UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT 1934. For the quarterly period ended September 30, 1998
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 For the transition period from to .
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Commission File Number: 0-27036
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Ambanc Holding Co., Inc.
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(Exact name of registrant as specified in its charter)
Delaware 14-1783770
- ------------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11 Division Street, Amsterdam, New York 12010-4303
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (518)842-7200
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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. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
Class Outstanding at November 13, 1998
- ----------------------------- -----------------------------------
Common Stock, $.01 Par Value 4,095,164
<PAGE>
AMBANC HOLDING CO., INC. AND SUBSIDIARIES
FORM 10-Q
September 30, 1998
Table of Contents
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Interim Financial Statements (unaudited):
Consolidated Interim Statements of Income for the three months
and nine months ended September 30, 1998 and 1997.............. 3
Consolidated Interim Statements of Financial Condition at
September 30, 1998 and December 31, 1997....................... 4
Consolidated Interim Statements of Cash Flows for the nine months
ended September 30, 1998 and 1997.............................. 5
Summarized Notes to Consolidated Interim Financial Statements.. 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations......................................10
Item 3. Quantitative and Qualitative Disclosures About Market Risk.....21
Part II. OTHER INFORMATION..................................................21
Item 1. Legal Proceedings..............................................21
Item 6. Exhibits and Reports on Form 8-K...............................22
SIGNATURES....................................................................23
EXHIBITS INDEX................................................................25
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
AMBANC HOLDING CO., INC. AND SUBSIDIARIES
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION> Nine Months Three Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
----------------- -----------------
Interest and dividend income:
<S> <C> <C> <C> <C>
Loans ................................................ $17,473 $15,359 $ 6,321 $ 5,415
Securities available for sale ........................ 10,082 10,394 3,349 3,237
Federal funds sold ................................... 262 377 172 119
Federal Home Loan Bank stock ......................... 242 145 113 56
------- ------- ------- -------
Total interest and dividend income ................. 28,059 26,275 9,955 8,827
------- ------- ------- -------
Interest Expense:
Deposits ............................................. 10,072 10,017 3,268 3,566
Borrowings ........................................... 6,192 4,349 2,602 1,380
------- ------- ------- -------
Total interest expense ............................. 16,264 14,366 5,870 4,946
------- ------- ------- -------
Net interest income ................................ 11,795 11,909 4,085 3,881
Provision for loan losses ............................... 675 863 225 225
------- ------- ------- -------
Net interest income after provision
for loan losses .................................. 11,120 11,046 3,860 3,656
------- ------- ------- -------
Non-interest income:
Service charges on deposit accounts .................. 714 580 250 204
Net gains (losses) on securities transactions ........ (165) 505 (60) 328
Other ................................................ 223 190 49 45
------- ------- ------- -------
Total non-interest income .......................... 772 1,275 239 577
------- ------- ------- -------
Non-interest expense:
Salaries, wages and benefits ......................... 4,713 4,418 1,558 1,527
Occupancy and equipment .............................. 1,197 1,131 386 420
Data processing ...................................... 941 875 328 290
Federal deposit insurance premium .................... 31 29 10 10
Correspondent bank processing fees ................... 104 95 37 31
Real estate owned and repossessed assets expenses, net 19 291 (2) 48
Professional fees .................................... 507 365 147 109
Consulting and termination cost of former executive... 399 0 0 0
Other ................................................ 2,225 1,964 856 610
------- ------- ------- -------
Total non-interest expenses ........................ 10,136 9,168 3,320 3,045
------- ------- ------- -------
Income before taxes .................................... 1,756 3,153 779 1,188
Income tax expense ...................................... 735 1,193 301 452
------- ------- ------- -------
Net income ......................................... $ 1,021 $ 1,960 $ 478 $ 736
------- ------- ------- -------
Net income per common share - basic ..................... $ 0.27 $ 0.49 $ 0.13 $ 0.19
Net income per common share - diluted ................... $ 0.27 $ 0.49 $ 0.13 $ 0.19
</TABLE>
See accompanying notes to consolidated interim financial statements.
3
<PAGE>
AMBANC HOLDING CO., INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition (unaudited)
(dollars in thousands) Sept. 30, December 31,
1998 1997
------------------------
Assets
Cash and due from banks ...............................$ 5,985 $ 10,225
Federal funds sold .................................... 8,100 --
-------- --------
Cash and cash equivalents ........................ 14,085 10,225
Securities available for sale, at fair value .......... 193,991 205,842
Loans receivable, net of unamortized fees ............. 334,573 284,930
Allowance for loan losses ........................ (4,199) (3,807)
-------- -------
Loans receivable, net ............................ 330,374 281,123
-------- -------
Accrued interest receivable ........................... 3,260 3,734
Premises and equipment, net ........................... 2,752 3,121
Federal Home Loan Bank of New York stock, at cost ..... 6,650 3,291
Real estate owned and repossessed assets .............. 98 143
Other assets .......................................... 3,044 2,965
-------- -------
Total assets .....................................$ 554,254 $ 510,444
========= =========
Liabilities and Shareholders' Equity
Liabilities:
Deposits ...........................................$ 314,233 $ 333,265
Advances from borrowers for taxes and insurance .... 900 1,902
Advances from FHLB ................................. 20,000 12,300
Securities repurchase agreements.................... 155,450 99,250
Accrued interest payable ........................... 1,521 819
Accrued expenses and other liabilities ............. 2,052 1,706
-------- -------
Total liabilities ................................ 494,156 449,242
-------- -------
Shareholders' equity:
Preferred stock $.01 par value. Authorized 5,000,000
shares; none outstanding at September 30, 1998 and
December 31, 1997 ................................. -- --
Common stock $.01 par value. Authorized 15,000,000
shares; 5,422,250 shares issued at September 30,
1998 and December 31, 1997 ........................ 54 54
Additional paid in capital ......................... 52,735 52,385
Retained earnings, substantially restricted ........ 26,731 26,458
Treasury Stock, at cost (1,317,086 shares at September
30, 1998 and 1,115,832 shares at December 31, 1997)(16,510) (12,585)
Common stock acquired by ESOP ...................... (2,937) (3,303)
Unearned RRP shares issued ......................... (1,195) (1,533)
Accumulated other comprehensive income ............. 1,220 (274)
-------- -------
Total shareholders' equity ....................... 60,098 61,202
-------- -------
Total liabilities and shareholders' equity .......$ 554,254 $ 510,444
========= =========
See accompanying notes to consolidated interim financial statements.
4
<PAGE>
AMBANC HOLDING CO., INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
(dollars in thousands) For the nine months
ended September 30,
1998 1997
-------------------
Increase (decrease) in cash and cash equivalents:
Cash flows provided by operating activities:
Net income ............................................ $ 1,021 $ 1,960
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ........................ 504 473
Provision for loan losses ............................ 675 863
Provision for losses and writedowns on
real estate owned and repossessed assets ............ 7 169
ESOP compensation expense ............................ 635 551
RRP expense .......................................... 338 0
Net (gains) losses on securities transactions ........ 165 (505)
Net (gain) loss on sale of real estate owned
and repossessed assets .............................. (7) 17
Net amortization on securities ...................... 827 230
(Increase) decrease in accrued interest receivable
and other assets .................................... (556) 2,041
Decrease (increase) in due from broker ............... -- (19,442)
Increase (decrease) in accrued interest payable
and other liabilities ............................... 1,048 425
Increase (decrease) in due to broker ................. -- 31,071
Increase (decrease) in advances from borrowers
for taxes and insurance ............................. (1,002) (1,040)
------- -------
Net cash provided by operating activities ........... 3,657 16,813
------- -------
Cash flows from investing activities:
Proceeds from sales and redemptions of
securities available for sale ........................ 119,301 131,895
Purchases of securities available for sale ............ (142,641) (179,136)
Proceeds from principal paydowns and
maturities of securities available for sale .......... 36,689 37,277
Purchase of FHLB stock ................................ (3,359) (1,262)
Net increase in loans made to customers ............... (18,256) (29,326)
Loans purchased ....................................... (31,888) --
Purchases of premises and equipment.................... (105) (931)
Proceeds from sale of real estate owned and
repossessed assets ................................... 262 459
-------- --------
Net cash used by investing activities ................. (39,997) (41,024)
-------- --------
(Continued)
5
<PAGE>
AMBANC HOLDING CO., INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued (unaudited)
(dollars in thousands) For the nine months
ended September 30,
1998 1997
-------------------
Cash flows from financing activities:
Net increase (decrease) in deposits ............... (19,032) 32,576
Advances from (repayments on) FHLB borrowings, net 7,700 (2,000)
Increase (decrease) in securities repurchase
agreements..................................... 56,200 (2,830)
Purchase of treasury stock ........................ (3,976) (3,488)
Dividends paid .................................... (748) (215)
Exercise of stock options ......................... 56 --
------- -------
Net cash provided by financing activities .......... 40,200 24,043
------- -------
Net increase (decrease) in cash and cash equivalents 3,860 (168)
Cash and cash equivalents at beginning of period.... 10,225 10,887
------- -------
Cash and cash equivalents at end of period ......... $14,085 $10,719
======= =======
Supplemental disclosures of cash flow information-
cash paid during the year for:
Interest ..................................... $15,563 $14,516
======= =======
Income taxes ................................. $ 838 $ 1,045
======= =======
Noncash investing activity:
Net reduction in loans receivable resulting
from the transfer to real estate owned and
repossessed assets ................................ $ 218 $ 157
======= =======
Adjustment of securities available for sale to
fair value, net of tax ............................ $ 1,494 ($ 121)
======= =======
Noncash operating activity:
Tax benefit from vesting of RRP shares ............ $ 76 --
======= =======
See accompanying notes to consolidated interim financial statements.
6
<PAGE>
SUMMARIZED NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(1) In management's opinion, the financial information, which is unaudited,
reflects all adjustments, consisting solely of normal recurring adjustments,
necessary for a fair presentation of the financial information as of and for the
nine month periods ended September 30, 1998 and September 30, 1997 in conformity
with generally accepted accounting principles. These consolidated financial
statements should be read in conjunction with Ambanc Holding Co., Inc.'s ("the
Company" herein) 1997 Annual Report on Form 10-K. The results of operations for
the interim periods are not necessarily indicative of the results of operations
to be expected for the full fiscal year ended December 31, 1998.
(2) Amounts in the prior periods' consolidated interim financial statements are
reclassified whenever necessary to conform to the current period presentation.
(3) Earnings Per Share
On December 31, 1997, the Company adopted the provisions of SFAS No. 128,
"Earnings Per Share". The statement supersedes Accounting Principles Board
Opinion No. 15, "Earnings Per Share" and related interpretations. SFAS No. 128
requires dual presentation of Basic EPS and Diluted EPS on the face of the
consolidated income statement for all entities with complex capital structures
and specifies additional disclosure requirements. Basic earnings per share
excludes dilution and is calculated by dividing net income available to common
shareholders by the weighted average number of shares outstanding during the
period. Unvested restricted stock awards are considered outstanding common
shares and included in the computation of basic EPS as of the date that they are
fully vested. Shares held by the Company's ESOP are not considered outstanding
until released as collateral for the loan from the Company to the ESOP. Diluted
EPS reflects the potential dilution that could occur if securities or other
contracts to issue common stock (such as the Company's stock options) were
exercised into common stock or resulted in the issuance of common stock. All
prior period EPS data has been restated to conform to the provisions of this
Statement.
Calculations of basic earnings per share (basic EPS) and diluted earnings
per share (diluted EPS) are as follows:
Weighted
Net Average Per Share
Income Shares Amount
(Dollars in thousands,
except per share amounts)
For the nine months ended September 30, 1998
Basic EPS
Income available to common shareholders $ 1,021 3,762,432 $ 0.27
====== =====
Effect of Dilutive Securities
Stock options 54,833
RRP shares 27,455
------
Diluted EPS
Income available to common shareholders
plus assumed conversions 1,021 3,844,720 0.27
===== ========= ====
7
<PAGE>
For the nine months ended September 30, 1997
Basic EPS
Income available to common shareholders $ 1,960 3,977,375 $ 0.49
====== =====
Effect of Dilutive Securities
Stock options 13,178
RRP shares 8,629
------
Diluted EPS
Income available to common shareholders
plus assumed conversions 1,960 3,999,182 0.49
===== ========= ====
For the three months ended September 30, 1998
Basic EPS
Income available to common shareholders $ 478 3,701,018 $ 0.13
==== =====
Effect of Dilutive Securities
Stock options 31,083
RRP shares 13,663
------
Diluted EPS
Income available to common shareholders
plus assumed conversions 478 3,745,764 0.13
=== ========= ====
For the three months ended September 30, 1997
Basic EPS
Income available to common shareholders $ 736 3,897,492 $ 0.19
==== =====
Effect of Dilutive Securities
Stock options 36,300
RRP shares 23,642
------
Diluted EPS
Income available to common shareholders
plus assumed conversions 736 3,957,434 0.19
=== ========= ====
(4) Comprehensive Income
On January 1, 1998, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income." This
statement establishes standards for reporting and display of comprehensive
income and its components. Comprehensive income includes the reported net income
of a company adjusted for items that are currently accounted for as direct
entries to equity, such as the mark to market adjustment on securities available
for sale, foreign currency items and minimum pension liability adjustments. At
the Company, comprehensive income represents net income plus other comprehensive
income, which consists of the net change in unrealized gains or losses on
securities available for sale, net of tax, for the period. Accumulated other
comprehensive income represents the net unrealized gains or losses on securities
available for sale as of the balance sheet dates.
Comprehensive income (loss) for the three-month periods ended September 30,
1998 and 1997 was $1.7 million and $954,000, respectively.
8
<PAGE>
Comprehensive income (loss) for the nine-month periods ended September 30,
1998 and 1997 was $2.5 million and $1.8 million, respectively. The following
summarizes the components of other comprehensive income:
The nine months ended
September 30,
1998 1997
---------------------
(In thousands)
Unrealized gains (losses) on Securities:
Unrealized net holding gains (losses) arising during
the nine months ended September 30, 1998 and 1997
respectively, net of tax (pre-tax amount of $2,325
and $303), respectively) ................................. $1,395 $ 182
Reclassification adjustment for net (gains) losses
realized in net income during the nine months ended
September 30, 1998 and 1997, net of tax (pre-tax
amount of $165 and ($505), respectively) ................. 99 (303)
------ ------
Other comprehensive income (loss) during the nine
months ended September 30, 1998 and 1997, respectively ... $1,494 ($ 121)
====== ======
The three months ended
September 30,
1998 1997
----------------------
(In thousands)
Unrealized gains (losses) on Securities:
Unrealized net holding gains (losses) arising during
the three months ended September 30, 1998 and 1997
respectively, net of tax (pre-tax amount of $1,932
and $692, respectively) ................................. $1,159 $ 415
Reclassification adjustment for net (gains) losses
realized in net income during the three months ended
September 30, 1998 and 1997, net of tax (pre-tax
amount of $60 and ($328), respectively) ................. 36 (197)
------ ------
Other comprehensive income (loss) during the three
months ended September 30, 1998 and 1997, respectively .. $1,195 $ 218
====== ======
(5) SFAS 125
Effective January 1, 1998 the Company adopted the remaining provisions of
SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," which relate to the accounting for securities
lending, repurchase agreements, and other secured financing activities. These
provisions, which were delayed for implementation by SFAS No. 127, did not have
a material impact on the Company.
(6) SFAS 131
In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of
an Enterprise and Related Information". SFAS No. 131 establishes standards for
reporting by public companies of operating segments within the company,
disclosures about products and services, geographic areas and major customers.
This statement is effective for the Company's 1998 annual financial reporting.
Management believes that the adoption of SFAS No. 131 will not have an impact on
the Company's consolidated financial statements.
9
<PAGE>
(7) SFAS 132
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits," which amends the disclosure
requirements of SFAS No. 87, "Employers' Accounting for Pensions, "SFAS No. 88,
"Employers' Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits," and SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." Statement No. 132
standardizes the disclosure requirements of Statements No. 87 and No. 106 to the
extent practicable and recommends a parallel format for presenting information
about pensions and other postretirement benefits. This statement is applicable
to all entities and addresses disclosure only. The Statement does not change any
of the measurement or recognition provisions provided for in Statement No. 87,
No. 88, or No. 106. The Statement is effective for fiscal years beginning after
December 15, 1997. Management anticipates providing the required disclosures in
the December 31, 1998 consolidated financial statements.
(8) SFAS 133
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. This Statement is
effective for all fiscal quarters of fiscal years beginning after June 15, 1999.
Management is currently evaluating the impact of this Statement on the Company's
consolidated financial statements.
(9) Acquisition
On April 23, 1998, the Company signed an agreement to merge AFSALA Bancorp,
Inc. (AFSALA) with the Company. Under the terms of the agreement, each AFSALA
share will be converted into 1.07 shares of the Company in a tax-free stock for
stock exchange. The shareholders of Ambanc and AFSALA approved the merger at
special meetings held on September 1 and 3, 1998, respectively. On October 27,
1998, the Office of Thrift Supervision approved the merger.
The closing for the merger is scheduled for November 16, 1998. The
acquisition will be accounted for under the purchase method of accounting.
Accordingly, the results of operations of AFSALA will be included with the
Company's beginning with the date of acquistion. In addition, the assets and
liabilities of AFSALA will be recorded by the Company at their respective fair
values at the date of acquistion. As of September 30, 1998, AFSALA had total
assets of $166.7 million.
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction with
the unaudited consolidated interim financial statements and related notes and
with the statistical information and consolidated financial data appearing in
this report as well as the Company's 1997 Annual Report on Form 10-K.
Forward Looking Statements
When used in this quarterly Report on Form 10-Q, the words or phrases "will
10
<PAGE>
likely result," "are expected to," "will continue," "is anticipated,"
"estimate," "project" or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are subject to certain risks and
uncertainties -- including, changes in economic conditions in the Company's
market area, changes in policies by regulatory agencies, fluctuations in
interest rates, demand for loans in the Company's market area and competition,
that could cause actual results to differ materially from historical earnings or
losses and those presently anticipated or projected. The Company wishes to
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. The Company wishes to advise
readers that the factors listed above could affect the Company's financial
performance and could cause the Company's actual results for future periods to
differ materially from any opinions or statements expressed with respect to
future periods in any current statements.
The Company does not undertake -- and specifically disclaims any obligation
- -- to publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of anticipated or unanticipated
events.
Acquisition
On April 23, 1998, the Company signed an agreement to merge AFSALA Bancorp,
Inc. (AFSALA) with the Company. Under the terms of the agreement, each AFSALA
share will be converted into 1.07 shares of the Company in a tax-free stock for
stock exchange. The shareholders of Ambanc and AFSALA approved the merger at
special meetings held on September 1 and 3, 1998, respectively. On October 27,
1998, the Office of Thrift Supervision approved the merger.
The closing for the merger is scheduled for November 16, 1998. The
acquisition will be accounted for under the purchase method of accounting.
Accordingly, the results of operations of AFSALA will be included with the
Company's beginning with the date of acquistion. In addition, the assets and
liabilities of AFSALA will be recorded by the Company at their respective fair
values at the date of acquistion. As of September 30, 1998, AFSALA had total
assets of $166.7 million.
A Form S-4 was filed electronically with the SEC on July 23, 1998 and can
be accessed at www.sec.gov, under EDGAR Database. The Form S-4 contains more
detailed information pertaining to the pending merger. Upon closing, the
Company's federal savings bank subsidiary will operate under the name Mohawk
Community Bank.
Settlement With Shareholder
On August 11, 1998, the Company and AFSALA announced that they had reached
an agreement with Seymour Holtzman, a stockholder of both companies, regarding
the pending merger of the two companies.
Mr. Holtzman agreed to drop all litigation against Ambanc, refrain from any
future litigation against both companies until at least January 1, 2000, fully
support and vote for the merger of Ambanc and AFSALA and vote for Ambanc's
nominees for director and avoid becoming involved with any other hostile action
at the annual meeting of Ambanc stockholders to be held in 1999.
11
<PAGE>
In return, Ambanc agreed to retain Sandler O'Neill & Partners, L.P., its
regular investment banker, to seek ways to maximize shareholder value following
completion of the merger, including the possible merger of the combined
companies with a third party. If Ambanc has not entered into a merger or
acquisition agreement with a third party acquiror on or before April 1, 1999, or
a merger or acquistion is not consummated, Ambanc has agreed to appoint to the
Ambanc board two persons from a list of at least four persons selected by Mr.
Holtzman. Finally, Ambanc and AFSALA have agreed to reimburse Mr. Holtzman
$80,000 for a portion of his expenses incurred in the litigation with Ambanc and
his actions with respect to the merger.
Year 2000 ("Y2K") Issues
Year 2000 issues are the result of computer programs having been written
using two digits rather than four to define the applicable year. Any of the
Company's programs that have time sensitive software may recognize a date using
"00" as the year 1900 rather than year 2000. This could result in a major system
failure or miscalculations. The Company is also aware of these risks to third
parties, including vendors (and to the extent appropriate, depositors and
borrowers), and the potential adverse impact on the Company that could result
from failures by these parties to adequately address the Year 2000 issues.
The Company has established a Y2K Committee to conduct a review of its
computer systems to identify the systems that could be affected by the Y2K
problem. The Y2K Committee reports on a monthly basis to the Board of Directors
as to the Company's status in resolving any Year 2000 issues.
To date, the Y2K Committee has received Year 2000 compliance
certifications/progress forms from approximately 70% of the Company's vendors.
Of the responses received, 60% of the vendors have certified that they are Y2K
compliant with the remaining 40% informing the Company of their progress and
anticipated compliance dates; however, no assurance can be given as to the
adequacy of such plans or to the timeliness of their implementation. Responses
have been received from all mission critical vendors and periodic updates will
be requested.
Final versions of the Company's Y2K customer evaluation forms and the
associated risk analysis have been completed. A majority of the mission critical
borrowers have been contacted to ensure that they complete the evaluation and
risk analysis. To date, the majority of those contacted have indicated that they
are not heavily reliant on computer systems and are, therefore, evaluated as a
low risk pertaining to Y2K. A spreadsheet is being developed that will list all
mission critical borrowers and their level of risk and will be monitored by the
Company's Asset Classification Committee.
The Company conducted its Y2K test with its primary outside data processing
service bureau in August 1998. However, due to the Company's pending merger with
AFSALA and certain issues pertaining to software and vendors to be retained
post-merger, the Company will complete a limited testing program during the
remainder of 1998 on other software applications.
The Y2K Committee has initiated the development of contingency plans to
address the actions that may be needed to be taken by the Company under various
"what if" scenarios, e.g. "what if" the Company's primary outside data
processing service bureau failed to be Y2K compliant on January 1, 2000. The
target date for completion of the contingency plans is December 31, 1998. In
addition, the Company's contingency plans will be modified as appropriate when
decisions pertaining to the pending merger with AFSALA are finalized.
12
<PAGE>
Based on the Company's current knowledge and investigations, the expense of
the year 2000 problem as well as the related potential effect on the Company's
earnings is not expected to have a material effect on the Company's financial
position or results of operations. Furthermore, the Company expects corrective
measures required to be prepared for the Year 2000 to be implemented on a timely
basis.
General
The results of operations of the Company's subsidiary Bank are dependent
primarily on net interest income, which is the difference between the income
earned on its loans and securities and its cost of funds, consisting of the
interest paid on deposits and borrowings. Results of operations are also
affected by the Bank's provision for loan losses, net expenses on foreclosed
assets and by general economic and competitive conditions, particularly changes
in interest rates, government policies and actions of regulatory authorities.
Future changes in applicable law, regulations or government policies may
materially impact the financial condition and results of operations of the
Company and the Bank.
Unless otherwise noted, discussion of operating results for the three and
nine-months ended September 30, 1998, are based on a comparison with the
corresponding periods in 1997.
The Company recorded net income of $478,000, or $0.13 per diluted share and
$1.0 million, or $0.27 per diluted share, for the three and nine-months ended
September 30, 1998, respectively. In the corresponding periods in 1997, the
Company had net income of $736,000, or $0.19 per diluted share, and $2.0
million, or $0.49 per diluted share.
The declines in net income for the three and nine-months ended September
30, 1998 were primarily attributable to losses on securities transactions in
1998 (compared to net gain in 1997) and certain nonrecurring charges against
earnings in 1998. During the quarter ended September 30, 1998, the Company
recorded net losses on the sales of securities of $60,000 compared to net gains
of $328,000 in 1997. Also contributing to the decline in earnings in the third
quarter of 1998 were charges against operating results of $132,000 that were
incurred by the Company to defend against and settle legal actions initiated by
a shareholder and a one-time charge of $67,000 to substantially modify
repurchase agreements.
During the nine-months ended September 30, 1998, the Company incurred net
losses on securities transactions of $165,000 compared to net gains in 1997 of
$505,000. Also contributing to the decline in earnings for the nine-months ended
September 30, 1998 were charges of $291,000 related to the shareholder legal
action and settlement, $399,000 related to the termination and consulting
agreements entered into with the Company's former President and CEO, and the
$67,000 one-time modification charge on repurchase agreements.
For the three months ended September 30, 1998, the Company's net income,
excluding nonrecurring items and the effects of securities transactions, was
approximately $637,000, an increase of $104,000, or 19.5%, with net interest
income increasing by $204,000, or 5.3%, to $4.1 million. However, for the
nine-months ended September 30, 1998, the Company's net income excluding
nonrecurring items and the effects of securities transactions declined to
approximately $1.6 million from $1.7 million in 1997. Net interest income for
the nine-months ended September 30, 1998 experienced a slight decline,
decreasing by $114,000, or 1.0%, to $11.8 million.
13
<PAGE>
RESULTS OF OPERATIONS
Comparison of Operating Results for the Quarters Ended September 30, 1998 and
1997.
Unless otherwise noted, the discussion of operating results for the three
months ended September 30, 1998, is based on a comparison with the corresponding
period in 1997.
Net Interest Income
Net interest income before provision for loan losses for the quarter ended
September 30, 1998 was $4.1 million, an increase of $204,000, or 5.3%. Total
interest and dividend income increased by $1.1 million, partially offset by an
increase of $924,000 in total interest expense. The increase in total interest
and dividend income resulted primarily from an increase in the average volume of
loans to $330.5 million, a growth of $53.7 million, or 19.4%. The increase in
total average loan volume resulted primarily from an increase of $16.3 million
in average home equity loans and a $27.7 million increase in the average volume
of purchased residential mortgages located outside of the Bank's primary market
area. The higher average volume of loans, partially offset by a decrease of 17
basis points in the average rate earned on loans to 7.59%, increased loan income
by $906,000. Interest and dividend income on other interest-earning assets
(other IEA), which includes securities, FHLB stock and federal funds sold and
other money market instruments, increased by $222,000, primarily due to an
increase in the average volume of other IEA. The positive revenue effect
produced by the increase in the average volume of other IEA was partially offset
by a decline by 70 basis points to 6.51% in the average rate earned on
securities.
The increase in total interest expense resulted primarily from an increase
in the average volume of total borrowed funds to $183.3 million from $89.7
million, partially offset by a decline of 48 basis points to 5.63% in the
average rate paid for these funds. The increase in the average volume of total
borrowed funds was used to fund growth of $86.6 million, or 18.4%, in the
average volume of total interest-earning assets and to partially replace a
decline in the average volume of time deposits, which decreased $16.7 million.
See also "Liquidity and Funding."
Provision For Loan Losses
The provision for loan losses of $225,000 for the quarter ended September
30, 1998 was unchanged from 1997 based on management's evaluation of the
adequacy of the Company's allowance for loan losses as of September 30, 1998.
Non-interest Income
Total non-interest income decreased by $338,000 due to net losses on
securities transactions of $60,000 compared to net gains of $328,000 in 1997. An
increase of $46,000 in service charges on deposit accounts partially offset the
decline from securities transactions. The increase in service charges was
primarily attributable to restructuring of services charges on certain deposit
products.
Non-interest Expenses
Total non-interest expenses increased by $275,000 to $3.3 million for the
14
<PAGE>
quarter ended September 30, 1998, primarily attributable to charges of $132,000
to defend against and settle legal actions initiated by a shareholder and a
one-time charge of $67,000 to substantially modify repurchase agreements.
Excluding these items, non-interest expenses increased by $76,000, or 2.5%,
primarily attributable to a $31,000, or 1.1%, increase in salaries, wages and
benefits and a $38,000 increase in data processing expenses. The increase in
salaries, wages and benefits was due to salary increases related to promotions
and normal merit and cost of living adjustments. The increase in data processing
fees was mainly the result of $27,000 in expenses incurred to date to deconvert
the deposit and loan processing systems from the Bank's current processor in
preparation for the migration to the post-merger processor for Mohawk Community
Bank. Also contributing to the total increase in data processing fees was an
increase of $12,000 in statement imaging expenses, the result of increases in
the number of items captured and statements rendered.
Income Taxes
Income tax expense decreased by $151,000 to $301,000 due primarily to the
decline in income before taxes to $799,000 from $1.2 million.
Comparison of Operating Results for the Nine Months Ended September 30, 1998 and
1997.
Unless otherwise noted, the discussion of operating results for the
nine months ended September 30, 1998, is based on a comparison with the
corresponding period in 1997.
Net Interest Income
Net interest income for the nine-months ended September 30, 1998 was $11.8
million, a decline of $114,000, or 1.0%. Total interest and dividend income
increased by $1.8 million while total interest expense increased by $1.9
million.
The increase in total interest and dividend income resulted primarily from
growth of $41.0 million, or 15.6%, in the average volume of loans to $303.3
million. The positive revenue effect derived from the increased loan volume was
partially offset by a decline in the average rate earned to 7.70% from 7.83%
resulting in an increase in interest on loans of $2.1 million.
The increase in loan interest was partially offset by a decrease of
$312,000 in interest earned on securities, the result of a decline of 65 basis
points to 6.59% in the average rate earned that more than offset the positive
income effect from an increase of $12.6 million in the average volume. The
reduced rate earned on securities was attributable to the general decline in
market interest rates from September 1997 to 1998. The lower rate environment
produced an acceleration in mortgage prepayments on mortgage backed securities
and redemptions on callable securities. The reinvestments of the cash flows
generated from securities were made at the lower interest rates that were in
effect on the dates of the reinvestments.
The increase in total interest expense resulted primarily from an increase
in the average volume of total borrowed funds to $142.4 million from $95.7
million, partially offset by a decline of 26 basis points to 5.81% in the
average rate paid for these funds. The increase in the average volume of total
borrowed funds was used to fund growth of $52.1 million, or 11.2%, in the
average volume of total interest-earning assets. See also "Liquidity and
Funding."
15
<PAGE>
Provision For Loan Losses
The provision for loan losses decreased by $188,000 to $675,000, the result
of the improved quality of the Company's loan portfolio.
Non-interest Income
Total non-interest income declined by $503,000 due primarily to net losses
on securities transactions of $165,000 compared to net gains in 1997 of
$505,000.
Service charges on deposit accounts increased by $134,000, or 23.1%, due
primarily to restructuring of services charges on certain deposit products.
Non-interest Expenses
Total non-interest expenses increased by $968,000, or 10.6%, to $10.1
million. The increase resulted primarily from the previously mentioned (see
"General") $399,000 cost incurred in connection with the termination and
consulting agreements entered into with the former President and CEO, the
$291,000 related to the shareholder legal action and settlement, and the $67,000
one-time modification charge on repurchase agreements.
Salaries, wages and payroll taxes increased by $154,000 to $3.4 million.
Salaries and wages related to the three branch offices opened in May and June
1997 accounted for approximately $47,000 of the total increase in salaries and
wages. The remainder of the increase was attributable to other additions to
staff, salary increases related to promotions, and normal merit and cost of
living adjustments. Expenses related to employee benefits increased by $138,000,
or 11.6%, to $1.3 million. This increase resulted from increased costs
associated with stock based compensation plans partially offset by a net decline
in all other employee benefit costs.
Total occupancy and equipment expense increased by $66,000, or 5.8%,
primarily related to the opening of three branch offices during the three months
ended June 30, 1997.
Total data processing expenses increased by $66,000, or 7.5%. The Company
incurred a charge of $27,000 to deconvert from its loan and deposit data
processor in preparation for the utilization of a single, post-merger processor.
Also contributing to the higher expenses was an increase of $26,000 in charges
related to statement imaging, the result of increases in the number of items
captured and statements rendered.
Income Taxes
Income tax expense for the nine-months ended September 30, 1998, decreased
by $458,000 due primarily to the decline in income before taxes to $1.8 million
from $3.2 million.
FINANCIAL CONDITION
The Company's total assets at September 30, 1998, were $554.3 million, an
increase of $43.8 million, or 8.6%, compared to total assets of $510.4 million
at December 31, 1997. The growth in total assets was primarily attributable to
increases in loans and federal funds sold, which increased by $49.6 million and
$8.1 million, respectively. See also "Liquidity and Funding."
Total deposits at September 30, 1998, were $314.2 million, a decrease of
$19.0 million, or 5.7%, from $333.3 million at December 31, 1997. The decrease
16
<PAGE>
in total deposits was attributable primarily to a $22.6 million, or 12.3%,
decrease in time deposits.
Total shareholders' equity decreased $1.1 million to $60.1 million,
primarily due to the repurchase of common stock totaling $4.0 million and the
payment of cash dividends of $748,000 partially offset by net income of $1.0
million and an increase of $1.5 million in other comprehensive income for the
nine months ended September 30, 1998. Including unallocated ESOP shares and
unvested restricted RRP shares as outstanding, the book value per share was
$14.64 at September 30, 1998 compared to $14.21 at December 31, 1997.
Additionally, excluding the tax-effected unrealized gains (losses) on securities
available for sale, the book value per share at September 30, 1998 was $14.34
compared to $14.28 at December 31, 1997.
Liquidity and Funding
The Company's primary sources of funds for operations are deposits from its
market area, principal and interest payments on loans and securities available
for sale, proceeds from the sale and maturity of securities available for sale,
advances from the FHLB of New York, and securities sold under agreements to
repurchase. While maturities and scheduled amortization of loans and securities
are generally predictable sources of funds, deposit flows and mortgage
prepayments are greatly influenced by general interest rates, economic
conditions, and competition.
The primary investing activities of the Company are the origination of
loans and the purchase of securities, and to a lesser extent, the purchase of
loans. During the nine months ended September 30, 1998, the Bank's loan
originations totaled $66.9 million. The Company purchased securities available
for sale of $142.6 million and also purchased whole loans of approximately $31.9
million during the same nine month period. The purchased loans consisted of
residential loans generally located outside of the Bank's primary market area.
The primary financing activity of the Bank is the attraction of deposits.
However, during the nine months ended September 30, 1998, the Bank's deposits
decreased by $19.0 million from December 31, 1997, primarily time deposits
(CDs), which decreased $22.6 million. Management believes that the decrease in
CDs during the nine months ended September 30, 1998 resulted primarily from the
holders of maturing time deposits pursuing alternative investments to obtain
better returns.
In the event the attraction of deposits is not sufficient to fund an
expansion in interest earning assets or when the level of market interest rates
for CDs is higher than the cost of borrowed funds, the Bank may utilize advances
from the Federal Home Loan Bank ("FHLB") and other types of borrowed funds to
fund interest earning asset growth. During the nine months ended September 30,
1998, the Bank increased its borrowed funds by $63.9 million. Advances from the
FHLB increased by $7.7 million and securities sold under agreements to
repurchase ("repos") increased by $56.2 million. Since March 31, 1998 the Bank
has added $100 million in callable repos with the FHLB to its borrowed funds
while reducing its obligations with other repo counterparties, to take advantage
of the lower rates offered by the FHLB on the dates of the borrowings. The FHLB
repos all mature in 10 years with call dates ranging from one year to five years
and fixed rates that range from a low of 5.01% to a high of 5.59%. The FHLB
repos were used primarily to fund the origination and purchase of whole loans.
The Bank is required to maintain minimum levels of liquid assets as defined
by OTS regulations. This requirement, which may be varied by the OTS depending
upon economic conditions and deposit flows, is based upon a percentage of
deposits and short-term borrowings. The required minimum liquidity ratio is
currently 4%. The Bank's average daily liquidity ratio for the month of
September 1998 was 9.5%.
17
<PAGE>
The Bank's most liquid assets are cash and cash equivalents, which include
federal funds sold and bank deposits. The level of these assets is dependent on
the Bank's operating, financing, and investing activities during any given
period. At September 30, 1998, cash and cash equivalents totaled $14.1 million,
compared to $10.2 million at December 31, 1997.
The Bank anticipates that it will have sufficient funds available to meet
its current commitments. At September 30, 1998, the Bank had commitments to
originate loans of $10.9 million as well as undrawn commitments of $6.6 million
on home equity and other lines of credit. The Bank had no commitments to
purchase additional loans at September 30, 1998. Time deposits that are
scheduled to mature in one year or less at September 30, 1998, totaled $109.7
million. Management believes that a significant portion of such deposits will
remain with the Bank. However, if the Bank is not able to maintain its
historical retention rate on maturing time deposits, it may consider employing
one or more of the following strategies: increase its borrowed funds position to
compensate for the deposit outflows; increase the rates it offers on these
deposits in order to maintain or increase the retention rate on maturing CDs
and/or to attract new deposits; or, attempt to increase time deposits through
the use of deposit brokers. Depending on the level of market interest rates at
the CD renewal dates, the implementation of one or a combination of these
strategies could result in higher or lower levels of net interest income and net
earnings.
The Company also has a need for, and sources of, liquidity. Liquidity is
required to fund its operating expenses, as well as for the payment of any
dividends to shareholders. The primary source of the Company's liquidity on an
ongoing basis is dividends from the Bank. The Bank paid its first cash dividend
to the Company on March 31, 1998, in the amount of $5.0 million.
Capital
Federally insured savings institutions are required to maintain a minimum
level of regulatory capital. The OTS has established capital standards,
including a tangible capital requirement, a leverage ratio (or core capital)
requirement and a risk-based capital requirement applicable to such savings
associations. These capital requirements must be generally as stringent as the
comparable capital requirements for national banks. The OTS is also authorized
to impose capital requirements in excess of these standards on individual
associations on a case-by-case basis.
At September 30, 1998, the Bank had $46.6 million of tangible and core
capital, respectively, or 8.55% of adjusted total assets, which was
approximately $38.4 million and $30.2 million above the minimum requirements of
1.5% and 3.0%, respectively, of the adjusted total assets at that date. On
September 30, 1998, the Bank had risk-based capital of $49.5 million (including
$46.6 million in core capital and $2.9 million in qualifying supplementary
capital) or 21.09% of risk-weighted assets of $235.0 million. The Bank's
risk-weighted capital was $30.7 million above the 8.0% requirement in effect on
that date.
ASSET QUALITY
Non-Performing Assets
The table below sets forth the amounts and categories of non-performing assets
at the dates indicated. Generally, loans are placed on non-accrual status when
the loan is 90 days or more delinquent or when management has determined that
the collection of principal and/or interest in full has become doubtful. When
18
<PAGE>
loans are designated as non-accrual, all accrued but unpaid interest is reversed
against current period income and, as long as the loan remains on non-accrual
status, interest is recognized only when received. Accruing loans delinquent 90
days or more include FHA insured loans, VA guaranteed loans, and loans that are
in the process of negotiating a restructuring with the Bank, excluding troubled
debt restructurings (TDRs), or where the Bank believes that the outstanding loan
balance plus accrued interest and late fees will be paid-in-full within a
relatively short period of time. Foreclosed assets include assets acquired in
settlement of loans.
September 30, December 31,
1998 1997
------------- ------------
(In thousands)
Non-accruing loans:
One-to four-family ...................... $ 606 $ 843
Multi-family ............................ 125 28
Commercial real estate .................. 195 265
Consumer ................................ 276 293
Commercial business ..................... 286 447
------ ------
Total ................................. 1,488 1,876
------ ------
Accruing loans delinquent more than 90 days:
One-to four-family ...................... 422 280
Multi-family ............................ 138 --
Commercial real estate .................. 320 13
Consumer ................................ -- 2
Commercial business ..................... -- 156
------ ------
Total ................................. 880 451
------ ------
Troubled debt restructured loans:
One-to four-family ...................... 85 86
Multi-family ............................ -- 34
Commercial real estate .................. 744 761
Consumer ................................ -- --
Commercial business ..................... 95 50
------ ------
Total ................................. 924 931
------ ------
Total non-performing loans ................. 3,292 3,258
------ ------
Foreclosed assets:
One-to four-family ...................... 46 69
Multi-family ............................ -- --
Commercial real estate .................. 30 --
Consumer ................................ 22 74
Commercial business ..................... -- --
------ ------
Total ................................. 98 143
------ ------
Total non-performing assets ................ $3,390 $3,401
====== ======
Total as a percentage of total assets ...... 0.61% 0.67%
There have been no material changes in non-performing assets since December
31, 1997.
19
<PAGE>
Allowance for Loan Losses
The allowance for loan losses is increased through a provision for loan
losses based on management's evaluation of the risks inherent in the Company's
loan portfolio and changes in the nature and volume of its loan activity,
including those loans that are being specifically monitored by management. Such
evaluation, which includes a review of loans for which full collectibility may
not be reasonably assured, considers, among other matters, the estimated fair
value of the underlying collateral for collateral dependent loans, the net
present value of estimated future cash flows if the loan is not collateral
dependent, economic conditions, historical loan loss experience, and other
factors that warrant recognition in providing for an adequate loan loss
allowance. Management believes that the allowance for loan losses is adequate to
absorb probable losses that are inherent in the loan portfolio at September 30,
1998. The following table sets forth an analysis of the Company's allowance for
loan losses.
For the nine months
ended September 30,
1998 1997
-------------------
(Dollars in thousands)
Balance at beginning of period ................ $ 3,807 $ 3,438
Charge-offs:
One- to four-family ...................... (13) (11)
Multi family ............................. (4) (12)
Commercial real estate ................... (161) (50)
Consumer ................................. (194) (254)
Commercial business ...................... (188) (260)
------- -------
Total charge offs ..................... (560) (587)
------- -------
Recoveries:
One- to four-family ...................... 1 1
Multi family ............................. -- --
Commercial real estate ................... 59 4
Consumer ................................. 43 46
Commercial business ...................... 174 382
------- -------
Total recoveries ...................... 277 433
------- -------
Net charge-offs ............................... (283) (154)
Provisions charged to operations .............. 675 863
------- -------
Balance at end of period ...................... $ 4,199 $ 4,147
======= =======
Ratio of net charge-offs during the period
to average loans outstanding during
period (annualized) .......................... 0.12% 0.08%
Ratio of allowance for loan losses to total
loan at period end ........................... 1.26% 1.48%
Ratio of allowance for loan losses to
non-performing loans at period end ........... 127.55% 114.78%
20
<PAGE>
Item 3.
Quantitative And Qualitative Disclosures About Market Risk
The composition of the Bank's balance sheet results in maturity mis-matches
between interest-earning assets and interest-bearing liabilities. The scheduled
maturities of the Bank's fixed rate interest-earning assets are generally longer
than the scheduled maturities of its fixed rate interest-bearing liabilities.
This mis-match exposes the Bank to interest rate risk. In a rising rate
scenario, as measured by the Office of Thrift Supervision ("OTS") interest rate
risk exposure simulation model, the estimated market or portfolio value ("PV")
of the Bank's assets would decline in value to a greater degree than the change
in the PV of the Bank's liabilities, thereby reducing net portfolio value
("NPV").
As of December 31, 1997, under a rate shock scenario of plus 200 basis
points ("bp"), the Bank's pre-shock NPV ratio (NPV as of % of PV of assets) was
estimated in the OTS model to be 10.89%. The post-shock NPV ratio was estimated
to be 6.78%, a decline of 411 bp. As of June 30, 1998, the most recent report
available, the Bank's sensitivity to interest rate changes increased compared to
December 31, 1997. The post-shock ratio for a 200 bp increase in market interest
rates as of June 30, 1998 was estimated to be 5.58%, a decrease of 442 bp from
the pre-shock NPV ratio estimate of 9.99%.
In order to lessen its exposure to interest rate risk, the Bank has
initiated a program to lengthen the maturities of its fixed rate
interest-bearing liabilities through the use of callable repurchase agreements
with the FHLB. See "Liquidity and Funding," herein.
Other types of market risk, such as foreign exchange rate risk and
commodity price risk, do not arise in the normal course of the Company's
business activities.
Part II - Other Information
Item 1. Legal Proceedings
In the ordinary course of business, the Company and the Bank are subject to
legal actions which involve claims for monetary relief. Management, based on
advice of counsel, does not believe that any currently known legal actions,
individually or in the aggregate will have a material effect on its consolidated
financial condition or results of operation.
The Company has incurred significant legal costs in connection with
defending against and settling legal actions initiated by a shareholder. See
also "Non-interest expenses" for the three and nine months ended September 30,
1998 and 1997. The Company announced a settlement with the shareholder on August
11, 1998. See also "Settlement with Shareholder."
21
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits as required by Item 601 of Regulation S-K.
Financial data schedule, Exhibit #27
(b) Reports on Form 8-K
Current reports on Form 8-K were filed July 1, July 7, August 11,
August 19, September 2, and September 14.
(i) July 1, 1998, press release regarding Ambanc Holding Co., Inc.
Retirement of President and CEO.
(ii) July 1, 1998, press release regarding Ambanc Holding Co., Inc.
Change in Directors' Compensation.
(iii) July 7, 1998 press release regarding Ambanc Holding Co., Inc.
Freeze on Executive Managers' Compensation.
(iv) August 11, 1998, press release regarding Ambanc Holding Co., Inc.
settlement with Seymour Holtzman.
(v) August 19, 1998, press release regarding Ambanc Holding Co., Inc.
Second Quarter Earnings.
(vi) September 2, 1998, press release regarding Ambanc Holding Co., Inc.
Approves Merger with AFSALA.
(vii) September 14, 1998, press release regarding Ambanc Holding Co., Inc.
Regular Quarterly Cash Dividend.
22
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 HOLDING CO., INC.
/s/Lauren T. Barnett
Lauren T. Barnett
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 13, 1998
/s/Betsy Darrow
Betsy Darrow
Acting Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: November 13, 1998
23
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1998 OF AMBANC HOLDING
CO., INC. AND ITS SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 2430
<INT-BEARING-DEPOSITS> 3555
<FED-FUNDS-SOLD> 8100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 193991
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 334573
<ALLOWANCE> 4199
<TOTAL-ASSETS> 554254
<DEPOSITS> 314233
<SHORT-TERM> 25450
<LIABILITIES-OTHER> 4473
<LONG-TERM> 150000
0
0
<COMMON> 54
<OTHER-SE> 60044
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<INTEREST-LOAN> 17473
<INTEREST-INVEST> 10082
<INTEREST-OTHER> 504
<INTEREST-TOTAL> 28059
<INTEREST-DEPOSIT> 10072
<INTEREST-EXPENSE> 16264
<INTEREST-INCOME-NET> 11795
<LOAN-LOSSES> 675
<SECURITIES-GAINS> (165)
<EXPENSE-OTHER> 10136
<INCOME-PRETAX> 1756
<INCOME-PRE-EXTRAORDINARY> 1756
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1021
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.27
<YIELD-ACTUAL> 3.04
<LOANS-NON> 1488
<LOANS-PAST> 880
<LOANS-TROUBLED> 924
<LOANS-PROBLEM> 4721
<ALLOWANCE-OPEN> 3807
<CHARGE-OFFS> 560
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</TABLE>
