FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1997
Commission File Number: 0-10710
AMBANC CORP.
(exact name of registrant as specified in its charter)
INDIANA 35-1525227
(State or other jurisdiction (I.R.S. Employer ID No.)
of incorporation or
organization)
302 Main Street
P.O. Box 556
Vincennes, Indiana 47591-0556
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code (812) 885-6418
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, (or for such shorter period that the
registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90
days.
Yes: X No:
3,316,213 common shares of stock were outstanding as of
August 14, 1997.
PAGE
<PAGE>
AMBANC CORP.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at
June 30, 1997 (unaudited) and
December 31, 1996
Consolidated Statements of Income for
Six and three months ended June 30, 1997
and 1996(unaudited)
Consolidated Statements of Cash
Flows for six months ended
June 30, 1997 and 1996 (unaudited)
Notes to Consolidated Financial
Statements (unaudited)
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition
PART II. OTHER INFORMATION
Item 1. Legal Preceedings
Item 6. Exhibits and Reports of Form 8-K
Signatures
Exhibit Index
PAGE
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMBANC CORP.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
June 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
Cash and due from banks $ 19,510 $ 26,409
Federal funds sold 2,525 5,875
Total cash and cash equivalents 22,035 32,284
Interest bearing deposits in other banks 397 590
Securities available for sale at market 161,471 170,724
Loans held for sale 2,005 2,350
Loans, net of unearned income 510,147 494,467
Allowance for loan losses (5,475) (5,630)
Loans, net 504,672 488,837
Premises, furniture and equipment, net 12,920 11,184
Accrued interest receivable and other assets 13,509 12,785
TOTAL ASSETS $ 717,009 $ 718,754
LIABILITIES
Noninterest bearing deposits $ 55,084 $ 61,518
Interest bearing deposits 573,792 571,940
Total deposits 628,876 633,458
Short-term borrowings 6,057 5,286
Long-term debt 1,968 2,309
Accrued interest payable and other liabilities 5,425 5,518
TOTAL LIABILITIES 642,326 646,571
SHAREHOLDERS' EQUITY
Preferred stock, $10 par value, 200,000 shares
authorized, no shares issued or outstanding -- --
Common stock, $10 par value, 10,000,000
shares authorized, 3,316,267
shares issued at June 30, 1997,
and December 31, 1996 33,163 33,163
Treasury stock (554 and 724 shares at cost) (21) (21)
Retained earnings 41,432 38,731
Unrealized gain/(loss) on securities
available for sale, net of deferred taxes 109 310
TOTAL SHAREHOLDERS' EQUITY 74,683 72,183
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 717,009 $ 718,754
</TABLE>
PAGE
<PAGE>
<TABLE>
<CAPTION>
AMBANC CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 11,343 $ 10,218 $ 22,337 $ 20,385
Interest and fees on loans
held for sale 23 168 70 292
Interest on securities
Taxable 1,695 1,994 3,441 3,883
Tax exempt 725 715 1,458 1,408
Other interest 149 166 233 503
TOTAL INTEREST INCOME 13,935 13,261 27,539 26,471
INTEREST EXPENSE
Interest on deposits 6,987 6,610 13,747 13,201
Interest on short-term borrowings 66 88 162 179
Interest on long-term debt 31 35 66 74
TOTAL INTEREST EXPENSE 7,084 6,733 13,975 13,454
NET INTEREST INCOME 6,851 6,528 13,564 13,017
Provision for loan losses 315 299 630 566
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 6,536 6,229 12,934 12,451
NONINTEREST INCOME
Income from fiduciary activities 177 207 371 337
Service charges on
deposit accounts 417 397 820 760
Gain/(loss) on securities 19 (8) 74 (7)
Other operating income 490 446 909 808
TOTAL NONINTEREST INCOME 1,103 1,042 2,174 1,898
NONINTEREST EXPENSE
Salaries and employees benefits 2,721 2,443 5,221 4,904
Occupancy expenses, net 351 307 692 592
Equipment expenses 343 276 659 578
Data processing expenses 113 91 236 223
FDIC insurance 26 22 33 43
Other operating expenses 1,169 1,269 2,341 2,365
TOTAL NONINTEREST EXPENSE 4,723 4,408 9,182 8,705
INCOME BEFORE INCOME TAXES 2,916 2,863 5,926 5,644
Income taxes 904 824 1,799 1,624
NET INCOME $ 2,012 $ 2,039 $ 4,127 $ 4,020
EARNINGS PER COMMON SHARE
Net income per share $ .60 $ .61 $ 1.24 $ 1.21
Weighted average outstanding shares 3,316,058 3,316,232 3,316,005 3,316,250
</TABLE>
PAGE
<PAGE>
<TABLE>
<CAPTION>
AMBANC CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands, except share data)
Six Months Ended
June 30,
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 4,127 $ 4,020
Adjustments to reconcile net income to
net cash from operating activities:
Net premium amortization and discount
accretion on securities 169 174
Depreciation 595 519
Provision for loan losses 630 566
(Gain)/loss on securities (74) 7
Gain on sales of assets (6) --
(Gain) on sales of loans (277) (216)
Proceeds from sales of loans held for sale 12,239 12,740
Loans held for sale made to customers,
net of payments collected (11,617) (15,353)
Accrued interest receivable
and other assets (715) (869)
Accrued interest payable
and other liabilities 16 2,166
Deferred loan fees net of costs (78) (23)
NET CASH FROM OPERATING ACTIVITIES 5,009 3,731
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of securities available
for sale 6,207 5,152
Proceeds from maturities and calls of securities
available for sale 10,390 24,995
Purchases of securities available for sale (7,758) (42,901)
Net change in interest bearing deposits
in other banks 193 101
Loans made to customers, net of
payments collected (16,387) (27,268)
Loans purchased -- (8)
Proceeds from sales of loans -- 3,404
Property and equipment expenditures (2,325) (1,188)
NET CASH FROM INVESTING ACTIVITIES (9,680) (37,713)
</TABLE>
PAGE
<PAGE>
<TABLE>
<CAPTION>
AMBANC CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(Dollar amounts in thousands, except share data)
Six Months Ended
June 30,
1997 1996
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits (4,582) 27,040
Net change in short-term borrowings 771 1,920
Payments on long-term debt (400) (484)
Proceeds on long-term debt 59 53
Net change in treasury stock -- (30)
Dividends paid (1,426) (1,328)
NET CASH FROM FINANCING ACTIVITIES (5,578) 27,171
NET CHANGE IN CASH AND CASH EQUIVALENTS (10,249) (6,811)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 32,284 43,173
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,035 $ 36,362
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period:
Interest $ 14,121 $ 12,756
Income taxes 2,198 2,000
Noncash activities during the period:
Reclassification of loans held for sale
to real estate loans -- 5,220
</TABLE>
PAGE
<PAGE>
AMBANC CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
The Consolidated balance sheet as of June 30, 1997,
consolidated statements of income for the six month and three
month periods ended June 30, 1997 and 1996, and the consolidated
statements of cash flows for the six month periods ended June 30,
1997 and 1996, have been prepared by the Corporation, without
audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present
fairly the financial position, results of operations and changes
in cash flows at June 30, 1997, and all periods presented, have
been made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction
with the consolidated financial statements and notes thereto
included in the Corporation's December 31, 1996, annual report to
shareholders. The results of operations for the period
ended June 30, 1997, are not necessarily indicative
of the operating results for the full year.
PAGE
<PAGE>
AMBANC CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
NEW ACCOUNTING PRONOUNCEMENTS
The Corporation adopted Statement of Financial Accounting
Standards (FAS) 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities," effective
January 1, 1997. The adoption of FAS 125 had no effect on the
Corporation's financial statements due to no covered transactions
existing.
FAS 128, "Earnings per Share," was issued in February 1997 and
establishes new standards for computing and presenting earnings
per share (EPS). Specifically FAS 128 replaces the presentation
of primary EPS with a presentation of basic EPS, requires dual
presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the
basic EPS computation to the numerator and denominator of the
diluted EPS computation. FAS 128 is effective for both interim
and annual fiscal periods ending after December 15, 1997.
Earlier application is not permitted. Management has determined
that the adoption of FAS 128 will not have a material effect on
the accompanying consolidated financial statements.
FAS 130, "Comprehensive Income", was issued in June 1997, becomes
effective for fiscal years beginning after December 15, 1997, and
requires reclassification of earlier financial statements for
comparative purposes. It requires that changes in the amounts of
certain items, including foreign currency translation adjustments
and gains and losses on certain securities be shown in the
financial statements. FAS 130 does not require a specific format
for the financial statement in which comprehensive income is
reported, but does require that an amount representing total
comprehensive income be reported in that statement. Management
has not yet determined the effect, if any, of FAS 130 on the
consolidated financial statements.
FAS 131, "Disclosures about Segments of an Enterprise and Related
Information", was issued in June 1997. This statement is
effective for fiscal years beginning after December 15, 1997, and
will change the way corporations report information about
products, services and segments of their business in their annual
financial statements and requires them to report selected segment
information in their quarterly reports issued to shareholders.
Management has not yet determined the effect, if any, of FAS 131
on the consolidated financial statements.
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
FINANCIAL STATEMENT RECLASSIFICATIONS
Income included in fees on loans has been restated for the
current period and all prior periods presented. Changes included
the reclassification of income items from fees on loans to the
other operating income section of the income statement. These
reclassifications had the effect of lowering the net interest
margin and increasing the noninterest income but had no effect on
net income. Reclassifications were made to present the
Corporation's income information on a consistent basis with that
of the financial institutions industry. Certain other items in
the prior years financial statements have been reclassified to
correspond with the current presentations.
ITEM 2.
RESULTS OF OPERATIONS
Net interest income is the principal source of the
Corporation's earnings and represents the difference
between interest income on loans and securities over
interest costs of deposits and borrowed funds. Income
from certain earning assets is exempt from federal income
tax and, as is customary in the banking industry, changes in
net interest income are analyzed on a fully tax equivalent
basis. Under this method, and throughout this discussion,
nontaxable income on loans and investments is adjusted to
an amount which represents the equivalent earnings if such
earnings were subject to federal tax. The marginal tax
rate used to restate nontaxable income was 34%.
Six Months Ended
June 30, Increase
1997 1996 (Decrease)
Interest income $ 27,539 $ 26,471 4.03 %
Adjusted for tax
exempt income 830 809 2.60
Tax equivalent
interest income 28,369 27,280 3.99
Interest expense 13,975 13,454 3.87
Net interest income $ 14,394 $ 13,826 4.11 %
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
Net interest income increased $568 or 4.11% for the six
months ended June 30, 1997, compared to the six months
ended June 30, 1996. This $568 increase was a combination of a
$1,089 increase in interest income offset by a $521 increase in
interest expense. The $1,089 increase in interest income was
composed of an increase of $832 due to increased volume of
average interest earning assets and an increase of $257 due to
increased rates received on these interest earning assets. The
$521 increase in interest expense was a combination of an
increase of $435 due to increased volume of average interest
bearing liabilities and an increase of $86 due to rate increases
on these interest bearing liabilities.
The Corporation's average assets for the first six months of 1997
increased $23,638 or 3.40% to $718,819 from $695,181 for the
first six months of 1996. The percent of average earning assets
to total average assets has decreased to 94.75% or $681,052 for
the first six months of 1997 and 95.09% or $661,068 for the first
six months of 1996.
Net interest margin increased .05% to 4.26% for the first six
months of 1997 from 4.21% for the first six months of 1996. This
increase is due to the cost of average interest bearing
liabilities increasing .05% from 4.77% for the first six months
of 1996 to 4.82% for the first six months of 1997 while the yield
on average earning assets increased .10% from 8.30% for the first
six months of 1996 to 8.40% for the first six months of 1997.
Although the Corporation continues to place emphasis on
increasing the net interest margin, it has proven increasingly
difficult with increased emphasis on rates by the competition.
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
The provision for loan losses was increased $64 or 11.31% to $630
during the first six months of 1997 compared to $566 during the
first six months of 1996. This increase was due to outstanding
loans increasing $15,680 or 3.17% in the first six months of 1997
and as a replacement for net loan charge offs of $785 in 1997.
The allowance for loan losses at June 30, 1997, was $5,475 or
1.07% of total loans less unearned income as compared to $5,630
or 1.14% of total loans less unearned income at December 31,
1996. During the first six months of 1997, loans charged off
were $949 and recoveries from previously written off loans were
$164, thus net charge offs for the first six months of 1997 were
$785. The adequacy of the allowance for loan losses is analyzed
by management of each subsidiary bank based upon review of
identified loans with more than a normal degree of risk,
historical loan loss percentage by type of loan and present and
forecasted economic conditions. Management's analysis indicates
that the allowance for loan loss at June 30, 1997, is adequate to
cover potential losses on identified loans with credit problems
and historical losses on the remaining loan portfolio. The
following are the different types of problem loans with their
outstanding balances and percent of total loans less unearned
income at June 30, 1997, and December 31, 1996:
June 30, 1997 December 31, 1996
Nonaccrual loans $1,242 .24% $1,421 .29%
Loans past due 90 days 973 .19 1,313 .27
Performing restructured loans 3,882 .76 3,089 .62
OREO 992 .19 324 .07
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
A summary of the activity in the allowance for loan losses
account for the first six months ending June 30, 1997 and
1996 was:
1997 1996
Balance, January 1 $5,630 $5,022
Provision for loan losses 630 566
Loans charged off (949) (431)
Recoveries of loans previously
charged off 164 274
Balance, June 30, $5,475 $5,431
Noninterest income for the six months ended June 30, 1997,
increased 14.54% or $276 to $2,174 from $1,898 in 1996. Income
from fiduciary services increased $34 or 10.09% to $371 from $337
in 1996. This increase is due to increased business and quicker
timing of billings in 1997 compared to 1996. The commissions for
selling securities through an affiliation with PrimeVest are
included in fiduciary activities income in 1997. This service is
being provided to customers at both bank subsidiaries for the
first time in 1997. Service charges on deposit accounts
increased $60 or 7.89% to $820 in 1997 compared to $760 in 1996
and is mainly due to increased charges on non sufficient fund
checks. Security gains were up $81 for the first six months of
1997 compared to the first six months of 1996. The Corporation
instituted a plan of selling small investment pieces to reduce
carrying expenses and to extending maturities on securities that
would mature within the next year. Securities due to mature in
1997, and having market gains were also sold during the second
quarter of 1997 to provide liquidity and take advantage of the
gains. Other operating income increased 12.50% or $101 to $909
for the six months ended June 30, 1997, from $808 for the same
six months in 1996. This increase is due primarily to increases
in insurance commissions and gains on sales of loans to the
secondary mortgage market.
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
Noninterest expense for the six months ended June 30, 1997, was
$9,182 as compared to $8,705 for the six months ended June 30,
1996, for an increase of $477 or 5.48%. Salaries and employee
benefits are the largest portion of noninterest expense and
increased $317 or 6.46% in the first six months of 1997 compared
to the same period in 1996. This increase is due in part to the
Corporation having three new branches in operation during the
first half of 1997 as compared to the first half of 1996. The
major increases in employee benefits were in medical insurance
and expenses related to SARs on stock options outstanding.
Occupancy expenses were up $100 or 16.89% and equipment expenses
were up $81 or 14.01% in the first six months of 1997 compared to
1996. The addition of the three branches in 1997 added to these
expenses. The Corporation opened two branches during the second
quarter of 1997. One of these branches is a replacement for an
existing drive-in branch and the other is the addition of a new
in store Wal-Mart branch. The Corporation entered the new market
area of Evansville, Indiana on January 1, 1997, and added this
Wal-Mart branch to that market area in May 1997. A piece of land
has also been committed to in Terre Haute, Indiana in Vigo County
for construction of a full service branch. This branch is
expected to be completed in the first quarter of 1998 and will
complement the Wal-Mart branch opened in that city in late 1995.
The addition of these branches can be expected to have
incremental increases on noninterest expenses of the Corporation.
Data processing expenses have increased $13 or 5.83% to $236 in
1997 and represent normal inflationary expenses. The subsidiary
banks have been assigned the classification of least risk by the
FDIC and as such are subject to the lowest deposit insurance
rates available from the Bank Insurance Fund (BIF) and the
Savings Association Insurance Fund (SAIF). These rates are set
to remain constant until the year 2000 and are .0129% for BIF and
.0243% for SAIF.
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
Other operating expenses decreased $24 or 1.01% to $2,341 for the
first six months of 1997 from $2,365 for the same period in 1996.
The June 30, 1996, consolidated financial statements contained an
estimate for the costs related to the name change of all
subsidiary banks. These added expenses in 1996 were almost
matched by increased expenses in 1997 due to the increase in the
number of branches and expenses related to entering a new market
area with denovo branches in Evansville. This year's expenses
are also up due to increased loan collection expenses related to
an increase in loan charge offs.
Income before income taxes was up $282 or 5.00% to $5,926 for the
first six months of 1997 from $5,644 for the first six months of
1996. The net income for the first six months ended June 30,
1997, was up $107 or 2.66% to $4,127 as compared to $4,020 for
the six months ended June 30, 1996. Earnings per share were $.60
and $.61 for the quarters ending June 30, 1997 and 1996 and were
$1.24 and $1.21 for the first 6 months of 1997 and 1996. Based
upon annualized net income the return on average assets for the
first six months of 1997 and 1996 was consistent at 1.16%.
PAGE
<PAGE>
<TABLE>
<CAPTION>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
The following schedule shows selected financial amounts and ratios for the
three months and six months ended June 30, 1997 and 1996. The Corporation
feels these financial highlights include pertinent information relevant for
its results as a company in the financial institutions industry.
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
AVERAGE BALANCE SHEET DATA
Total assets $ 723,083 $ 699,245 $ 718,819 $ 695,181
Earning assets 684,266 666,396 681,052 661,068
Securities 162,825 185,106 165,856 182,322
Loans 508,117 459,058 504,165 452,779
Allowance for loan losses 5,346 5,162 5,400 5,091
Goodwill 1,696 1,872 1,717 1,893
Deposits 636,344 615,858 632,098 611,746
Shareholders' equity 72,739 67,959 72,625 68,027
END OF PERIOD BALANCE SHEET DATA
Total assets $ 717,009 $ 712,586
Securities 161,471 182,924
Loans 510,147 471,615
Allowance for loan losses 5,475 5,431
Goodwill 1,681 1,851
Deposits 628,876 627,109
Shareholders' equity 74,683 68,405
INCOME DATA
Net interest income(t.e. basis) $ 7,264 $ 6,937 $ 14,394 $ 13,826
Provision for loan losses 315 299 630 566
Noninterest income 1,103 1,042 2,174 1,898
Noninterest expense 4,723 4,408 9,182 8,705
Net income 2,012 2,039 4,127 4,020
</TABLE>
PAGE
<PAGE>
<TABLE>
<CAPTION>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
PER SHARE DATA
Net income $ .60 $ .61 $ 1.24 $ 1.21
Cash dividends .22 .20 .43 .40
Book value at end of period 22.52 20.63
Tangible book value at end
of period 22.02 20.08
Stock price at end of period 37.13 27.38
Weighted average
shares 3,316,267 3,316,267 3,316,267 3,316,267
Weighted average
treasury shares 209 35 262 17
SELECTED RATIOS
Return on average assets 1.12% 1.17% 1.16% 1.16%
Return on average equity 11.09 12.07 11.46 11.88
Net interest margin(t.e.basis) 4.26 4.19 4.26 4.21
Efficiency ratio 59.38 58.23 58.34 58.36
Net charge-offs to average loans .05 -- .16 .03
Allowance for loan losses
to loans 1.07 1.15
Nonaccrual loans to loans .24 .84
Loans past due 90 days or
more to loans .19 .37
Performing restructured loans
to loans .76 .02
OREO to loans .19 .06
Tier 1 leverage capital 10.14 9.71
Tier 1 capital 13.66 13.31
Total capital 14.68 14.38
</TABLE>
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
FINANCIAL CONDITION
Total assets have decreased $1,745 or .24% to $717,009 at June
30, 1997, from $718,754 at December 31, 1996. Total noninterest
bearing deposits have decreased $6,434 or 10.46% and interest
bearing deposits have increased $1,852 or .32% at June 30, 1997,
from December 31, 1996 for a total deposit decrease of $4,582 or
.72%. Securities available for sale before the mark to market
have decreased $8,934 or 5.25% to $161,315 at June 30, 1997, from
$170,249 at December 31, 1996. The Corporation sold small
investment pieces to eliminate carrying costs, but the major
portion of the decrease in securities was due to normal
maturities and calls. Securities available for sale at market
indicates a decrease of $9,253 or 5.42% at June 30, 1997, from
December 31, 1996. This decrease includes the mark-to-market on
securities which went to a positive $156 at June 30, 1997, from a
positive $475 at December 31, 1996. This market valuation change
is the result of normal repricing of investment securities in
different rate environments and accounted for $319 of the
reduction in the valuation of securities available for sale on
the balance sheet.
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
Loans held for sale represent qualifying fixed rate mortgage
loans that are available for sale into the secondary market.
Fixed rate real estate mortgage loan rates were low enough that
the Corporation has experienced demand for these loans during the
six months ended June 30, 1997. Current market rate competition
on these loans is making it necessary to sell them as soon as
they are booked. The following is the detail of activity in the
loans held for sale between year end and June 30, 1997:
Balance December 31, 1996 $ 2,350
New loans booked (net of payments) 11,617
Loans sold (11,962)
Total at June 30, 1997 $ 2,005
The sale of loans to the secondary market has provided $277 of
net gains on sales during the first six months of 1997 and the
Corporation is servicing $102,825 of real estate loans sold to
the secondary market as of June 30, 1997.
Loans have increased $15,680 or 3.17% at June 30, 1997, from
December 31, 1996. The following shows the balance and percent
of total by loan classification as of the end of the periods:
6-30-97 12-31-96
% of % of
Balance Total Balance Total
Commercial $204,884 40.16% $201,092 40.67%
Agricultural 52,780 10.35 55,404 11.20
Real estate 139,423 27.33 129,116 26.11
Installment 109,748 21.51 105,169 21.27
Credit cards 3,312 .65 3,686 .75
Total $510,147 $494,467
The types of loans outstanding as a percentage of total loans has
remained very consistent between year end 1996 and June 30, 1997.
The demand for new commercial loans has been the strongest
because there have been several pay offs of large commercial
loans during the second quarter of 1997. The decrease in
agricultural loans is due to normal seasonal fluctuations with
crops being sold and loan balances being paid down during the
first six months of the year. The slight increase in the
percentage of real estate loans to total loans is due to a
special program for variable rate loans during the second quarter
at one of our bank subsidiaries.
PAGE
<PAGE>
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the six months ended June 30, 1997
(Dollar amounts in thousands, except share data)
Total shareholders' equity, including the unrealized loss on
securities available for sale, increased $2,500 or 3.46% to
$74,683 at June 30, 1997, from $72,183 at December 31, 1996. The
change in the adjustment for securities available for sale caused
total equity to decrease $201 or .28% at June 30, 1997, from
December 31, 1996. This decrease is the after tax effect of the
mark-to-market adjustment on securities available for sale which
was a positive $109 at June 30, 1997, and was a positive $310 at
December 31, 1996. The Corporation's regulators have issued
guidelines stating that the unrealized gain or loss on securities
available for sale, other than those related to mutual funds (FAS
115 adjustments), should not be included in shareholders' equity
for capital ratio calculations. Total shareholders' equity,
excluding the FAS 115 adjustments, was $71,757 at December 31,
1996, and increased $2,703 or 3.77% to $74,460 at June 30, 1997.
This increase was due to net income of $4,127 less dividends paid
of $1,426 plus $2 related to a decrease in the mark-to-market on
mutual funds.
Capital adequacy in the banking industry is evaluated primarily
by the use of three required capital ratios based on three
separate calculations: Tier 1 Leverage Capital, Tier 1 Capital
and Total Capital. The Corporation's capital ratios at June 30,
1997, and December 31, 1996, were:
June 30, 1997 December 31, 1996
Tier 1 Leverage Capital 10.14% 10.00%
Tier 1 Capital 13.66% 13.26%
Total Capital 14.68% 14.33%
PAGE
<PAGE>
AMBANC CORP.
As of and for the six months ended June 30, 1997
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Other than ordinary routine litigation incidental to the
business, there are no material pending legal proceedings to
which the Corporation or its subsidiaries are a party or of which
any of their property is the subject.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11 Statement of Computation of per share
earnings. The copy of this exhibit filed as
Exhibit 11 to AMBANC's Annual Report on Form
10-K for the year ended December 31, 1996,
is incorporated herein by reference.
27 Financial Data Schedule for June 30, 1997.
(b) No Form 8-K was filed with the SEC during the quarter
ended June 30, 1997.
PAGE
<PAGE>
AMBANC CORP.
As of and for the six months ended June 30, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
AMBANC CORP.
(Registrant)
DATE: August 14, 1997 BY: R. Watson
Robert G. Watson, Chairman of
the Board, President and
Chief Executive Officer
DATE: August 14, 1997 BY: Richard E. Welling
Richard E. Welling, Secretary,
Treasurer and C.F.O.
PAGE
<PAGE>
AMBANC CORP.
As of and for the six months ended June 30, 1997
EXHIBIT INDEX
EXHIBITS PAGE
11 Statement of Computation of per *
share earnings. The copy of this
exhibit filed as Exhibit 11 to
AMBANC's Annual Report on Form 10-K
for the year ended December 31, 1996,
is incorporated herein by reference.
27 Financial Data Schedule for June
30, 1997.
* Incorporated by reference from previously filed
documents.
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000702904
<NAME> AMBANC CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 19,510
<INT-BEARING-DEPOSITS> 397
<FED-FUNDS-SOLD> 2,525
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 161,315
<INVESTMENTS-MARKET> 161,471
<LOANS> 510,147
<ALLOWANCE> 5,475
<TOTAL-ASSETS> 717,009
<DEPOSITS> 628,876
<SHORT-TERM> 6,057
<LIABILITIES-OTHER> 5,425
<LONG-TERM> 1,968
0
0
<COMMON> 33,142
<OTHER-SE> 41,541
<TOTAL-LIABILITIES-AND-EQUITY> 717,009
<INTEREST-LOAN> 11,343
<INTEREST-INVEST> 2,420
<INTEREST-OTHER> 149
<INTEREST-TOTAL> 13,935
<INTEREST-DEPOSIT> 6,987
<INTEREST-EXPENSE> 7,084
<INTEREST-INCOME-NET> 6,851
<LOAN-LOSSES> 315
<SECURITIES-GAINS> 19
<EXPENSE-OTHER> 4,723
<INCOME-PRETAX> 2,916
<INCOME-PRE-EXTRAORDINARY> 2,916
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,012
<EPS-PRIMARY> .60
<EPS-DILUTED> .60
<YIELD-ACTUAL> 4.02
<LOANS-NON> 1,242
<LOANS-PAST> 973
<LOANS-TROUBLED> 3,882
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,422
<CHARGE-OFFS> 344
<RECOVERIES> 82
<ALLOWANCE-CLOSE> 5,475
<ALLOWANCE-DOMESTIC> 1,891
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 3,584
</TABLE>
