<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended____June 30, 1995________________________
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from___________ to___________
Commission file number 0-13664
____________________GRANGE NATIONAL BANC CORP___________________________
(Exact name of registrant as specified in its charter)
________________PENNSYLVANIA__________ ____________23-2314065_________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
198 E. TIOGA STREET
________TUNKHANNOCK, PENNSYLVANIA_______
(Address of principal executive offices)
__________(717)_836-2100_________________
(Issuer's telephone number)
_________________________________________
Former name, former address and former fiscal year, if
changed since last report.
Check whether the issuer (1) 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 periods 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 ___
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: 345,627
Transitional Small Business Disclosure Format (Check one):
Yes ___; No _X_
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Page
Unaudited Financial Statements:
Consolidated Balance Sheets as of June 30, 1995
and December 31, 1994.............................. 2
Consolidated Statements of Income For the Three
and Six Months Ended June 30, 1995................. 3
Consolidated Statements of Changes in Stockholders'
Equity For the Six Months Ended June 30, 1995
and 1994.......................................... 4
Consolidated Statements of Cash Flows For the
Six Months ended June 30, 1995 and 1994........... 5
Notes to Consolidated Financial Statements........ 6 - 8
ITEM 2. Management's Discussion and Analysis of
Financial Condition.......................... 9 - 11
Results of Operations............................. 12 - 13
PART 11. OTHER INFORMATION:
ITEM 6. Exhibits and Reports on Form 8-K............. 14
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, JUNE 30, 1995 AND DECEMBER 31, 1994
<TABLE>
<CAPTION>
1995 1994
(UNAUDITED) (AUDITED)
----------- -----------
<S> <C> <C>
ASSETS:
Cash and due from banks................... $1,651,601 $1,486,145
Investment securities, held to maturity
(market value 1995, $14,163,000;
1994, $11,143,000....................... 14,062,337 11,412,673
Investment securities, available for sale
(Note 3)................................. 7,657,488 8,619,700
Interest bearing deposits................. 8,565,696 5,501,885
Loans, net of unearned interest........... 49,904,462 46,733,322
Less: allowance for loan losses.......... 485,932 479,390
----------- -----------
Loans - net........................ 49,418,530 46,253,932
Bank premises and equipment - net......... 2,283,387 2,201,107
Other real estate......................... 232,264 187,071
Accrued interest and other assets......... 787,002 642,814
----------- -----------
TOTAL ASSETS............................ $84,658,305 $76,305,327
=========== ===========
LIABILITIES:
Domestic deposits:
Non-interest bearing deposits........... $8,748,253 $7,698,578
Interest bearing deposits............... 65,806,140 59,315,159
----------- -----------
Total deposits........................ 74,554,393 67,013,737
Other borrowed funds...................... 846,565 772,039
Accrued interest and other liabilities.... 393,104 276,539
----------- -----------
Total liabilities..................... 75,794,062 68,062,315
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred stock authorized 1,000,000 shares
of $5 par;
None issued nor outstanding.............
Common stock authorized 5,000,000 shares of
$5 par value; 345,654 shares issued and
outstanding (Note 4).................... 1,728,270 1,728,270
Additional paid-in capital................ 1,483,334 1,483,334
Retained earnings......................... 5,663,241 5,137,944
Unrealized holding losses on investment
securities (net of deferred income taxes
of $5,212 and $54,000 in 1995 and 1994,
respectively) (Note 4).................. (10,116) (106,000)
----------- -----------
Total................................. 8,864,729 8,243,548
Less: Treasury stock, 23 and 26 shares,
respectively, at cost.............. 486 536
----------- -----------
Total stockholders' equity............ 8,864,243 8,243,012
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.. $84,658,305 $76,305,327
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
June 30 June 30
---------------------- ----------------------
1995 1994 1995 1994
---------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans............ $1,215,709 $995,961 $2,358,238 $1,906,383
---------- -------- ---------- ----------
Interest and dividends
on investment securities............ 298,737 264,610 586,554 502,836
Interest on federal funds sold........ 3,858 0 11,152
Interest on deposits in banks......... 87,851 48,649 154,823 87,581
---------- -------- ---------- ----------
Total interest income......... 1,602,297 1,313,078 3,099,615 2,507,952
---------- -------- ---------- ----------
Interest Expense:
Interest on deposits.................. 681,570 493,084 1,274,762 977,328
Interest on borrowed funds............ 9,020 9,394 19,188 19,438
---------- -------- ---------- ----------
Total interest expense........ 690,590 502,478 1,293,950 996,766
---------- -------- ---------- ----------
Net interest income............. 911,707 810,600 1,805,665 1,511,186
Provision for loan losses......... 15,000 20,000 30,000 50,000
---------- -------- ---------- ----------
Net interest income after
provision for loan losses..... 896,707 790,600 1,775,665 1,461,186
---------- -------- ---------- ----------
Other Income:
Service charges and other income...... 97,985 78,766 192,076 146,560
---------- -------- ---------- ----------
Other Expenses:
Salaries and employee benefits........ 257,890 221,765 503,814 441,272
Occupancy expense..................... 45,125 30,854 107,416 67,447
Equipment expense..................... 51,970 41,797 102,218 90,032
Other operating expense............... 201,397 163,250 385,870 305,149
---------- -------- ---------- ----------
Total other expenses.......... 556,382 457,666 1,099,318 903,900
---------- -------- ---------- ----------
Income before income taxes.............. 438,310 411,700 868,423 703,846
Provision for income taxes.............. 136,000 127,500 274,000 214,500
---------- -------- ---------- ----------
Net income.............................. $302,310 $284,200 $594,423 $489,346
========== ======== ========== ==========
Earnings per share (Note 4)............. $0.87 $1.06 $1.72 $1.84
========== ======== ========== ==========
Weighted average common shares.......... 345,631 268,851 345,631 265,580
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
STOCKHOLDERS' EQUITY, January 1 8,243,012 5,544,147
COMMON STOCK, $5.00 par value
Transfer to common stock due to 3 for 1 stock split 874,400
Issuance of common stock (83,334 shares) 311,295
ADDITIONAL PAID-IN CAPITAL
Transfer to common stock due to 3 for 1 stock split (734,400)
Issuance of common stock (83,334 shares) 1,182,921
RETAINED EARNINGS
Transfer to common stock due to 3 for 1 stock split (140,000)
NET INCOME 594,423 489,346
Cash dividends paid: (69,126) (53,993)
UNREALIZED HOLDING GAINS AND LOSSES
Unrealized holding gains (losses) on investment
securities (net of deferred income taxes of $5,212
and $35,884 in 1995 and 1994, respectively) 95,884 (69,654)
TREASURY STOCK
Reissuance of common stock (3 shares each
in 1994 and 1993) 50 50
---------- ----------
STOCKHOLDERS' EQUITY, June 30 $8,864,243 $7,404,112
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1995 1994
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income..................................... $594,423 $489,346
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................ 72,000 67,000
Provision for loan losses.................... 30,000 50,000
Increase (decrease) in deferred income taxes. 48,788 (4,000)
Changes in operating assets and liabilities:
Increase in accrued interest income and other
assets....................................... (144,188) (49,311)
Increase in accrued interest expense and other
liabilties................................... 67,777 54,821
---------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES......................... 668,800 607,856
---------- ----------
INVESTING ACTIVITIES:
Purchase bank premises and equipment........... (154,280) (153,199)
Decrease (increase) in other real estate....... (45,193) 21
Purchase of securities "available for sale".... (2,041,878) (3,113,552)
Redemptions of securities "available for sale". 3,099,974 2,201,402
Purchase of securities "held to maturity"...... (4,990,982) (1,581,045)
Redemptions of securities "held to maturity"... 2,292,362 1,404,559
Decrease in mortgage-backed securities......... 48,956 146,729
Increase in loans to customers................. (3,194,598) (2,382,019)
Increase in deposits in banks.................. (3,063,811) (4,810,380)
---------- ----------
NET CASH USED IN
INVESTING ACTIVITIES......................... (8,049,450) (8,287,484)
---------- ----------
FINANCING ACTIVITIES:
Increase in deposits before interest credited.. 6,464,844 2,596,351
Interest credited to deposits.................. 1,150,338 726,770
Cash dividends paid............................ (69,126) (53,993)
Decrease in treasury stock..................... 50 50
Issuance of common stock....................... 1,494,216
---------- ----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES......................... 7,546,106 4,763,394
---------- ----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS............................... 165,456 (2,916,234)
CASH AND CASH EQUIVALENTS, January 1............ 1,486,145 4,670,674
---------- ----------
CASH AND CASH EQUIVALENTS, June 30.............. $1,651,601 $1,754,440
========== ==========
SUPPLEMENTARY SCHEDULE OF CASH FLOW INFORMATION:
Cash paid during the six months for:
Interest...................................... $250,677 $209,510
Income taxes.................................. $268,000 $212,000
Non-cash investing activities:
Unrealized gains (losses) on securities, net
of tax....................................... $95,884 ($105,538)
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BUSINESS COMBINATION AND PRINCIPLES
OF CONSOLIDATION:
Grange National Banc Corp. (Company) was organized and incorporated under
the laws of the Commonwealth of Pennsylvania on October 2, 1984, for the
purpose of becoming a bank holding company. On April 30, 1985 the Company
acquired the Grange National Bank of Wyoming County (Bank) pursuant to a
plan of reorganization and merger. The Bank became a wholly owned subsidiary
of the Company, and each outstanding share of Bank common stock was
converted into one share of Company common stock. The accompanying
consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary (Bank) with the reorganization accounted for as
a pooling of interests.
2. BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements have been
prepared in conformity with the accounting principles and practices
reflected in the annual financial statements, and reflect all adjustments
which are normal and recurring and, in the opinion of management, necessary
for a fair presentation of the results of operations for the interim
periods. The results of operations reported in interim financial statements
are not necessarily indicative of results to be expected for the year.
3. CHANGE IN ACCOUNTING PRINCIPLE:
In May 1993 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115 "Accounting for Certain Investments
in Debt and Equity Securities" ("SFAS No. 115"), which the Company adopted
as of January 1, 1994. SFAS No. 115 requires the Company to classify each
debt and equity security in one of three categories: held to maturity,
available for sale or trading. Investments classified as held to maturity
are reflected at amortized cost. Investments classified as either available
for sale or trading securities are reflected at fair market value.
Unrealized gains or losses for trading securities are included in earnings.
Unrealized gains and losses on available for sale securities are excluded
from earnings and reflected, net of income taxes, in a separate component of
stockholders' equity until realized. All equity and U.S. Treasury securities
are classified as "available for sale" and all other securities are
classified as "held to maturity". Upon implementation on January 1, 1994,
fair market value of available for sale securities exceeded amortized cost
by $70,000. At June 30, 1995 and 1994, amortized cost exceeded fair market
value by approximately $15,000 and $105,000, respectively.
6
<PAGE>
4. STOCK SPLIT - RETROACTIVE EFFECT ON FINANCIAL STATEMENTS:
In January 1994, the Board of Directors of the Company voted a three-for-one
split of the Company's common stock, to be effected in the form of a stock
distribution, payable to shareholders of record as of April 1, 1994. The
split was approved by the shareholders as part of an amendment to the
Company's articles of incorporation to increase the number of authorized
shares of common stock from 300,000 to 5,000,000 (an additional 1,000,000
shares of preferred stock of $5 par value was also authorized). The
financial statements have been revised to give retroactive effect of the
stock split as if the additional shares had been outstanding for all periods
presented.
STOCK OPTIONS:
In January 1994, the Board adopted an Employee Stock Option Plan in which
common stock options may be granted to all officers and key employees of the
Company. The aggregate number of shares which may be issued upon exercise of
the options under the plan is 20,000. Options are exercisable up to
one-third in the second year after the date of grant, up to two thirds in
the third year after the date of grant and up to 100% in the fourth year
after the date of grant. Options were granted at various times during 1994,
at prices ranging from $24.00 to $26.25 per share
The Board of Directors also adopted a Stock Option Plan for non-employee
Directors which will be available to all non-employee members of the Board
of Directors. The aggregate number of shares which may be issued upon
exercise of the options under the Director's plan is 20,000 shares and are
exercisable in part from time to time beginning one year after the date of
grant and expiring ten years thereafter. Effective April 1, 1994, options to
purchase 1,000 shares of common stock, at $24.00 per share, were
automatically granted to each non-employee Director under this plan expiring
April 1, 2004.
7
<PAGE>
PUBLIC OFFERING
In 1994 the Company engaged in a stock offering in which 83,334 shares of
common stock were offered and sold at $24.00 per share for a total of
$2,000,016. The net proceeds received from the stock offering after the
offering costs of $100,012 was $1,900,004.
PREFERRED STOCK:
The Company authorized 1,000,000 of preferred stock at $5 par value. At
December 31, 1994 and June 30, 1995, no shares were issued nor outstanding.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION:
Net income for the three months ending June 30, 1995 totaled $302,000, which
is a 6% increase from the $284,000 net income reported for the same period
in 1994. Net interest income for the three months ending June 30, 1995
increased by $106,000 to $897,000 compared to $791,000 for the same period
in 1994 This constitutes an increase of 13% over the same period in 1994.
Interest income for this period increased by $289,000 or 22% compared to
1994, and interest expense increased by $188,000 or 37% compared to 1994.
The increase in interest income has been principally in loan income, which
increase $220,000 or 22% compared to the same period last year. This
increased occurred as a result of increased loan volume which was
experienced in the first and second quarters of 1995.
Interest income from investment securities increased by $34,000 or 13% and
interest on fed funds sold decreased by $4,000. This occurred largely as a
result of a reclassification of interest earned on federal funds sold to
interest on deposits in banks. Interest on deposits in banks increased by
$39,000 compared to the three months ending June 30, 1994. Interest on fed
funds sold declined to zero as a result of the transfer of fed funds
balances to the Federal Home Loan Bank. The income derived from these
balances is classified as interest earned on deposits in banks.
The increase in interest expense is due directly to the steady increase in
interest rates during the third and fourth quarters of 1994 and the first
quarter of 1995. Although the average total sources to fund earning assets
increased by $6,279,000, from $67,991,000 at June 30, 1994, to $74,270,000
at June 30, 1995, the average interest rate increased from 4.58% to 4.93%,
respectively, accounting for the increase in interest expense.
The increase in deposits in the past several years has provided funds for
investment in securities as well as loans. Loan demand during the second
quarter continued to be very strong. Management believes that this is due to
a stable local economy and the increase in loan volume associated with its
Edwardsville office, which opened in March of 1995. Loan balances increased
from $46,733,000 at December 31, 1994 to $49,904,000 at June 30, 1995, for
an increase of $3,171,000 or 7%. Balances of investment securities "held to
maturity" increased by $2,649,000 or 23%, while balances of investment
securities "available for sale" decreased by $963,000 or 11% as compared to
December 31, 1994. Management expects loan demand to continue to be strong
for the remainder of the year due to the continued expansion of its
Edwardsville, Bowman's Creek and Tunkhannock offices.
The provision for loan losses during the three months ending June 30, 1995
was $15,000 compared to $20,000 for the three months ended June 30, 1994.
9
<PAGE>
The decrease was due to management's belief that the loan loss account was
adequately funded. The allowance for loan loss at June 30, 1995 and December
31, 1994 was $486,000 and $477,000, respectively. This represents 0.98% and
1.02% of total loans, 454% and 379% of non-performing loans, and 143% and
152% of non-performing assets for June 30, 1995 and December 31, 1994,
respectively. Management performs a quarterly analysis of the Bank's
potential loan losses on a "worst case" basis. A loan review process is
performed by an independent loan review officer on a continuing basis. This
information is closely reviewed by the Board of Directors and used to
evaluate the adequacy of the loan loss reserve in order to provide coverage
for identifiable losses, provide for coverage for unexpected losses, and to
keep the size of the reserve in proportion to the growing size of the loan
portfolio.
The following sets forth loans past due 90 days or more on which interest
has continued to be accrued for June 30, 1995 and December 1994.
<TABLE>
<CAPTION>
June 1995 December 1994
--------- -------------
(In thousands)
<S> <C> <C>
Real estate mortgages $324 $174
Commercial 64 5
Installment 1
---- ----
Total $388 $180
==== ====
</TABLE>
Non-accrual loans decreased from $126,000 at December 31, 1994 to $107,000
at June 30, 1995. Other real estate increased to $232,000 at June 30, 1995
from $187,000 at December 1994. The Bank has sold one of the four parcels in
other real estate in July 1995, and expects that the remaining properties
will be liquidated during 1995 with minimal loss, if any, to the Bank.
Although the overall quality of the loan portfolio of the Bank is good,
management expects future non-performing assets to increase in proportion to
the increase in the size of the loan portfolio.
Investments in securities "held to maturity" increased as previously noted,
while investment securities "available for sale" decreased as previously
noted. The market value of the securities "held to maturity" is $101,000
greater than the carrying value, while the securities "available for sale"
reflect an unrealized gain in value of $96,000 from December 31, 1994 to
June 30, 1995. This still reflects a loss of $15,000 from the "booked" value
and is reflected as a reduction in the Bank's equity of $10,000, net of
deferred tax effects.
The interest increase is due to previous investments at lower rates maturing
and being replaced by current investments, which produce higher yields.
Rising interest rates during 1994 accounted for the unrealized loss on
"available for sale" securities at December 31, 1994. Interest rates have
declined during 1995, and this decline accounts for the reduction in the
unrealized loss on the "available for sale" portfolio. The value of the
investment portfolio will change inversely to changes in interest rates.
10
<PAGE>
Management strives to keep the average maturity of the investments short in
order to minimize market value changes.
Management continues to purchase only high quality investments to minimize
credit risk to the value of the Bank's investments. There have been no
adverse credit valuations on any of the investments. Although investment
opportunities exist which will produce higher yields, they generally contain
higher credit or interest rate risk.
Salaries and employee benefits have increased by $36,000 from $222,000 to
$258,000 or 16% for the three months ended June 30, 1995, compared to the
same period for 1994, due to salary increases and the hiring of new
employees for the Edwardsville office. Occupancy expense
increased by $14,000 or 45% due to rent and utility expenses for the
Edwardsville office and increased depreciation costs related to the other
offices. Equipment expense increased by $10,000 or 24% due to expenditures
at the Edwardsville office. F.D.I.C. deposit insurance premiums have leveled
off as the rate did not change for 1995. Under the "risk-based" premium
system instituted in 1993 by the F.D.I.C., the Bank pays the lowest possible
premium rate, but will still pay over $160,000 for deposit insurance during
1995, unless the premium is lowered in accordance with existing laws which
should take effect in the third quarter of 1995. Assuming the Bank continues
to pay the lowest possible premium, which is scheduled to be 4 cents per
hundred dollars of deposits, the Bank will realize a reduced F.D.I.C.
expense approximately $45,000 for the balance of 1995.
Management continues to monitor the Bank's repricing and liquidity by
performing and interest rate analysis and liquidity analysis on a monthly
basis. These reports are reviewed by management and the Board of Directors
to determine ways to improve the Bank's interest rate sensitivity gap and
meet liquidity needs. The Bank continues to place great emphasis on
adjustable rate loan products, such as variable rate home equity loans and
annually adjustable mortgage loans as well as adjustable rate and short term
investments, in order to minimize interest rate risk.
Since 1991 the Comptroller of the Currency has required all national banks
to meet certain "Risk Based Capital" standards. These standards weight
certain assets based on the risk of the asset, and also includes certain
off-balance sheet items. The table below sets forth the Bank's Tier 1 and
Tier 2 capital, risk adjusted assets (including off-balance sheet items) and
the Bank's risk- based capital ratios under the guidelines, for June 30,
1995 and December 31, 1994.
<TABLE>
<CAPTION>
(In thousands, except ratios) 1995 1994
------- -------
<S> <C> <C>
Tier I capital:
Shareholders' equity........................ $8,864 $ 8,349
Tier II capital:
Loan loss reserve 486 479
------- -------
Total Qualifying Capital...................... $9,350 $ 8,828
======= =======
Risk-adjusted assets (including
off-balance sheet items).................... $49,713 $45,961
Tier I Capital Ratio (4.00% required)......... 17.83% 18.17%
Total Capital Ratio (8.00% required).......... 18.81% 19.21%
</TABLE>
11
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
AVERAGE BALANCES, INTEREST INCOME/EXPENSE AND RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 1995 JUNE 30, 1994
------------------------- -------------------------
(1) Interest Average (1) Interest Average
Average Income/ Interest Average Income/ Interest
(Dollars in thousands) Balance Expense Rate Balance Expense Rate
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS:
Loans:
Mortgages...................... $29,401 $701 9.54% $26,572 $661 9.95%
Installment.................... 3,719 105 11.29 3,539 85 9.61
Commercial..................... 16,680 421 10.10 12,508 256 8.19
---------------- ----------------
Total loans.................. 49,800 1,227 9.86 42,619 1,002 9.40
---------------- ----------------
Securities available for sale:
U.S. Treasury securities....... 6,766 72 4.26 10,156 124 4.88
Other securities............... 315 9 11.43 256 3 4.69
---------------- ----------------
Total available for sale... 7,081 81 4.58 10,412 127 4.88
---------------- ----------------
Securities held to maturity:
U.S. government agencies....... 10,227 170 6.65 5,598 78 5.57
Municipal bonds................ 2,305 32 5.55 3,637 53 5.83
Other securities............... 1,118 25 8.94 1,568 24 6.12
---------------- ----------------
Total held to maturity....... 13,650 227 6.65 10,803 155 5.74
---------------- ----------------
Federal funds sold.............. 384 5 5.21
Deposits in banks............... 6,216 88 5.66 5,564 45 3.24
---------------- ----------------
TOTAL...................... $76,747 1,623 8.46 $69,782 1,334 7.65
=======--------- =======---------
INTEREST BEARING LIABILITIES:
Deposits:
NOW and super-NOW.............. $7,517 38 2.02 $6,531 34 2.08
Savings and money market....... 21,006 151 2.88 21,058 167 3.17
Certificates of deposit........ 34,380 490 5.70 29,985 289 3.86
Other time deposits............ 200 3 6.00 200 2 4.00
---------------- ----------------
Total deposits............... 63,103 682 4.32 57,774 492 3.41
Other borrowed funds............ 699 9 5.15 769 10 5.20
---------------- ----------------
TOTAL...................... 63,802 691 4.33 58,543 502 3.43
Non-interest bearing
funds, net (2).................. 12,945 11,239
---------------- ----------------
TOTAL SOURCES TO FUND
EARNING ASSETS................... $76,747 691 3.60 $69,782 502 2.88
=======--------- =======---------
NET INTEREST/YIELD............... $932 4.86% $832 4.77%
==== ====
</TABLE>
(1) Average balances are daily averages.
(2) Demand deposits, stockholders's equity and other non-interest bearing
liabilities less non-interest earning assets.
Non-accrual loans are reflected in the loan balances, but contributing no
interest income.
NOTE - Tax exempt interest income has been converted to a tax equivalent basis
at the U.S. federal income tax rate of 34%.
See Notes to Consolidated Financial Statements
12
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
AVERAGE BALANCES, INTEREST INCOME/EXPENSE AND RATES
<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1995 JUNE 30, 1994
------------------------- -------------------------
(1) Interest Average (1) Interest Average
Average Income/ Interest Average Income/ Interest
(Dollars in thousands) Balance Expense Rate Balance Expense Rate
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS:
Loans:
Mortgages...................... $29,169 $1,378 9.45% $26,105 $1,219 9.34%
Installment.................... 3,634 205 11.28 3,082 167 10.84
Commercial..................... 15,534 793 10.21 12,210 533 8.73
---------------- ----------------
Total loans.................. 48,337 2,376 9.83 41,397 1,919 9.27
---------------- ----------------
Securities available for sale:
U.S. Treasury securities....... 7,163 177 4.94 9,737 240 4.93
Other securities............... 289 9 6.23 238 6 5.04
Total available for sale... 7,452 186 4.99 9,975 246 4.93
Securities held to maturity:
U.S. government agencies....... 9,272 305 6.58 5,433 144 5.30
Municipal bonds................ 2,620 75 5.73 3,735 101 5.41
Other securities............... 1,128 46 8.16 1,476 46 6.23
---------------- ----------------
Total held to maturity....... 13,020 426 6.54 10,644 291 5.47
Federal funds sold.............. 478 10 4.18
Deposits in banks............... 5,461 155 5.68 5,497 87 3.17
---------------- ----------------
TOTAL...................... $74,270 3,143 8.46 $67,991 2,553 7.51
=======--------- =======---------
INTEREST BEARING LIABILITIES:
Deposits:
NOW and super-NOW.............. $6,749 74 2.19 $6,527 66 2.02
Savings and money market....... 21,026 302 2.87 20,798 331 3.18
Certificates of deposit........ 29,927 893 5.97 29,836 577 3.87
Other time deposits............ 200 6 6.00 200 3 3.00
---------------- ----------------
Total deposits............... 57,902 1,275 4.40 57,361 977 3.41
Other borrowed funds............ 800 19 4.75 823 20 4.86
---------------- ----------------
TOTAL...................... 58,702 1,294 4.41 58,184 997 3.43
Non-interest bearing
funds, net (2).................. 15,568 9,807
---------------- ----------------
TOTAL SOURCES TO FUND
EARNING ASSETS................... $74,270 1,294 3.48 $67,991 997 2.93
=======--------- =======---------
NET INTEREST/YIELD............... $1,849 4.98% $1,556 4.58%
====== ======
</TABLE>
(1) Average balances are daily averages.
(2) Demand deposits, stockholders's equity and other non-interest bearing
liabilities less non-interest earning assets.
Non-accrual loans are reflected in the loan balances, but contributing no
interest income.
NOTE - Tax exempt interest income has been converted to a tax equivalent basis
at the U.S. federal income tax rate of 34%.
See Notes to Consolidated Financial Statements
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
(ii) Statement re: computation of earnings per share:
Earnings per share are calculated on the basis of the weighted average
number of shares outstanding. The number of shares used to calculate
earnings per share for the periods presented are as indicated in each
period.
During the current fiscal quarter, there have been no events of a nature
required to be filed on Form 8-K.
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.
GRANGE NATIONAL BANC CORP.
--------------------------
(Registrant)
Date August 11, 1995 /s/ Thomas A. McCullough
--------------- -------------------------
Thomas A. McCullough
President
Chief Executive Officer
Chief Financial Officer
Date August 11, 1995 /s/ Philip O. Farr
--------------- -------------------------
Philip O. Farr
Chief Accounting Officer
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM OUR JUNE 30, 1995 10-QSB AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,652
<INT-BEARING-DEPOSITS> 8,566
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 7,657
<INVESTMENTS-CARRYING> 14,062
<INVESTMENTS-MARKET> 14,163
<LOANS> 49,904
<ALLOWANCE> 486
<TOTAL-ASSETS> 84,658
<DEPOSITS> 74,554
<SHORT-TERM> 320
<LIABILITIES-OTHER> 393
<LONG-TERM> 527
<COMMON> 3,212
0
0
<OTHER-SE> 5,652
<TOTAL-LIABILITIES-AND-EQUITY> 84,658
<INTEREST-LOAN> 2,358
<INTEREST-INVEST> 587
<INTEREST-OTHER> 155
<INTEREST-TOTAL> 3,100
<INTEREST-DEPOSIT> 1,275
<INTEREST-EXPENSE> 1,294
<INTEREST-INCOME-NET> 1,806
<LOAN-LOSSES> 30
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,099
<INCOME-PRETAX> 868
<INCOME-PRE-EXTRAORDINARY> 594
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 594
<EPS-PRIMARY> 1.72
<EPS-DILUTED> 1.72
<YIELD-ACTUAL> 4.98
<LOANS-NON> 98
<LOANS-PAST> 388
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 479
<CHARGE-OFFS> 28
<RECOVERIES> 5
<ALLOWANCE-CLOSE> 486
<ALLOWANCE-DOMESTIC> 486
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
