FORM 10-K
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
(X) Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999.
Commission file no. 0-11783.
ACNB CORPORATION
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2233457
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(State of Incorporation) (IRS Employer Identification Number)
675 Old Harrisburg Road
Gettysburg, PA 17325
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (717)334-3161
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Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON CAPITAL STOCK PAR VALUE $2.50 A SHARE
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(Title of Class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
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Indicate by check mark whether the registrant (1) has filed all reports
required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past ninety (90) days. YES X NO
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As of February 29, 2000, ACNB Corporation had outstanding 5,705,530 shares
of Common Stock. The aggregate market value of such Common Stock held by
nonaffiliates as of February 29, 2000, was approximately $98,449,544. Shares of
Common Stock held by each officer and director and by each person who owns 5% or
more of the outstanding Common Stock have been excluded because they may be
deemed to be affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Annual Meeting of Shareholders to
be held May 2, 2000, are incorporated by reference into Part III.
FORM 10-K
PART I
ITEM 1. BUSINESS
The Registrant owns all of the outstanding shares of Adams County National
Bank and Farmers National Bank of Newville (hereinafter the "Banks"). The
Registrant, organized in 1983 and headquartered in Gettysburg, Pennsylvania,
presently has no significant operations other than serving as a bank holding
company.
On March 31, 1999, ACNB Corporation acquired Farmers National Bancorp,
Inc., a single-bank holding company located in Newville, Cumberland County,
Pennsylvania, with assets of $44 million. The sole and wholly-owned subsidiary
of Farmers National Bancorp, Inc. was Farmers National Bank of Newville. The
rate of exchange was 2.266 shares of ACNBCorporation for every share of Farmers
National Bancorp, Inc. The town of Newville had a 1996 population of 1,354, but
the surrounding townships of North Newton, with a population of 1,939, and West
Pennsboro, with a population of 5,343, have shown marked growth over the last
several decades. Cumberland County had a 1996 population of 207,042. The
Newville area is mainly agricultural. The Banks engage in a full-service
commercial and consumer banking and trust business. Adams County National Bank
provides financial services to its customers through its community banking
network of thirteen full-service offices located throughout Adams County,
Pennsylvania, and in Hanover, York County, Pennsylvania. Farmers National Bank
of Newville serves its marketplace via three banking offices in the Newville,
Cumberland County, Pennsylvania area.
The Banks' services include accepting demand, savings and time deposits
including NOW, SuperNOW, money market, passbook savings, a diversified array of
certificates of deposit, IRAs, and club accounts. The services also include
making secured and unsecured commercial and consumer loans; financing commercial
transactions; making construction and mortgage loans; making residential
mortgage loans and home equity lines of credit; making small business loans;
making student loans; and, the renting of safe deposit box facilities. Further,
the Banks' business loans include seasonal credit, collateral loans and term
loans.
Trust services provided by Adams County National Bank include services as
executor and trustee under wills and deeds, estate planning services, and
custodian and agent for various investment companies. Trust services also
include transfer agent and registrar of bond issues and escrow agent.
The Banks have a relatively stable deposit base, and no material amount of
deposits is obtained from a single depositor or group of depositors (including
federal, state and local governments). See Management's Discussion and Analysis
in the 1999 Annual Report. The Banks have not experienced any significant
seasonal fluctuations in the amount of its deposits.
As of December 31, 1999, the Registrant had a total of 174 full-time and 73
part-time employees.
SUPERVISION AND REGULATION
The Registrant and the Banks are considered "affiliates" for purposes of
Section 23A of the Federal Reserve Act and, as such, are subject to certain
limitations specified therein on the making of loans on, extensions of credit
to, or investments in each other. The Federal Bank Holding Company Act of 1956
restricts the Registrant's activities, whether conducted directly or through
subsidiary corporations, to specified activities functionally related to
banking. Permissible activities under the Act include lending, certain leasing
activities, fiduciary and investment advisory services, acting as insurance
agent or broker in connection with loans by subsidiary or affiliated companies,
and certain bookkeeping or data processing services.
COMPETITION
All phases of the Banks' business are highly competitive. The Banks' market
area is the primary trading area of Adams County, Pennsylvania; a western
portion of York County, Pennsylvania; central Cumberland County, Pennsylvania,
and, the northernmost portions of those counties in Maryland which are
immediately adjacent to the southern border of Adams County. The market
concentration is in the area of Gettysburg, Pennsylvania. The Banks compete with
local commercial banks, other commercial banks with branches in the Banks'
market area, savings associations, and other financial service providers. The
Banks consider their major competition to be PNC Bank, Allfirst, Bank of Hanover
and Trust Co, Peoples State Bank of East Berlin, Keystone Financial, F & M
Trust, and Orrstown Bank.
GOVERNMENT MONETARY POLICIES AND ECONOMIC CONTROLS
The earnings and growth of the Banks are affected by the policies of the
regulatory authorities including the Office of the Comptroller of the Currency,
the Board of Governors of the Federal Reserve System, and the Federal Deposit
Insurance Corporation. An important function of the Federal Reserve System is to
regulate the money supply and interest rates. Among the instruments used to
implement these objectives are open market operations in U.S. Government
securities and changes in reserve requirements against member bank deposits.
These instruments are used in varying combinations to influence overall growth
and distribution of bank loans, investments and deposits. Their use may also
affect interest rates charged on loans or paid for deposits. The policies and
regulations of the Federal Reserve Board have had, and will probably continue to
have, a significant effect on the Banks' deposits, loans and investment growth,
as well as the rate of interest earned and paid. The impact of such policies and
regulations upon the future business and earnings of the Banks cannot be
accurately predicted.
ITEM 2. PROPERTIES
ACNB Corporation owns two offices in Gettysburg, PA. The office at 675 Old
Harrisburg Road is the main office and administrative headquarters. The
Corporation also owns nine offices and leases one, which are spread throughout
and serve Adams County. In addition, the Corporation owns one office in western
York County and three in central Cumberland County. All three counties are
located in south central Pennsylvania.
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FORM 10-K
ITEM 3. LEGAL PROCEEDINGS
In the opinion of the management of the Corporation, there are no
proceedings pending to which the Corporation and the Banks are a party or to
which its property is subject, which, if determined adversely to the Corporation
and the Banks, would be material in relation to the Corporation's and Banks'
financial condition. There are no proceedings pending other than ordinary
routine litigation incident to the business of the Corporation and the Banks. In
addition, no material proceedings are pending or are known to be threatened or
contemplated against the Corporation and the Banks by government authorities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The information required by this Item, regarding market value, dividend
payment, and number of shareholders, is set forth on page 53 of the Registrant's
1999 Annual Report and incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is set forth on pages 15 and 46 of
the Registrant's 1999 Annual Report and incorporated herein by reference.
ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information required by this Item is set forth on pages 16 through 25
of the Registrant's 1999 Annual Report and incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this Item is set forth on pages 20 and 21 of
the Registrant's 1999 Annual Report and incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is set forth on pages 26 through 45
of the Registrant's 1999 Annual Report and incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item, relating to directors, executive
officers, and control persons, is set forth in sections "Principal Beneficial
Owners of the Corporation's Stock", "Information as to Nominees, Directors and
Executive Officers" and "Principal Officers of the Corporation" of the
Registrant's definitive Proxy Statement to be used in connection with the 2000
Annual Meeting of Shareholders, which pages are incorporated herein by
reference.
Section 16(a) Beneficial Ownership Compliance. Section 16(a) of the
Securities Exchange Act of 1934, as amended, requires the Registrant's officers
and directors, and persons who own more than 10 percent of a registered class of
the Registrant's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission, or SEC. Officers,
directors and greater than 10 percent shareholders are required by SEC
regulation to furnish the Registrant with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms received by it or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Registrant believes that during the period of
January 1, 1999, through December 31, 1999, its officers and directors were in
compliance with all filing requirements applicable to them.
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PART IV
ITEM 14b. EXHIBITS
EXHIBIT 3(i) Articles of Incorporation of ACNB Corporation, as amended.
EXHIBIT 3(ii) Bylaws of Registrant
A copy of the Bylaws, as amended, of ACNB Corporation is incorporated by
reference to Exhibit 3(ii) of the Registrant's Current Report on Form 8-K, filed
with the Commission on March 25, 1998.
EXHIBIT 10.1 Executive Employment Agreement Dated as of January 1, 1998,
between Adams County National Bank, ACNB Corporation and
Ronald L. Hankey
A copy of the Executive Employment Agreement dated as of January 1, 1998,
between Adams County National Bank, ACNB Corporation and Ronald L. Hankey is
incorporated by reference to Exhibit 99 of the Registrant's Current Report on
Form 8-K, filed with the Commission on March 25, 1998.
EXHIBIT 11 Statement Regarding the Computation of Earnings Per Share
For the Fiscal Year
ended December 31
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1999 1998 1997
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Weighted average shares outstanding ................. 5,782,930 5,815,246 5,817,273
Common stock
Common Stock equivalents
Stock options ..................................... -- -- --
Stock awards ...................................... -- -- --
ESOP shares ....................................... -- -- --
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Total common stock equivalents ...................... -- -- --
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Total Weighted Average Shares Outstanding ........... 5,782,930 5,815,246 5,817,273
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Net Income .......................................... $7,823,000 $7,725,000 $7,770,000
Net Income Per Share ................................ $1.35 $1.33 $1.34
EXHIBIT 12 Statements Regarding the Computation of Ratios
The information required by this Exhibit is set forth on page 46 of the
Registrant's 1999 Annual Report and incorporated herein by reference.
EXHIBIT 21 Subsidiaries of the Registrant
The Registrant has two banking subsidiaries, Adams County National Bank and
Farmers National Bank of Newville, both national banks, which are wholly-owned
by the Registrant.
EXHIBIT 27 Financial Data Schedule
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FORM 10-K
ITEM 15. SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
ACNB CORPORATION (Registrant) March 21, 2000
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Date
BY: /s/ Ronald L. Hankey BY: /s/ John W. Krichten
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Ronald L. Hankey John W. Krichten
Chairman, Secretary & Treasurer
President & CEO
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed on March 21, 2000, by the following persons in the
capacities indicated.
/s/ Philip P. Asper /s/ William B. Lower
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Philip P. Asper William B. Lower
Director Director
/s/ Guy F. Donaldson /s/ Paul G. Pitzer
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Guy F. Donaldson Paul G. Pitzer
Director Director
/s/ Richard L. Galusha /s/ Ralph S. Sandoe
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Richard L. Galusha Ralph S. Sandoe
Director Director
/s/ D. Richard Guise /s/ Marian B. Schultz
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D. Richard Guise Marian B. Schultz
Director & Vice Chairman of the Director
Board
/s/ Ronald L. Hankey /s/ L. Robert Snyder
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Ronald L. Hankey L. Robert Snyder
Director, Chairman, President & CEO Director
/s/ Edgar S. Heberlig /s/ Jennifer L. Weaver
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Edgar S. Heberlig Jennifer L. Weaver
Director Director
/s/ Philip M. Jones /s/ Harry L. Wheeler
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Philip M. Jones Harry L. Wheeler
Director Director
/s/ Wayne E. Lau
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Director
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