-----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, S+uxNhkG6jf2/dfQw+ev9fhLEDjx7eq0EyO/K5slJ3SZVKYHr4rK2TVEnvPkwK6S 1hQfSBYqHb1N/PQKXwLs5Q== 0000702904-96-000002.txt : 19960514 0000702904-96-000002.hdr.sgml : 19960514 ACCESSION NUMBER: 0000702904-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 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: 96561259 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, 1996 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: 3,158,961 common shares of stock were outstanding as of May 10, 1996. PAGE AMBANC CORP. INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets at March 31, 1996 (unaudited) and December 31, 1995 Consolidated Statements of Income for three months ended March 31, 1996 and 1995(unaudited) Consolidated Statements of Cash Flows for three months ended March 31, 1996 and 1995 (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) March 31, December 31, 1996 1995 ASSETS Cash and due from banks $ 19,455 $ 20,520 Federal funds sold 19,737 22,653 Total cash and cash equivalents 39,192 43,173 Interest bearing deposits in other banks 691 692 Securities available for sale at market 186,186 173,469 Loans held for sale 7,702 6,727 Loans, net of unearned income 451,023 442,657 Allowance for loan losses (5,139) (5,022) Loans, net 445,884 437,635 Premises, furniture and equipment, net 9,928 9,398 Accrued interest receivable and other assets 11,686 11,253 TOTAL ASSETS $ 701,269 $ 682,347 LIABILITIES Noninterest bearing deposits $ 53,663 $ 63,116 Interest bearing deposits 564,748 536,953 Total deposits 618,411 600,069 Short-term borrowings 7,873 6,788 Long-term debt 2,402 2,677 Accrued interest payable and other liabilities 4,965 5,101 TOTAL LIABILITIES 633,651 614,635 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, 3,158,961 and 3,158,961 shares issued and outstanding at March 31, 1996, and December 31, 1995 31,590 31,590 Retained earnings 36,327 35,009 Unrealized gain/(loss) on securities available for sale (299) 1,113 TOTAL SHAREHOLDERS' EQUITY 67,618 67,712 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 701,269 $ 682,347
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AMBANC CORP. CONSOLIDATED STATEMENTS OF INCOME (Dollar amounts in thousands, except share data) Three Months Ended March 31, 1996 1995 INTEREST INCOME Interest and fees on loans $ 10,313 $ 8,703 Interest and fees on loans held for sale 124 45 Interest on securities Taxable 1,889 2,031 Tax exempt 693 698 Other interest 337 70 TOTAL INTEREST INCOME 13,356 11,547 INTEREST EXPENSE Interest on deposits 6,591 5,104 Interest on short-term borrowings 91 147 Interest on long-term debt 39 44 TOTAL INTEREST EXPENSE 6,721 5,295 NET INTEREST INCOME 6,635 6,252 Provision for loan losses 267 146 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 6,368 6,106 NONINTEREST INCOME Income from fiduciary activities 130 213 Service charges on deposit accounts 346 343 Gain/(loss) on securities 1 5 Other operating income 242 211 TOTAL NONINTEREST INCOME 719 772 NONINTEREST EXPENSE Salaries and employees benefits 2,461 2,418 Occupancy expenses, net 285 264 Equipment expenses 297 260 Data processing expenses 147 91 FDIC insurance 21 310 Other operating expenses 1,095 1,190 TOTAL NONINTEREST EXPENSE 4,306 4,533 INCOME BEFORE INCOME TAXES 2,781 2,345 Taxes 800 635 NET INCOME $ 1,981 $ 1,710 EARNINGS PER COMMON SHARE(based on 3,158,610 and 3,158,948 average outstanding shares in 1996 and 1995) Net income per share $ .63 $ .54
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AMBANC CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands, except share data) Three Months Ended March 31, 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,981 $ 1,710 Adjustments to reconcile net income to net cash from operating activities: Net premium amortization and discount accretion on securities 75 95 Depreciation 258 241 Provision for loan losses 267 146 (Gain)/loss on securities (1) (5) Proceeds from sales of loans held for sale 6,967 2,739 Loans held for sale made to customers, net of payments collected (7,942) (2,915) Accrued interest receivable and other assets (433) 330 Accrued interest payable and other liabilities 687 (1,109) Deferred loan fees net of costs 13 29 NET CASH FROM OPERATING ACTIVITIES 1,872 1,261 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of securities available for sale -- 995 Proceeds from maturities and calls of securities available for sale 15,125 10,032 Proceeds from maturities and calls of securities held to maturity -- 1,724 Purchases of securities available for sale (30,151) (3,476) Purchases of securities held to maturity -- (3,220) Net change in interest bearing deposits in other banks 1 199 Loans made to customers, net of payments collected (9,933) (22,249) Loans purchased (1,000) -- Proceeds from sales of loans 2,404 3,110 Property and equipment expenditures (788) (66) NET CASH FROM INVESTING ACTIVITIES (24,342) (12,951)
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AMBANC CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued (Dollar amounts in thousands, except share data) Three Months Ended March 31, 1996 1995 CASH FLOWS FROM FINANCING ACTIVITIES Net change in deposits 18,342 13,450 Net change in short-term borrowings 1,085 (3,246) Payments on long-term debt (300) (339) Proceeds on long-term debt 25 20 Issuance of stock for dividend reinvestment -- 12 Dividends paid (663) (550) NET CASH FROM FINANCING ACTIVITIES 18,489 9,347 NET CHANGE IN CASH AND CASH EQUIVALENTS (3,981) (2,343) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 43,173 29,531 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 39,192 $ 27,188 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period ended March 31: Interest $ 6,237 $ 5,095 Income taxes 165 124
PAGE AMBANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of and for the three months ended March 31, 1996 (Dollar amounts in thousands, except share data) ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS Effective November 1, 1995, AMBANC Corp. completed the acquisition of First Robinson Bancorp (FRB) of Robinson, Illinois in Crawford county. The acquisition, which has been accounted for as a pooling of interests, involved the issuance of 668,329 shares of AMBANC Corp. common stock in exchange for the 119,200 shares of outstanding common stock of FRB. No fractional shares were issued and AMBANC Corp. paid $3 for 94 equivalent fractional shares and issued 668,235 common shares in the FRB acquisition. At the conclusion of the acquisition, FRB was merged into AMBANC Corp. and its wholly owned subsidiary, First National Bank in Robinson, Robinson, Illinois in Crawford county became a direct, wholly owned subsidiary of AMBANC Corp. The consolidated balance sheet at December 31, 1995, and the consolidated statement of income and consolidated statement of cash flows for three months ended March 31, 1995, represent the retroactive restatement, under the pooling of interests basis, of information for FRB and the previous AMBANC Corp. The following page presents the consolidated three month income statement for the previous AMBANC Corp. and FRB at March 31, 1995. PAGE
AMBANC CORP. CONSOLIDATED STATEMENT OF INCOME (Dollar amounts in thousands, except share data) Three Months Ended March 31, 1995 AMBANC FRB Consolidated Total interest income $ 9,515 $ 2,032 $ 11,547 Total interest expense 4,363 932 5,295 Net interest income before provision for loan losses 5,152 1,100 6,252 Provision for loan losses 75 71 146 Net interest income after provision for loan losses 5,077 1,029 6,106 Total other income 609 163 772 Total other expense 3,719 814 4,533 Income taxes 557 78 635 Net income $ 1,410 $ 300 $ 1,710 Earnings per common share (based on 3,158,948 average outstanding shares) $ .54
PAGE AMBANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of and for the three months ended March 31, 1996 (Dollar amounts in thousands, except share data) The Consolidated balance sheet as of March 31, 1996, consolidated statements of income for the three month periods ended March 31, 1996 and 1995, and the consolidated statements of cash flows for the three month periods ended March 31, 1996 and 1995, 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, 1996, 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, 1995, annual report to shareholders. The results of operations for the period ended March 31, 1996, 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 three months ended March 31, 1996 (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%. Three Months Ended March 31, Increase 1996 1995 (Decrease) Interest income $ 13,356 $ 11,547 15.67 % Adjusted for tax exempt income 400 403 (.74) Tax equivalent interest income 13,756 11,950 15.11 Interest expense 6,721 5,295 26.93 Net interest income $ 7,035 $ 6,655 5.71 % Net interest income increased $380 or 5.71% for the three months ended March 31, 1996, compared to the three months ended March 31, 1995. This $380 increase was a combination of a $1,806 increase in interest income and a $1,426 increase in interest expense. The $1,806 increase in interest income was composed of an increase of $1,367 due to increased volume of average interest earning assets and an increase of $439 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 three months ended March 31, 1996 (Dollar amounts in thousands, except share data) interest earning assets. The $1,426 increase in interest expense was a combination of an increase of $724 due to increased volume of average interest bearing liabilities and an increase of $702 due to rate increases on these interest bearing liabilities. The Corporation's average assets for the first three months of 1996 increased $71,982 or 11.63% to $691,117 from $619,135 for the first three months of 1995, but the percent of average earning assets to total average assets decreased to 94.88% for the first three months of 1996 from 95.39% for the first three months of 1995. This decrease is partially explained by the fact that 1996 average assets contained $1,914 average nonearning goodwill while 1995 only contained $566 average nonearning goodwill. This increase is due to the purchase of $25,462 of deposits on March 17, 1995, and the related goodwill associated with the purchased deposits. This goodwill, originally booked at $1,777, was only included in average assets for 15 days in 1995 but is included for the complete quarter in 1996. The nonearning assets of the Corporation are also lower due to average premises, furniture and equipment, net of depreciation, increasing $887 to $10,006 for the first quarter of 1996 compared to $9,119 for the first quarter of 1995. This average increase is due to the opening of four new branches since March 31, 1995. Net interest margin decreased .25% to 4.32% for the first three months of 1996 from 4.57% for the first three months of 1995. This decrease is due to the fact that costs on average interest bearing liabilities are increasing faster than rates on average interest earning assets. The yield on average interest earning assets increased to 8.44% for the first three months of 1996 from 8.21% for the first three months of 1995 for an increase of .23%. The cost on average interest bearing liabilities increased at a faster rate and was 4.81% for the first three months of 1996 and 4.28% for the first three months of 1995 for an increase of .53%. The net interest margin started out the first quarter of 1995 at its best rate and decreased each subsequent quarter ending at 4.38% for all of 1995. The net interest margin for the fourth quarter of 1995 was 4.24% and thus actually increased .08% during the first quarter of 1996 compared to the last quarter of 1995. The commercial loan fees received during the first quarter of 1996 were higher than normal. Without these higher loan fees, the net interest margin for the first quarter of 1996 would have been only 4.21% or .11% lower than actual. The interest spread, which is the mathematical difference between yields on average interest earning assets and costs on average interest bearing liabilities was at 3.63% for the first three months of 1996 compared to 3.93% for the first three months of 1995. 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, 1996 (Dollar amounts in thousands, except share data) The provision for loan losses was $267 during the first three months of 1996 compared to $146 during the first three months of 1995. The provision for loan losses was increased during 1996 because of increased loan volume and not due to loan credit problems. The allowance for loan losses at March 31, 1996, was $5,139 or 1.14% of total loans less unearned income as compared to $5,022 or 1.13% of total loans less unearned income at December 31, 1995. During the first three months of 1996, loans charged off were $277 and recoveries from previously written off loans were $127, thus net charge offs for the first three months of 1996 were $150. 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 March 31, 1996, 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 March 31, 1996, and December 31, 1995: March 31,1996 December 31, 1995 Nonaccrual loans .22% .22% Loans past due 90 days .38 .29 Performing restructured loans .01 .01 OREO .06 .06 A summary of the activity in the allowance for loan losses account for the first three months ending March 31, 1996, and 1995 was: 1996 1995 Balance, January 1 $5,022 $4,531 Provision for loan losses 267 146 Loans charged off (277) (162) Recoveries of loans previously charged off 127 85 Balance, March 31 $5,139 $4,600 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, 1996 (Dollar amounts in thousands, except share data) Noninterest income for the three months ended March 31, 1996, was down $53 or 6.87% to $719 as compared to $772 for the three months ended March 31, 1995. Income from fiduciary services was down by $83 or 38.97% to $130 in 1996 from $213 in 1995. While trust fees were up at the lead bank, the newest subsidiary bank's fees were down drastically due to annual billings not being completed in the first quarter of 1996 as had been the case in 1995. Service charges on deposit accounts remained consistent and the Corporation had net gains of $1 on calls of securities. Other operating income increased $31 or 14.69% to $242 for the three months ended March 31, 1996, from $211 for the same three months in 1995. This $31 is due to several factors with customer service charges and insurance commissions decreasing but being offset by increased gains on the sale of loans held for sale. The Corporation adopted Statement of Financial Accounting Standards (FAS) 122, "Accounting for Mortgage Servicing Rights", effective January 1, 1996, and with it the gains on sales of mortgages to the secondary mortgage market increased. The adoption of FAS 122 resulted in the Corporation booking servicing rights of $50 on $4,142 of qualifying fixed rate mortgages sold to the secondary mortgage market with the Corporation retaining servicing rights. The adoption of FAS 122 effected only those mortgage loans booked and sold during the first quarter of 1996. The gains on sales of loans were also $50 higher due to the effect of adopting and booking FAS 122. The book value of the sold real estate loans is reduced for the amount assigned to these servicing rights and the gain on the sale of these loans is increased accordingly. Booked servicing rights are being amortized against future service fee income based upon the anticipated life of each loan. 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, 1996 (Dollar amounts in thousands, except share data) Noninterest expense for the three months ended March 31, 1996, was $4,306 as compared to $4,533 for the three months ended March 31, 1995, for a decrease of $227 or 5.01%. Salaries and employee benefits are the largest portion of noninterest expense and increased $43 or 1.78% in the first three months of 1996 compared to the same period in 1995. Individual major components showed increases in salaries and related taxes and decreases in medical and pension expense. One of the affiliate banks was funding a defined benefit pension plan in 1995 and not in 1996. This pension plan was curtailed in 1994 and final funding was completed during 1995. Occupancy expenses were up $21 or 7.95% and equipment expenses were up $37 or 14.23% in the first three months of 1996 compared to 1995. As mentioned earlier, the Corporation has added four branches since March 31, 1995, and these expenses have increased accordingly. Data processing expenses have increased due to the upgrading of the computer system. The $56 or 38.10% increase in data processing expenses during the first quarter of 1996, are the result of a decision to add short term expenses that will benefit the Corporation with reduced data processing expenses in the future. The upgrading of the data processing system in late 1995 and the conversion of another subsidiary bank to this system during the first quarter of 1996 will provide for long term expense reduction. The conversion of the last bank subsidiary to the in-house data processing system is anticipated to be complete during the last quarter of 1996. All of the Corporation's 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). Because of excess funding, the FDIC set its BIF premium rate at 0% with a minimum of $2 per subsidiary bank effective January 1, 1996. This 0% rate for FDIC insurance will exist as long as BIF remains at or above the 1.25% of total insured deposits set by law. Two of the subsidiary banks purchased deposits from savings and loans in the past and thus must continue to pay the Savings Association Insurance Fund (SAIF) rather than the BIF rate on these deposits. The SAIF rate is .23% of insured deposits. With these changes, the Corporation has seen FDIC insurance expense reduce to only $21 in the first quarter of 1996 from $310 during the first quarter of 1995. 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, 1996 (Dollar amounts in thousands, except share data) Other operating expenses decreased $95 or 7.98% to $1,095 for the first three months of 1996 from $1,190 for the same period in 1995. This decrease is due to many increases and decreases with major changes being increased amortization of goodwill in 1996 due to the purchased deposits being included in the whole quarter of 1996 and only during a fifteen day period of 1995 offset by a large decrease in professional fees because 1995 contained merger expenses and 1996 does not. The Corporation adopted FAS 121, "Accounting for the Impairment of Long-Lived Assets or for Long-Lived Assets to be Disposed of", effective January 1, 1996. The adoption of FAS 121 had no effect on the Corporation because no assets, liabilities or intangibles of the Corporation were effected by this new FAS. Income before income taxes was up $436 or 18.59% to $2,781 for the first three months of 1996 from $2,345 for the first three months of 1995. As noted on previous page, $289 is due to the reduction in FDIC expense. The net income for the first three months ended March 31, 1996, was up $271 or 15.85% to $1,981 as compared to $1,710 for the three months ended March 31, 1995. Earnings per share were $.63 in 1996 and were $.54 in 1995. Based upon annualized net income the return on average assets was 1.15% for the first three months of 1996 compared to 1.12% for the same period in 1995. 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, 1996 (Dollar amounts in thousands, except share data) The following schedule shows selected financial amounts and ratios for the three months ended March 31, 1996 and 1995. 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, 1996 1995 AVERAGE BALANCE SHEET DATA Total assets $ 691,117 $ 619,135 Securities 179,538 183,991 Loans 446,500 393,647 Allowance for loan losses 5,020 4,527 Deposits 607,634 542,494 Shareholders' equity 68,095 58,742 END OF PERIOD BALANCE SHEET DATA Total assets $ 701,269 $ 637,716 Securities 186,186 183,258 Loans 451,023 407,690 Allowance for loan losses 5,139 4,600 Deposits 618,411 563,837 Shareholders' equity 67,618 61,023 INCOME DATA Net interest income(t.e. basis) $ 7,035 $ 6,655 Provision for loan losses 267 146 Noninterest income 719 772 Noninterest expense 4 306 4,533 Net income 1,981 1,710
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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, 1996 (Dollar amounts in thousands, except share data) Three Months Ended March 31, 1996 1995 PER SHARE DATA Net income $ .63 $ .54 Cash dividends before pooling of interests .21 .20 Book value at end of period 21.41 19.32 Book value at end of period before FAS 115 21.53 19.94 Tangible book value at end of period 20.80 18.67 Tangible book value at end of period before FAS 115 20.93 19.30 Stock price at end of period 30.50 29.52 Weighted average shares outstanding 3,158,961 3,158,948 SELECTED RATIOS Return on average assets 1.15% 1.12% Return on average equity before FAS 115 11.88 11.24 Net interest margin(t.e.basis) 4.32 4.57 Net charge-offs to average loans .03 .02 Allowance for loan losses to loans 1.14 1.13 Nonaccrual loans to loans .22 .27 Loans past due 90 days or more to loans .38 .18 Performing restructured loans to loans .01 .12 OREO to loans .06 .10 Leverage capital(Tier 1 equity/average assets) 9.59 9.73 Tier 1 risk-based capital 13.39 13.45 Total risk-based capital 14.44 14.47
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, 1996 (Dollar amounts in thousands, except share data) FINANCIAL CONDITION Total assets have increased $18,922 or 2.77% to $701,269 at March 31, 1996, from $682,347 at December 31, 1995. This growth is mostly attributable to the opening of two new branch locations in Wal-Mart Supercenters and the resulting increased deposits. The rates paid on deposits were set to attract new customers and business but actually increased deposits more than was budgeted. This deposit growth is also affected by the fact that rates paid on bank deposits are coming closer to investment rates paid by brokerage firms and the Corporation has seen customers returning deposits to the banks. Deposits increased $18,342 or 3.06% to $618,411 at March 31, 1996, from $600,069 at December 31, 1995. Noninterest bearing deposits actually decreased $9,453 or 14.98% while interest bearing deposits increased $27,795 or 5.18%. The decrease in noninterest bearing deposits during the first quarter is due to normal reductions of institutional public funds on deposit at December 31, 1995, and not on deposit at March 31, 1996. The total cash and cash equivalents have decreased $3,981 or 9.22% at March 31, 1996, from December 31, 1995, and have provided an additional source for investing by the Corporation. These increased cash flows were mostly used to increase investments, loans held for sale and loans during the quarter ended March 31, 1996. Investments increased $12,717 or 7.33% to $186,186 at quarter ended March 31, 1996, from $173,469 at year end 1995. This is the book balance of securities available for sale which are presented after being adjusted to market value. The market value adjustment for these securities went from a positive $1,725 at year end 1995 to a negative $510 at the end of March 1996. This swing is the result of normal repricing of investment securities in a rising rate environment which occurred during the first quarter of 1996. Without this mark to market swing of $2,235, investments would have increased $14,952 or 8.71% between December 31, 1995, and March 31, 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, 1996 (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 where low enough that the Corporation experienced demand for these loans during the quarter and the balance increased $975 or 14.49% during the quarter. This increase is after sales of loans held for sale during the quarter totaling $6,967 which provided a gain on sale of $117 including the increased gains of $50 due to the adoption of FAS 122. New loans net of loan payments and transferred loans totaled $7,942 during the quarter and the ending balance equaled $7,702. Loans totaling $940 and classified as loans held for sale at December 31, 1995, were determined not to fit the criteria of loans the Corporation is currently selling to the secondary market and were transferred to real estate loans during the first quarter of 1996. The $8,366 or 1.89% increase in loans at March 31, 1996, from December 31, 1995, is composed of an increase of $7,206 in commercial loans, a decrease of $52 in installment loans and a $1,212 increase in real estate loans. The Corporation has seen increased demand for commercial loans as the economy continues its steady to slightly increased movement. The demand for installment loans is just steady and is running slightly behind principal paydowns on installment loans. Real estate loans, which currently only includes new variable rate loans, have shown an increase of $1,212 but this includes the transfer from loans held for sale discussed previously. These changes in loans are after a reclassification of approximately $17,000 of real estate loans to commercial loans during the quarter. The newest bank affiliate was converted to the Corporation's data processing system on February 17, 1996, and with that conversion these loans were reclassified. This reclassification was made to conform loans to the same classifications as being used by the other subsidiary banks. 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, 1996 (Dollar amounts in thousands, except share data) Total shareholders' equity, including the unrealized loss on securities available for sale, decreased $94 or .14% to $67,618 at March 31, 1996, from $67,712 at December 31, 1995. The change in the adjustment for securities available for sale caused total equity to decrease $1,412 or 2.09% at March 31, 1996, from December 31, 1995. This decrease is the after tax effect of the mark-to-market adjustment on securities available for sale which was a negative $299 at March 31, 1996, and was a positive $1,113 at December 31, 1995. 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 $66,510 at December 31, 1995, and increased $1,296 or 1.95% to $67,806 at March 31, 1996. This increase was net income of $1,981 less dividends paid of $663 less $22 related to a decrease in the mark-to-market on mutual funds. 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 three months ended March 31, 1996 (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 March 31, 1996, and December 31, 1995, were: March 31, 1996 December 31, 1995 Leverage capital ratio 9.59% 10.01% Tier 1 risk-based capital 13.39% 13.61% Total risk-based capital 14.44% 14.67% PENDING CHANGES The Corporation has approved the merger of two of our subsidiary banks. These banks, The American National Bank of Vincennes and Citizens' National Bank of Linton, are both domiciled in Indiana. This merger will mean that all of the Corporation's banking operations in Indiana will be performed by one legal entity. The Corporation has also approved a name change for all of the subsidiary banks. The banks will all be named "AmBank" and will use consistent signage and advertisements. The name change is anticipated to bring several efficiencies and will provide for more exposure and recognition with all banks using the same name. This name change is also anticipated to bring more exposure to the Corporation since the new name for the banks will be very similar to our corporate name, "AMBANC Corp." and "AMBK" our NASDAQ symbol. The above two pending changes will require approval from various regulators. The approval of the appropriate regulators has been applied for and if received, the Corporation will complete the above two changes effective July 1, 1996. PAGE AMBANC CORP. As of and for the three months ended March 31, 1996 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, 1995, is incorporated herein by reference. 27 Financial Data Schedule for March 31, 1996. (b) No Form 8-K was filed with the SEC during the quarter ended March 31, 1996. PAGE AMBANC CORP. As of and for the three months ended March 31, 1996 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 10, 1996 BY: R. Watson Robert G. Watson, Chairman of the Board, President and Chief Executive Officer DATE: May 10, 1996 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, 1996 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, 1995, is incorporated herein by reference. 27 Financial Data Schedule for March 31, 1996. * Incorporated by reference from previously filed documents. EX-27 2
9 0000702904 AMBANC CORP. 1,000 3-MOS DEC-31-1996 MAR-31-1996 19,455 691 19,737 0 186,186 0 0 451,023 5,139 701,269 618,411 7,873 4,965 2,402 0 0 31,590 36,028 701,269 10,313 2,582 337 13,356 6,591 6,721 6,635 267 1 4,306 2,781 2,781 0 0 1,981 .63 .63 4.11 983 1,713 45 0 5,022 277 127 5,139 1,636 0 3,503
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