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, 1998.
[ ] 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: 363,305
Transitional Small Business Disclosure Format (Check one): Yes ; No X
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<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
ITEM 1. Unaudited Financial Statements
<TABLE>
<CAPTION>
Page
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<S> <C>
Consolidated Statements of Financial Position as
of March 31, 1998 and December 31, 1997..................................................................2
Consolidated Statements of Income and Comprehensive Income For the
Three Months Ended March 31, 1998 and 1997...............................................................3
Consolidated Statements of Changes to Stockholder's Equity For the Three Months
Ended March 31, 1998 and 1997............................................................................4
Consolidated Statements of Cash Flows For the Three Months ended
March 31, 1998 and 1997..................................................................................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 STATEMENTS OF FINANCIAL POSITION,
March 31, 1998 and December 31, 1997
<TABLE>
<CAPTION>
1998 1997
(UNAUDITED) (AUDITED)
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<S> <C> <C>
ASSETS:
Cash and due from banks................................... $2,125,865 $2,514,202
Interest bearing deposits................................. 7,284,570 2,417,987
Investment securities, available for sale (Note 3)........ 12,749,416 13,001,723
Investment securities, held to maturity (fair
value 1998, $22,376,000; 1997, $25,316,000)............. 22,828,536 25,205,836
Loans, net of unearned interest........................... 79,254,168 76,995,428
Less: allowance for loan losses.......................... 819,205 767,475
------------ ------------
Loans - net........................................ 78,434,963 76,227,953
Bank premises and equipment - net......................... 2,992,790 3,028,098
Other real estate......................................... 236,533 149,795
Accrued interest and other assets......................... 1,713,077 1,730,580
Premium on deposits....................................... 136,203 140,460
------------ ------------
TOTAL ASSETS............................................ $128,501,953 $124,416,634
============ ============
LIABILITIES:
Domestic deposits:
Non-interest bearing deposits........................... $16,394,618 $14,675,828
Interest bearing deposits............................... 97,019,203 94,112,851
------------ ------------
Total deposits........................................ 113,413,821 108,788,679
Other borrowed funds...................................... 1,238,952 2,279,294
Accrued interest and other liabilities.................... 793,906 710,857
------------ ------------
Total liabilities..................................... 115,446,679 111,778,830
------------ ------------
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; 363,305 shares issued and
outstanding in 1997 and 1996 (Note 4).................. 1,816,525 1,816,525
Additional paid-in capital............................... 2,052,158 2,052,158
Retained earnings........................................ 9,099,283 8,685,313
Accumulated other comprehensive income................... 87,500 84,000
------------ ------------
Total................................................ 13,055,466 12,637,996
Treasury stock, 8 shares at cost....................... (192) (192)
------------ ------------
Total stockholders' equity........................... 13,055,274 12,637,804
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................. $128,501,953 $124,416,634
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31
1998 1997
------------ ----------
<S> <C> <C>
Interest Income:
Interest and fees on loans.................................................... $1,745,116 $1,445,045
Interest and dividends
on investment securities.................................................... 589,094 508,128
Interest on deposits in banks................................................. 24,424 30,194
----------- ----------
Total interest income................................................. 2,358,634 1,983,367
----------- ----------
Interest Expense:
Interest on deposits.......................................................... 1,014,738 838,943
Interest on borrowed funds.................................................... 23,866 11,323
----------- ----------
Total interest expense................................................ 1,038,604 850,266
----------- ----------
Net interest income..................................................... 1,320,030 1,133,101
Provision for loan losses................................................. 75,000 30,000
----------- ----------
Net interest income after
provision for loan losses............................................. 1,245,030 1,103,101
----------- ----------
Other Income:
Service charges and other income.............................................. 189,202 132,819
----------- ----------
Total other income.................................................... 189,202 132,819
----------- ----------
Other Expenses:
Salaries and employee benefits................................................ 431,290 370,610
Occupancy expense............................................................. 89,921 63,762
Equipment expense............................................................. 75,437 55,457
Other operating expense....................................................... 233,614 241,323
----------- ----------
Total other expenses.................................................. 830,262 731,152
----------- ----------
Income before income taxes...................................................... 603,970 504,768
Provision for income taxes...................................................... 190,000 143,000
----------- ----------
Net income...................................................................... $413,970 $361,768
----------- ----------
Other comprehensive income, net of tax:
Unrealized gains on securities:
Unrealized holding gain (loss) arising during period....................... $3,500 ($76,000)
----------- ----------
Other comprehensive income.................................................... $3,500 ($76,000)
Comprehensive income............................................................ $417,470 $285,768
----------- ----------
----------- ----------
Earnings per share (Note 4)..................................................... $1.00 $0.88
----------- ----------
----------- ----------
Weighted average common shares.................................................. 412,754 412,754
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
STOCKHOLDERS' EQUITY, January 1....................... $12,637,804 $10,939,858
COMMON STOCK, $5.00 PAR VALUE
Options exercised..................................... 5,145
ADDITIONAL PAID-IN CAPITAL
Options exercised..................................... 18,851
RETAINED EARNINGS
Net income............................................ 413,970 361,768
ACCUMULATED OTHER COMPREHENSIVE INCOME
Other comprehensive income, net of tax................ 3,500 (76,000)
TREASURY STOCK
Reissuance of common stock (3 shares)................. 50
----------- -----------
STOCKHOLDERS' EQUITY, March 31....................... $13,055,274 $11,249,672
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1998 1997
- ------------------------------------ ------ ------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income..................................................................... $413,970 $361,767
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................................................ 73,107 194,653
Provision for loan losses.................................................... 75,000 30,000
Decrease in deferred income taxes............................................ (5,000) (45,900)
Changes in operating assets and liabilities:
Increase (decrease) in accrued interest income and other assets............... 22,503 (38,167)
Increase in accrued interest expense and other liabilities.................... 83,049 103,591
---------- ----------
NET CASH PROVIDED BY
OPERATING ACTIVITIES......................................................... 662,629 605,944
---------- ----------
INVESTING ACTIVITIES:
Purchase bank premises and equipment........................................... (33,542) (454,902)
Increase in other real estate.................................................. (86,738)
Purchase of securities "available for sale".................................... (473,612) (540,948)
Decrease in mortgage-backed securities "available for sale".................... 200,848
Redemptions of securities "available for sale"................................. 528,571 81,118
Redemptions of securities "held to maturity"................................... 2,359,314 2,104,949
Decrease (increase) in mortgage-backed securities "held to maturity"........... 17,986 (778,779)
Increase in loans to customers................................................. (2,282,010) (2,721,043)
Increase in deposits in banks.................................................. (4,866,583) (5,205,317)
---------- ----------
NET CASH USED IN
INVESTING ACTIVITIES......................................................... (4,635,766) (7,514,922)
---------- ----------
FINANCING ACTIVITIES:
Increase in deposits before interest credited.................................. 3,828,323 6,421,564
Decrease in borrowed funds..................................................... (1,040,342) (595,347)
Interest credited to deposits.................................................. 796,819 550,459
Decrease in treasury stock..................................................... 50
Issuance of common stock....................................................... 23,997
---------- ----------
NET CASH PROVIDED BY
FINANCING ACTIVITIES......................................................... 3,584,800 6,400,723
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS............................................................... (388,337) (508,255)
CASH AND CASH EQUIVALENTS, January 1............................................ 2,514,202 2,566,232
---------- ----------
CASH AND CASH EQUIVALENTS, March 31............................................. $2,125,865 $2,057,977
========== ==========
SUPPLEMENTARY SCHEDULE OF CASH FLOW INFORMATION:
Cash paid during the year for
Interest...................................................................... $215,702 $162,868
Income taxes.................................................................. $75,000 $225,000
Non-cash investing activities:
Unrealized gains (losses) on securities....................................... $9,000 ($123,000)
</TABLE>
See Notes to Consolidated Financial Statements
<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. COMPREHENSIVE INCOME:
In 1997, the Financial Accounting Standards Board issued Statement No.
130 "Reporting Comprehensive Income," which is effective for years
beginning after December 15, 1997. This statement establishes standards
for reporting and display of comprehensive income and its components in
a full set of general-purpose financial statements. The purpose of
reporting comprehensive income is to report a measure of all changes in
equity that result from recognized transactions and other economic
events of the period other than transactions with owners in their
capacity as owners. Prior to the issuance of this statement, some of
those changes in equity were displayed in a statement that reports the
results of operations, while others were included directly in a
statement of financial position. The 1997 financial statements have
been restated where applicable to reflect the adoption of SFAS No. 130.
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
<PAGE>
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
$57.50 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, 1998 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.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION:
Net income for the three months ending March 31, 1998 totaled $414,000 which is
a 14% increase over the $362,000 reported for the same period in 1997. Net
interest income for the three months ending March 31, 1998 increased by $187,000
to $1,320,000 compared to $1,133,000 for the same period in 1997. This
constitutes an increase of 17% over the previous year. Interest income for this
period increased by $375,000 or 19% compared to 1997, and interest expense
increased as well by $189,000 or 22% compared to 1997.
The increase in interest income has been principally from interest on loans
which increased $300,000 or 21% compared to the same period last year. Interest
income from investment securities increased by $81,000 or 16% compared to the
same period last year. Interest rates on loans have remained fairly stable since
March of 1997. Although the New York prime rate has not changed since March of
1997, competitive pressures have reduced the Bank's spread to the prime on new
loans. Management has increased its purchases of longer term municipal bonds and
purchased some mortgage-backed bonds to increase the yield of the bond
portfolio. The municipal bonds currently being purchased, mostly have maturities
of between eight and ten years, and are classified as "available for sale". If
interest rates increase significantly these bonds could be sold. Interest on
deposits in banks decreased by $6,000 from $30,000 to $24,000 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 1998 as compared to the first quarter of
1997, as well as a slight increase in the rate paid to depositors. The average
total sources to fund earning assets increased by $15,909,000, from $99,417,000
to $115,326,000 in 1998, while the average interest rate increased from 3.42% to
3.60%, 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
$2,259,000 or 3% from $76,995,000 in at December 31, 1997 to $79,254,000 at
March 31, 1998. Loan demand appears to be picking up as the second quarter
begins. Balances of investment securities declined during the first quarter with
a decrease of $2,630,000 or 7% since December 31, 1997. Interest bearing
deposits at banks increased by $4,867,000 to $7,285,000 from $2,418,000 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, 1998 was
$75,000 compared to $30,000 for the same period in 1997, 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 $819,000 and $767,000 at March 31, 1998 and
December 31, 1997, respectively. This represents 1.03% and 1.00% of total loans,
195% and 171% of non-performing loans, and 124% and 128% of non-performing
assets, 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
<PAGE>
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. The following sets forth loans past due 90
days or more on which interest has continued to be accrued for March 31, 1998
and December 31, 1997.
March 1998 December 1997
(In thousands)
Real estate mortgages $230 $311
Commercial 14 1
Installment
---- ----
Total $244 $312
==== ====
Non-accrual loans increased from $136,000 at December 31, 1997 to $177,000 at
March 31, 1998. 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 $2,237,000 or 6 %
from December 31, 1997 to March 31, 1998. The average rate earned on available
for sale, held to maturity and deposits in banks were 6.38%, 7.24% and 5.56% for
the three months ended March 31, 1998, as compared to 5.95%, 6.64% and 5.44% for
the three months ended March 31, 1997. As of March 31, 1998, the fair value of
the Bank's investments classified as held to maturity exceeded their amortized
value by $145,000, and the fair value of investments classified as available for
sale exceeded their amortized value by $138,000. This is reflected as an
increase in the Bank's equity of approximately $88,000, net of deferred tax
effects.
Slightly lower interest rates at March 31, 1998 account for the unrealized gain
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 short to moderate maturities, generally five to ten 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 addition of loan, insurance agency and administrative employees, along with
annual raises attributed to the increase in salary expense. In addition,
numerous on going expenses associated with the February 1997 opening of the Back
Mountain office and the January 1997 computer upgrade and associated software
conversion did not begin to be expensed until after the first quarter of 1997.
This accounts for the 1998 increase in salary, occupancy, and equipment
expenses. Salaries and employee benefits have increased by $60,000 or 16% from
$371,000 to
<PAGE>
$431,000, occupancy expense increased $26,000 or 40% from $64,000 to $90,000 and
equipment expense increased $20,000 or 36% from $55,000 to $75,000. Other
operating expenses increased $7,000 or 3% from $241,000 to $234,000. During 1997
other operating expenses included approximately $49,000 in expenses for
advertising associated with the opening of the Back Mountain office.
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, 1998 and December
31, 1997.
(In thousands, except ratios) 1998 1997
Tier I capital:
Shareholders' equity.................................... $12,919 $12,414
Tier II capital:
Loan loss reserve....................................... 819 767
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Total Qualifying Capital..................................... $13,738 $13,181
====== ======
Risk-adjusted assets (including off balance sheet items)..... $79,099 $76,937
Tier I Capital Ratio (4.00% required)........................ 16.39% 16.14%
Total Capital Ratio (8.00% required)......................... 17.37% 17.13%
<PAGE>
GRANGE NATIONAL BANC CORP. AND SUBSIDIARY
AVERAGE BALANCES, INTEREST INCOME/EXPENSE AND RATES
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, 1998 MARCH 31, 1997
------------------------------------ ----------------------------
(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............................................ $43,157 $952 8.82% $35,942 $795 8.85%
Installment.......................................... 5,058 134 10.60 5,083 134 10.54
Commercial........................................... 29,283 672 9.18 22,904 529 9.24
-------- ------ ------- -----
Total loans........................................ 77,498 1,758 9.07 63,929 1,458 9.12
-------- ------ ------- -----
Securities available for sale:
U.S. Treasury securities............................. 6,545 99 6.05 11,410 171 5.99
U.S. government agencies............................. 3,598 58 6.45
Municipal bonds...................................... 2,232 42 7.53
Other securities...................................... 533 7 5.25 412 5 4.85
-------- ------ ------- -----
Total available for sale......................... 12,908 206 6.38 11,822 176 5.95
-------- ------ ------- -----
Securities held to maturity:
U.S. government agencies............................. 17,662 320 7.25 17,333 280 6.46
Municipal bonds...................................... 4,039 65 6.44 3,740 70 7.49
Other securities..................................... 2,120 35 6.60 388 6 6.19
-------- ------ ------- -----
Total held to maturity............................. 23,821 420 7.05 21,461 356 6.64
-------- ------ ------- -----
Deposits in banks..................................... 1,726 24 5.56 2,205 30 5.44
-------- ------ ------- -----
TOTAL............................................ $115,953 2,408 8.31 $99,417 2,020 8.13
-------- ------ ------- -----
-------- ------ ------- -----
INTEREST BEARING LIABILITIES:
Deposits:
NOW and super-NOW.................................... $11,185 58 2.07 $9,270 46 1.98
Savings and money market............................. 26,554 179 2.70 24,618 167 2.71
Certificates of deposit.............................. 56,126 775 5.52 46,153 623 5.40
Other time deposits.................................. 200 3 6.00 200 3 6.00
-------- ------ ------- -----
Total deposits..................................... 94,065 1,015 4.32 80,241 839 4.18
Other borrowed funds.................................. 1,564 24 6.14 823 11 5.35
-------- ------ ------- -----
TOTAL............................................ 95,629 1,039 4.35 81,064 850 4.19
Non-interest bearing
funds, net (2)........................................ 20,324 18,353
-------- -------
TOTAL SOURCES TO FUND
EARNING ASSETS......................................... $115,953 1,039 3.58 $99,417 850 3.42
-------- ------ ------- -----
-------- ------ ------- -----
NET INTEREST/YIELD..................................... $1,369 4.72% $1,170 4.71%
------ -----
------ -----
</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>
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, 1998 /s/ Thomas A. McCullough
----------------------------- -------------------------
Thomas A. McCullough
President
Chief Executive Officer
Chief Financial Officer
Date May 14, 1998 /s/ Philip O. Farr
----------------------------- ------------------------
Philip O. Farr
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM OUR
SEPTEMBER 30, 1997 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000763850
<NAME> GRANGE NATIONAL BANC CORP
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1.000
<CASH> 2,126
<INT-BEARING-DEPOSITS> 7,285
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 12,749
<INVESTMENTS-CARRYING> 22,829
<INVESTMENTS-MARKET> 22,376
<LOANS> 79,254
<ALLOWANCE> 819
<TOTAL-ASSETS> 128,502
<DEPOSITS> 113,414
<SHORT-TERM> 1,239
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<LONG-TERM> 0
0
0
<COMMON> 3,869
<OTHER-SE> 9,187
<TOTAL-LIABILITIES-AND-EQUITY> 128,502
<INTEREST-LOAN> 1,745
<INTEREST-INVEST> 589
<INTEREST-OTHER> 24
<INTEREST-TOTAL> 2,359
<INTEREST-DEPOSIT> 1,015
<INTEREST-EXPENSE> 1,039
<INTEREST-INCOME-NET> 1,320
<LOAN-LOSSES> 75
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 830
<INCOME-PRETAX> 604
<INCOME-PRE-EXTRAORDINARY> 604
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 417
<EPS-PRIMARY> 1.00
<EPS-DILUTED> 1.00
<YIELD-ACTUAL> 4.72
<LOANS-NON> 177
<LOANS-PAST> 244
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<ALLOWANCE-OPEN> 767
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<RECOVERIES> 4
<ALLOWANCE-CLOSE> 819
<ALLOWANCE-DOMESTIC> 819
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
