-----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, GY0ic8cncz7qhSkFdUFk4mwBi31+8i7lkXZr5FCb47F3CqRFDVL4Z2dH7b/3nktL nxutbAYTjHbup2Rbu5bL7w== 0000702904-97-000007.txt : 19970818 0000702904-97-000007.hdr.sgml : 19970818 ACCESSION NUMBER: 0000702904-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970815 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: 97664616 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, 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 August 14, 1997. PAGE AMBANC CORP. INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets at June 30, 1997 (unaudited) and December 31, 1996 Consolidated Statements of Income for Six and three months ended June 30, 1997 and 1996(unaudited) Consolidated Statements of Cash Flows for six months ended June 30, 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) June 30, December 31, 1997 1996 ASSETS Cash and due from banks $ 19,510 $ 26,409 Federal funds sold 2,525 5,875 Total cash and cash equivalents 22,035 32,284 Interest bearing deposits in other banks 397 590 Securities available for sale at market 161,471 170,724 Loans held for sale 2,005 2,350 Loans, net of unearned income 510,147 494,467 Allowance for loan losses (5,475) (5,630) Loans, net 504,672 488,837 Premises, furniture and equipment, net 12,920 11,184 Accrued interest receivable and other assets 13,509 12,785 TOTAL ASSETS $ 717,009 $ 718,754 LIABILITIES Noninterest bearing deposits $ 55,084 $ 61,518 Interest bearing deposits 573,792 571,940 Total deposits 628,876 633,458 Short-term borrowings 6,057 5,286 Long-term debt 1,968 2,309 Accrued interest payable and other liabilities 5,425 5,518 TOTAL LIABILITIES 642,326 646,571 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 June 30, 1997, and December 31, 1996 33,163 33,163 Treasury stock (554 and 724 shares at cost) (21) (21) Retained earnings 41,432 38,731 Unrealized gain/(loss) on securities available for sale, net of deferred taxes 109 310 TOTAL SHAREHOLDERS' EQUITY 74,683 72,183 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 717,009 $ 718,754
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AMBANC CORP. CONSOLIDATED STATEMENTS OF INCOME (Dollar amounts in thousands, except share data) Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 INTEREST INCOME Interest and fees on loans $ 11,343 $ 10,218 $ 22,337 $ 20,385 Interest and fees on loans held for sale 23 168 70 292 Interest on securities Taxable 1,695 1,994 3,441 3,883 Tax exempt 725 715 1,458 1,408 Other interest 149 166 233 503 TOTAL INTEREST INCOME 13,935 13,261 27,539 26,471 INTEREST EXPENSE Interest on deposits 6,987 6,610 13,747 13,201 Interest on short-term borrowings 66 88 162 179 Interest on long-term debt 31 35 66 74 TOTAL INTEREST EXPENSE 7,084 6,733 13,975 13,454 NET INTEREST INCOME 6,851 6,528 13,564 13,017 Provision for loan losses 315 299 630 566 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 6,536 6,229 12,934 12,451 NONINTEREST INCOME Income from fiduciary activities 177 207 371 337 Service charges on deposit accounts 417 397 820 760 Gain/(loss) on securities 19 (8) 74 (7) Other operating income 490 446 909 808 TOTAL NONINTEREST INCOME 1,103 1,042 2,174 1,898 NONINTEREST EXPENSE Salaries and employees benefits 2,721 2,443 5,221 4,904 Occupancy expenses, net 351 307 692 592 Equipment expenses 343 276 659 578 Data processing expenses 113 91 236 223 FDIC insurance 26 22 33 43 Other operating expenses 1,169 1,269 2,341 2,365 TOTAL NONINTEREST EXPENSE 4,723 4,408 9,182 8,705 INCOME BEFORE INCOME TAXES 2,916 2,863 5,926 5,644 Income taxes 904 824 1,799 1,624 NET INCOME $ 2,012 $ 2,039 $ 4,127 $ 4,020 EARNINGS PER COMMON SHARE Net income per share $ .60 $ .61 $ 1.24 $ 1.21 Weighted average outstanding shares 3,316,058 3,316,232 3,316,005 3,316,250
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AMBANC CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands, except share data) Six Months Ended June 30, 1997 1996 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 4,127 $ 4,020 Adjustments to reconcile net income to net cash from operating activities: Net premium amortization and discount accretion on securities 169 174 Depreciation 595 519 Provision for loan losses 630 566 (Gain)/loss on securities (74) 7 Gain on sales of assets (6) -- (Gain) on sales of loans (277) (216) Proceeds from sales of loans held for sale 12,239 12,740 Loans held for sale made to customers, net of payments collected (11,617) (15,353) Accrued interest receivable and other assets (715) (869) Accrued interest payable and other liabilities 16 2,166 Deferred loan fees net of costs (78) (23) NET CASH FROM OPERATING ACTIVITIES 5,009 3,731 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of securities available for sale 6,207 5,152 Proceeds from maturities and calls of securities available for sale 10,390 24,995 Purchases of securities available for sale (7,758) (42,901) Net change in interest bearing deposits in other banks 193 101 Loans made to customers, net of payments collected (16,387) (27,268) Loans purchased -- (8) Proceeds from sales of loans -- 3,404 Property and equipment expenditures (2,325) (1,188) NET CASH FROM INVESTING ACTIVITIES (9,680) (37,713)
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AMBANC CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued (Dollar amounts in thousands, except share data) Six Months Ended June 30, 1997 1996 CASH FLOWS FROM FINANCING ACTIVITIES Net change in deposits (4,582) 27,040 Net change in short-term borrowings 771 1,920 Payments on long-term debt (400) (484) Proceeds on long-term debt 59 53 Net change in treasury stock -- (30) Dividends paid (1,426) (1,328) NET CASH FROM FINANCING ACTIVITIES (5,578) 27,171 NET CHANGE IN CASH AND CASH EQUIVALENTS (10,249) (6,811) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 32,284 43,173 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,035 $ 36,362 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period: Interest $ 14,121 $ 12,756 Income taxes 2,198 2,000 Noncash activities during the period: Reclassification of loans held for sale to real estate loans -- 5,220
PAGE AMBANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of and for the six months ended June 30, 1997 (Dollar amounts in thousands, except share data) The Consolidated balance sheet as of June 30, 1997, consolidated statements of income for the six month and three month periods ended June 30, 1997 and 1996, and the consolidated statements of cash flows for the six month periods ended June 30, 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 June 30, 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 consolidated 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 June 30, 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 six months ended June 30, 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 both interim and annual fiscal 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 consolidated financial statements. FAS 130, "Comprehensive Income", was issued in June 1997, becomes effective for fiscal years beginning after December 15, 1997, and requires reclassification of earlier financial statements for comparative purposes. It requires that changes in the amounts of certain items, including foreign currency translation adjustments and gains and losses on certain securities be shown in the financial statements. FAS 130 does not require a specific format for the financial statement in which comprehensive income is reported, but does require that an amount representing total comprehensive income be reported in that statement. Management has not yet determined the effect, if any, of FAS 130 on the consolidated financial statements. FAS 131, "Disclosures about Segments of an Enterprise and Related Information", was issued in June 1997. This statement is effective for fiscal years beginning after December 15, 1997, and will change the way corporations report information about products, services and segments of their business in their annual financial statements and requires them to report selected segment information in their quarterly reports issued to shareholders. Management has not yet determined the effect, if any, of FAS 131 on the consolidated financial statements. 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, 1997 (Dollar amounts in thousands, except share data) FINANCIAL STATEMENT RECLASSIFICATIONS Income included in fees on loans has been restated for the current period and all prior periods presented. Changes included the reclassification of income items from fees on loans to the other operating income section of the income statement. These reclassifications had the effect of lowering the net interest margin and increasing the noninterest income but had no effect on net income. Reclassifications were made to present the Corporation's income information on a consistent basis with that of the financial institutions industry. Certain other items in the prior years financial statements have been reclassified to correspond with the current presentations. 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%. Six Months Ended June 30, Increase 1997 1996 (Decrease) Interest income $ 27,539 $ 26,471 4.03 % Adjusted for tax exempt income 830 809 2.60 Tax equivalent interest income 28,369 27,280 3.99 Interest expense 13,975 13,454 3.87 Net interest income $ 14,394 $ 13,826 4.11 % 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, 1997 (Dollar amounts in thousands, except share data) Net interest income increased $568 or 4.11% for the six months ended June 30, 1997, compared to the six months ended June 30, 1996. This $568 increase was a combination of a $1,089 increase in interest income offset by a $521 increase in interest expense. The $1,089 increase in interest income was composed of an increase of $832 due to increased volume of average interest earning assets and an increase of $257 due to increased rates received on these interest earning assets. The $521 increase in interest expense was a combination of an increase of $435 due to increased volume of average interest bearing liabilities and an increase of $86 due to rate increases on these interest bearing liabilities. The Corporation's average assets for the first six months of 1997 increased $23,638 or 3.40% to $718,819 from $695,181 for the first six months of 1996. The percent of average earning assets to total average assets has decreased to 94.75% or $681,052 for the first six months of 1997 and 95.09% or $661,068 for the first six months of 1996. Net interest margin increased .05% to 4.26% for the first six months of 1997 from 4.21% for the first six months of 1996. This increase is due to the cost of average interest bearing liabilities increasing .05% from 4.77% for the first six months of 1996 to 4.82% for the first six months of 1997 while the yield on average earning assets increased .10% from 8.30% for the first six months of 1996 to 8.40% for the first six months of 1997. 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 six months ended June 30, 1997 (Dollar amounts in thousands, except share data) The provision for loan losses was increased $64 or 11.31% to $630 during the first six months of 1997 compared to $566 during the first six months of 1996. This increase was due to outstanding loans increasing $15,680 or 3.17% in the first six months of 1997 and as a replacement for net loan charge offs of $785 in 1997. The allowance for loan losses at June 30, 1997, was $5,475 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 six months of 1997, loans charged off were $949 and recoveries from previously written off loans were $164, thus net charge offs for the first six months of 1997 were $785. 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 June 30, 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 June 30, 1997, and December 31, 1996: June 30, 1997 December 31, 1996 Nonaccrual loans $1,242 .24% $1,421 .29% Loans past due 90 days 973 .19 1,313 .27 Performing restructured loans 3,882 .76 3,089 .62 OREO 992 .19 324 .07 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, 1997 (Dollar amounts in thousands, except share data) A summary of the activity in the allowance for loan losses account for the first six months ending June 30, 1997 and 1996 was: 1997 1996 Balance, January 1 $5,630 $5,022 Provision for loan losses 630 566 Loans charged off (949) (431) Recoveries of loans previously charged off 164 274 Balance, June 30, $5,475 $5,431 Noninterest income for the six months ended June 30, 1997, increased 14.54% or $276 to $2,174 from $1,898 in 1996. Income from fiduciary services increased $34 or 10.09% to $371 from $337 in 1996. This increase is due to increased business and quicker timing of billings in 1997 compared to 1996. The commissions for selling securities through an affiliation with PrimeVest are included in fiduciary activities income in 1997. This service is being provided to customers at both bank subsidiaries for the first time in 1997. Service charges on deposit accounts increased $60 or 7.89% to $820 in 1997 compared to $760 in 1996 and is mainly due to increased charges on non sufficient fund checks. Security gains were up $81 for the first six months of 1997 compared to the first six months of 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. Securities due to mature in 1997, and having market gains were also sold during the second quarter of 1997 to provide liquidity and take advantage of the gains. Other operating income increased 12.50% or $101 to $909 for the six months ended June 30, 1997, from $808 for the same six months in 1996. This increase is due primarily to 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 six months ended June 30, 1997 (Dollar amounts in thousands, except share data) Noninterest expense for the six months ended June 30, 1997, was $9,182 as compared to $8,705 for the six months ended June 30, 1996, for an increase of $477 or 5.48%. Salaries and employee benefits are the largest portion of noninterest expense and increased $317 or 6.46% in the first six months of 1997 compared to the same period in 1996. This increase is due in part to the Corporation having three new branches in operation during the first half of 1997 as compared to the first half of 1996. The major increases in employee benefits were in medical insurance and expenses related to SARs on stock options outstanding. Occupancy expenses were up $100 or 16.89% and equipment expenses were up $81 or 14.01% in the first six months of 1997 compared to 1996. The addition of the three branches in 1997 added to these expenses. The Corporation opened two 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 added this Wal-Mart branch to that market area in May 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 increased $13 or 5.83% to $236 in 1997 and represent normal inflationary expenses. 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 six months ended June 30, 1997 (Dollar amounts in thousands, except share data) Other operating expenses decreased $24 or 1.01% to $2,341 for the first six months of 1997 from $2,365 for the same period in 1996. The June 30, 1996, consolidated financial statements contained an estimate for the costs related to the name change of all subsidiary banks. These added expenses in 1996 were almost matched by increased expenses in 1997 due to the increase in the number of branches and expenses related to entering a new market area with denovo branches in Evansville. This year's expenses are also up due to increased loan collection expenses related to an increase in loan charge offs. Income before income taxes was up $282 or 5.00% to $5,926 for the first six months of 1997 from $5,644 for the first six months of 1996. The net income for the first six months ended June 30, 1997, was up $107 or 2.66% to $4,127 as compared to $4,020 for the six months ended June 30, 1996. Earnings per share were $.60 and $.61 for the quarters ending June 30, 1997 and 1996 and were $1.24 and $1.21 for the first 6 months of 1997 and 1996. Based upon annualized net income the return on average assets for the first six months of 1997 and 1996 was consistent at 1.16%. 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, 1997 (Dollar amounts in thousands, except share data) The following schedule shows selected financial amounts and ratios for the three months and six months ended June 30, 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 Six Months Ended June 30, June 30, 1997 1996 1997 1996 AVERAGE BALANCE SHEET DATA Total assets $ 723,083 $ 699,245 $ 718,819 $ 695,181 Earning assets 684,266 666,396 681,052 661,068 Securities 162,825 185,106 165,856 182,322 Loans 508,117 459,058 504,165 452,779 Allowance for loan losses 5,346 5,162 5,400 5,091 Goodwill 1,696 1,872 1,717 1,893 Deposits 636,344 615,858 632,098 611,746 Shareholders' equity 72,739 67,959 72,625 68,027 END OF PERIOD BALANCE SHEET DATA Total assets $ 717,009 $ 712,586 Securities 161,471 182,924 Loans 510,147 471,615 Allowance for loan losses 5,475 5,431 Goodwill 1,681 1,851 Deposits 628,876 627,109 Shareholders' equity 74,683 68,405 INCOME DATA Net interest income(t.e. basis) $ 7,264 $ 6,937 $ 14,394 $ 13,826 Provision for loan losses 315 299 630 566 Noninterest income 1,103 1,042 2,174 1,898 Noninterest expense 4,723 4,408 9,182 8,705 Net income 2,012 2,039 4,127 4,020
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AMBANC CORP. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION As of and for the six months ended June 30, 1997 (Dollar amounts in thousands, except share data) Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 PER SHARE DATA Net income $ .60 $ .61 $ 1.24 $ 1.21 Cash dividends .22 .20 .43 .40 Book value at end of period 22.52 20.63 Tangible book value at end of period 22.02 20.08 Stock price at end of period 37.13 27.38 Weighted average shares 3,316,267 3,316,267 3,316,267 3,316,267 Weighted average treasury shares 209 35 262 17 SELECTED RATIOS Return on average assets 1.12% 1.17% 1.16% 1.16% Return on average equity 11.09 12.07 11.46 11.88 Net interest margin(t.e.basis) 4.26 4.19 4.26 4.21 Efficiency ratio 59.38 58.23 58.34 58.36 Net charge-offs to average loans .05 -- .16 .03 Allowance for loan losses to loans 1.07 1.15 Nonaccrual loans to loans .24 .84 Loans past due 90 days or more to loans .19 .37 Performing restructured loans to loans .76 .02 OREO to loans .19 .06 Tier 1 leverage capital 10.14 9.71 Tier 1 capital 13.66 13.31 Total capital 14.68 14.38
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, 1997 (Dollar amounts in thousands, except share data) FINANCIAL CONDITION Total assets have decreased $1,745 or .24% to $717,009 at June 30, 1997, from $718,754 at December 31, 1996. Total noninterest bearing deposits have decreased $6,434 or 10.46% and interest bearing deposits have increased $1,852 or .32% at June 30, 1997, from December 31, 1996 for a total deposit decrease of $4,582 or .72%. Securities available for sale before the mark to market have decreased $8,934 or 5.25% to $161,315 at June 30, 1997, from $170,249 at December 31, 1996. The Corporation sold 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 $9,253 or 5.42% at June 30, 1997, from December 31, 1996. This decrease includes the mark-to-market on securities which went to a positive $156 at June 30, 1997, from a positive $475 at December 31, 1996. This market valuation change is the result of normal repricing of investment securities in different rate environments and accounted for $319 of the reduction 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 six months ended June 30, 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 six months ended June 30, 1997. Current market rate competition on these loans is making it necessary to sell them as soon as they are booked. The following is the detail of activity in the loans held for sale between year end and June 30, 1997: Balance December 31, 1996 $ 2,350 New loans booked (net of payments) 11,617 Loans sold (11,962) Total at June 30, 1997 $ 2,005 The sale of loans to the secondary market has provided $277 of net gains on sales during the first six months of 1997 and the Corporation is servicing $102,825 of real estate loans sold to the secondary market as of June 30, 1997. Loans have increased $15,680 or 3.17% at June 30, 1997, from December 31, 1996. The following shows the balance and percent of total by loan classification as of the end of the periods: 6-30-97 12-31-96 % of % of Balance Total Balance Total Commercial $204,884 40.16% $201,092 40.67% Agricultural 52,780 10.35 55,404 11.20 Real estate 139,423 27.33 129,116 26.11 Installment 109,748 21.51 105,169 21.27 Credit cards 3,312 .65 3,686 .75 Total $510,147 $494,467 The types of loans outstanding as a percentage of total loans has remained very consistent between year end 1996 and June 30, 1997. The demand for new commercial loans has been the strongest because there have been several pay offs of large commercial loans during the second quarter of 1997. The decrease in agricultural loans is due to normal seasonal fluctuations with crops being sold and loan balances being paid down during the first six months of the year. The slight increase in the percentage of real estate loans to total loans is due to a special program for variable rate loans during the second quarter at one of our bank subsidiaries. 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, 1997 (Dollar amounts in thousands, except share data) Total shareholders' equity, including the unrealized loss on securities available for sale, increased $2,500 or 3.46% to $74,683 at June 30, 1997, from $72,183 at December 31, 1996. The change in the adjustment for securities available for sale caused total equity to decrease $201 or .28% at June 30, 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 positive $109 at June 30, 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 $2,703 or 3.77% to $74,460 at June 30, 1997. This increase was due to net income of $4,127 less dividends paid of $1,426 plus $2 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: Tier 1 Leverage Capital, Tier 1 Capital and Total Capital. The Corporation's capital ratios at June 30, 1997, and December 31, 1996, were: June 30, 1997 December 31, 1996 Tier 1 Leverage Capital 10.14% 10.00% Tier 1 Capital 13.66% 13.26% Total Capital 14.68% 14.33% PAGE AMBANC CORP. As of and for the six months ended June 30, 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 June 30, 1997. (b) No Form 8-K was filed with the SEC during the quarter ended June 30, 1997. PAGE AMBANC CORP. As of and for the six months ended June 30, 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: August 14, 1997 BY: R. Watson Robert G. Watson, Chairman of the Board, President and Chief Executive Officer DATE: August 14, 1997 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, 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 June 30, 1997. * Incorporated by reference from previously filed documents. EX-27 2
9 0000702904 AMBANC CORP. 1,000 3-MOS DEC-31-1997 JUN-30-1997 19,510 397 2,525 0 0 161,315 161,471 510,147 5,475 717,009 628,876 6,057 5,425 1,968 0 0 33,142 41,541 717,009 11,343 2,420 149 13,935 6,987 7,084 6,851 315 19 4,723 2,916 2,916 0 0 2,012 .60 .60 4.02 1,242 973 3,882 0 5,422 344 82 5,475 1,891 0 3,584
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