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, 2000.
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
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 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 / /
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/
As of February 28, 2001, ACNB Corporation had outstanding 5,436,101
shares of Common Stock. The aggregate market value of such Common Stock
held by nonaffiliates as of February 28, 2001, was approximately
$85,063,000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 2000 Annual Report to Shareholders are
incorporated by reference into Parts II, III and IV. Portions of the Proxy
Statement for the Annual Meeting of Shareholders, to be held May 1, 2001,
are incorporated by reference into Part III.
PART I
ITEM 1. BUSINESS
The Registrant owns all of the outstanding shares of Adams County
National Bank (hereinafter the "Bank"). The Registrant, organized in 1983
and headquartered in Gettysburg, Pennsylvania, presently has no significant
operations other than serving as a financial 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 ACNB Corporation for
every share of Farmers National Bancorp, Inc. Then, effective October 1,
2000, Farmers National Bank of Newville became a division of Adams County
National Bank.
The Bank engages 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 offices
located throughout Adams County, Pennsylvania, and in Hanover, York County,
Pennsylvania. Farmers National Bank of Newville, a division of Adams
County National Bank, serves its marketplace via three banking offices in
the Newville, Cumberland County, Pennsylvania area. As of December 31,
2000, the Registrant had a total of 160 full-time and 61 part-time
employees.
The Bank's primary 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.
These 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 Bank's 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 and
settlement; personal trust administration; and, investment planning and
management. Trust services also include employee benefit services for
employers such as pension and profit-sharing plans.
The Bank has 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 2000 Annual Report to shareholders. The
Bank has not experienced any significant seasonal fluctuations in the
amount of its deposits.
During 2000, ACNB Corporation, along with seven other banks, entered
into a joint venture to form Pennsbank Insurance Company, an offshore
reinsurance company. Each bank owns an insurance cell through which its
premiums and losses from credit life, health and accident insurance are
funded. Each bank is responsible for the activity in its respective cell.
The limited 2000 financial activity for the insurance cell has been
included in the consolidated financial statements.
SUPERVISION AND REGULATION
The Registrant and the Bank 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 Gramm-Leach-Bliley Act of
1999, also called the Financial Services Modernization Act, repealed the
Glass-Steagall Act, which prohibits commercial banks from engaging in the
securities industry. The Financial Services Modernization Act permits
national banks to engage in expanded activities, such as having a
subsidiary engaged in any activity authorized for national banks, except
for insurance underwriting, insurance investments, real estate investment
or development, or merchant banking, which must be conducted through a
subsidiary of a Financial Holding Company. The Registrant became a
Financial Holding Company in Fourth Quarter 2000, as permitted under an
amendment to the Bank Holding Company Act.
COMPETITION
All phases of the Bank's business are highly competitive. The Bank's
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 Bank
competes with local commercial banks, other commercial banks with branches
in the Bank's market area, savings banks, and other financial service
providers. The Bank considers its major competition to be PNC Bank,
Allfirst Bank, Bank of Hanover, Peoples State Bank of East Berlin, M&T
Bank, F&M Trust, and Orrstown Bank.
GOVERNMENT MONETARY POLICIES AND ECONOMIC CONTROLS
The earnings and growth of the Bank 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 Bank's 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 Bank cannot be
accurately predicted.
ITEM 2. PROPERTIES
ACNB Corporation owns two offices in Gettysburg, Pennsylvania. The
office at 675 Old Harrisburg Road is the main office and administrative
headquarters. The Registrant owns eight other offices and leases two
facilities, which are spread throughout Adams County. In addition, the
Registrant owns one office in western York County and two in central
Cumberland County. A third facility in Cumberland County is leased. All
three counties are located in southcentral Pennsylvania.
ITEM 3. LEGAL PROCEEDINGS
In the opinion of the management of the Registrant, there are no
proceedings pending to which the Registrant and the Bank are a party or to
which its property is subject, which, if determined adversely to the
Registrant and the Bank, would be material in relation to the Registrant's
and Bank's financial condition. There are no proceedings pending other
than ordinary routine litigation incident to the business of the Registrant
and the Bank. In addition, no material proceedings are pending or are
known to be threatened or contemplated against the Registrant and the Bank
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 2000 Annual Report to Shareholders, which is attached at
Exhibit 13 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 2000 Annual Report to Shareholders, which is attached
at Exhibit 13 and incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by this Item is set forth on pages 16 through
24 of the Registrant's 2000 Annual Report to Shareholders, which is
attached at Exhibit 13 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 through
21 of the Registrant's 2000 Annual Report to Shareholders, which is
attached at Exhibit 13 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 2000 Annual Report to Shareholders, which is
attached at Exhibit 13 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 "Board of Directors and
Executive Officers" and "Information as to Nominees and Directors" in the
Registrant's definitive Proxy Statement to be used in connection with the 2001
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, 2000, through December 31, 2000, its officers and
directors were in compliance with all filing requirements applicable to
them.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item, relating to executive
compensation, is set forth in pages 7 through 13 and 22 of the Registrant's
definitive Proxy Statement to be used in connection with the 2001 Annual
Meeting of Shareholders, which pages are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
The information required by this Item, relating to beneficial ownership
of the Registrant's Common Stock, is set forth in pages 19 and 20 of
the Registrant's definitive Proxy Statement to be used in connection with
the 2001 Annual Meeting of Shareholders, which pages are incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this Item, relating to transactions with
management and others, certain business relationships and indebtedness of
management, is set forth on page 15 of the Registrant's definitive Proxy
Statement to be used in connection with the 2001 Annual Meeting of
Shareholders, which page is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND
REPORTS ON FORM 8-K.
(a) 1. Financial Statements.
The following financial statements are included by reference
in Part II, Item 8 hereof:
Report of Independent Certified Public Accountants.
Consolidated Statements of Condition.
Consolidated Statements of Income.
Consolidated Statements of Changes in Stockholders' Equity.
Consolidated Statement of Cash Flows.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedules.
Financial Statement Schedules are omitted because the required
information is either not applicable, not required or is
shown in the respective financial statements or in the
notes thereto.
3. The following Exhibits are filed herewith or incorporated by
reference as a part of this Annual Report.
EXHIBIT 3(i) Articles of Incorporation of ACNB Corporation,
as amended.
EXHIBIT 3(ii) Bylaws of Registrant. (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. (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 10.2 Executive Employment Agreement Dated as of
January 1, 2000, between Adams County National Bank, ACNB
Corporation and Thomas A. Ritter. (Incorporated by reference
to Exhibit 99 of the Registrant's Current Report on Form 8-K,
filed with the Commission on March 26, 2001.)
EXHIBIT 11 Statement Regarding the Computation of Earnings
Per Share.
EXHIBIT 12 Statements Regarding the Computation of Ratios.
(Incorporated by reference to page 46 of the Registrant's
2000 Annual Report to Shareholders.)
EXHIBIT 13 Excerpts from Registrant's 2000 Annual Report
to Shareholders.
(b) Reports on Form 8-K.
No Reports on Form 8-K were filed during the fourth
quarter of 2000.
(c) The exhibits required herein are included in
Item 14(a)(3), above.
(d) Not applicable
EXHIBIT 21 Subsidiaries of the Registrant.
EXHIBIT 23 Consent of Independent Auditors.
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 20, 2001
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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 & CEO Secretary & Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed on March 20, 2001, 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/ Ralph S. Sandoe
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Guy F. Donaldson 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 Board Director
/s/ Ronald L. Hankey /s/ Jennifer L. Weaver
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Ronald L. Hankey Jennifer L. Weaver
Director, Chairman & CEO Director
/s/ Edgar S. Heberlig /s/ Harry L. Wheeler
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Edgar S. Heberlig Harry L. Wheeler
Director Director
/s/ Wayne E. Lau
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Wayne E. Lau
Director
EXHIBIT INDEX
EXHIBIT 3(i) Articles of Incorporation of ACNB Corporation,
as amended.
EXHIBIT 3(ii) Bylaws of Registrant. (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. (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 10.2 Executive Employment Agreement Dated as of
January 1, 2000, between Adams County National Bank, ACNB
Corporation and Thomas A. Ritter. (Incorporated by reference
to Exhibit 99 of the Registrant's Current Report on Form 8-K,
filed with the Commission on March 26, 2001.)
EXHIBIT 11 Statement Regarding the Computation of Earnings
Per Share.
EXHIBIT 12 Statements Regarding the Computation of Ratios.
(Incorporated by reference to page 46 of the Registrant's
2000 Annual Report to Shareholders.)
EXHIBIT 13 Excerpts from Registrant's 2000 Annual Report
to Shareholders.
EXHIBIT 21 Subsidiaries of the Registrant.
EXHIBIT 23 Consent of Independent Auditors.