-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZntA8HC9mkWLLx9RRxUX61gcPRKdAtr7UfwQBqurm+DSEtt1mPM2tksePNsE0kIe CKyJrWFJlpQVzmbFmvzGZA== 0000702904-95-000014.txt : 19950814 0000702904-95-000014.hdr.sgml : 19950814 ACCESSION NUMBER: 0000702904-95-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMBANC CORP CENTRAL INDEX KEY: 0000702904 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] 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: 95561530 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 June 30, 1995 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: 2,372,555 common shares of stock were outstanding as of August 10, 1995. PAGE AMBANC CORP. INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets at June 30, 1995 (unaudited) and December 31, 1994 Consolidated Statements of Income six months ended June 30, 1995 and 1994(unaudited) Consolidated Statements of Cash Flows for six months ended June 30, 1995 and 1994 (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 6. Exhibits and Reports of Form 8-K Signatures Exhibit Index PAGE
AMBANC CORP. CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except share data) June 30, December 31, 1995 1994 ASSETS Cash and due from banks $ 15,784 $ 19,595 Federal funds sold 13,167 7,000 Total cash and cash equivalents 28,951 26,595 Interest bearing deposits in other banks 894 1,193 Securities available for sale at market 102,396 112,214 Securities held to maturity(market values of $39,488 and $38,707 at June 30, 1995, and December 31, 1994) 39,092 39,695 Loans held for sale 5,874 2,664 Loans, net of unearned income 347,871 321,096 Allowance for loan losses (4,008) (3,911) Loans, net 343,863 317,185 Premises, furniture and equipment, net 6,378 6,487 Accrued interest receivable and other assets 10,597 10,063 TOTAL ASSETS $ 538,045 $ 516,096 LIABILITIES Noninterest bearing deposits $ 46,720 $ 51,838 Interest bearing deposits 426,352 403,396 Total deposits 473,072 455,234 Short-term borrowings 5,956 5,690 Long-term debt 2,643 3,189 Accrued interest payable and other liabilities 3,442 2,946 TOTAL LIABILITIES 485,113 467,059 SHAREHOLDERS' EQUITY Preferred stock, $10 par value, 200,000 shares authorized, no shares issued or outstanding -- -- Common stock, $10 par value, 5,000,000 shares authorized, 2,372,555 and 2,372,172 shares issued and outstanding at June 30, 1995, and December 31, 1994 23,726 23,722 Retained earnings 30,082 28,277 Unrealized gain/(loss) on securities available for sale (876) (2,962) TOTAL SHAREHOLDERS' EQUITY 52,932 49,037 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 538,045 $ 516,096 PAGE
AMBANC CORP. CONSOLIDATED STATEMENTS OF INCOME (Dollar amounts in thousands, except share data) Six Months Ended Three Months Ended June 30, June 30, 1995 1994 1995 1994 INTEREST INCOME Interest and fees on loans $ 15,152 $ 11,480 $ 7,899 $ 5,981 Interest and fees on loans held for sale 115 428 73 150 Interest on securities Taxable 3,137 3,666 1,538 1,804 Tax exempt 1,102 1,140 547 574 Other interest 169 145 103 45 TOTAL INTEREST INCOME 19,675 16,859 10,160 8,554 INTEREST EXPENSE Interest on deposits 9,138 7,278 4,917 3,681 Interest on short-term borrowings 146 129 48 87 Interest on long-term debt 84 73 40 46 TOTAL INTEREST EXPENSE 9,368 7,480 5,005 3,814 NET INTEREST INCOME 10,307 9,379 5,155 4,740 Provision for loan losses 150 50 75 -- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 10,157 9,329 5,080 4,740 NONINTEREST INCOME Income from fiduciary activities 185 192 84 72 Service charges on deposit accounts 619 534 320 279 Gain/(loss) on securities 6 (3) 6 2 Other operating income 419 530 210 207 TOTAL NONINTEREST INCOME 1,229 1,253 620 560 NONINTEREST EXPENSE Salaries and employees benefits 3,986 3,580 2,000 1,790 Occupancy expenses, net 420 423 207 223 Equipment expenses 436 400 226 204 Data processing expenses 181 227 91 117 FDIC insurance 523 508 267 255 Other operating expenses 1,844 1,892 880 920 TOTAL NONINTEREST EXPENSE 7,390 7,030 3,671 3,509 INCOME BEFORE INCOME TAXES 3,996 3,552 2,029 1,791 Taxes 1,204 1,044 647 519 NET INCOME $ 2,792 $ 2,508 $ 1,382 $ 1,272 EARNINGS PER COMMON SHARE(based on 2,372,542 and 2,369,784 average outstanding shares in 1995 and 1994) Net income per share $ 1.18 $ 1.06 $ .58 $ .54 PAGE
AMBANC CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands, except share data) Six Months Ended June 30, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,792 $ 2,508 Adjustments to reconcile net income to net cash from operating activities: Net premium amortization and discount accretion on securities 145 257 Depreciation 339 410 Provision for loan losses 150 50 (Gain)/loss on securities (6) 3 Net change in loans held for sale (3,210) 12,876 Accrued interest receivable and other assets (534) (2,053) Accrued interest payable and other liabilities 2,582 (2,895) Deferred loan fees net of costs (3) 6 NET CASH FROM OPERATING ACTIVITIES 2,255 11,162 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of securities available for sale 1,500 7,369 Proceeds from sale of securities held to maturity -- -- Proceeds from maturities and calls of securities available for sale 10,178 26,076 Proceeds from maturities and calls of securities held to maturity 8,444 2,183 Purchases of securities available for sale (1,980) (23,775) Purchases of securities held to maturity (7,860) (3,445) Net change in interest bearing deposits in other banks 299 (987) Loans made to customers, net of payments collected (29,224) (30,090) Loans purchased (986) (1,690) Proceeds from sales of loans 3,385 2,192 Property and equipment expenditures (230) (897) NET CASH FROM INVESTING ACTIVITIES (16,474) (23,064) PAGE
AMBANC CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued (Dollar amounts in thousands, except share data) Six Months Ended June 30, 1995 1994 CASH FLOWS FROM FINANCING ACTIVITIES Net change in demand deposits and savings accounts (15,584) 527 Net change in certificates of deposit 33,422 (9,039) Net change in short-term borrowings 266 3,269 Payments on long-term debt (597) 2,162 Proceeds on long-term debt 51 -- Issuance of stock for dividend reinvestment 12 -- Dividends paid (995) (771) NET CASH FROM FINANCING ACTIVITIES 16,575 (3,852) NET CHANGE IN CASH AND CASH EQUIVALENTS 2,356 (15,754) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 26,595 32,510 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 28,951 $ 16,756 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period ended June 30: Interest $ 8,881 $ 7,499 Income taxes 1,475 1,196 PAGE AMBANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of and for the six months ended June 30, 1995 (Dollar amounts in thousands, except share data) ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS The Consolidated balance sheet as of June 30, 1995, consolidated statements of income for the six month periods ended June 30, 1995 and 1994, and the consolidated statements of cash flows for the six month periods ended June 30, 1995 and 1994, 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 June 30, 1995, 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, 1994, annual report to shareholders. The results of operations for the period ended June 30, 1995, are not necessarily indicative of the operating results for the full year. COMMITMENTS AND CONTINGENT LIABILITIES 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. PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1995 (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 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%. Six Months Ended June 30, Increase 1995 1994 (Decrease) Interest income $ 19,675 $ 16,859 16.70 % Adjusted for tax exempt income 642 670 (4.18) Tax equivalent interest income 20,317 17,529 15.91 Interest expense 9,368 7,480 25.24 Net interest income $ 10,949 $ 10,049 8.96 % Net interest income increased $900 or 8.96% for the six months ended June 30, 1995, compared to the six months ended June 30, 1994. This $900 increase was a combination of a $2,788 increase in interest income and a $1,888 increase in interest expense. The $2,788 increase in interest income was composed of an increase of $309 due to increased volume of average interest earning assets and an increase of $2,479 due to increased rates received on these PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1995 (Dollar amounts in thousands, except share data) interest earning assets. The $1,888 increase in interest expense was a combination of an increase of $254 due to increased volume of average interest bearing liabilities and an increase of $1,634 due to rate increases on these interest bearing liabilities. The Corporation's average assets for the first six months of 1995 increased $11,561 or 2.27% to $521,894 from $510,333 for the same period in 1994, but the percent of average earning assets to total average assets decreased to 94.46% for the first six months of 1995 from 95.13% for the first six months of 1994. This decrease was in part due to 1995 average assets containing $1,034 of average goodwill associated with the deposits purchased (see details on subsequent page). Net interest margin increased .31% to 4.48% for the first six months of 1995 from 4.17% for the first six months of 1994. This increase was due to the yields on average earning assets increasing faster than the costs on average interest bearing liabilities. The Corporation's yields on loans and investments and costs of deposits, although not completely determined by the prime rate, are influenced by changes in the prime rate. The prime rate started at 8.50% in 1995 and increased to 9.00% in February, 1995, and averaged 8.91% for the first six months of 1995. The prime rate for 1994 started at 6.00%, increased three times to an ending rate of 7.25%, and averaged 6.46% for the first six months of 1994. With higher interest rates in 1995 and the fact that rates continued to increase during the last half of 1994, the Corporation was able to maintain a higher spread between interest received on average interest earning assets and interest paid on average interest bearing liabilities. The yield on average interest earning assets increased to 8.31% for the first six months of 1995 from 7.28% for the first six months of 1994 for an increase of 1.03%. The cost on average interest bearing liabilities increased at a slower rate and was 4.46% for the first six months of 1995 and 3.66% for the first six months of 1994 for an increase of .80%. This leaves the interest spread which is the mathematical difference between yields on average interest earning assets and costs on average interest bearing liabilities at 3.85% for the first six months of 1995 compared to 3.62% for the first six months of 1994. The provision for loan losses was $150 during the first six months of 1995 compared to $50 during the first six months of 1994. The provision for loan losses was increased during 1995 because of increased loan volume and not due to loan credit problems. The allowance for loan losses at June 30, 1995, was $4,008 or 1.15% of total loans less unearned income as compared to $3,911 or 1.22% of total loans less unearned income at PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1995 (Dollar amounts in thousands, except share data) December 31, 1994. During the first six months of 1995, loans charged off were $191 and recoveries from previously written off loans were $138, thus net charge offs for the first six months of 1995 were $53. The adequacy of the allowance for loan losses is analyzed by management of each bank subsidiary 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 June 30, 1995, is adequate to cover potential losses on identified loans with credit problems and historical losses on the remaining loan portfolio. The following are ratios of the different types of problem loans as a percent of total loans less unearned income at June 30, 1995, and December 31, 1994: June 30, 1995 December 31, 1994 Nonaccrual loans .22% .18% Loans past due 90 days .26% .20% Performing restructured loans .04% .15% OREO .12% .14% Effective January 1, 1995, the Corporation adopted Financial Accounting Standard No. 114, (FAS 114) "Accounting by Creditors for Impairment of a Loan," as amended by Financial Accounting Standard No. 118, (FAS 118) "Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosures." These statements require that impaired loans be measured based on the present value of expected future cash flows discounted at the loans' effective interest rates or at the fair value of the underlying collateral and allow existing methods for recognizing interest income. The effect of adopting FAS 114 and FAS 118 was not material to the Financial Statements of the Corporation. Noninterest income for the six months ended June 30, 1995, was down $24 or 1.92% to $1,229 as compared to $1,253 for the six months ended June 30, 1994. Income from fiduciary services was down by $7 or 3.65% to $185 in 1995 from $192 in 1994 as a result of decreased fees on trust accounts managed. Service charges on deposit accounts were up by $85 or 15.92% to $619 in 1995 from $534 in 1994 due to new and increased fees on deposit accounts. The Corporation had a net gain of $6 on calls and sales of securities during the first six months of 1995. Other operating income decreased $111 or 20.94% to $419 during the six months ended June 30, 1995, from $530 during the same six months in 1994. This $111 decrease was mainly due to the reduction of gain on sales of loans held for sale and a small reduction of customer service fee income less increases in income from a new investment PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1995 (Dollar amounts in thousands, except share data) service being offered customers, other nonrecurring income and a small increase in insurance commission income. During the first six months of 1994 mortgage rates were increasing and the Corporation sold $29,389 of the conforming fixed rate mortgage loans, classified as loans held for sale on the balance sheet, into the secondary mortgage market, and other operating income included $197 related to gains from these sales. During part of the first six months of 1995, mortgage rates increased to the point that many customers were selecting variable rate mortgage loans which are classified as real estate loans on the balance sheet as compared to fixed rate mortgage loans which are classified as loans held for sale on the balance sheet. The Corporation did sell $5,081 in fixed rate mortgage loans into the secondary mortgage market and recorded gains of $46 during the six months ended June 30, 1995. The servicing rights on more than 95% of sold fixed rate loans are retained by the Corporation. Noninterest expense for the six months ended June 30, 1995, was $7,390 as compared to $7,030 for the six months ended June 30, 1994, for an increase of $360 or 5.12%. Salaries and employee benefits are the largest portion of noninterest expense and increased $406 or 11.34% in the first six months of 1995 compared to the same time period in 1994. Individual components showed increases in salaries, pension expense and medical insurance expense. Occupancy expense remained steady with only a $3 or .71% decrease in 1995 from 1994. Equipment expense was up by $36 or 9.00% to $436 in 1995 from $400 in 1994 due mainly to increases in contract expenses related to new branches and equipment. Data processing expense decreased $46 or 20.26% to $181 in 1995 from $227 in 1994 and was due to a reduction in depreciation and continued efficiencies resulting from consolidating operations. The Corporation will be installing a larger computer system, during the third quarter of 1995, to provide for better customer service and further consolidation of operations. Data processing expenses starting during the third quarter of 1995 are expected to increase because of this change. The FDIC insurance increased only $15 or 2.95% and is due to increased deposit balances. The Corporation's subsidiary banks have all been assigned the highest classification by the FDIC and as such continue to pay the lowest possible FDIC deposit insurance rates in both 1995 and 1994. The deposits purchased by the Corporation from a federal savings bank (see financial condition for details) remain subject to the SAIF rather than BIF deposit insurance rates. The $48 or 2.54% decrease in other operating expenses to $1,844 in 1995 from $1,892 in 1994 was due to a combination of many increases and decreases with large changes in goodwill and professional fees. PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1995 (Dollar amounts in thousands, except share data) Other operating expenses for 1995 includes the addition of $35 for goodwill amortization in 1995 related to the deposits purchased on March 17, 1995. Other 1995 operating expenses were lower because of reduced professional fees, due to the inclusion in 1994 of both sides of expenses for a merger completed on June 1, 1994, under the pooling of interests method and the inclusion in 1995 of only the Corporation's merger expenses of a merger expected to be completed during this year, also under the pooling of interests method.Income before income taxes was up $444 or 12.50% to $3,996 for the first six months of 1995 from $3,552 for the first six months of 1994. The net income for the first six months ended June 30, 1995, was up $284 or 11.32% to $2,792 as compared to $2,508 for the six months ended June 30, 1994. Earnings per share were $1.18 in 1995 and were $1.06 in 1994. Based upon annualized net income the return on average assets was 1.08% for the first six months of 1995 compared to .99% for the same period in 1994. The following schedule shows selected financial amounts and ratios for the three months ended and six months ended June 30, 1995 and 1994. The Corporation feels these financial highlights include pertinent information relevant for its results as a company in the financial institutions industry. Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 AVERAGE BALANCE SHEET DATA Total assets $ 531,145 $ 511,229 $ 521,894 $ 510,333 Securities 145,591 178,642 147,541 179,158 Loans 345,765 296,820 336,437 287,542 Allowance for loan losses 3,946 3,812 3,919 3,774 Deposits 469,450 448,081 459,607 448,972 Shareholders' equity 51,241 49,329 50,350 49,184 END OF PERIOD BALANCE SHEET DATA Total assets $ 538,045 $ 508,453 Securities 141,488 167,629 Loans 347,871 306,720 Allowance for loan losses 4,008 3,785 Deposits 473,072 444,110 Shareholders' equity 52,932 48,225 INCOME DATA Net interest income(t.e. basis) $ 5,477 $ 5,079 $ 10,949 $ 10,049 Provision for loan losses 75 -- 150 50 Noninterest income 620 560 1,229 1,253 Noninterest expense 3,671 3,509 7,390 7,030 Net income 1,382 1,272 2,792 2,508 PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1995 (Dollar amounts in thousands, except share data) Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 PER SHARE DATA Net income $ .58 $ .54 $ 1.18 $ 1.06 Cash dividends before pooling of interests .21 .21 .42 .42 Book value at end of period 22.31 20.35 Book value at end of period before FAS 115 22.68 21.09 Tangible book value at end of period 21.49 20.27 Tangible book value at end of period before FAS 115 21.86 21.01 Stock price at end of period Weighted average 32.81 32.25 shares outstanding 2,372,547 2,369,784 SELECTED RATIOS Return on average assets 1.04% 1.00% 1.08% .99% Return on average equity before FAS 115 10.82 10.34 10.39 10.23 Net interest margin(t.e.basis) 4.38 4.18 4.48 4.17 Net charge-offs to average loans .01 .01 .02 (.02) Allowance for loan losses to loans 1.15 1.23 Nonaccrual loans to loans .22 .23 Loans past due 90 days or more to loans .26 .18 Performing restructured loans to loans .04 .18 OREO to loans .12 .14 Leverage capital(Tier 1 equity/average assets) 9.88 9.75 Tier 1 risk-based capital 13.50 14.39 Total risk-based capital 14.55 15.54 The Corporation's lead bank, The American National Bank of Vincennes, completed the purchase of $25,462 of deposits from a federal savings bank, on March 17, 1995. The Corporation has historically had a decrease in total assets during the first six months of each year due to the year end total assets including institutional public funds on deposit that are not in the June 30th deposits. With these purchased deposits, total assets increased by $21,949 or 4.25% to $538,045 at June 30, 1995, from $516,096 at December 31, 1994. Significant changes in assets from December 31, 1994, to June 30, 1995, included an increase in PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1995 (Dollar amounts in thousands, except share data) cash and cash equivalents, loans and loans held for sale and decreases in securities and interest bearing deposits in other banks. With the continuing loan demand, as demonstrated in loan growth, the Corporation has retained a portion of the increased deposits purchased in readily available funds, and cash and cash equivalents have increased $2,356 or 8.86% at June 30, 1995, from year end 1994. Total securities and interest bearing deposits in other banks decreased $10,720 or 7.00% to $142,382 at June 30, 1995, from $153,102 at December 31, 1994. The effect of FAS 115 and the mark-to-market of securities available for sale added $3,324 to securities available for sale during the first six months of 1995. The FAS 115 negative mark-to-market adjustment at December 31, 1994, was $4,746 as compared to only $1,422 at June 30, 1995, and was due to the normal market adjustment when interest rates are stabilizing. Without the FAS 115 adjustment, available for sale securities decreased $13,142 or 11.24% from maturities and calls and $1,500 of sales during the first six months of 1995. There were no sales or transfers of securities classified as held to maturity during the period ended June 30, 1995. Securities held to maturity decreased $603 or 1.52% due to maturities or calls during the six months ended June 30, 1995. The Corporation experienced increased loan demand and total loans increased $26,775 or 8.34% to $347,871 at June 30, 1995, from $321,096 at December 31, 1994. Commercial loans increased $17,744 or 11.10% to $177,658 at June 30, 1995, from $159,914 at December 31, 1994. Commercial loan demand showed steady increases all during the six months ended June 30, 1995. Real estate loans increased $5,187 or 6.53% to $84,651 at June 30, 1995, from $79,464 at December 31, 1994. As noted previously, the renewed interest in variable rate mortgage loans caused this increase. Installment loans increased $3,844 or 4.70% to $85,562 at June 30, 1995, from $81,718 at December 31, 1994. Loans held for sale also increased $3,210 or 120.50% at June 30, 1995, to $5,874 from $2,664 at December 31, 1994. Total deposits increased $17,838 or 3.92% during the first six months of 1995. Noninterest bearing deposits decreased $5,118 or 9.87% to $46,720 at June 30, 1995, from $51,838 at year end 1994, due to normal reductions of institutional public funds that were on deposit at December 31, 1994, and not on deposit at June 30, 1995. Interest bearing deposits increased $22,956 or 5.69% to $426,352 during the six months ended June 30, 1995, from $403,396 at December 31, 1994, and was due in part to the purchased PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1995 (Dollar amounts in thousands, except share data) deposits. Long-term debt, which is mainly borrowings from the Federal Home Loan Bank that were matched off against specific fixed rate lending programs, decreased $546 or 17.12% at June 30, 1995, from December 31, 1994, due to normal repayments. Total shareholders' equity, including the unrealized loss on securities available for sale, increased $3,895 or 7.94% to $52,932 at June 30, 1995, from $49,037 at December 31, 1994. The FAS 115 after tax mark-to-market adjustment on the available for sale securities accounted for $2,086 or 4.25% of this increase in total shareholders' equity at June 30, 1995, from December 31, 1994. The Corporation's regulators have issued guidelines stating that the unrealized 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 $51,952 at December 31, 1994, and increased $1,825 or 3.51% to $53,777 at June 30, 1995. This increase was net income of $2,792 less dividends paid of $995 plus $16 related to increased mark-to-market on mutual funds and $12 related to sales of the Corporation's common stock for the dividend reinvestment and stock purchase plan. The dividend reinvestment and stock purchase plan was changed to a market only plan, during the second quarter of 1995, and no more shares of common stock will be issued by the Corporation through this plan. Capital adequacy in the banking industry is evaluated primarily by the use of three required capital ratios based on three separate calculations; leverage capital, Tier 1 risk-based capital and total risk-based capital. The leverage capital ratio is defined as total ending Tier 1 capital divided by total average assets less intangible assets and FAS 115 adjustments. Tier 1 risk-based capital is defined as Tier 1 capital divided by risk-weighted assets. Total risk-based capital is defined as Tier 1 capital plus Tier 2 capital divided by risk-weighted assets. Tier 1 capital is the sum of the core capital elements (common shareholders' equity, qualifying perpetual preferred stock and minority interest in the equity accounts of consolidated subsidiaries) less intangible assets and the FAS 115 PAGE AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1995 (Dollar amounts in thousands, except share data) adjustments. Tier 2 capital consists of the allowance for loan losses (limited to an maximum of 1.25% of risk-weighted assets), perpetual preferred stock and other hybrid capital instruments. Risk-weighted assets are defined to include the assets on the balance sheet and off-balance sheet financial instruments in broad categories that are weighted at 20% to 100% depending on the asset totals within these broad categories. The Corporation's capital ratios at June 30, 1995, and December 31, 1994, were: June 30, 1995 December 31, 1994 Leverage capital ratio 9.88% 10.14% Tier 1 risk-based capital 13.50% 14.32% Total risk-based capital 14.55% 15.41% PENDING ACQUISITION On October 12, 1994, the Corporation executed an Agreement of Merger and Plan of Reorganization that provides for the Corporation to acquire First Robinson Bancorp, the holding company for The First National Bank in Robinson, Robinson, Illinois. On June 19, 1995, the original Agreement of Merger and Plan of Reorganization was amended to include the merger of The First National Bank in Robinson and Farmers' State Bank of Palestine, a wholly-owned subsidiary of the Corporation. As a result of the amendment, the combined entity resulting from the merger of First National Bank and Farmers' State Bank will be a wholly-owned subsidiary of the Corporation. The proposed acquisition will be accounted for as a pooling of interests and the Corporation will issue 636,504 shares of its common stock in exchange for the 119,200 currently issued and outstanding shares of First Robinson Bancorp. PAGE AMBANC CORP. As of and for the six months ended June 30, 1995 OTHER INFORMATION 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, 1994, is incorporated herein by reference. 27 Financial Data Schedule for June 30, 1995. (b) A Form 8-K was filed with the SEC on June 28, 1995, for the June 19, 1995, execution of the Amended Agreement of Merger and Plan of Reorganization ("Amended Agreement") that provides for the Corporation's acquisition of First Robinson Bancorp, the holding company for The First National Bank in Robinson, Robinson , Illinois, and the merger of Farmers' State Bank of Palestine, Palestine, Illinois, a wholly-owned subsidiary of the Corporation, into the First National Bank in Robinson. The Amended Agreement provides that each share of First Robinson Bancorp common stock will be exchanged for 5.3398 shares of the Corporation's common stock. The acquisition will continue to be accounted for as a pooling of interests transaction. PAGE AMBANC CORP. As of and for the six months ended June 30, 1995 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: August 10, 1995 BY: R. Watson Robert G. Watson, Chairman of the Board, President and Chief Executive Officer DATE: August 10, 1995 BY: Richard E. Welling Richard E. Welling, Secretary, Treasurer and C.F.O. PAGE AMBANC CORP. As of and for the six months ended June 30, 1995 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, 1994, is incorporated herein by reference. 27 Financial Data Schedule for June 30, 1995. * Incorporated by reference from previously filed documents.
EX-27 2
9 0000702904 AMBANC CORP. 1,000 3-MOS DEC-31-1994 JUN-30-1995 15,784 994 13,167 0 102,396 39,092 39,488 347,871 4,008 538,045 473,072 5,956 3,442 2,643 23,726 0 0 29,206 538,045 7,899 2,085 103 10,160 4,917 5,005 5,155 75 6 3,671 2,029 2,029 0 0 1,382 .58 .58 4.12 781 890 127 0 3,911 98 75 4,008 1,880 0 2,128
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