FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995
Commission File Number: 0-10710
AMBANC CORP.
(exact name of registrant as specified in its charter)
INDIANA 35-1525227
(State or other jurisdiction (I.R.S. Employer ID No.)
of incorporation or
organization)
302 Main Street
P.O. Box 556
Vincennes, Indiana 47591-0556
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code (812) 885-6418
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, (or for such shorter period that the
registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90
days.
Yes: X No:
2,372,555 common shares of stock were outstanding as of
August 28, 1995.
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AMBANC CORP.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at
March 31, 1995 (unaudited) and
December 31, 1994
Consolidated Statements of Income
three months ended
March 31, 1995 and 1994(unaudited)
Consolidated Statements of Cash
Flows for three months ended
March 31, 1995 and 1994 (unaudited)
Notes to Consolidated Financial
Statements (unaudited)
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports of Form 8-K
Signatures
Exhibit Index
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AMBANC CORP.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
March 31, December 31,
1995 1994
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ASSETS
Cash and due from banks $ 16,540 $ 19,595
Federal funds sold 8,625 7,000
Total cash and cash equivalents 25,165 26,595
Interest bearing deposits in other banks 994 1,193
Securities available for sale at market 109,950 112,214
Securities held to maturity(market values of
$38,535 and $38,707 at March 31,
1995, and December 31, 1994) 38,545 39,695
Loans held for sale 2,775 2,664
Loans, net of unearned income 342,477 321,096
Allowance for loan losses (3,955) (3,911)
Loans, net 338,522 317,185
Premises, furniture and equipment, net 6,341 6,487
Accrued interest receivable and other assets 10,391 10,063
TOTAL ASSETS $ 532,683 $ 516,096
LIABILITIES
Noninterest bearing deposits $ 45,479 $ 51,838
Interest bearing deposits 426,606 403,396
Total deposits 472,085 455,234
Short-term borrowings 3,417 5,690
Long-term debt 2,870 3,189
Accrued interest payable and other liabilities 3,231 2,946
TOTAL LIABILITIES 481,603 467,059
SHAREHOLDERS' EQUITY
Preferred stock, $10 par value, 200,000 shares
authorized, no shares issued or outstanding -- --
Common stock, $10 par value, 5,000,000 shares
authorized, 2,372,555 and 2,372,172 shares
issued and outstanding at March 31, 1995,
and December 31, 1994 23,726 23,722
Retained earnings 29,198 28,277
Unrealized gain/(loss) on securities
available for sale (1,844) (2,962)
TOTAL SHAREHOLDERS' EQUITY 51,080 49,037
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 532,683 $ 516,096
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AMBANC CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands, except share data)
Three Months Ended
March 31,
1995 1994
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INTEREST INCOME
Interest and fees on loans $ 7,253 $ 5,499
Interest and fees on loans
held for sale 42 278
Interest on securities
Taxable 1,599 1,862
Tax exempt 555 566
Other interest 66 100
TOTAL INTEREST INCOME 9,515 8,305
INTEREST EXPENSE
Interest on deposits 4,221 3,597
Interest on short-term borrowings 98 42
Interest on long-term debt 44 27
TOTAL INTEREST EXPENSE 4,363 3,666
NET INTEREST INCOME 5,152 4,639
Provision for loan losses 75 50
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,077 4,589
NONINTEREST INCOME
Income from fiduciary activities 101 120
Service charges on
deposit accounts 299 255
Gain/(loss) on securities -- (5)
Other operating income 209 323
TOTAL NONINTEREST INCOME 609 693
NONINTEREST EXPENSE
Salaries and employees benefits 1,986 1,790
Occupancy expenses, net 213 200
Equipment expenses 210 196
Data processing expenses 90 110
FDIC insurance 256 253
Other operating expenses 964 972
TOTAL NONINTEREST EXPENSE 3,719 3,521
INCOME BEFORE INCOME TAXES 1,967 1,761
Taxes 557 525
NET INCOME $ 1,410 $ 1,236
EARNINGS PER COMMON SHARE(based on 2,372,542 and 2,369,784
average outstanding shares in 1995 and 1994)
Net income per share $ .59 $ .52
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<CAPTION>
AMBANC CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands, except share data)
Three Months Ended
March 31,
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,410 $ 1,236
Adjustments to reconcile net income to
net cash from operating activities:
Net premium amortization and discount
accretion on securities 76 107
Depreciation 210 220
Provision for loan losses 75 50
(Gain)/loss on securities -- 5
Proceeds from sales of loans held for sale (2,674) (9,911)
Loans held for sale made to customers,
net of payments collected 2,563 18,146
Accrued interest receivable
and other assets (328) (1,016)
Accrued interest payable
and other liabilities 1,403 (2,044)
Deferred loan fees net of costs 29 7
NET CASH FROM OPERATING ACTIVITES 2,764 6,800
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of securities available
for sale -- 999
Proceeds from sale of securities held to maturity -- --
Proceeds from maturities and calls of securities
available for sale 4,179 17,923
Proceeds from maturities and calls of securities
held to maturity 8,073 1,724
Purchases of securities available for sale (1,980) (26,107)
Purchases of securities held to maturity (6,934) (3,220)
Net change in interest bearing deposits
in other banks 199 (1,472)
Loans made to customers, net of
payments collected (23,351) (9,020)
Loans purchased -- (699)
Proceeds from sales of loans 1,910 1,122
Property and equipment expenditures (64) (467)
NET CASH FROM INVESTING ACTIVITIES (17,968) (19,217)
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AMBANC CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(Dollar amounts in thousands, except share data)
Three Months Ended
March 31,
1995 1994
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CASH FLOWS FROM FINANCING ACTIVIES
Net change in demand deposits
and savings accounts (5,002) (3,509)
Net change in certificates of deposit 21,853 (3,844)
Net change in short-term borrowings (2,273) 1,303
Payments on long-term debt (339) --
Proceeds on long-term debt 20 2,500
Issuance of stock for dividend reinvestment 12 --
Dividends paid (497) (381)
NET CASH FROM FINANCING ACTIVITIES 13,774 (3,931)
NET CHANGE IN CASH AND CASH EQUIVALENTS (1,430) (16,348)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 26,595 32,510
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 25,165 $ 16,162
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period ended March 31:
Interest $ 4,103 $ 3,676
Income taxes 100 344
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AMBANC CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
ITEM 1.
CONSOLIDATED FINANCIAL STATEMENTS
Effective June 1, 1994, AMBANC Corp. completed the
acquisition of Lincolnland Bancshares, Inc. of Casey,
Illinois (LBI). The acquisition, which has been accounted
for as a pooling of interests, involved the issuance of
542,464 shares of AMBANC Corp. common stock in exchange
for the 160,000 shares of outstanding common stock of LBI.
No fractional shares were issued and AMBANC Corp. paid $4
for 126 equivalent fractional shares and issued 542,338
common shares in the LBI acquisition. At the conclusion
of the acquisition, LBI was merged into AMBANC Corp. and
its wholly owned subsidiary, Bank of Casey, Casey,
Illinois, an Illinois State-Chartered banking association,
became a direct, wholly owned subsidiary of AMBANC Corp.
The balance sheet at December 31, 1994, and the statement
of income and statement of cash flow for the three months
ended March 31, 1994, represent the retroactive
restatement, under the pooling of interests basis, of
information for LBI and the previous AMBANC Corp. The
following page presents the consolidated three month
income statement for the previous AMBANC Corp. and LBI
at March 31, 1994.
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<CAPTION>
AMBANC CORP.
CONSOLIDATED STATEMENT OF INCOME
(Dollar amounts in thousands, except share data)
Three Months Ended
March 31, 1994
LBI Consolidated
<S> <C> <C> <C>
Total interest income $ 6,768 $ 1,537 $ 8,305
Total interest expense 2,959 707 3,666
Net interest income before
provision for loan losses 3,809 830 4,639
Provision for loan losses 50 -- 50
Net interest income after
provision for loan losses 3,759 830 4,589
Total other income 608 85 693
Total other expense 2,836 685 3,521
Income taxes 440 85 525
Net income $ 1,091 $ 145 $ 1,236
Earnings per common share (based on
2,369,784 average outstanding shares) $ .52
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AMBANC CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
ITEM 1.
CONSOLIDATED FINANCIAL STATEMENTS - continued
The Consolidated balance sheet as of March 31, 1995,
consolidated statements of income for the three month
period ended March 31, 1995 and 1994, and the
consolidated statements of cash flows for the three month
period ended March 31, 1995 and 1994, have been
prepared by the Corporation, without audit. In the
opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly
the financial position, results of operations and changes
in cash flows at March 31, 1995, and all periods
presented, have been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in
the Corporation's December 31, 1994, annual report to
shareholders. The results of operations for the period
ended March 31, 1995, are not necessarily indicative
of the operating results for the full year.
COMMITMENTS AND CONTINGENT LIABILITIES
Other than ordinary routine litigation incidental to the
business, there are no material pending legal proceedings
to which the Corporation or its subsidiaries are a party
or of which any of their property is the subject.
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AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
ITEM 2.
RESULTS OF OPERATIONS
Net interest income is the principal source of the
Corporation's earnings and represents the difference
between interest income on loans and securities over
interest costs of deposits and borrowed funds. Income
from certain earning assets is exempt from federal income
tax and as customary in the banking industry, changes in
net interest income are analyzed on a fully tax equivalent
basis. Under this method, and throughout this discussion,
nontaxable income on loans and investments is adjusted to
an amount which represents the equivalent earnings if such
earnings were subject to federal tax. The marginal tax
rate used to restate nontaxable income was 34%.
Three Months Ended
March 31, Increase
1995 1994 (Decrease)
Interest income $ 9,515 $ 8,305 14.57 %
Adjusted for tax
exempt income 320 331 (3.32)
Tax equivalent
interest income 9,835 $ 8,636 13.88
Interest expense 4,363 3,666 19.01
Net interest income $ 5,472 $ 4,970 10.10 %
Net interest income increased $502 or 10.10% for the three
months ended March 31, 1995, compared to the three
months ended March 31, 1994. This $502 increase is a
combination of a $1,199 increase in interest income and a
$697 increase in interest expense. The $1,199 increase in
interest income is composed of a reduction of $5 due to
decreased volume of average interest earning assets and a
increase of $1,204 due to increased rates received on these
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AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
interest earning assets. The $697 increase in interest expense
is a combination of an increase of $39 due to increased volume
of average interest bearing liabilities and an increase of
$658 due to rate increases on these interest bearing
liabilities.
Net interest margin was 4.59% during the first three months of
1995 and 4.16% for the first three months of 1994. The
Corporation's percent of average earning assets to total average
assets decreased to 94.40% for the first three months of 1995
from 95.02% for the first three months of 1994. The yields on
average interest earning assets have increased to 8.24% for the
first three months of 1995 from 7.24% for the first three months
of 1994 for an increase of 1.00%. The costs on average interest
bearing liabilities have also increased to 4.26% for the first
three months of 1995 from 3.62% for the first three months of
1994 for an increase of .64%. This leaves the interest spread
which is the mathematical difference between yields on average
interest bearing assets and costs on average interest bearing
liabilities at 3.98% for the first three months of 1995 compared
to 3.62% for the first three months of 1994.
The provision for loan loss was $75 during the first three months
of 1995 compared to $50 during the first three months of 1994.
The allowance for loan loss at March 31, 1995, was $3,955 or
1.15% of total loans less unearned income as compared to $3,911
or 1.22% of total loans less unearned income at December 31,
1994. During the first three months of 1995, loans charged off
were $94 and recoveries from previously written off loans were
$63, thus net charge offs for the first quarter of 1995 were $31.
The adequacy of the allowance for loan loss is analyzed by
management of each bank subsidiary based upon review of
identified loans with more than a normal degree of risk,
historical loan loss percentage by type of loan and present and
forecasted economic conditions. Management's analysis indicates
that the allowance for loan loss at March 31, 1995, is adequate
to cover potential losses on identified loans with credit
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AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
problems and historical losses on the remaining loan portfolio.
The following are ratios of the different types of problem loans
as a percent of total loans less unearned income at March 31,
1995, and December 31, 1994:
March 31, 1995 December 31, 1994
Nonaccrual loans .26% .18%
Loans past due 90 days .04% .20%
Performing restructured loans .14% .15%
OREO .12% .14%
Effective January 1, 1995, the Corporation adopted Financial
Accounting Standard No. 114, (FAS 114) "Accounting by Creditors
for Impairment of a Loan," as amended by Financial Accounting
Standard No. 118, (FAS 118) "Accounting by Creditors for
Impairment of a Loan-Income Recognition and Disclosures." These
statements require that impaired loans be measured based on the
present value of expected future cash flows discounted at the
loans' effective interest rates or at the fair value of the
underlying collateral and allow existing methods for recognizing
interest income. The effect of adopting FAS 114 and FAS 118 was
not material to the Financial Statements of the Corporation. At
March 31, 1995, the recorded balance of loans that were
considered to be impaired under FAS 114 was $2,056 of which $710
were on a nonaccrual basis. The average recorded balance for
impaired loans for the three month period ended March 31, 1995,
approximated the ending balance. Included in this amount were
$1,589 of impaired loans for which the related specific allocated
reserve for credit losses was $240, and $467 of impaired loans
that did not have a specific allocated reserve at March 31, 1995.
A summary of the activity in the allowance for loan losses
account for the first three months ending March 31, 1995, and
1994 was:
1995 1994
Balance, January 1 $3,911 $3,685
Provision for loan losses 75 50
Loans charged off (94) (64)
Recoveries of loans previously
charged off 63 129
Balance, March 31 $3,955 $3,800
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AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
With the adoption of FAS 114, the Corporation continued to use
its normal methods of identifying loans that are subject to
classification as criticized assets. This consists of creating a
monthly report containing loans with a more than normal degree of
risk. This report includes all such loans with balances of $100
or larger and even includes totals for loans smaller than $100 if
they are collateralized by real estate or other specific
collateral. Smaller-balance homogeneous loans, like credit
cards, moneyline loans which are consumer lines of credit either
secured with second mortgages on real estate or unsecured, and
consumer installment loans which are secured by vehicles and
other specific collateral or unsecured, are not included as loans
with a more than normal degree of risk. These loans are
specifically covered in the analysis of the adequacy of the
allowance for loan losses using historical loss percentages and
current delinquency reports. Smaller-balance homogeneous loans
are placed on nonaccrual after they are 90 days delinquent and
are written down to their collateral value or are charged off
when they are determined to be uncollectable. The report of
loans with a more than normal degree of risk is the by-product of
an ongoing loan review process, the purpose of which is to
determine the level of credit risk within the portfolio and to
ensure proper adherence to the Corporation's underwriting and
documentation standards.
The Corporation's report of loans with a more than normal degree
of risk is divided into three classifications, other loans
especially mentioned, substandard performing loans and
substandard non-performing loans. Other loans especially
mentioned are loans that are fundamentally sound but exhibit
potentially unwarranted credit risks or contain unsatisfactory
characteristics. Substandard performing loans are inadequately
protected by current sound net worth, paying capacity of the
obligor, or pledged collateral as well as those loans with
unsatisfactory characteristics causing more than acceptable
levels of risk, but are being serviced by the customer in regards
to the timely payment of principal and interest. Substandard
non-performing loans show weaknesses inherent in the substandard
performing loans but where collection or liquidation in full, on
a timely basis, is highly questionable. Substandard non-
performing loans are loans that have been placed on nonaccrual
when they are 90 days delinquent and there is no evidence to
support the continued regular payments required under the loan
contract.
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AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
The classification of impaired loans is determined by the
analysis of the loan's collateral, repayment capacity of the
borrower and other known information to determine that it is
probable that the Corporation will be unable to collect all
amounts of principle and interest due according to the
contractual terms of the loan. Although a loan is on nonaccrual
it is possible that the liquidation of collateral will provide
for full recovery of all nonaccrued interest and principal on the
loan without a significant delay. Loans on nonaccrual that do
not meet this criteria are considered to be impaired. Loans that
are still on accrual, because the payments are currently being
serviced by the customer, but that exhibit or are known to have
other circumstances that will make them probable of not being
collected in full as to interest and principal, are also
considered to be impaired. Specific reserves are assigned to
impaired loans when in management's opinion the liquidation of
collateral, less selling expenses, will not represent collection
in full of principal and interest on the loan. Specific reserves
plus a reserve calculation based on historical loan loss
experience by type of loan are considered when analyzing the
adequacy of the allowance for loan losses. Impaired loans not
collateralized, but being repaid from cash flows, are measured
based upon the present value of expected future cash flows and
any shortfalls are recognized by the reduction of the impaired
loan by creating a valuation allowance and a corresponding charge
against the allowance for loan losses. The Corporation currently
does not have any impaired loans requiring a valuation allowance
due to insufficient present value calculations of expected future
cash flows. Since the adoption of FAS 114 no unusual additions
to the allowance for loan losses have been required due to loans
being classified as impaired.
Impaired loans on nonaccrual recognize payments or other cash
flows from liquidation of collateral first as principal payments.
When the principal on these loans is collected in full,
subsequent payments are recorded as income until all of the
nonaccrued interest income is collected. Since the nonaccrued
interest income is not booked until collected, any interest
shortfall on nonaccrual loans is never recognized as income.
Impaired loans on accrual continue to recognize income on the
same basis as all other loans. The method used in recognizing
payments and interest income on impaired loans is consistent with
those being used by the Corporation for substandard performing
loans and substandard non-performing loans before the adoption of
FAS 114.
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AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
Noninterest income for the first three months ended March 31,
1995, was down $84 or 12.12% to $609 as compared to $693 for the
three months ended March 31, 1994. Income from fiduciary
services was down by $19 or 15.83% to $101 in 1995 from $120 in
1994 and was the result of decreased fees on trust accounts
managed. Service charges on deposit accounts were up by $44 or
17.25% to $299 in 1995 from $255 in 1994 due to new and increased
fees on deposit accounts. The Corporation sold no securities
from securities available for sale during the first quarter of
1995. Other operating income decreased $114 or 35.29% to $209
during the three months ended March 31, 1995, from $323 during
the same three months in 1994. This $114 decrease is mainly due
to decreases in insurance commission income and the reduction of
gain on sales of loans held for sale less a small increase in
customer service charges. During the first quarter of 1994
mortgage rates were increasing and the Corporation sold $18,146
of the conforming fixed rate mortgage loans, classified as loans
held for sale on the balance sheet, into the secondary mortgage
market and other operating income included $146 related to gains
from these sales. Mortgage rates have increased to the point
that variable rate mortgage loans, classified as real estate
loans on the balance sheet, are replacing fixed rate mortgage
loans as the most popular mortgage type. During the first
quarter of 1995 the Corporation sold $2,563 of these fixed rate
mortgage loans and had gains of $32. The servicing rights on
more than 95% of sold fixed rate loans are retained by the
Corporation.
Noninterest expense for the three months ended March 31, 1995,
was $3,719 as compared to $3,521 for the three months ended March
31, 1994, for an increase of $198 or 5.62%. Salaries and
employee benefits are the largest portion of noninterest expense
and increased $196 or 10.95% in the first three months of 1995
compared to the same time period in 1994. Individual components
showed increases in salaries, pension expense and medical
insurance less reductions in payroll taxes, education and life
insurance. Occupancy expense is up $13 or 6.50% to $213 in 1995
from $200 in 1994 and is due mainly to increased depreciation,
building repairs and maintenance and utilities less a decrease in
property insurance expense. Equipment expense is up by $14 or
7.14% to $210 in 1995 from $196 in 1994 due mainly to increases
in depreciation and contract expense related to new branches.
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AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
Data processing expense decreased $20 or 18.18% to $90 in 1995
from $110 in 1994 and is due to a reduction in depreciation and
continued efficiencies resulting from consolidating operations.
The FDIC insurance expense remained almost constant with only a
$3 or 1.19% increase which is due to increased deposit balances.
The Corporation's subsidiary banks have all been assigned the
highest classification by the FDIC and as such continue to pay
the lowest possible FDIC deposit insurance rates in both 1995 and
1994. The deposits purchased from a federal savings bank (see
financial condition for details) will remain subject to the SAIF
rather than BIF deposit insurance rates. The $8 or .82% decrease
in other operating expenses to $964 in 1995 from $972 in 1994 is
due to many minor increases and decreases.
Income before income taxes was up $206 or 11.70% to $1,967 for
the first three months of 1995 from $1,761 for the first three
months of 1994. The income tax rate as a percent of income
before taxes was down to 28.32% in 1995 from 29.81% in 1994 and
is due in part to the Corporation having more expenses related to
mergers in 1994 than in 1995 which are nondeductible for income
tax purposes. The net income for the first three months ended
March 31, 1995, was up $174 or 14.08% to $1,410 as compared to
$1,236 for the three months ended March 31, 1994. Earnings per
share were $.59 in 1995 and were $.52 in 1994. Based upon
annualized net income the return on average assets was 1.12% for
the first three months of 1995 compared to .98% for the same
period in 1994.
FINANCIAL CONDITION
The Corporation's lead bank, The American National Bank of
Vincennes, completed the purchase of $25,462 of deposits from the
Princeton, Indiana branch of First Indiana Bank, a Federal
Savings Bank, on March 17, 1995. The Corporation has
historically had a decrease in total assets during the first
quarter due to the year end total assets including institutional
public funds on deposit that are not in the first quarters
deposits. With these purchased deposits, total assets increased
by $16,587 or 3.21% to $532,683 at March 31, 1995, from $516,096
at December 31, 1994. Significant changes in assets from
December 31, 1994, to March 31, 1995, include an increase in
total loans and a decrease in securities and interest bearing
deposits in other banks.
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AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
Total securities and interest bearing deposits in other banks
decreased $3,613 or 2.36% to $149,489 at March 31, 1995, from
$153,102 at December 31, 1994. The effect of FAS 115 and the
mark-to-market of securities available for sale added $1,781 to
securities available for sale during the first quarter of 1995.
The FAS 115 negative mark-to-market adjustment at December 31,
1994, was $4,746 and was only $2,965 at March 31, 1995, and is
due to the normal market adjustment when interest rates are
stabilizing. Without the FAS 115 adjustment, available for sale
securities decreased $4,045 or 3.46% from maturities and calls
and no sales during the first quarter of 1995. There were no
sales or transfers of securities classified as held to maturity
during the quarter ended March 31, 1995. Securities held to
maturity decreased $1,105 or 2.90% due to maturities or calls.
The Corporation has experienced increased loan demand and total
loans increased $21,381 or 6.66% to $342,477 at March 31, 1995,
from $321,096 at December 31, 1994. Commercial loans have
increased $16,447 or 10.28% to $176,361 at March 31, 1995, from
$159,914 at December 31, 1994. Included in this increase is
$6,947 of short-term commercial paper and bankers acceptances
that were acquired with funds from the purchased deposits.
Without these loans, commercial loans still increased $9,500 or
5.94% during the quarter. Real estate loans increased $3,846 or
4.84% to $83,310 at March 31, 1995, from $79,464 at December 31,
1994. As noted previously, the renewed interest in variable rate
mortgage loans has caused this increase. Installment loans
increased $1,088 or 1.33% to $82,806 at March 31, 1995, from
$81,718 at December 31, 1994.
Accrued interest receivable and other assets increased $328 or
3.26% at March 31, 1995, from December 31, 1994. This account
does include $1,777 of new goodwill associated with the purchased
deposits.
Total deposits increased $16,851 or 3.70% during the first three
months of 1995. Noninterest bearing deposits decreased $6,359 or
12.27% from normal reductions of institutional public funds on
deposit at December 31, 1994, and not on deposit at March 31,
1995. Interest bearing deposits increased $23,210 or 5.75%
during the three months ended March 31, 1995, and is due in part
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
to the purchased deposits. Short-term borrowings consisting of
federal funds purchased, repurchase agreements and treasury tax
and loan accounts decreased $2,273 or 39.95% at March 31, 1995,
from December 31, 1994, as funds were not required for
operations. Long-term debt, which is mainly borrowings from the
Federal Home Loan Bank that were matched off against specific
fixed rate lending programs, decreased $319 or 10.00% at March
31, 1995, from December 31, 1994, due to normal repayments.
Total shareholders' equity, including the unrealized loss on
securities available for sale, has increased $2,043 or 4.17% to
$51,080 at March 31, 1995, from $49,037 at December 31, 1994.
The FAS 115 after tax mark-to-market adjustment on the available
for sale securities accounted for $1,118 or 2.28% of this
increase in total shareholders' equity at March 31, 1995, from
December 31, 1994. The Corporation's regulators have issued
guidelines stating that the unrealized loss on securities
available for sale, other than those related to mutual funds (FAS
115 adjustments), should not be included in shareholders' equity
for capital ratio calculations. Total shareholders' equity,
excluding the FAS 115 adjustments, was $51,952 at December 31,
1994, and increased $933 or 1.80% to $52,885 at March 31, 1995.
This increase is net income of $1,410 less dividends paid of $497
plus $8 related to increased mark-to-market on mutual funds and
$12 related to sales of the Corporation's common stock for the
dividend reinvestment and stock purchase plan.
Capital adequacy in the banking industry is evaluated primarily
by the use of three required capital ratios based on three
separate calculations; leverage capital, Tier 1 risk-based
capital and total risk-based capital. The leverage capital ratio
is defined as total ending Tier 1 capital divided by total
average assets less intangible assets and FAS 115 adjustments.
Tier 1 risk-based capital is defined as Tier 1 capital divided by
risk-weighted assets. Total risk-based capital is defined as
Tier 1 capital plus Tier 2 capital divided by risk-weighted
assets. Tier 1 capital is the sum of the core capital elements
(common shareholders' equity, qualifying perpetual preferred
stock and minority interest in the equity accounts of
consolidated subsidiaries) less intangible assets and the FAS 115
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1995
(Dollar amounts in thousands, except share data)
adjustments. Tier 2 capital consists of the allowance for loan
losses (limited to an maximum of 1.25% of risk-weighted assets),
perpetual preferred stock and other hybrid capital instruments.
Risk-weighted assets are defined to include the assets on the
balance sheet and off-balance sheet financial instruments in
broad categories that are weighted at 20% to 100% depending on
the asset totals within these broad categories. The
Corporation's capital ratios at March 31, 1995, and December 31,
1994 were:
March 31, 1995 December 31, 1994
Leverage capital ratio 9.86% 10.14%
Tier 1 risk-based capital 13.48% 14.32%
Total risk-based capital 14.53% 15.41%
PENDING ACQUISITION
On October 12, 1994, the Corporation executed an Agreement and
Plan of Merger that provides for the Corporation to acquire
First Robinson Bancorp, the holding company for The First
National Bank in Robinson, Robinson, Illinois. The
proposed acquisition will be accounted for as a pooling of
interests and the Corporation will issue a maximum of
approximately 666,090 shares of its common stock in
exchange for the 119,200 currently issued and outstanding
shares of First Robinson Bancorp.
PAGE
<PAGE>
AMBANC CORP.
As of and for the three months ended March 31, 1995
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Statement of Computation of per share
earnings. The copy of this exhibit filed as
Exhibit 11 to AMBANC's Annual Report on Form
10-K for the year ended December 31, 1994,
is incorporated herein by reference.
27 Financial Data Schedule for March 31, 1995.
(b) A Form 8-K was filed with the SEC on March 27, 1995,
for the change in auditors from Crowe Chizek & Company
to Deloitte & Touche LLP for the year ending December
31, 1995. The change in auditors was effective with
the conclusion of the 1994 audit on March 27, 1995.
PAGE
<PAGE>
AMBANC CORP.
As of and for the three months ended March 31, 1995
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
AMBANC CORP.
(Registrant)
DATE: August 28, 1995 BY: R. Watson
Robert G. Watson, Chairman of
the Board, President and
Chief Executive Officer
DATE: August 28, 1995 BY: Richard E. Welling
Richard E. Welling, Secretary,
Treasurer and C.F.O.
PAGE
<PAGE>
AMBANC CORP.
As of and for the three months ended March 31, 1995
EXHIBIT INDEX
EXHIBITS PAGE
11 Statement of Computation of per *
share earnings. The copy of this
exhibit filed as Exhibit 11 to
AMBANC's Annual Report on Form 10-K
for the year ended December 31, 1994,
is incorporated herein by reference.
27 Financial Data Schedule for March 31,
1995.
* Incorporated by reference from previously filed
documents.
<PAGE>
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