UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________________ to
Commission file number 0-11783
ACNB CORPORATION
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(Exact name of corporation as specified in its charter)
PENNSYLVANIA 23-2233457
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16 LINCOLN SQUARE, GETTYSBURG, PA 17325
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(Address of principal executive offices) (Zip Code)
(717) 334-3161
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(corporation's telephone number, including area code)
675 OLD HARRISBURG ROAD, GETTYSBURG, PA 17325
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(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the corporation (1) has 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 period that the
corporation was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No ____
Indicate by check mark whether the corporation is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes __X__ No _____
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the corporation has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ____ No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class - Common Stock ($2.50 par value)
Outstanding at March 31, 2003 - 5,436,101
PART I ITEM I FINANCIAL INFORMATION
ACNB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
3/31 3/31 12/31
2003 2002 2002
ASSETS (000 omitted)
Cash and Due from Banks $27,598 $18,344 $19,098
Investment Securities
Securities Held to Maturity 32,941 37,141 31,658
Securities Available for Sale 323,037 175,710 282,389
______ ______
Total Investment Securities 355,978 212,851 314,047
Loans 380,728 364,264 374,850
Less: Reserve for Loan Losses (3,849) (3,688) (3,837)
_______ _______
Net Loans 376,879 360,576 371,013
Premises and Equipment 7,357 5,647 7,182
Other Real Estate 515 1,509 559
Other Assets 23,665 19,639 22,745
________ ________ ________
TOTAL ASSETS $791,992 $618,566 $734,644
======== ======== ========
LIABILITIES
Deposits
Noninterest Bearing 75,266 74,090 70,728
Interest Bearing 529,527 437,669 511,887
_______ _______ _______
Total Deposits 604,793 511,759 582,615
Securities Sold Under
Agreement To Repurchase 33,089 28,902 35,945
Borrowing Federal Home Loan Bank 75,000 8,050 40,050
Demand Notes U.S. Treasury 469 450 450
Other Liabilities 7,033 6,467 5,484
_______ _______ _______
TOTAL LIABILITIES 720,384 555,628 664,544
SHAREHOLDERS' EQUITY
Common Stock ($2.50 par value)
20,000,000 shares authorized:
5,436,101 shares issued and
outstanding at 3/31/03 13,590 13,590 13,590
Retained Earnings 54,054 49,856 52,781
Accumulated Other Comprehensive
Income (Loss) 3,963 (508) 3,729
______ ______ ______
TOTAL SHAREHOLDERS' EQUITY 71,607 62,938 70,100
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $791,991 $618,566 $734,644
======== ======== ========
See accompanying notes to financial statements.
ACNB CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
3/31
2003 2002
(000 omitted)
INTEREST INCOME
Loan Interest and Fees $6,053 $6,267
Interest and Dividends on
Investment Securities 3,497 3,131
Interest on Federal Funds Sold 0 0
Interest on Balances with
Depository Institutions 15 11
_____ _____
TOTAL INTEREST INCOME 9,565 9,409
INTEREST EXPENSE
Deposits 3,109 3,054
Other Borrowed Funds 587 259
_____ _____
TOTAL INTEREST EXPENSE 3,696 3,313
NET INTEREST INCOME 5,869 6,096
Provision for Loan Losses 60 60
NET INTEREST INCOME AFTER PROVISION _____ _____
FOR LOAN LOSSES 5,809 6,036
OTHER INCOME
Trust Department 162 152
Service Charges on Deposit Accounts 463 399
Other Operating Income 515 395
Gain on Other Real Estate 222 0
Bank Owned Life Insurance 127 88
Securities Gains 450 0
_____ _____
TOTAL OTHER INCOME 1,939 1,034
OTHER EXPENSES
Salaries and Employee Benefits 2,452 2,151
Premises and Equipment 647 527
Other Expenses 1,203 1,114
_____ _____
TOTAL OTHER EXPENSE 4,302 3,792
INCOME BEFORE INCOME TAX 3,446 3,278
Applicable Income Tax 979 1,004
_____ _____
NET INCOME $2,467 $2,274
===== =====
EARNINGS PER SHARE* $0.45 $0.42
DIVIDENDS PAID PER SHARE 0.21 0.40
*Based on a weighted average of 5,436,101 shares outstanding in 2003 and
5,436,101 in 2002.
See accompanying notes to financial statements.
ACNB CORPORATION AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
Three months ended
3/31
2003 2002
(000 (omitted)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash Flows from Operating Activities:
Interest and Dividends Received $ 10,821 $ 9,834
Fees and Commissions Received 2,109 1,133
Interest Paid (3,593) (3,738)
Cash Paid to Suppliers and Employees (5,043) (4,654)
Income Taxes Paid 0 0
Loans Originated for Sale (4,476) 0
Proceeds of Mortgage Loans Sold 5,214 0
Net Cash (Used in) Provided by Operating Activities 5,032 2,575
Cash Flows from Investing Activities:
Proceeds from Maturities of Investment Securities 59,364 19,251
Purchase of Investment Securities (100,444) (10,000)
Net Decrease (Increase) in Loans (5,879) (1,608)
Capital Expenditures (359) (48)
Proceeds from Sale of Other Real Estate Owned 494 0
Net Cash (Used in) Provided by Investing Activities (46,824) 7,595
Cash Flow from Financing Activities:
Net Increase (Decrease) in Demand Deposits, NOW Accounts, and
Savings Accounts 19,388 4,823
Net Increase (Decrease) in Certificates of Deposit (67) (6,638)
Net Increase in Securities Sold Under Agreement to Repurchase (2,856) 0
Dividends Paid (1,142) (2,174)
Net Increase (Decrease) in Borrowings 34,969 (9,762)
Net Cash (Used in) Provided by Financing Activities 50,292 (13,751)
Net Increase (Decrease) in Cash and Cash Equivalents 8,500 (3,581)
Cash and Cash Equivalents: Beginning of Period 19,098 21,925
End of Period $ 27,598 $1 8,344
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES
Net Income $ 2,467 $ 2,274
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 184 105
Provision for Loan Losses 60 60
Provision for Deferred Taxes (404) (390)
Amortization (Accretion) of Investment Securities Premiums 656 (65)
Increase (Decrease) in Taxes Payable 1,383 1,394
(Increase) Decrease in Interest Receivable 257 (125)
Increase (Decrease) in Interest Payable 103 (425)
Increase (Decrease) in Accrued Expenses 251 80
Decrease (Increase) in Mortgage Loans Held for Sale 738 0
(Increase) Decrease in Other Assets (1,176) (1,047)
Increase (Decrease) in Other Liabilities 513 714
Net Cash (Used in) Provided by Operating Activities $ 5,032 $ 2,575
DISCLOSURE OF ACCOUNTING POLICY
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand, amounts due from banks, and federal funds sold. Generally,
federal funds are purchased and sold for one-day periods.
ACNB CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present
fairly ACNB Corporation's financial position as of March 31, 2003 and
2002 and December 31, 2002 and the results of its operations for the
three months ended March 31, 2003 and 2002 and changes in financial
position for the three months then ended. All such adjustments are of a
normal recurring nature.
The accounting policies followed by the corporation are set forth in
Note A to the corporation's financial statements in the 2002 ACNB
Corporation Annual Report and Form 10-K, filed with the SEC on March
21, 2003.
2. The book and approximate market value of securities owned at March 31,
2003 and December 31, 2002 were as follows:
3/31/03 12/31/02
Amortized Fair Amortized Fair
Cost Value Cost Value
(000 omitted)
U.S. Treasury and U.S. Government
Agencies (held to maturity) $ 25,539 $ 28,359 $ 25,540 $ 28,350
State and Municipal (held to
maturity) 1,425 1,434 1,509 1,524
Corporate (held to maturity) 0 0 217 219
State and Municipal
(available for sale) 22,928 23,173 10,337 10,513
U.S. Government Agencies
(available for sale) 1,330 1,356 21,501 22,138
Mortgage Backed Securities
(available for sale) 189,575 193,575 180,696 184,893
Corporate (available for sale) 102,554 104,933 63,565 64,845
Restricted Equity Securities 5,977 5,977 4,392 4,392
TOTAL $349,328 $358,807 $307,757 $316,874
Income earned on investment securities was as follows:
Three Months Ended March 31
2003 2002
(000 omitted)
U.S. Treasury and U.S.
Government Agencies $ 545 $1,529
Mortgage Backed Securities 1,945 1,514
State and Municipal 172 24
Other Investments 835 64
$3,497 $3,131
3. Gross loans are summarized as follows:
March 31 December 31
(000 omitted)
2003 2002
Real Estate $326,991 $326,180
Real Estate Construction 19,037 16,096
Commercial and Industrial 23,240 21,128
Consumer 11,460 11,446
Total Loans $380,728 $374,850
4. Earnings per share are based on the weighted average number of shares
of stock outstanding during each period. Weighted average shares
outstanding for the three month periods ended March 31, 2003, and 2002
were 5,436,101 and 5,436,101, respectively.
5. Dividends paid per share were $.21 and $.40 for the three month periods
ended March 31, 2003, and 2002, respectively. This represented a 46%
payout of net income in 2003 and a 95% payout in 2002.
6. The results of operations for the three month periods ended March 31,
2003, and 2002, are not necessarily indicative of the results to be
expected for the full year.
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
The corporation's discussion and analysis of the significant changes in the
results of operations, capital resources and liquidity presented in the
accompanying consolidated financial statements for the Registrant, and its
wholly-owned subsidiaries, Adams County National Bank and Pennbanks Insurance
Company, follow. The corporation's consolidated statement of financial condition
and results of operations consist principally of the bank's financial condition
and results of operations. This discussion should be read in conjunction with
the corporation's 2002 Annual Report to Shareholders. Current performance does
not guarantee, assure, and is not necessarily indicative of similar performance
in the future.
In addition to historical information, this Form 10-Q contains forward-looking
statements. From time to time, the corporation may publish forward-looking
statements relating to such matters as anticipated financial performance,
business prospects, technological developments, new products, research and
development activities and similar matters. The Private Securities Litigation
Reform Act of 1995 provides a safe harbor for forward-looking statements. In
order to comply with the terms of the safe harbor, the corporation notes that a
variety of factors could cause the corporation's actual results and experience
to differ materially from the anticipated results or other expectations
expressed in the corporation's forward-looking statements. The risks and
uncertainties that may affect the operations, performance, development and
results of the corporation's business include the following: general economic
conditions, including their impact on capital expenditures; business conditions
in the banking industry; the regulatory environment; rapidly changing technology
and evolving banking industry standards; competitive factors, including
increased competition with community, regional and national financial
institutions; new service and product offerings by competitors and price
pressures; and similar items.
Three months ended March 31, 2003 compared to three months ended March 31, 2002
Net Income for the three month period ending March 31, 2003 was $2,467,000, up
$193,000 from the first quarter of 2002. Net interest income was down, total
other income was up and other expense was up. The first quarter increase is due
to securities gain and gain on sale of other real estate. Net income per share,
for the first quarter, was $.45, compared to the $.42 earned in the same period
in 2002. For the three month period (annualized) in 2003, the return on average
assets and return on average equity were 1.30% and 14.14%, respectively,
compared to 1.47% and 14.55%, respectively for 2002.
An explanation of the factors and trends that caused changes between the two
periods, by major earnings category, follows.
Total interest income for the first three month period of 2003 was $9,565,000,
up $156,000 or 1.6% above the $9,409,000 earned in the same period of 2002. The
$156,000 increase in interest income was due to a rapid growth in earning assets
in the securities portfolio during 2003. The average yield on earning assets
declined 114 basis points compared to the same quarter in 2002. In an effort to
manage interest rate risk, the corporation continues to lower interest rates on
transaction accounts and keep securities maturities short. Income from loans was
down approximately $214,000 due to lower interest rates while security income
was up approximately $366,000 due to greater volume of securities.
Total interest expense for the first three month period of 2003 was $3,696,000,
up $383,000 or 11.6% from the $3,313,000 incurred for the same period in 2002.
The $383,000 increase in interest expense was due to successful deposit
promotions and increased borrowing. Because the increase in interest expense
exceeded the increase in interest income, net interest income decreased
$227,000.
Total other income for the first three month period of 2003 at $1,939,000, was
$905,000 greater than the same quarter in 2002. The following are the primary
causes of the 88% increase in other income:
o A $55,000 increase in overdraft charges as the overdraft privilege
program continues to be successful.
o Gain on sale of other real estate. The former Carroll Valley Office
was sold in March of 2003, and a gain of $222,000 was recognized.
o Realized gains on securities of $450,000. Short term securities with
terms of approximately 12 to 18 months were sold for gains, and the
proceeds reinvested at terms of 24 to 30 months at higher rates. Not
all of the funds were reinvested at higher rates, but the average
return ended up greater than before the sale.
o Additional income from bank owned life insurance of approximately
$50,000.
Since interest margins continue to narrow, the main cause of increased net
earnings can be traced to the other income category.
Total other expense for the first three month period of 2003 was $4,302,000, up
$510,000 from the $3,792,000 incurred for the first quarter of 2002. The
following are the primary causes of the 13% increase in other expense:
o A $301,000 or 14% increase in salaries and benefits caused by a
continuation of staffing efforts connected with a new branch
in Dillsburg, PA, and upgrading of loan personnel.
o A $120,000 increase in premises and equipment expense. This increase
was spread across the entire category and not confined to a specific
area.
o An $89,000 increase spread across the entire other expense category.
The provision for income taxes in the first quarter decreased $25,000 due to a
higher level of tax-free income and low income housing tax credits.
OVERVIEW OF THE BALANCE SHEET
The changes in the balance sheet have been driven by strong growth in interest
bearing transaction accounts and borrowings. The following are some of the
results:
o Total investment securities were $355,978,000, at March 31, 2003, an
increase of $143,127,000 or 67% since March 31, 2002. Securities have
increased from 34% of total assets to 45% of total assets, of these
securities, $20,000,000 mature within seven months with a total of
$72,100,000 maturing within two years. These funds should be available
for reinvestment when interest rates rise.
o Total deposits have grown from $511,759,000, at March 31, 2002, to
$604,793,000, at March 31, 2003, an increase of $93,034,000 or 18%.
Approximately $72,600,000 of those deposits are called classic money
market. At March 31,2002, the corporation had none of these accounts.
They are transaction accounts, which will require a movement of
interest rates, similar to general money market rates, when the economy
improves. In addition, borrowings have increased from $37,400,000, at
March 31, 2002, to $108,600,000, at March 31, 2003. Of these
$75,000,000 are term borrowings ranging from two to ten years in
maturity.
o Accumulated other comprehensive income has increased from a negative
$508,000, at March 31, 2002, to a positive $3,963,000, at March 31,
2003. This indicates the after tax effect in the change in market value
of the available for sale securities portfolio. This shift enhances the
corporation's ability to reposition the portfolio for income purposes
as interest rates rise. As these securities come closer to maturity,
they can be sold and terms lengthened to obtain higher yields.
INTEREST RATE SPREAD AND NET YIELD ON EARNING ASSETS
Three Months Ended
3/31/03 3/31/02
Rate Rate
Earning Assets 5.33% 6.47%
Interest Bearing Liabilities 2.39% 2.73%
Interest Rate Spread 2.94% 3.74%
Net Yield on Earning Assets 3.28% 4.19%
Net Yield on Earning Assets is the difference, stated in percentages, between
the interest earned on loans and other investments and the interest paid on
deposits and other sources of funds. The Net Yield on Earning Assets is one of
the best analytical tools available to demonstrate the effect of interest rate
changes on the corporation's earning capacity.
The Net Yield on Earning Assets, for the first three months of 2003, was down 91
basis points compared to the same period in 2002. Yields on loans and securities
have changed more rapidly than deposit rates as interest rates in the general
economy have remained at record low levels after falling dramatically in 2001
and 2002.
PROVISION AND RESERVE FOR POSSIBLE LOAN LOSSES
Reserve for Possible Loan Losses
(In Thousands)
Three Months Ended
3/31/03 3/31/02
Balance at Beginning of Period $3,837 $3,723
Provision Charged to Expense 60 60
Loans Charged Off 60 104
Recoveries 12 9
Balance at End of Period $3,849 $3,688
Ratios:
Net Charge-offs to:
Net Income 1.95% 4.18%
Total Loans .01% .03%
Reserve for Possible Loan Losses 1.25% 2.58%
Reserve for Possible Loan Losses to:
Total Loans 1.01% 1.01%
The Reserve for Possible Loan Losses at March 31, 2003 was $3,849,000 (1.01% of
Total Loans), an increase of $161,000 from $3,688,000 (1.01% of Total Loans) at
the end of the first quarter of 2002. Loans past due 90 days and still accruing
were $1,265,000 and non-accrual loans were $424,000, as of March 31, 2003. The
ratio of non-performing assets plus other real estate owned to total assets was
..28%, at March 31, 2003. All properties are carried at the lower of market or
book value and are not considered to represent significant threat of loss to the
bank.
Loans past due 90 days and still accruing were $1,379,000, at year end 2002,
while non-accruals were $1,037,000. The bulk of the corporation's real estate
loans are in residential mortgages. Management believes that internal loan
review procedures will be effective in recognizing and correcting any real
estate lending problems that may occur due to current economic conditions.
Interest not accrued, due to an average of $730,000 in non-accrual loans, was
approximately $10,000 for the first quarter of 2003.
The bank considers a loan impaired when, based on current information and
events, it is probable that a lender will be unable to collect all amounts due.
We measure impaired loans based on the present value of expected future cash
flows, discounted at the loan's effective interest rate, or as a practical
expedient, at the loan's observable market price or the fair value of the
collateral if the loan is collateral dependent. If the measure of the impaired
loan is less than its recorded investment a lender must recognize an impairment
by creating, or adjusting, a valuation allowance with a corresponding charge to
loan loss expense. The corporation uses the cash basis method to recognize
interest income on loans that are impaired. All of the corporation's impaired
loans were on a non-accrual status for all reported periods.
CAPITAL MANAGEMENT
Total Shareholders' Equity was $71,607,000, at March 31, 2003, compared to
$62,938,000, at March 31, 2002, an increase of $8,669,000 or 13.8% over that
period. The ratio of Total Shareholders' Equity to Total Assets was 9.54%, at
December 31, 2002, 10.17%, at March 31, 2002, and 9.04%, at March 31, 2003. The
total risk-based capital ratio was 14.53%, at March 31, 2003. The leverage ratio
was 8.65%, at March 31, 2003, and 10.16%, during the same period in 2002.
Capital growth of $4,471,000 reflects a change in other comprehensive income,
consisting mainly of unrealized security gains, but the remainder, $4,198,000,
was generated internally through retained earnings.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Management believes that the corporation's liquidity is adequate. Liquid assets
(cash and due from banks, federal funds sold, money market instruments,
available for sale securities and held to maturity investment securities
maturing within one year) were 45% of total assets, at March 31, 2003. This
mix of assets would be readily available for funding any cash requirements. In
addition, the Bank has an approved line of credit of $343,284,000 at the Federal
Home Loan Bank of Pittsburgh with $75,000,000 outstanding at March 31, 2003.
As of March 31, 2003, the cumulative asset sensitive gap was 4.2% of total
assets at one month, 9.0% at six months, and 17.0% at one year. Adjustable rate
mortgages, which have an annual interest rate cap of 2%, are considered rate
sensitive. Twenty-five (25%) percent of passbook and statement savings, NOW and
money market deposit accounts are calculated to reprice overnight. The remaining
75% are carried in the over 5-year category.
Other than the construction of a new operations center, costing approximately
$7,000,000 over the next 18 months, there are no known trends or demands,
commitments, events or uncertainties that will result in, or that are reasonably
likely to result in, liquidity increasing or decreasing in any material way.
Aside from those matters described above, management does not currently believe
that there are any known trends or uncertainties that would have a material
impact on future operating results, liquidity or capital resources nor is it
aware of any current recommendations by the regulatory authorities, which, if
they were to be implemented, would have such an effect, although the general
cost of compliance with numerous and multiple federal and state laws and
regulation does have and in the future may have a negative impact on the
corporation's results of operations.
ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Management monitors and evaluates changes in market conditions on a regular
basis. Based upon the most recent review management has determined that there
have been no material changes in market risks since year end. For further
discussion of year end information, refer to the annual report.
ITEM 4
CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the corporation carried out
an evaluation, under the supervision and with the participation of the
corporation's management, including the corporation's Chief Financial Officer,
of the effectiveness of the design and operation of the corporation's disclosure
controls and procedures pursuant to the Securities Exchange Act of 1934
("Exchange Act") Rule 13a-14. Based upon that evaluation, the corporation's
Chief Executive Officer along with the corporation's Chief Financial Officer
concluded that the corporation's disclosure controls and procedures are
effective in timely alerting them to material information relating to the
corporation (including its consolidated subsidiaries) required to be included in
the corporation's periodic SEC filings. There have been no significant changes
in the corporation's internal controls or in other factors which could
significantly affect these controls subsequent to the date the corporation
carried out its evaluation. Disclosure controls and procedures are corporation
controls and other procedures that are designed to ensure that information
required to be disclosed by the Corporation in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - Nothing to report.
Item 2. Changes in Securities and Use of Proceeds - Nothing to report.
Item 3. Defaults Upon Senior Securities - Nothing to report.
Item 4. Submission of Matters to a Vote of Security Holders - Nothing to
report.
Item 5. Other Information - Nothing to report.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following Exhibits are included in this Report:
Exhibit 3(i) Articles of Incorporation of Registrant (Incorporated by
Reference to Exhibit 3 ( i ) in Registrant's Annual Report
on Form 10-K for the year ended December 31, 1999).
Exhibit 3(ii) Bylaws of Registrant (Incorporated by Reference to Exhibit
3(ii) in Registrant's Report of Form 8-K, filed with the
Commission on March 25, 1998).
Exhibit 10.1 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 Computation of Earnings Per Share.
Exhibit 99.1 Certification of Chairman of the Board and Chief Executive
Officer
Exhibit 99.2 Certification of Chief Financial Officer
(b) Report on Form 8-K.
The Registrant filed no Current Reports on Form 8-K during the quarter ended
March 31, 2003.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
corporation has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACNB CORPORATION
Ronald L. Hankey, Chairman of the Board/CEO
May 2, 2003
John W. Krichten, Secretary/Treasurer
CERTIFICATION
I, Ronald L. Hankey, Chairman of the Board/Chief Executive Officer, certify,
that:
1. I have reviewed this quarterly report on Form 10-Q of ACNB
Corporation.
2. Based on my knowledge, the quarterly report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report.
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report.
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons performing
the equivalent function):
(a) all significant deficiencies in the design or operation of the
internal controls which could adversely affect the registrant's ability
to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls.
6. The registrant's other certifying officer and I have
indicated in this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly affect the
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
By:
Ronald L. Hankey, Chairman of the Board/CEO
Date: May 2, 2003
CERTIFICATION
I, John W. Krichten, Secretary/Treasurer, certify, that:
1. I have reviewed this quarterly report on Form 10-Q of ACNB
Corporation.
2. Based on my knowledge, the quarterly report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this quarterly report.
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report.
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:
(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date.
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons performing
the equivalent function):
(a) all significant deficiencies in the design or operation of the
internal controls which could adversely affect the registrant's ability
to record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls.
6. The registrant's other certifying officer and I have indicated
in this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect the
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
By:
John W. Krichten, Secretary/Treasurer
Date: May 2, 2003
EXHIBIT INDEX
Exhibit Number
Exhibit 3(i) Articles of Incorporation of Registrant (Incorporated by
Reference to Exhibit 3 ( i ) of Registrant's Annual Report
on Form 10-K for the year ended December 31, 1999).
Exhibit 3(ii) Bylaws of Registrant (Incorporated by Reference to Exhibit 3
(ii) of Registrant's Report on Form 8-K, filed with the
Commission on March 25, 1998).
Exhibit 10.1 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 Computation of Earnings Per Share.
Exhibit 99.1 Certification Pursuant to 18 U.S.C. Section 1350 as Added by
Section of 906 of the Sarbanes-Oxley Act of 2002 by Ronald L.
Hankey
Exhibit 99.2 Certification Pursuant to 18 U.S.C. Section 1350 as Added by
Section of 906 of the Sarbanes-Oxley Act of 2002 by John W.
Krichten