared to 5.02% in 1995,
an improvement of 3 basis points. The company's net interest margin (FTE)
for the year ended December 31, 1995 was 5.02%.
Higher net interest income and margins (FTE) can be attributed largely
to continuing gradual increases in loan volume which has occured over the
past year. Also, a greater amount of earning assets are being funded with
non-interest bearing deposits of individuals, partnerships and corporations.
Page 10 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
March 31, 1996
- - -------------------------------------------------------------------------------
PROVISION FOR LOAN LOSSES
The Company's provision for loan losses decreased $51,000 for the
three months ended March 31, 1996 when compared to the same period in
1995. The Company recorded provision for loan loss expense based on the
1996 operating plan, and continued to strengthen the allowance for loan
losses based upon the amount of loans outstanding.
Net chargeoffs during the first three months of 1996 were $59,000
compared to net chargeoffs of $485,000 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. Total other income increased
$170,000 during the first three months of 1996 compared to 1995. The
Company recorded $112,000 more in trust revenue for the first quarter of
1996 over 1995, which accounted for approximately 67% of the increase in
total other income. The remaining increase in total other income came
about primarily as a result of increases in fees related to insurance
commissions and greater ATM fees.
Realized gains on loans sold were $64,000 for the first three months of
1996 compared to $18,000 for the same period in 1995. However, the
Company recorded unrealized losses for first quarter 1996 of $43,000.
Other expenses increased $237,000 in the first three months of 1996
compared to the same period in 1995. Salaries and employee benefits for
the three months ending March 31, 1996 increased $119,000 or 5.2% over the
comparable period in 1995. Retirement expense for the Company's pension
plan was $32,000 greater for first quarter 1996 compared to first quarter
1995. The balance of the increase amounting to $87,000 or 3.8% is primarily
salary related, for normal and merit pay adjustments. Full time equivalent
employees were 259 at March 31, 1996 compared to 275 for March 31, 1995.
In 1996, the Company anticipates a special deposit insurance assessment
related to deposits acquired in a thrift acquisition in April 1991. While
final legislation has not yet been passed by Congress, the Company, in
anticipation of legislation being passed during 1996, has recorded one-fourt
of the estimated expense during the first quarter of 1996. Of the $231,000
deposit insurance premium expense recorded on March 31, 1996 $165,000 is
related to this special assessment.
INCOME TAXES
Income tax expense, including both federal income tax and the Indiana
franchise tax increased by $141,000 for the first three months of 1996 over
1995. Income before income tax increased $336,000 for first three months
of 1996 over 1995. The effective tax rate for the first three months of 199
was 32.2% compared to 30.5% for the first three months of 1995.
Page 11 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
March 31, 1996
- - -------------------------------------------------------------------------------
BALANCE SHEET
The Company's total assets decreased $19.147 million from the level
reported at year end 1995. When compared to March 31, 1995 total assets
have increased $22.575 million or 5.1%.
Cash and cash equivalents decreased $25.324 million at March 31, 1996
from the level reported at December 31, 1995. Federal funds sold decreased
by $14.800 million from December 31, 1995 while cash and due from banks,
including interest bearing deposit accounts, declined $10.524 million from
the levels reported at year end.
LOANS AND DEPOSITS
Loans, excluding loans held for sale and term federal funds, were $343.038
million at March 31, 1996, an increase of $2.909 million over the year end
level of $340.129 million. At March 31, 1995 loans, excluding loans held
for sale and term federal funds, were $324.052 million. Growth in the
Company's loan portfolio from March 31, 1995 to first quarter 1996 has been
$18.986 million or approximately 6%. This loan growth has occurred primaril
in business loans and nonfarm nonresidential real estate mortgage loans.
The 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.
Real estate loans continue to be the largest asset category of the Company
At March 31, 1996 loans made to individuals on owner occupied property
represented 28.6% of total assets and 59% of the Company's mortgage loan
portfolio. At March 31, 1995 loans made to individuals on owner occupied
property represented 30% of total assets and 60.9% of the Company's mortgage
loan portfolio. Most of the growth in the Company's mortgage loan portfolio
has been in the nonfarm nonresidential category. Nonfarm nonresidential
mortgage loans increased $810 thousand since year end 1995 and $6.988 millio
from March 31, 1995. Business loans have increased $1.588 million since
December 31, 1995.
Total loans, including loans held for sale, represented 75.4% of total
assets at March 31, 1996, compared to 72.2% at 1995 year end and 74.7%
at March 31, 1995.
Total deposits of the Company at March 31, 1996 decreased $17.716 million
from levels reported at the year end 1995, but were higher by $13.006 millio
from total deposits as reported March 31, 1995. Noninterest bearing deposit
declined by $10.817 million at March 31, 1996 from year end 1995. Year end
1995 noninterest bearing deposits were higher due to municipal tempory funds
being deposited, and an increased level of trust deposits. Certificates of
deposit for $100,000 or more were $6.544 million lower than year end 1995,
which accounted for most of the remaining decline in total deposits.
ALLOWANCE FOR LOAN LOSSES AND NONPERFORMING LOANS
The Company's nonperforming loans, which include nonaccrual, past due
90 days, and restructured loans, decreased $47,000 from December 31, 1995.
At March 31, 1996 total nonperforming loans amounted to $2.266 million
or .49% of total assets, compared to .48% for year end 1995. Loan
delinquency trends are stable and are less than delinquency percentages
of the Company's peer group.
Total nonperforming loans represented .65% of total loans at March 31,
1996, compared to .71% and .66% at March 31, 1995 and December 31, 1995
respectively.
The allowance for loan losses at March 31, 1996 increased $7,000 from
year end 1995. Loans charged off for the period ending March 31, 1996
decreased by $434,000 when compared to first quarter 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 128% of non-performing loans for the
quarter ended March 31, 1996 compared to 101% and 99% for December 31, 1995
and March 31, 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
March 31, 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 86.8% on March 31, 1996 compared to 85.1% at March 31, 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-establishe
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 $49.718 million at March 31, 1996. Book value per share was $11.00 at
March 31, 1996, compared to $10.92 at year end 1995. Net unrealized gains
on securities available for sale declined $506 thousand or $0.11 a share
from year end 1995. Excluding net unrealized gains on securities available
for sale, book value of the Company increased $0.19 to $10.69 for the quarte
ended March 31, 1996. Tangible book value of the Company at March 31, 1996
was $9.71 compared to $9.55 at December 31, 1995 and $9.03 on March 31, 1995
(Tangible book value is defined as total stockholders' equity less net
unrealized gains on securities available for sale and goodwill.)
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 quarter of 1996 22,000 shares were reacquired under
the program, with the total purchase price being $367 thousand. A total of
91,302 shares have been reacquired by the Company since the buy back program
was approved.
For the quarter ended March 31, 1996, 6,404 shares were issued under the
Company's Dividend Reinvestment and Stock Purchase Plan.
At March 31, 1996 the Company's Tier 1 risk based capital ratio was
14.03% and its leverage capital ratio was 9.55%. 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
March 31, 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 March 31, 1996.
Page 14 of 15 Pages
<PAGE>
ANB CORPORATION
FORM 10-Q
March 31, 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: May 1, 1996 BY:
--------------------
James R. Schrecongost
President and Chief Executive Officer
Date: May 1, 1996 BY:
--------------------
Larry E. Thomas
Chief Financial Officer and
Principal Accounting Officer
Page 15 of 15 Pages
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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0
0
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</TABLE>
