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 March 31, 1997.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number 0-13664
GRANGE NATIONAL BANC CORP
PENNSYLVANIA 23-2314065
------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
198 E. Tioga St., Tunkhannock, Pennsylvania
-------------------------------------------
(Address of principal executive offices)
(717) 836-2100
--------------------------------------------------
(Registrant's telephone number, including area code)
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: 356,320
-------
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
<TABLE>
<CAPTION>
Page
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<S> <C>
Consolidated Balance Sheets as of March 31, 1997 and December 31,
1996..................................................................2
Consolidated Statements of Income For the Three Months
Ended March 31, 1997 and 1996.........................................3
Consolidated Statements of Changes to Stockholder's Equity For the
Three Months Ended March 31, 1997 and 1996............................4
Consolidated Statements of Cash Flows For the Three Months ended
March 31, 1997 and 1996...............................................5
Notes to Consolidated Financial Statements........................6 - 7
ITEM 2. Management's Discussion and Analysis of Financial
Condition................................................8 - 11
PART II OTHER INFORMATION:
ITEM 6. Exhibits and Reports on Form 8-K.....................................12
</TABLE>
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, MARCH 31, 1997 AND DECEMBER 31, 1996
<TABLE>
<CAPTION>
1997 1996
(UNAUDITED) (AUDITED)
----------- --------
<S> <C> <C>
ASSETS:
Cash and due from banks .................................. $ 2,057,977 $ 2,566,232
Investment securities, held to maturity (fair
value 1997, $20,870,000; 1996, $22,182,000) ............ 20,943,653 22,269,823
Investment securities, available for sale (Note 3) ....... 12,151,620 11,732,690
Interest bearing deposits ................................ 7,179,959 1,974,642
Loans, net of unearned interest .......................... 64,742,037 62,033,046
Less: allowance for loan losses ......................... 640,769 622,821
------------- -------------
Loans - net ....................................... 64,101,268 61,410,225
Bank premises and equipment - net ........................ 2,945,085 2,680,580
Premium on deposits ...................................... 153,229 157,485
Accrued interest and other assets ........................ 1,505,779 1,407,712
------------- -------------
TOTAL ASSETS ........................................... $ 111,038,570 $ 104,199,389
============= =============
LIABILITIES:
Domestic deposits:
Non-interest bearing deposits .......................... $ 14,813,693 $ 12,206,738
Interest bearing deposits .............................. 83,213,728 78,848,660
------------- -------------
Total deposits ....................................... 98,027,421 91,055,398
Other borrowed funds ..................................... 1,017,813 1,613,160
Accrued interest and other liabilities ................... 743,664 590,973
------------- -------------
Total liabilities .................................... 99,788,898 93,259,531
------------- -------------
STOCKHOLDERS' EQUITY:
Preferred stock authorized 1,000,000 shares of $5 par;
None issued
Common stock authorized 5,000,000 shares of
$5 par value; 356,320 and 355,291 shares issued and
outstanding in 1997 and 1996, respectively (Note 4) .... 1,781,600 1,776,455
Additional paid-in capital ............................... 1,786,801 1,767,949
Retained earnings ........................................ 7,754,657 7,392,890
Unrealized holding gains (losses) on investment securities
(net of deferred income taxes) ......................... (73,000) 3,000
------------- -------------
Total ................................................ 11,250,058 10,940,294
Treasury stock, 17 and 20 shares,
respectively, at cost .................................. (386) (436)
------------- -------------
Total stockholders' equity ........................... 11,249,672 10,939,858
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................. $ 111,038,570 $ 104,199,389
============= =============
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months
Ended
March 31
----------------------
1997 1996
---- ----
Interest Income
Interest and fees on loans ........................ $ 1,445,045 $ 1,273,170
Interest and dividends
on investment securities ........................ 508,128 495,096
Interest on deposits in banks ..................... 30,194 38,057
----------- -----------
Total interest income ..................... 1,983,367 1,806,323
----------- -----------
Interest Expense:
Interest on deposits .............................. 838,943 779,472
Interest on borrowed funds ........................ 11,323 10,290
----------- -----------
Total interest expense .................... 850,266 789,762
----------- -----------
Net interest income ......................... 1,133,101 1,016,561
Provision for loan losses ..................... 30,000 13,000
----------- -----------
Net interest income after
provision for loan losses ................. 1,103,101 1,003,561
----------- -----------
Other Income:
Service charges and other income .................. 132,819 118,223
Gain (loss) on sale of other real estate .......... (22,801)
----------- -----------
Total other income ........................ 132,819 95,422
----------- -----------
Other Expenses:
Salaries and employee benefits .................... 370,610 311,759
Occupancy expense ................................. 63,762 48,772
Equipment expense ................................. 55,457 54,930
Other operating expense ........................... 241,323 148,274
----------- -----------
Total other expenses ...................... 731,152 563,735
----------- -----------
Income before income taxes .......................... 504,768 535,248
Provision for income taxes .......................... 143,000 165,000
----------- -----------
Net income .......................................... $ 361,768 $ 370,248
=========== ===========
Earnings per share (Note 4) ......................... $ 0.97 $ 1.06
=========== ===========
Weighted average common shares ...................... 374,819 348,754
See Notes to Consolidated Financial Statements
3
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
1997 1996
---- ----
STOCKHOLDERS' EQUITY, January 1 ................. $ 10,939,858 $ 9,522,267
COMMON STOCK, $5.00 PAR VALUE
Options exercised ............................... 5,145
ADDITIONAL PAID-IN CAPITAL
Options exercised ............................... 18,851
RETAINED EARNINGS
Net income ...................................... 361,768 370,248
UNREALIZED HOLDING GAINS AND LOSSES
Unrealized holding gains (losses) on investment
securities (net of deferred income tax asset of
$43,000 in 1997) .............................. (76,000) (77,912)
TREASURY STOCK
Reissuance of common stock (3 shares each
in 1997 and 1996) ............................. 50 50
------------ ------------
STOCKHOLDERS' EQUITY, March 31 .................. $ 11,249,672 $ 9,814,653
============ ============
See Notes to Consolidated Financial Statements
4
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1997 1996
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income ........................................................... $ 361,767 $ 376,463
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ...................................... 194,653 47,758
Provision for loan losses .......................................... 30,000 13,000
Increase (decrease) in deferred income taxes ....................... (45,900) (40,242)
Changes in operating assets and liabilities:
Increase in accrued interest income and other assets ................ (38,167) (230,036)
Increase (decrease) in accrued interest expense and other liabilities 103,591 (109,631)
----------- -----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES ............................................... 605,944 57,312
----------- -----------
INVESTING ACTIVITIES:
Purchase bank premises and equipment ................................. (454,902) (76,960)
Decrease (increase) in other real estate ............................. 53,749
Purchase of securities "available for sale" .......................... (540,948) (2,561,554)
Redemptions of securities "available for sale" ....................... 81,118 1,472,580
Purchase of securities "held to maturity" ............................ (5,517,223)
Redemptions of securities "held to maturity" ......................... 2,104,949 3,897,330
Decrease (increase) in mortgage-backed securities .................... (778,779) (456,323)
Decrease (increase) in loans to customers ............................ (2,721,043) 622,200
Decrease (increase) in deposits in banks ............................. (5,205,317) (3,050,089)
Premium paid on core deposits ........................................ (170,254)
----------- -----------
NET CASH USED IN
INVESTING ACTIVITIES ............................................... (7,514,922) (5,786,544)
----------- -----------
FINANCING ACTIVITIES:
Increase in deposits before interest credited ........................ 6,421,564 5,975,186
Increase (decrease) in borrowed funds ................................ (595,347) (843,593)
Interest credited to deposits ........................................ 550,459 581,599
Decrease in treasury stock ........................................... 50 50
Issuance of common stock ............................................. 23,997
----------- -----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES ............................................... 6,400,723 5,713,242
----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ..................................................... (508,255) (15,990)
----------- -----------
CASH AND CASH EQUIVALENTS, January 1 .................................. 2,566,232 1,793,476
----------- -----------
CASH AND CASH EQUIVALENTS, March 31 ................................... $ 2,057,977 $ 1,777,486
=========== ===========
SUPPLEMENTARY SCHEDULE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest ............................................................ $ 162,868 $ 233,477
Income taxes ........................................................ $ 225,000 $ 174,000
Non-cash investing activities:
Unrealized gains (losses) on securities ............................. ($ 123,000) ($ 77,912)
</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 COMBINATION:
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 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 March 31, 1997 and 1996
amortized cost exceeded fair market value by approximately $119,000 and
$20,000, respectively.
6
<PAGE>
4. 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, with options
expiring at the end of ten years 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. The
Plan provides for adjustments to the number of options to compensate
for stock dividends and splits. Accordingly all effected figures have
been adjusted to reflect stock dividends. April 1, 1994 and 1997,
options to purchase 1,029 shares of common stock, at $23.32 and $42.00,
per share, respectively, were automatically granted to each
non-employee Director under this plan expiring April 1, 2004. Of these
options, 1,029 have been exercised.
The Board of Directors adopted an additional Stock Option Plan (the
"Plan") in November 1995 covering the employees and directors. The Plan
authorizes the grant of options to purchase not more than 56,105 shares
of Common Stock under the Plan. Options granted under the Plan are
intended to be either incentive stock options or nonstatutory stock
options. As of April 30, 1997 options for 56,105 shares of Common Stock
having an exercise price of $31.86 were outstanding (1,747 options did
not vest and lapsed) and 6,702 shares were available for future option
grants under the Plan. Of the 49,403 shares of Common Stock outstanding
for options, 37,050 shares of Common Stock were issued as incentive
stock options. The remaining shares outstanding for options were
granted to each non-employee director equally as nonstatutory stock
options.
PREFERRED STOCK:
The Company authorized 1,000,000 of preferred stock at $5 par value. At
December 31, 1996 and March 31, 1997, no shares were issued nor
outstanding.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION:
Net income for the three months ending March 31, 1997 totaled $362,000 which is
a 2% decrease from the $370,000 reported for the same period in 1996. Net
interest income for the three months ending March 31, 1997 increased by $116,000
to $1,133,000 compared to $1,017,000 for the same period in 1996. This
constitutes an increase of 11% over the previous year. Interest income for this
period increased by $177,000 or 10% compared to 1996, and interest expense
increased as well by $60,000 or 8% compared to 1996.
The increase in interest income has been principally from interest on loans
which increased $172,000 or 14% compared to the same period last year. Interest
income from investment securities increased by $13,000 or 3% compared to the
same period last year. Interest rates on loans were fairly stable through the
end of the first quarter. At the end of March the New York Prime Rate increased
by 25 basis points in response to the Federal Reserve's action increasing the
interest rate at the discount window by 25 basis points. This should increase
the bank's interest rate spread during the second quarter because many
commercial and consumer loans adjust with the New York Prime Rate. Interest on
deposits in banks decreased by $8,000 from $38,000 to $30,000 due to lower
balances and lower rates.
The increase in interest expense is due to the increase in interest bearing
deposits during the first quarter of 1997 as compared to the first quarter of
1996. The average total sources to fund earning assets increased by $12,932,000,
from $86,485,000 to $99,417,000 in 1997, while th average interest rate
decreased from 4.35% to 4.19%, respectively.
The increase in deposits continues to provide funds for loans and liquidity.
Loan demand during the first quarter was somewhat mild as loans increased
$2,691,000 or 4% from $61,410,000 in at December 31, 1996 to $64,101,000 at
March 31, 1997. Loan demand appears to be picking up as the second quarter
begins. Balances of investment securities remained stable during the first
quarter with a decline of $907,000 or 3% since December 31, 1996. Interest
bearing deposits at banks increased by $5,205,000 to $7,180,000 from $1,975,000
due to deposits flowing in and management holding off on investing the funds due
to low rates on securities, and increased loan demand is anticipated.
The provision for loan loss during the three months ending March 31, 1997 was
$30,000 compared to $13,000 for the same period in 1996, as management tries to
keep the allowance for loan losses in line with the size of the loan portfolio.
The allowance for loan losses was $641,000 and $623,000 at March 31, 1997 and
December 31, 1996, respectively. This represents 0.99% and 1.00% of total loans,
269% and 192% of non-performing loans, respectively, as well as non-performing
assets. 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 coverage for unexpected losses, and to keep the size of the reserves in
proportion to the growing size of the loan portfolio.
7
<PAGE>
The following sets forth loans past due 90 days or more on which interest has
continued to be accrued for March 31, 1997 and December 31, 1996.
March 1997 December 1996
---------- -------------
(In thousands)
Real estate mortgages .......................... $67
Commercial ..................................... $ 1 11
Installment .................................... 10
--- ---
Total .......................... $11 $78
=== ===
Non-accrual decreased from $247,000 at December 31, 1996 to $227,000 at March
31, 1997. The overall quality remains very good, and management expects
non-performing assets to remain at substantially the same levels as a proportion
of loans.
Investments in securities and deposits in banks increased by $4,298,000 or 12%
from December 31, 1996 to March 31, 1997. The average rate earned on available
for sale, held to maturity and deposits in banks were 5.95%, 6.64% and 5.44% at
March 31, 1997, as compared to 5.49%, 6.99% and 5.97% at December 31, 1996. The
amortized value of the Bank's investments classified as held to maturity
exceeded their fair value by $74,000, and the amortized value of investments
classified as available for sale exceeded their fair value by $119,000. This is
reflected as a decrease in the Bank's equity of approximately $76,000, net of
deferred tax effects.
Slightly higher interest rates at March 31, 1997 account for the unrealized loss
on the available for sale securities reflected on the balance sheet. Rates are
expected to change from day to day, but remain fairly level. This will result in
minimal impact on the fair value of securities available for sale. As the Bank
extends the length of the securities it purchases, interest rate changes will
have greater impact on the fair value of those securities. This interest rate
risk is offset by higher yields on the securities. The Bank continues to
purchase fairly short maturities, generally five to seven years for fixed rate
securities.
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.
The Bank experienced substantial increased associated with the addition of two
new offices and a computer conversion. The Towanda office opened in November
1996, the Back Mountain office opened in February 1997 and the computer
conversion occurred in January 1997. The Back Mountain office is leased over a
term of 15 years, and renewable at that time, for $70,000 per year. Salaries and
employee benefits have increased by $59,000 or 19% from $312,000 to $371,000,
occupancy expense increased $15,000 or 31% from $49,000 to $64,000, and other
operating expenses increased $93,000 or 63% from $148,000 to $241,000. Included
in other operating expenses are increases of $13,000 for postage and $36,000 for
advertising over the
8
<PAGE>
prior year period. Management believes the additional expense incurred will
benefit the Bank as additional deposits and loans are generated from these two
new offices.
Management performs an interest rate and liquidity analysis on a monthly basis
to monitor the Bank's interest rate sensitivity gap and liquidity needs. These
reports are reviewed by the Board of Directors and used to formulate ways to
improve the Bank's interest rate gap. 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 March 31, 1997 and December
31, 1996.
(In thousands, except ratios) 1997 1996
Tier I capital:
Shareholders' equity .............................. $11,205 $10,780
Tier II capital:
Loan loss reserve ................................. 623 623
------- -------
Total Qualifying Capital .......................... $11,828 $11,403
======= =======
Risk-adjusted assets (including off balance sheet items) $63,358 $61,371
Tier I Capital Ratio (4.00% required) .................. 17.81% 17.57%
Total Capital Ratio (8.00% required) ................... 18.67% 18.58%
9
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
AVERAGE BALANCES, INTEREST INCOME/EXPENSE AND RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1997 MARCH 31, 1996
---------------------------------- -------------------------------------
(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 ................................ $35,942 $ 795 8.85% $30,751 $ 719 9.35%
Installment .............................. 5,083 134 10.54 4,784 116 9.70
Commercial ............................... 22,904 529 9.24 16,510 442 10.71
------- ------- ------- ------
Total loans ............................ 63,929 1,458 9.12 52,045 1,277 9.81
------- ------- ------- ------
Securities available for sale:
U.S. Treasury securities ................. 11,410 171 5.99 10,354 142 5.49
Other securities ......................... 412 5 4.85 357 5 5.60
------- ------- ------- ------
Total available for sale ............. 11,822 176 5.95 10,711 147 5.49
------- ------- ------- ------
Securities held to maturity:
U.S. government agencies ................. 17,333 280 6.46 16,371 289 7.06
Municipal bonds .......................... 3,740 70 7.49 4,016 65 6.47
Other securities ......................... 388 6 6.19 795 16 8.05
------- ------- ------- ------
Total held to maturity ................. 21,461 356 6.64 21,182 370 6.99
------- ------- ------- ------
Deposits in banks ......................... 2,205 30 5.44 2,547 38 5.97
------- ------- ------- ------
TOTAL ................................ $99,417 2,020 8.13 $86,485 1,832 8.47
======= ------- ======= ------
INTEREST BEARING LIABILITIES:
Deposits:
NOW and super-NOW ........................ $ 9,270 46 1.98 $ 8,090 40 1.98
Savings and money market ................. 24,618 167 2.71 22,142 152 2.75
Certificates of deposit .................. 46,153 623 5.40 41,426 585 5.65
Other time deposits ...................... 200 3 6.00 200 3 6.00
------- ------- ------- ------
Total deposits ......................... 80,241 839 4.18 71,858 780 4.34
Other borrowed funds ...................... 823 11 5.35 797 10 5.02
------- ------- ------- ------
TOTAL ................................ 81,064 850 4.19 72,655 790 4.35
Non-interest bearing
funds, net (2) ............................ 18,353 13,830
------- ------- ------- ------
TOTAL SOURCES TO FUND
EARNING ASSETS ............................. $99,417 850 3.42 $86,485 790 3.65
======= ------- ======= ------
NET INTEREST/YIELD ......................... $ 1,170 4.71% $1,042 4.82%
======= ======
</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
10
<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:
Primary earnings per share is computed by dividing net income
by the weighted average number of shares of common stock and
common stock equivalents outstanding during the quarter. Stock
options are considered common stock equivalents and are
included in the computation of the number of shares
outstanding using the treasury stock method. 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 May 14, 1997 /s/ Thomas A. McCullough
-------------------------------- -------------------------
Thomas A. McCullough
President
Chief Executive Officer
Chief Financial Officer
Date May 14, 1997 /s/ Philip O. Farr
-------------------------------- -------------------
Philip O. Farr
Chief Accounting Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM OUR MARCH
31, 1997 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1.000
<CASH> 2,058
<INT-BEARING-DEPOSITS> 7,180
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 12,152
<INVESTMENTS-CARRYING> 20,944
<INVESTMENTS-MARKET> 20,870
<LOANS> 64,742
<ALLOWANCE> 641
<TOTAL-ASSETS> 111,039
<DEPOSITS> 98,027
<SHORT-TERM> 655
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0
0
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</TABLE>
