-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I2AMP6m6ElwFWBBXTzs8dVhHFSL8SPXuc8XNUcswJWrz7iS2S360Am8HrNVkRRXC MOUwThnHbt1YhU4YF+30SA== 0000702904-97-000003.txt : 19970520 0000702904-97-000003.hdr.sgml : 19970520 ACCESSION NUMBER: 0000702904-97-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMBANC CORP CENTRAL INDEX KEY: 0000702904 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 351525227 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10710 FILM NUMBER: 97609563 BUSINESS ADDRESS: STREET 1: 302 MAIN ST STREET 2: P O BOX 438 CITY: VINCENNES STATE: IN ZIP: 47591 BUSINESS PHONE: 8128823050 MAIL ADDRESS: STREET 1: 302 MAIN STREET CITY: VINCENNES STATE: IN ZIP: 47591 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended March 31, 1997 Commission File Number: 0-10710 AMBANC CORP. (exact name of registrant as specified in its charter) INDIANA 35-1525227 (State or other jurisdiction (I.R.S. Employer ID No.) of incorporation or organization) 302 Main Street P.O. Box 556 Vincennes, Indiana 47591-0556 (Address of principal executive (Zip Code) offices) Registrant's telephone number, including area code (812) 885-6418 Indicate by check mark whether the registrant (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 registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes: X No: 3,316,213 common shares of stock were outstanding as of May 14, 1997. PAGE AMBANC CORP. INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets at March 31, 1997 (unaudited) and December 31, 1996 Consolidated Statements of Income for three months ended March 31, 1997 and 1996(unaudited) Consolidated Statements of Cash Flows for three months ended March 31, 1997 and 1996 (unaudited) Notes to Consolidated Financial Statements (unaudited) Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition PART II. OTHER INFORMATION Item 1. Legal Preceedings Item 6. Exhibits and Reports of Form 8-K Signatures Exhibit Index PAGE
PART I. FINANCIAL INFORMATION Item 1. Financial Statements AMBANC CORP. CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except share data) March 31, December 31, 1997 1996 ASSETS Cash and due from banks $ 21,347 $ 26,409 Federal funds sold 12,315 5,875 Total cash and cash equivalents 33,662 32,284 Interest bearing deposits in other banks 495 590 Securities available for sale at market 163,552 170,724 Loans held for sale 2,297 2,350 Loans, net of unearned income 506,782 494,467 Allowance for loan losses (5,422) (5,630) Loans, net 501,360 488,837 Premises, furniture and equipment, net 11,690 11,184 Accrued interest receivable and other assets 13,523 12,785 TOTAL ASSETS $ 726,579 $ 718,754 LIABILITIES Noninterest bearing deposits $ 58,694 $ 61,518 Interest bearing deposits 580,866 571,940 Total deposits 639,560 633,458 Short-term borrowings 6,434 5,286 Long-term debt 2,063 2,309 Accrued interest payable and other liabilities 6,043 5,518 TOTAL LIABILITIES 654,100 646,571 SHAREHOLDERS' EQUITY Preferred stock, $10 par value, 200,000 shares authorized, no shares issued or outstanding -- -- Common stock, $10 par value, 10,000,000 shares authorized, 3,316,267 shares issued at March 31, 1997, and December 31, 1996 33,163 33,163 Treasury stock (564 and 724 shares at cost) (19) (21) Retained earnings 40,149 38,731 Unrealized gain/(loss) on securities available for sale, net of deferred taxes (814) 310 TOTAL SHAREHOLDERS' EQUITY 72,479 72,183 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 726,579 $ 718,754
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AMBANC CORP. CONSOLIDATED STATEMENTS OF INCOME (Dollar amounts in thousands, except share data) Three Months Ended March 31, 1997 1996 INTEREST INCOME Interest and fees on loans $ 11,070 $ 10,295 Interest and fees on loans held for sale 47 124 Interest on securities Taxable 1,746 1,889 Tax exempt 733 693 Other interest 84 337 TOTAL INTEREST INCOME 13,680 13,338 INTEREST EXPENSE Interest on deposits 6,760 6,591 Interest on short-term borrowings 96 91 Interest on long-term debt 35 39 TOTAL INTEREST EXPENSE 6,891 6,721 NET INTEREST INCOME 6,789 6,617 Provision for loan losses 315 267 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 6,474 6,350 NONINTEREST INCOME Income from fiduciary activities 194 130 Service charges on deposit accounts 403 363 Gain/(loss) on securities 55 1 Other operating income 343 234 TOTAL NONINTEREST INCOME 995 728 NONINTEREST EXPENSE Salaries and employees benefits 2,500 2,461 Occupancy expenses, net 341 285 Equipment expenses 316 302 Data processing expenses 123 132 FDIC insurance 7 21 Other operating expenses 1,172 1,096 TOTAL NONINTEREST EXPENSE 4,459 4,297 INCOME BEFORE INCOME TAXES 3,010 2,781 Income taxes 895 800 NET INCOME $ 2,115 $ 1,981 EARNINGS PER COMMON SHARE Net income per share $ .64 $ .60 Weighted average outstanding shares 3,315,952 3,316,267
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AMBANC CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands, except share data) Three Months Ended March 31, 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,115 $ 1,981 Adjustments to reconcile net income to net cash from operating activities: Net premium amortization and discount accretion on securities 84 75 Depreciation 299 258 Provision for loan losses 315 267 (Gain)/loss on securities (55) (1) (Gain) on sales of loans (130) (62) Proceeds from sales of loans held for sale 6,303 6,967 Loans held for sale made to customers, net of payments collected (6,120) (7,880) Accrued interest receivable and other assets (78) (433) Accrued interest payable and other liabilities 525 687 Deferred loan fees net of costs (25) 13 NET CASH FROM OPERATING ACTIVITIES 3,233 1,872 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of securities available for sale 5,791 -- Proceeds from maturities and calls of securities available for sale 5,742 15,125 Purchases of securities available for sale (6,174) (30,151) Net change in interest bearing deposits in other banks 95 1 Loans made to customers, net of payments collected (12,813) (9,933) Loans purchased -- (1,000) Proceeds from sales of loans -- 2,404 Property and equipment expenditures (805) (788) NET CASH FROM INVESTING ACTIVITIES (8,164) (24,342)
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AMBANC CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued (Dollar amounts in thousands, except share data) Three Months Ended March 31, 1997 1996 CASH FLOWS FROM FINANCING ACTIVITIES Net change in deposits 6,102 18,342 Net change in short-term borrowings 1,148 1,085 Payments on long-term debt (267) (300) Proceeds on long-term debt 21 25 Net change in treasury stock 2 -- Dividends paid (697) (663) NET CASH FROM FINANCING ACTIVITIES 6,309 18,489 NET CHANGE IN CASH AND CASH EQUIVALENTS 1,378 (3,981) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 32,284 43,173 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 33,662 $ 39,192 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period: Interest $ 7,062 $ 6,237 Income taxes 8 165
PAGE AMBANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) The Consolidated balance sheet as of March 31, 1997, consolidated statements of income for the three month periods ended March 31, 1997 and 1996, and the consolidated statements of cash flows for the three month periods ended March 31, 1997 and 1996, have been prepared by the Corporation, without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows at March 31, 1997, and all periods presented, have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Corporation's December 31, 1996, annual report to shareholders. The results of operations for the period ended March 31, 1997, are not necessarily indicative of the operating results for the full year. PAGE AMBANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) NEW ACCOUNTING PRONOUNCEMENTS The Corporation adopted Statement of Financial Accounting Standards (FAS) 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities", effective January 1, 1997. The adoption of FAS 125 had no effect on the Corporation's financial statements due to no covered transactions existing. FAS 128, "Earnings per Share" was issued in February 1997 and establishes new standards for computing and presenting earnings per share (EPS). Specifically FAS 128 replaces the presentation of primary EPS with a presentation of basic EPS, requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. FAS 128 is effective for financial statements issued for periods ending after December 15, 1997: earlier application is not permitted. Management has determined that the adoption of FAS 128 will not have a material effect on the accompanying financial statements. FINANCIAL STATEMENT RECLASSIFICATIONS Certain items in the prior years financial statements have been reclassified to correspond with the current presentation. PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) ITEM 2. RESULTS OF OPERATIONS Net interest income is the principal source of the Corporation's earnings and represents the difference between interest income on loans and securities over interest costs of deposits and borrowed funds. Income from certain earning assets is exempt from federal income tax and, as is customary in the banking industry, changes in net interest income are analyzed on a fully tax equivalent basis. Under this method, and throughout this discussion, nontaxable income on loans and investments is adjusted to an amount which represents the equivalent earnings if such earnings were subject to federal tax. The marginal tax rate used to restate nontaxable income was 34%. Three Months Ended March 31, Increase 1997 1996 (Decrease) Interest income $ 13,680 $ 13,338 2.56 % Adjusted for tax exempt income 417 400 4.25 Tax equivalent interest income 14,097 13,738 2.61 Interest expense 6,891 6,721 2.53 Net interest income $ 7,206 $ 7,017 2.69 % Net interest income increased $189 or 2.69% for the three months ended March 31, 1997, compared to the three months ended March 31, 1996. This $189 increase was a combination of a $359 increase in interest income offset by a $170 increase in interest expense. The $359 increase in interest income was composed of an increase of $459 due to increased volume of average interest earning assets and a decrease of $100 due to decreased rates received on these interest earning assets. The PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) $170 increase in interest expense was a combination of an increase of $235 due to increased volume of average interest bearing liabilities and a decrease of $65 due to rate decreases on these interest bearing liabilities. The Corporation's average assets for the first three months of 1997 increased $23,391 or 3.38% to $714,508 from $691,117 for the first three months of 1996. The percent of average earning assets to total average assets has stayed consistent at 94.86% for the first three months of 1997 and 94.88% for the first three months of 1996. Net interest margin increased .01% to 4.31% for the first three months of 1997 from 4.30% for the first three months of 1996. This small increase is due to the cost of average interest bearing liabilities decreasing .01% from 4.81% for the first three months of 1996 to 4.80% for the first three months of 1997 while the yield on average earning assets remained the same for the first three months of 1997 and 1996 at 8.43%. Although the Corporation continues to place emphasis on increasing the net interest margin, it has proven increasingly difficult with increased emphasis on rates by the competition. PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) The provision for loan losses was increased $48 or 17.98% to $315 during first quarter 1997 compared to $267 during the first quarter 1996. This increase was due to outstanding loans increasing $12,315 or 2.49% in the first three months of 1997 compared to an increase of $8,366 or 1.89% in the same period in 1996 and as replacement for net loan charge offs which increased in 1997 compared to 1996. The allowance for loan losses at March 31, 1997, was $5,422 or 1.07% of total loans less unearned income as compared to $5,630 or 1.14% of total loans less unearned income at December 31, 1996. During the first three months of 1997, loans charged off were $605 and recoveries from previously written off loans were $82, thus net charge offs for the first three months of 1997 were $523. The adequacy of the allowance for loan losses is analyzed by management of each subsidiary bank based upon review of identified loans with more than a normal degree of risk, historical loan loss percentage by type of loan and present and forecasted economic conditions. Management's analysis indicates that the allowance for loan loss at March 31, 1997, is adequate to cover potential losses on identified loans with credit problems and historical losses on the remaining loan portfolio. The following are the different types of problem loans with their outstanding balances and percent of total loans less unearned income at March 31, 1997, and December 31, 1996: March 31, 1997 December 31, 1996 Nonaccrual loans $1,266 .25% $1,421 .29% Loans past due 90 days 1,898 .37 1,313 .27 Performing restructured loans 4,012 .79 3,089 .62 OREO 419 .08 324 .07 PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) A summary of the activity in the allowance for loan losses account for the first three months ending March 31, 1997 and 1996 was: 1997 1996 Balance, January 1 $5,630 $5,022 Provision for loan losses 315 267 Loans charged off (605) (277) Recoveries of loans previously charged off 82 127 Balance, March 31, $5,422 $5,139 Noninterest income for the three months ended March 31, 1997, increased 36.68% or $267 to $995 from $728 in 1996. Income from fiduciary services increased $64 or 49.23% to $194 from $130 in 1996. This increase is due to increased business and quicker timing of billings in 1997 compared to 1996. Service charges on deposit accounts increased $40 or 11.02% to $403 in 1997 compared to $363 in 1996 and is mainly due to increased charges on non sufficient fund checks. Security gains were up $54 for the first quarter 1997 compared to first quarter 1996. The Corporation instituted a plan of selling small investment pieces to reduce carrying expenses and to extending maturities on securities that would mature within the next year. These efforts increased security gains by $54 in first quarter 1997 over 1996. Other operating income increased 46.58% or $109 to $343 for the three months ended March 31, 1997, from $234 for the same three months in 1996. This increase is due to several factors with the largest ones being increases in insurance commissions and gains on sales of loans to the secondary mortgage market. PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) Noninterest expense for the three months ended March 31, 1997, was $4,459 as compared to $4,297 for the three months ended March 31, 1996, for an increase of $162 or 3.77%. Salaries and employee benefits are the largest portion of noninterest expense and increased $39 or 1.58% in the first three months of 1997 compared to the same period in 1996. This increase is due in part to the Corporation having three more branches in operation during the first quarter of 1997 than during the first quarter of 1996. Salary expenses are actually lower in 1997 as compared to 1996 because $80 of bonuses were paid during the second quarter of 1997 verses the comparable bonuses being paid during the first quarter in 1996. These bonuses are not accrued but are approved by the Board of Directors annually. Occupancy expenses were up $56 or 19.65% and equipment expenses were up $14 or 4.64% in the first quarter of 1997 compared to 1996. The addition of the three branches in 1997 added to these expenses. The Corporation will open two more branches during the second quarter of 1997. One of these branches is a replacement for an existing drive-in branch and the other is the addition of a new in store Wal-Mart branch. The Corporation entered the new market area of Evansville, Indiana on January 1, 1997, and will add this Wal-Mart branch to that market area on May 21, 1997. A piece of land has also been committed to in Terre Haute, Indiana in Vigo County for construction of a full service branch. This branch is expected to be completed in the first quarter of 1998 and will complement the Wal-Mart branch opened in that city in late 1995. The addition of these branches can be expected to have incremental increases on noninterest expenses of the Corporation. Data processing expenses have decreased $9 or 6.82% to $123 in 1997 due to the consolidation of data processing systems which was completed during 1996. The subsidiary banks have been assigned the classification of least risk by the FDIC and as such are subject to the lowest deposit insurance rates available from the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF). These rates are set to remain constant until the year 2000 and are .0129% for BIF and .0243% for SAIF. PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) Other operating expenses increased $76 or 6.93% to $1,172 for the first three months of 1997 from $1,096 for the same period in 1996. This increase is due primarily to the increase in the number of branches and expenses related to entering a new market area with a denovo branch in Evansville, Indiana. Loan collection expenses have also increased with the increase in loans charged off. Income before income taxes was up $229 or 8.23% to $3,010 for the first three months of 1997 from $2,781 for the first three months of 1996. The net income for the first three months ended March 31, 1997, was up $134 or 6.76% to $2,115 as compared to $1,981 for the three months ended March 31, 1996. Earnings per share were $.64 in 1997 and were $.60 in 1996. Based upon annualized net income the return on average assets was 1.20% for the first three months of 1997 compared to 1.15% for the same period in 1996. PAGE
AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) The following schedule shows selected financial amounts and ratios for the three months ended March 31, 1997 and 1996. The Corporation feels these financial highlights include pertinent information relevant for its results as a company in the financial institutions industry. Three Months Ended March 31, 1997 1996 AVERAGE BALANCE SHEET DATA Total assets $ 714,508 $ 691,117 Securities 168,921 179,538 Loans 500,169 446,500 Allowance for loan losses 5,455 5,020 Deposits 627,805 607,634 Shareholders' equity 72,510 68,095 END OF PERIOD BALANCE SHEET DATA Total assets $ 726,579 $ 701,269 Securities 163,552 186,186 Loans 506,782 451,023 Allowance for loan losses 5,422 5,139 Deposits 639,560 618,411 Shareholders' equity 72,479 67,618 INCOME DATA Net interest income(t.e. basis) $ 7,206 $ 7,017 Provision for loan losses 315 267 Noninterest income 995 728 Noninterest expense 4,459 4,297 Net income 2,115 1,981
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AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) Three Months Ended March 31, 1997 1996 PER SHARE DATA Net income $ .64 $ .60 Cash dividends .21 .20 Book value at end of period 21.86 20.39 Book value at end of period before FAS 115 22.10 20.48 Tangible book value at end of period 21.34 19.82 Tangible book value at end of period before FAS 115 21.58 19.91 Stock price at end of period 36.00 29.05 Weighted average shares 3,316,267 3,316,267 Weighted average treasury shares 315 -- SELECTED RATIOS Return on average assets 1.20% 1.15% Return on average equity before FAS 115 11.87 11.89 Net interest margin(t.e.basis) 4.31 4.30 Efficiency ratio 57.28 58.50 Net charge-offs to average loans .10 .03 Allowance for loan losses to loans 1.07 1.14 Nonaccrual loans to loans .25 .22 Loans past due 90 days or more to loans .37 .38 Performing restructured loans to loans .79 .01 OREO to loans .08 .06 Leverage capital(Tier 1 equity/average assets) 10.03 9.59 Tier 1 risk-based capital 13.34 13.39 Total risk-based capital 14.35 14.44
PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) FINANCIAL CONDITION Total assets have increased $7,825 or 1.09% to $726,579 at March 31, 1997, from $718,754 at December 31, 1996 while total noninterest bearing deposits have decreased $2,824 or 4.59% and interest bearing deposits have increased $8,926 or 1.56% at March 31, 1997, from December 31, 1996 for a total deposit increase of $6,102 or .96%. Securities available for sale before the mark to market have decreased $5,388 or 3.16% to $164,861 at March 31, 1997, from $170,249 at December 31, 1997. The Corporation did sell small investment pieces to eliminate carrying costs, but the major portion of the decrease in securities was due to normal maturities and calls. Securities available for sale at market indicates a decrease of $7,172 or 4.20% at March 31, 1997, from December 31, 1996. This decrease includes the mark-to-market on securities which went to a negative $1,309 at March 31, 1997, from a positive $475 at December 31, 1996. This market valuation reduction is the result of normal repricing of investment securities in a rising rate environment but did account for $1,784 of the change in the valuation of securities available for sale on the balance sheet. PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) Loans held for sale represent qualifying fixed rate mortgage loans that are available for sale into the secondary market. Fixed rate real estate mortgage loan rates were low enough that the Corporation has experienced demand for these loans during the three months ended March 31, 1997. Current market rate competition on these loans is making it necessary to sell these loans as soon as they are booked. The following is the detail of activity in the loans held for sale between year end and March 31, 1997: Balance December 31, 1996 $ 2,350 New loans booked (net of payments) 6,303 Loans sold (6,356) Total at March 31, 1997 $ 2,297 The sale of loans to the secondary market has provided $130 of net gains on sales during the first quarter of 1997 and the Corporation is servicing $100,378 of real estate loans sold to the secondary market as of March 31, 1997. Loans have increased $12,315 or 2.49% at March 31, 1997, from December 31, 1996. The following shows the balance and percent of total by loan classification as of the end of the periods: 3-31-97 12-31-96 % of % of Balance Total Balance Total Commercial $216,558 42.73% $201,092 40.67% Agricultural 48,347 9.54 55,404 11.20 Real estate 132,902 26.22 129,116 26.11 Installment 105,592 20.84 105,169 21.27 Credit cards 3,383 .67 3,686 .75 Total $506,782 $494,467 The Corporation has seen increased demand for commercial loans as the economy continues its steady to slightly increased movement and commercial loans have increased $15,466 or 7.69%. The decrease in agricultural loans is due to normal seasonal fluctuations with crops being sold and loan balances being paid down during the first quarter of the year. PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the three months ended March 31, 1997 (Dollar amounts in thousands, except share data) Total shareholders' equity, including the unrealized loss on securities available for sale, increased $296 or .41% to $72,479 at March 31, 1997, from $72,183 at December 31, 1996. The change in the adjustment for securities available for sale caused total equity to decrease $1,124 or 1.56% at March 31, 1997, from December 31, 1996. This decrease is the after tax effect of the mark-to-market adjustment on securities available for sale which was a negative $814 at March 31, 1997, and was a positive $310 at December 31, 1996. The Corporation's regulators have issued guidelines stating that the unrealized gain or loss on securities available for sale, other than those related to mutual funds (FAS 115 adjustments), should not be included in shareholders' equity for capital ratio calculations. Total shareholders' equity, excluding the FAS 115 adjustments, was $71,757 at December 31, 1996, and increased $1,408 or 1.96% to $73,165 at March 31, 1997. This increase was net income of $2,115 less dividends paid of $697 less $12 related to a decrease in the mark-to-market on mutual funds and plus $2 related to treasury stock. Capital adequacy in the banking industry is evaluated primarily by the use of three required capital ratios based on three separate calculations; Tier 1 Leverage Capital, Tier 1 Capital and total Capital. The Corporation's capital ratios at March 31, 1997, and December 31, 1996, were: March 31, 1997 December 31, 1996 Tier 1 Leverage Capital 10.03% 10.00% Tier 1 Capital 13.34% 13.26% Total Capital 14.35% 14.33% PAGE AMBANC CORP. As of and for the three months ended March 31, 1997 PART II. OTHER INFORMATION Item 1. Legal Proceedings Other than ordinary routine litigation incidental to the business, there are no material pending legal proceedings to which the Corporation or its subsidiaries are a party or of which any of their property is the subject. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11 Statement of Computation of per share earnings. The copy of this exhibit filed as Exhibit 11 to AMBANC's Annual Report on Form 10-K for the year ended December 31, 1996, is incorporated herein by reference. 27 Financial Data Schedule for March 31, 1997. (b) No Form 8-K was filed with the SEC during the quarter ended March 31, 1997. PAGE AMBANC CORP. As of and for the three months ended March 31, 1997 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. AMBANC CORP. (Registrant) DATE: May 14, 1997 BY: R. Watson Robert G. Watson, Chairman of the Board, President and Chief Executive Officer DATE: May 14, 1997 BY: Richard E. Welling Richard E. Welling, Secretary, Treasurer and C.F.O. PAGE AMBANC CORP. As of and for the three months ended March 31, 1997 EXHIBIT INDEX EXHIBITS PAGE 11 Statement of Computation of per * share earnings. The copy of this exhibit filed as Exhibit 11 to AMBANC's Annual Report on Form 10-K for the year ended December 31, 1996, is incorporated herein by reference. 27 Financial Data Schedule for March 31, 1997. * Incorporated by reference from previously filed documents. EX-27 2
9 0000702904 AMBANC CORP. 1,000 3-MOS DEC-31-1997 MAR-31-1997 21,347 495 12,315 0 0 164,861 163,552 506,782 5,422 726,579 639,560 6,434 6,043 2,063 0 0 33,144 39,335 726,579 11,070 2,479 84 13,680 6,760 6,891 6,789 315 55 4,459 3,010 3,010 0 0 2,115 .64 .64 4.02 1,266 1,898 4,012 0 5,630 605 82 5,422 1,821 0 3,601
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