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, 1995
COMMISSION FILE NUMBER 0-12422
INDIANA UNITED BANCORP
(Exact name of registrant as specified in its charter)
INDIANA 35-1562245
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 NORTH BROADWAY GREENSBURG, INDIANA 47240
(Address of principal executive offices) (Zip Code)
(812) 663-4711
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report.)
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
As of June 30, 1995 there were outstanding 1,250,897 shares,
without par value of the registrant.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
INDEX
Page
No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Balance Sheet............. 3
Consolidated Condensed Statement of Income....... 4
Consolidated Condensed Statement of Changes in
Shareholders' Equity............................. 5
Consolidated Condensed Statement of Cash Flows... 6
Notes to Consolidated Condensed Financial
Statements....................................... 7-9
Item 2. Managment's Discussion and Analysis of Financial
Condition and Results of Operations.............. 10-24
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................. 25
Signatures................................................ 26
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited)
(Dollars in Thousands)
<CAPTION>
June 30 Dec. 31
1995 1994
<S> <C> <C>
ASSETS
Cash and Due From Banks................. 9,920 8,549
Interest-bearing Demand Deposits........ 100 156
Federal Funds Sold...................... 7,000 2,875
Cash and Cash Equivalents............. 17,720 11,580
Interest-bearing Time Deposits.......... 47 147
Securities:
Available for sale.................... 80,139 83,839
Held to Maturity...................... 7,764 8,115
Total Securities.................... 87,903 91,954
Loans:
Loans................................. 200,268 194,736
Less: Allowance for Loan Losses...... 2,722 2,784
Net Loans........................... 197,546 191,952
Premises & Equipment.................... 5,837 5,460
Federal Home Loan Bank Stock............ 1,138 1,138
Core Deposit Intangibles................ 162 182
Accrued Interest Receivable............. 1,960 1,896
Other Real Estate....................... 0 100
Other Assets............................ 898 1,638
Total Assets........................ 313,211 306,047
LIABILITIES
Deposits:
Non-Interest Bearing.................. 27,673 28,360
Interest Bearing...................... 232,662 233,011
Total Deposits...................... 260,335 261,371
Short-Term Borrowings................... 15,986 10,801
Long-Term Debt.......................... 6,500 7,500
Accrued Interest Payable................ 1,156 864
Other Liabilities....................... 1,851 1,229
Total Liabilities................... 285,828 281,765
SHAREHOLDERS' EQUITY
Preferred Stock, No Par Value:
Authorized--400,000 Shares
Issued and Outstanding-22,000 and
24,000 Shares........................ 2,200 2,400
Common Stock $1 Stated Value:
Authorized--3,000,000 Shares
Issued and Outstanding--1,250,897
Shares............................... 1,251 1,251
Paid-In Surplus......................... 10,677 10,677
Valuation Adj-Securities AFS............ (22) (2,641)
Retained Earnings....................... 13,277 12,595
Total Shareholders' Equity.......... 27,383 24,282
Total Liabilities and
Shareholders' Equity.............. 313,211 306,047
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
INDIANA UNITED BANCORP
<TABLE>
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(Dollars in Thousands)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest Income:
Loans, Including Fees 4,173 3,991 8,148 7,845
Securities:
Taxable 1,360 1,470 2,808 2,997
Tax-Exempt 57 57 116 122
Federal Funds Sold 66 42 68 65
Interest-Bearing Deposits 2 6 3 9
Total Interest Income 5,658 5,566 11,143 11,038
Interest Expense:
Deposits 2,560 2,453 4,882 4,983
Short-Term Borrowings 259 93 530 162
Long-Term Debt 167 156 332 297
Total Interest Expense 2,986 2,702 5,744 5,442
Net Interest Income 2,672 2,864 5,399 5,596
Provision for Loan Losses 6 42 9 85
Net Interest Income After
Provision for Loan Losses 2,666 2,822 5,390 5,511
Noninterest Income:
Securities Gains (Losses) 10 (173) 11 (152)
Other Operating Income 420 404 769 777
Total Other Income 430 231 780 625
Noninterest Expense 2,103 2,364 4,266 4,661
Income Before Income Tax 993 689 1,904 1,475
Less Income Tax Expense 392 272 750 576
Net Income 601 417 1,154 899
Per Common Share:
Net Income 0.45 0.30 0.86 0.65
Cash Dividends Declared 0.16 0.15 0.32 0.29
Average Common Shares
Outstanding 1,250,897 1,250,897 1,250,897 1,250,897
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
<TABLE>
CONSOLIDATED CONDENSED STATEMENT OF CHANGES TO SHAREHOLDERS' EQUITY
(Unaudited)
(Dollars in Thousands)
<CAPTION>
1995 1994
<S> <C> <C>
Balance, January 1............................. 24,282 25,203
Net income..................................... 1,154 899
Cumulative effect of change in method of
accounting for securities.................... 846
Net change in unrealized loss on securities
available for sale........................... 2,619 (2,281)
Redemption of preferred stock.................. (200) (300)
Cash Dividends:
Preferred stock.............................. (73) (81)
Common stock................................. (399) (330)
Balance, June 30............................... 27,383 23,956
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
<TABLE>
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
<CAPTION>
Six Months Ended
June 30
1995 1994
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income................................... 1,154 899
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses.................. 9 85
Depreciation and amortization.............. 316 324
Premiums and discounts amortization
on investment securities................. 35 64
Accretion of loan and deposit fair
value adjustments........................ 68 69
Amortization of core deposit intangibles... 20 23
Securities gains......................... (11) 152
Decrease in interest receivable............ (64) 17
Decrease in interest payable............... 292 (41)
Other adjustments.......................... 1,593 73
Net cash provided by operating activities 3,412 1,665
Cash Flows From Investing Activities:
Proceeds from interest-bearing time deposits
maturities................................. 56 (4)
Purchases of securities available for sale... (8,430) (20,486)
Proceeds from maturities of securities
available for sale......................... 1,376 16,218
Proceeds from sales of securities available
for sale................................... 10,754 17,719
Proceeds from maturities of securities held
to maturity................................ 351 0
Net change in loans.......................... (5,532) (4,461)
Purchases of premises and equipment.......... (693) (141)
Proceeds from other real estate.............. 100 966
Other investment activities.................. 2,269 (624)
Net cash provided by
investing activities 251 9,187
Cash Flows From Financing Activities:
Net change in:
Non-interest bearing,NOW, money market and
savings deposits......................... (6,629) (7,989)
Certificates of deposit.................... 5,593 (11,097)
Short-term borrowings...................... 5,185 3,139
Payments on long-term debt................. (1,000) (850)
Redemption of preferred stock.............. (200) (300)
Cash dividends............................. (472) (411)
Net cash provided (used) by financing
activities........................... 2,477 (17,508)
Net increase (decrease) in Cash and
Cash Equivalents............................. 6,140 (6,656)
Cash and Cash Equivalents, Beginning of Period. 11,580 15,533
Cash and Cash Equivalents, End of Period....... 17,720 8,877
</TABLE>
See notes to consolidated condensed financial statements.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Table Dollar Amounts in Thousands)
NOTE 1.
The significant accounting policies followed by Indiana United Bancorp
("Company") and its subsidiaries, Union Bank and Trust Company of Indiana
("Union Bank") and Regional Federal Savings Bank ("Regional Bank") for
interim financial reporting are consistent with the accounting policies
followed for annual financial reporting. Effective July 1, 1994 the Company
merged Union Bank and Turst Company of Greensburg and Peoples Bank, Portland
and named the combined institution Union Bank and Trust Company of Indiana.
All adjustments, consisting only of normal recurring adjustments, which in
the opinion of management are necessary for a fair presentation of the
results for the periods reported, have been included in the accompanying
consolidated financial statements. The results of operations for the six
months ended June 30, 1995 are not necessarily indicative of those expected
for the remainder of the year.
<TABLE>
NOTE 2.
<CAPTION>
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Securities Available for Sale
at June 30, 1995
U.S. Treasury................... $ 3,020 $ 10 $ 23 $ 3,007
Federal Agencies................ 9,868 7 184 9,691
State and Municipal............. 1,727 13 4 1,736
Corporate and other securities.. 1,444 -- 74 1,370
Mortgage-backed securities...... 63,992 706 363 64,335
Totals..................... $80,051 $ 736 $ 648 $ 80,139
</TABLE>
<TABLE>
<CAPTION>
Gross Gross Approximate
Amortized Unrelaized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Securities Available for Sale
at December 31, 1994
U.S. Treasury................... $ 3,221 $ 138 $ 3,083
Federal Agencies................ 9,921 $ 6 629 9,298
State and Municipal............. 2,064 11 15 2,060
Corporate and other securities.. 2,590 2 89 2,503
Mortgage-backed securities...... 70,281 35 3,421 66,895
Totals..................... $88,077 $ 54 $ 4,292 $ 83,839
</TABLE>
<TABLE>
<CAPTION>
Beyond
Within 1-5 5-10 10
Maturity Distributions at 1 Year Years Years Years Totals
June 30, 1995
<S> <C> <C> <C> <C> <C>
U.S. Treasury.................... $ 996 $ 2,011 $ 3,007
Federal Agencies................. 1,005 8,503 $ 183 9,691
State and Municipal.............. 1,140 541 55 1,736
Corporate and other securities... 864 $ 506 1,370
Mortgage-backed securities....... 124 5,442 5,078 53,691 64,335
Totals......................... $4,129 $16,497 $ 5,316 $54,197 $ 80,139
Weighted average yields.......... 6.21% 5.12% 7.78% 6.39% 6.27%
</TABLE>
*Amounts in the tables above are based on scheduled maturity or call dates.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
<TABLE>
NOTE 3.
<CAPTION>
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Securities Held to Maturity
at June 30, 1995
U.S. Treasury.................. $ -- $ -- $ -- $ --
Federal Agencies............... 1,100 -- 21 1,079
State and Municipal............ 2,838 36 -- 2,874
Corporate and other Securities. -- -- -- --
Mortgage-backed securities..... 3,826 115 82 3,859
Totals.................... $ 7,764 $ 151 $ 103 $ 7,812
Securities Held to Maturity
December 31, 1994
U.S. Treasury.................. $ -- $ -- $ -- $ --
Federal Agencies............... 1,100 -- 32 1,068
State and Municipal............ 3,012 -- 76 2,936
Corporate and other securities. -- -- -- --
Mortgage-backed securities..... 4,003 -- 307 3,696
Totals.................... $ 8,115 $ -- $ 415 $ 7,700
</TABLE>
<TABLE>
<CAPTION>
Beyond
Within 1-5 5-10 10
Maturity Distribution at 1 Year Years Years Years Totals
June 30, 1995
<S> <C> <C> <C> <C> <C>
U.S. Treasury.................. $ -- $ -- $ -- $ -- $ --
Federal Agencies............... -- 1,100 -- -- 1,100
State and Municipal............ 322 770 1,746 -- 2,838
Corporate and other securities. -- -- -- -- --
Mortgage-backed securities..... -- 111 59 3,656 3,826
Totals....................... $ 322 $ 1,981 $ 1,805 $ 3,656 $ 7,764
Weighted average yields........ 6.55% 6.03% 7.24% 6.55% 6.58%
</TABLE>
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
<TABLE>
NOTE 4.
<CAPTION>
June 30 December 31
1995 1994
<S> <C> <C>
Loans:
Commercial.............................. $ 10,813 $ 7,595
Agricultural production financing
and other loans to farmers............ 10,144 7,859
Farm real estate........................ 29,670 28,358
Commercial real estate mortgage......... 24,217 25,619
Residential real estate mortgage........ 99,848 101,455
Construction and development............ 7,220 7,161
Consumer................................ 16,165 13,870
Government guaranteed loans purchased... 2,191 2,819
Total loans........................... $ 200,268 $ 194,736
Underperforming loans:
Nonaccruing loans $ 1,089 $ 1,030
Accruing loans contractually past
due 90 days or more as to principal
or interest payments 78 113
Restructured loans -- --
NOTE 5.
Deposits:
Noninterest bearing $ 27,673 $ 28,360
NOW accounts 31,617 35,085
Money market deposit accounts 33,919 39,550
Savings 26,791 23,857
Certificates of deposit $100,000 or more 20,084 16,420
Other certificates and time deposits 120,251 118,099
Total deposits $ 260,335 $ 261,371
NOTE 6.
Short-Term Borrowings:
Federal funds purchased
Securities sold under
repurchase agreements $ 11,163 $ 9,977
U.S. Treasury demand notes 1,823 824
Federal Home Loan Bank Advances 3,000 --
Total short-term borrowings $ 15,986 $ 10,801
</TABLE>
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Indiana United Bancorp is headquartered in Greensburg, Indiana and
is presently engaged in conducting banking business through the
twelve offices of its subsidiaries. The Company and the subsidiary
banks are subject to applicable federal and state laws as well as
regulations of the Federal Reserve Board, the Federal Deposit
Insurance Corporation, the Office of Thrift Supervision and the
Indiana Department of Financial Institutions.
Strategic Plan
In 1993, the Company formulated a strategic plan ("plan") designed
to improve the Company's financial performance, increase its
competitive ability and enhance long-term shareholder value. The
plan is premised on the belief of the Company's board of directors
that the Company can best promote long-term shareholder interests
by continuing as an independently owned community banking
organization.
In connection with the plan, the Company initiated significant
actions in 1994. At mid year, it consolidated the operation of its
two commercial banking subsidiaries to form Union Bank and Trust
Company of Indiana ("Union Bank"), while retaining Indiana state
banking charter #1. This subsidiary primarily serves customers
located in, and contiguous to, Decatur and Jay counties. In late
October, the Company sold three unprofitable branches of Regional
Federal Savings Bank ("Regional Bank") which were not located in
its primary service area of Floyd and Clark counties. The Company
believes each of these actions will increase its operating
efficiency and the latter will improve its net interest margin.
The plan also focused on improving net interest margin by reducing
the Company's dependence on expensive, non-core deposits. As
anticipated, these actions resulted in a substantial decline in
deposits based upon year end comparisons of 1994 and 1993.
A current objective of the plan is the rebuilding of a strong
customer base from within the primary markets now served by the
Company through the establishment of new branches by both Union
Bank and Regional Bank. Entry into new markets will be pursued
through exploration of acquisition opportunities. A continuing
tenet of the plan is to establish more pro-active relationships
with market makers and financial analysts.
The plan was revised in 1994 to include the adoption during the
first half of 1995 of a sales philosophy supported by a performance
based employee incentive program. The dynamics of the plan assure
continually evolving objectives, and the extent of the Company's
success will depend upon how well it anticipates and responds to
competitive changes within its markets, the interest rate
environment and other external forces.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Results of Operations
Second quarter 1995 income increased 44.1% to $601,000 as compared
to the same quarter last year. Earnings for the first half of 1995
increased 28.4% to $1,154,000 as compared to the same period in
1994. Gross gains on the sale of securities of20202 $10,000 were
realized in the second quarter of 1995 as compared to gross losses
of $173,000 in the same prior year period. Non-interest income in
the first half of 1995 has been somewhat negatively impacted by the
restructuring and relocation of the Company's Jay County insurance
operations. The reduction in non-interest expense reflects a
portion of the annual savings expected to be fully realized in 1995
and beyond due to the merger of Union Bank and Peoples Bank in mid
1994 and the sale of Regional Bank's branches in late 1994.
Net income per common share was $.45 in the second quarter of 1995
compared to $.30 for the same period in 1994. Per share earnings
for the first half of 1995 and 1994 were $.86 and $.65
respectively. The Company's second quarter return on average
total assets was .79% in 1995 and .49% in 1994. Year-to-date return
on average total assets was .76% and .53% for 1995 and 1994.
Return on average shareholders' equity was 9.23% and 6.87% for the
second quarter of 1995 and 1994 respectively. Year-to-date return
on average shareholders' equity was 9.21% and 7.26% respectively
for 1995 and 1994.
Net Interest Income
Net interest income is influenced by the volume and net yield of
earning assets and the cost of interest-bearing liabilities. Net
interest margin reflects the mix of interest-bearing and non-
interest bearing liabilities that fund earning assets, as well as
interest spreads between the rates earned on these assets and the
rates paid on interest-bearing liabilities. Net interest income of
$5,399,000 in the first half of 1995 decreased $197,000 from
$5,596,000 in the first half of 1994, a decline of 3.5%.
In the first six months of 1995, the Company's net interest margin
was 3.74% compared to 3.45% in the same 1994 period, reflecting an
increase of 29 basis points. Several changes in the investment
portfolio were made primarily in the first half of 1994 to improve
portfolio duration and reduce extension risk. Yield improvement
began to impact earnings in the last half of 1994 and has continued
somewhat in 1995.
The Company has traditionally offered low-rate loans to attract
high performance borrowers. The Company has prospered under this
philosophy and loan quality measurements have consistently exceeded
peer group averages. Conversely, the Company's net interest margin
has consistently not attained peer group average.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Provision for Loan Losses
The determination of the provision in any period is based on
management's continuing review and evaluation of loan loss
experience, changes in the composition of the loan portfolio,
current economic conditions and the amount of loans outstanding.
Net charge-offs increased in the second quarter of 1995 compared to
the similar 1994 period. Net charge-offs of $71,000 were realized
compared to $11,000 in net recoveries for the same period in 1994.
Further analysis is provided in the following tables.
<TABLE>
<CAPTION>
Summary of Allowance for Loan Losses
(Dollars in Thousands)
1995 Year Ended
thru December 31,
June 30 1994
<S> <C> <C>
Balance at beginning of period $2,784 $2,682
Chargeoffs:
Commercial 53 6
Real-estate mortgage 38 65
Installment 10 21
Total chargeoffs 101 92
Recoveries:
Commercial 1 37
Real-estate mortgage 27 15
Installment 2 27
Total recoveries 30 79
Net Chargeoffs 71 13
Provision for loan losses 9 115
Balance at end of period $2,722 $2,784
Ratio of net chargeoffs to average
loans outstanding during the period .04% .01%
Ratio of provision for loan losses to average
loans outstanding during the period -- .06%
Ratio of allowance to total loans at
end of period 1.36% 1.43%
</TABLE>
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
<TABLE>
<CAPTION>
Allocation of the Allowance for Loan Losses
(Dollars in Thousands)
June 30, 1995 December 31, 1994
Amount Percent Amount Percent
<S> <C> <C> <C> <C>
Real estate:
Residential $ 139 5% $ 146 5%
Agricultural 15 -- 14 1
Commercial 620 23 702 25
Construction and development 80 3 52 2
Total real estate 854 31 914 33
Commercial:
Agribusiness 127 5 151 5
Other commercial 135 5 131 5
Total commercial 262 10 282 10
Consumer 81 3 66 2
Unallocated 1,525 56 1,522 55
Total $ 2,722 100% $ 2,784 100%
</TABLE>
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Noninterest Income
Noninterest income increased $155,000 or 25% in the first six
months of 1995 as compared to 1994, primarily due to gains on the
sale of investment securities as compared to net losses in 1994.
Insurance income decreased $20,000 or 7% from the previous year
first six months. In mid 1994, Jay County insurance operations were
completely restructured and relocated to a remodeled full service
branch office. As a result of these disruptions, the volume of
insurance commissions have declined. Trust fees for the first six
months have remained stable as compared to the prior year. Estate
administration represents a substantial portion of trust income and
the level of estate assets administered may cause total trust
income to flucuate significantly. Service charges on deposit
accounts decreased $22,000 or 9% as compared to the same period
last year due to higher earnings credits in 1995 offsetting account
charges on commercial accounts. Other noninterest income increased
31% to $188,000.
Net gains on sales of investment securities were $11,000 for the
first six months of 1995 compared to a $152,000 loss in 1994. The
sale of securities in 1995 for the first six months resulted in
$156,000 in gross gains and $145,000 in gross losses. In the same
period for 1994, $24,000 in gross gains had been recognized and
$176,000 in gross losses. Since the market value of the investment
portfolio has increased dramatically since year end 1994, any
additional sales will likely not result in any material gains or
losses. The Company and its subsidiaries do not speculate in the
junk bond market.
<TABLE>
<CAPTION>
(Dollars in Thousands) 1995 1994
2nd Qtr. 1st Half 2nd Qtr. 1st Half
<S> <C> <C> <C> <C>
Insurance commissions $ 155 $ 258 $ 150 $ 278
Turst fees 50 100 54 110
Service charges on deposit
accounts 114 223 124 245
Gains (losses) on sales of
securities 10 11 (173) (152)
Other income 101 188 76 144
$ 430 $ 780 $ 231 $ 625
</TABLE>
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
<TABLE>
<CAPTION>
AVERAGE BALANCE SHEET AND NET INTEREST ANALYSIS
(Taxable Equivalent Basis)*<F1> Six Months Ended
June 30, 1995 June 30, 1994
Avg. Yield/ Avg. Yield/
Bal. Interest Rate Bal. Interest Rate
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-bearing deposits 147 3 4.12% 530 9 3.42%
Federal funds sold 2,262 68 6.06% 3,625 65 3.62%
Securities:
Taxable 90,191 2,808 6.23% 112,361 2,997 5.33%
Tax-exempt 4,641 166 7.15% 4,568 185 8.10%
Total securities 94,832 2,974 6.27% 116,929 3,182 5.44%
Loans:**<F2>
Commercial 63,566 2,956 9.38% 65,523 2,760 8.49%
Real estate mortgage 115,404 4,252 7.37% 124,194 4,256 6.85%
Installment 14,532 831 11.53% 14,029 740 10.55%
Government guaranteed
loans purchased 2,633 109 8.35% 3,171 89 5.66%
Total loans 196,135 8,148 8.34% 206,917 7,845 7.61%
Total earning assets 293,376 11,193 7.69% 328,001 11,101 6.80%
Allowance for loan losses (2,733) (2,727)
Unrealized losses on
securities (1,920) (5)
Cash and due from banks 7,426 7,710
Premises and equipment 5,658 6,530
Other assets 3,342 4,609
Total assets 305,149 344,118
LIABILITIES
Interest bearing deposits:
NOW and Super NOW
accounts 31,157 418 2.71% 36,530 412 2.27%
Money market investment
accounts 36,213 639 3.56% 45,336 600 2.67%
Savings 25,070 391 3.15% 29,415 376 2.58%
Certificates of deposit
and other time
deposits 134,808 3,434 5.14% 161,639 3,595 4.49%
Total interest bearing
deposits 227,248 4,882 4.33% 272,920 4,983 3.68%
Short-term borrowings 17,788 530 6.01% 9,836 162 3.32%
Long-term debt 7,411 332 9.03% 9,118 297 6.57%
Total interest bearing
liabilities 252,447 5,744 4.59% 291,874 5,442 3.76%
Noninterest bearing demand
deposits 23,837 23,526
Other liabilities 2,894 3,451
Total liabilities 279,178 318,851
Shareholders' equity 25,971 25,267
Total liabilities and<F3> ***
shareholders' equity 305,149 5,744 3.95% 344,118 5,442 3.35%
Net interest income 5,449 3.74% 5,659 3.45%
Adjustment to convert tax exempt
securities and loans to a fully
taxable equivalent basis using
a marginal rate of 34% 50 63
<FN>
<F1>* Adjusted to reflect income related to securities and loans exempt from
Federal income taxes reduced by nondeductible portion on interest
expenses.
<F2>** Nonaccruing loans have deen included in the average balances.
<F3>*** Total interest expense divided by total earning assets.
</TABLE>
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Noninterest Expenses
Personnel expenses have decreased $126,000 or approximately 5% in
the first half of 1995 as compared to the same period in 1994.
Personnel expense reductions experienced with the merging of Union
Bank and Peoples Bank and the sale of Regional Bank's branches have
been partially negated by additional staffing needed in the new
branches by both organizations. The Company and its subsidiaries
have determined they have no postretirement or postemployment
benefit funding liability.
Professional fees decreased $109,000 in 1995 compared to the prior
year first six months due to a reduction in amounts paid to the
investment advisor retained by the Company in 1994. Deposit
insurance was $59,000 less in 1995 than the same six month period
last year due to a lower volume of deposits on which the insurance
premium is calculated. All subsidiaries are currently in the
lowest risk category and are assessed at the lowest rate. The FDIC
has recently adopted a rule that will reduce premiums by 82.6% for
deposit insurance paid for by commercial banks. This decrease
translates into an annual savings of approximately $300,000. The
FDIC has also decided to retain the current premium rates paid by
thrift institutions, and is currently evaluating several proposals
for the recapitalization of SAIF. The impact of these proposals on
the Company has yet to be determined. All other noninterest
expenses decreased $101,000 in the first six months of 1995 as
compared to the prior year period, primarily as a result of
reductions in various other expense categories as the efficiencies
of the merger and effects of the branch sales are realized.
<TABLE>
<CAPTION>
(Dollars in Thousands) 1995 1994
1st 1st
2nd Qtr Half 2nd Qtr Half
<S> <C> <C> <C> <C>
Salaries and employee $1,113 $2,242 $1,182 $2,368
benefits
Premises and equipment 369 750 390 770
expenses
Professional fees 53 116 147 225
Amortization of core deposit
intangibles 10 20 11 23
Deposit insurance/supervisory 161 322 190 381
assessment
Stationary, printing, supplies 78 151 89 172
Insurance 33 68 35 70
Postage 48 98 53 110
Other operating expenses 238 499 267 542
$2,103 $4,266 $2,364 $4,661
</TABLE>
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Income Taxes
Income tax expense for the first six months of 1995 was $750,000
compared to $576,000 for the same period in 1994, and the effective
tax rates are approximately 39% for both years.
The Company and its subsidiaries will file a consolidated federal
income tax return in 1995. The increase in tax expense in 1995
compared to 1994 is primarily attributable to the increase in
taxable income.
Effects of Changing Prices
Changing prices of goods, services, and capital affect the
financial position of every business enterprise. The level of
market interest rates and the price of funds loaned or borrowed
fluctuate due to changes in the rate of inflation and various other
factors, including government monetary policies. Fluctuating
interest rates affect the Company's net interest income and loan
volume.
Financial Condition
Total assets and average assets and the components of these assets
reflect decreases attributable to the sale of Regional Bank's
branches in late October, 1994. In connection with the sale, total
assets were reduced by approximately $24,000,000 consisting
primarily of loans of $13,350,000, fixed assets of $1,150,000 and
securities of $9,500,000 sold to fund the sale. Total deposits
were affected by a comparable aggregate amount.
In the first half of 1995 assets decreased to $313,211,000 from
$336,948,000 at June 30, 1994. Assets averaged $305,149,000, a
decrease of $38,969,000 from the first six months of 1994. Assets
declined at both subsidiaries because the Company chose not to
acquire deposits at interest rates offering unacceptable margins to
fund investment activities. Consequently, new deposit pricing
strategies resulted in reduced deposit and investment totals.
Average earning assets represented 95% of average total assets for
both periods.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Average interest-bearing deposits decreased $45,672,000 or 17% in
the first half of 1995 compared to 1994, as a result of revised
deposit pricing strategies and the sale of branches. Time deposits
obtained within the local markets provide the primary source of
funding for earning assets. Noninterest-bearing demand deposits
have remained stable for both 1995 and 1994 periods. Long-term
debt of $6,500,000 is the Company's loan for the purchase of
Regional Bank and Union Bank and is secured by the capital stock of
the Company's subsidiaries. The Company prepaid $625,000 of the
long-term debt in June 1995. Interest is variable with the
lender's prime rate. The Company believes it has complied with all
terms and covenants of the loan agreement.
Shareholders' equity at June 30, 1995 is greatly impacted by the
Company's decision to categorize a large portion of its securities
portfolio as "available for sale" under accounting rules adopted
January 1, 1994. Securities in this category are carried at market
value, and shareholders' equity is adjusted to reflect unrealized
gains and losses.
Shareholders' equity was $27,383,000 on June 30, 1995, compared to
$23,956,000 in 1994. Book value per common share increased to
$20.13 or 17% from $17.23 at June 30, 1994. The unrealized loss on
securities available for sale after tax effect totaled $22,000 or
$.02 per share on June 30, 1995. Excluding the net unrealized loss
on securities available for sale, book value per share was $20.15
or an increase of 9.6% over the book value at June 30, 1994. A 10%
common stock dividend was issued to shareholders of record in
December 1994. The Company redeemed $200,000 of its preferred
stock in 1995 and $300,000 in 1994. The Company may redeem
additional preferred stock later in 1995.
Loans and Credit Risk Management
Loans remain the Company's largest concentration of assets and
continue to represent the greatest risk. The Company's commercial
banking subsidiaries have observed conservative loan underwriting
standards for several years, historically resulting in high levels
of loan quality and nominal net chargoffs as measured against peer
group averages. Total loans at June 30, 1995 were $200,268,000, a
decrease of $9,701,000 or 4.6% as compared to June 30, 1994.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Underperforming assets, including $1,167,000 in nonaccrual,
restructured and certain other loans, and zero in other real estate
owned, totaled $1,167,000 at June 30, 1995, compared to $259,000
and $969,000 at June 30, 1994. Underperforming loans of the
Company as of June 30, 1995 were .6% of total loans, approaching
its pre-acquisition loan quality standards.
The loan underwriting standards observed by each of the Company's
subsidiaries are viewed by management as a deterrent to the
reemergence of an abnormal level of problem loans and a subsequent
increase in net chargeoffs. In 1995, the Company intends to expand
its consumer loan portfolio, emphasizing automobile financing.
This strategy is intended to provide greater diversification within
the portfolio and should generate higher yields than residential
real estate loans.
The Company regards its ability to identify and correct loan
quality problems as one of its greatest strengths. Loans are
placed in a nonaccruing status when in management's judgement the
collateral value and/or the borrower's financial condition do not
justify accruing interest. As a general rule, a loan is
reclassified to nonaccruing status when it becomes 90 days past
due, if not earlier. Interest previously recorded but not deemed
collectible is reversed and charged against current income.
Interest income on these loans is then recognized when collected.
Net chargeoffs for the last several years for the commercial bank
subsidiaries have been significantly below peer group averages.
Regional Bank's credit losses were substantially greater than its
preaquisition experience, when its policies did not encourage early
detection and elimination of problem loans. Management believes
the present loans at Regional Bank contain a substantially reduced
level of credit risk and that total chargeoff activity in 1995 will
be substantially less than in prior years.
The ability to absorb loan losses promptly when problems are
identified is invaluable to a banking organization. Most often,
losses incurred as a result of quick action are much lower than
losses incurred after prolonged legal preceedings.
The adequacy of the allowance for loan losses in each subsidiary is
reviewed at least monthly. This review specifically considers past
credit loss history, present levels of delinquency and other
nonperformance measurements, current economic conditions, adequacy
of collateral positions, borrower repayment capacity and regulatory
examination findings.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
A management watch list of loans warranting either the assignment
of a specific reserve amount or other special administrative
attention is also reviewed monthly, as are all classified loans,
nonaccrual loans and loans delinquent 30 days or more. The
allowance for loan losses as of June 30, 1995 is considered
adequate by management.
Securities
Securities are the primary means by which the Company manages
interest-rate risk, provides liquidity and responds to changing
maturity characteristics of assets and liabilities. The Company's
investment policy prohibits establishing a trading account and does
not allow investment in high risk derivative products or junk
bonds.
Effective January 1, 1994, the Company adopted new accounting rules
for investment securities. The new rules require that each
security must be individually designated as a trading security,
hold to maturity (HTM) security, or available for sale (AFS)
security.
"Trading" securities are bought and held primarily for sale in the
near term and are carried at fair vale, with unrealized gains and
losses included in earnings.
As of June 30, 1995 the Company has designated $7,764,000 in HTM
securities, confirming its interest and ability to hold to
maturity. HTM securities are carried at amortized cost.
At the end of the first half of 1995, the Company classified
$80,139,000 or 92% of total securities as AFS. In the same period
last year, $102,652,000 in securities were designated as AFS
representing approximately 93% of total securities. AFS securities
are carried at fair value with unrealized gains and losses excluded
from earnings and reported as a separate component of shareholders'
equity.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
The Company's decision to categorize a much larger portion of its
securities portfolio as AFS than its peer group was influenced by
its desire to reflect as accurately and fairly as possible the true
value of its assets. In addition, AFS securities provide far
greater management flexibility in responding to changes within
financial markets. Although the designation of a large portion of
securities as AFS by the Company creates capital volatility, the
Company's strong capital and liquidity positions suggest that such
volatility will not impair the Company's ability to achieve
financial objectives.
Source of Funds
No recommendations by regulatory authorities exist which would
materially affect liquidity, capital resources or operations.
Earning assets are funded by deposits, securities sold under
repurchase agreements, long-term debt and shareholders' equity.
The major source of funding for earning assets comes from
interest-bearing deposits generated within local markets. Total
interest-bearing deposits averaged 91% and 92% of total deposits as
of June 30, 1995 and 1994 respectively. Noninterest-bearing
deposits provided a secondary funding source.
Securities sold under repurchase agreements ("repos") are not
subject to FDIC assessment and generally involve less cost than
large certificates of deposit. Repos are high denomination
investments utilized by public entities and commercial customers as
an important element of their cash management responsibilities.
The Company intends to increase repos and other short-term
borrowings throughout 1995. Repurchase agreements averaged
$9,492,000 for the first six months of 1995, and $7,635,000 in the
same period of 1994.
Long-term debt decreased to $6,500,000 at the end of June 30, 1995,
a $2,025,000 decrease as compared to the same period last year.
The Company incurred additional debt to consummate the aquisition
of Regional Bank in 1991. The Company prepaid $625,000 on long-
term debt in the first half of 1995 and $500,000 in the first half
of 1994.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Capital Resources
The Company's total shareholders' equity was $27,383,000 at June
30, 1995, and includes $2,200,000 of preferred stock. The Company
redeemed $200,000 of the preferred stock in the first quarter of
1995 and $300,000 in 1994.
The Federal Reserve Bank has adopted risk-based capital quidelines
which assign risk weightings to assets and off-balance sheet items.
Core capital (Tier 1) consists principally of shareholders' equity
less goodwill, while total capital consists of core capital,
certain debt instruments and a portion of the allowance for credit
losses. At June 30, 1995, Tier 1 capital to total assets was 8.6%
and total capital to total assets was 9.3%. Total capital to
risk-adjusted assets was 16.5%, substantially exceeding the
requirements of 8%.
The Company declared and paid second quarter common dividends of
$.16 per share in 1995 and $.15 in 1994. Book value per common
share increased 17% to $20.13 from $17.23 on June 30, 1994 based on
common equity, net of unrealized losses of $22,000 on AFS
securities. The net adjustment for AFS securities reduced book
value by $.02 at June 30, 1995. Depending on market conditions,
the adjustments for AFS securities can cause significant
fluctuations in equity and make meaningful comparisons between
periods difficult. The dividend payment rate on preferred stock
was 6.34% during the past two years. A 10% stock dividend was
issued prior to year end to recordholders on December 20, 1994.
Liquidity
The primary obligation of the Company's asset/liability management
is maximizing earnings by safely and profitably managing net
interest income through responsible development of deposit accounts
and deployment of funds. This objective is accomplished by
responding to frequent fluctuations in market rates of interest due
to changes in economic conditions and consumer demands.
As of June 30, 1995, management increased cash and cash equivalents
with cash inflows from operating, investing and financing
activities.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
The objective of the Company's liquidity management is to provide
adequate levels of funding to meet unexpected deposit withdrawals
and changes in loan demand. This goal is accomplished by
maintaining a source of liquidity consisting of payments received
from amortizing and maturing assets and the capacity to raise funds
through deposits and borrowed funds.
On June 30, 1995, the Company had approximately $204,409,000 in one
year interest-sensitive assets, comprised of securities, loans, and
time deposits. The Company's main source of funding earning assets
came from core deposits. Average core deposits funded
approximately 77% of total earning assets at June 30, 1995.
The Company's interest rate sensitivity analysis for the period
ended June 30, 1995, appears in the following table. Effective
asset and liability management requires the maintenance of a proper
ratio between maturing or repriceable interest-earning assets and
interest-bearing liabilities. It is the policy of the Company that
rate-sensitive assets less rate-sensitive liabilities to total
assets be kept within a range of 80% to 130%. The Company desires
to maintain a slightly negative gap when rates are declining and a
slightly positive gap when rates are increasing.
The Company is currently pursuing a strategy to attain a neutral to
a slightly negative gap position in the belief that the current
interest rate cycle is near its peak. In any event, the Company
does not anticipate that its earnings will be materially impacted
in 1995 regardless of the direction interest rates may trend.
<TABLE>
<CAPTION>
Rate Sensitivity Analysis at June 30, 1995
Maturing or Repricing
Over 3-
3 Months 1 Year 3 Years 5 Years
<S> <C> <C> <C> <C>
Rate-sensitive assets $84,372 $120,037 $ 39,709 $ 21,569
Rate-sensitive liabilities 77,482 82,789 65,156 28,212
Rate sensitivity gap (assets less $ 6,890 $ 37,248 $(25,447) $( 6,643)
liabilities)
Rate sensitivity gap (cum. $ 6,890 $ 44,138 $ 18,691 $ 12,048
Percent of total assets (cum.) 2.2% 14.1% 6.0% 3.8%
Rate-sensitive assets/liabilities (cum.) 108.9% 127.5% 108.3% 104.8%
</TABLE>
*Interest-bearing transaction and savings accounts are not presented as
immediately repriceable in the above table.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
Future Accounting Changes
The Company has determined that it and its subsidiaries have no
postretirement or postemployment benefit funding liabilities under
SFAS No. 106, Employers Accounting For Postretirement Benefits
Other Than Pensions, or SFAS No. 112, Employers Accounting for
Postemployment Benefits.
SFAS No. 114, Accounting by Creditors for Impairment of a Loan, and
SFAS No. 118, Accounting by Creditors for Impairment of a Loan-
Income Recognition and Disclosures, eliminates inconsistencies in
the accounting among different types of creditors for loans with
similar collection problems by requiring a single method for
measuring impaired loans. The Company adopted this standard on
January 1, 1995 with no material effect on the Company's financial
postion or results of operation.
SFAS No. 116, Accounting for Contributions Received and
Contributions Made, is effective for the Company in 1995. This
statement did not have any significant impact upon the Company's
financial position or results of operations when adopted.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are furnished in accordance with the
provisions of Item 601 of Regulation S-K.
20: The Financial Report dated June 30, 1995 and furnished to
Registrant's shareholders is attached to this Form 10-Q.
(b) No report on Form 8-K was filed during the quarter for which this
Quarterly Report is filed.
No other information is required to be filed under Part II of this form.
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INDIANA UNITED BANCORP
August 11, 1995 By:/s/Robert E. Hoptry
Robert E. Hoptry
Chairman and President
August 11, 1995 By:/s/Jay B. Fager
Jay B. Fager
Chief Financial Officer,
Treasurer and Principal
Accounting Officer
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
EXHIBIT INDEX
Page
20 The Financial Report dated June 30, 1995 and 28-32
furnished to Registrant's shareholders is attached
<PAGE>
A FUTURE IN FOCUS
INDIANA UNITED BANCORP
Financial Report
June 30, 1995
<PAGE>
Dear Shareholders and Friends:
During 1994, Indiana United initiated temporary asset-contraction
strategies designed to improve long-term performance. The impact
of these actions is already significant and positive.
Second quarter noninterest expenses declined by $260,907, or 11%,
from the prior year period, and our net interest margin has
increased 29 basis points. Net income for the quarter totalled
$600,650, exceeding second quarter, 1994 results by $183,567, or
44%.
A critical element of our interest rate strategy was to actively
compete for savings, money market and other short-term deposit
accounts, while many of our competitors aggresively pursued longer
term deposits at significantly higher interes rates. As the
appropriateness of our strategy became validated by declining
interest rates, we began expanding our deposits at rates up to 50
basis points less than paid by competitors only a few weeks
earlier.
This strategy resulted in second quarter deposit growth of $13.3
million with an increase in funding costs well below increases
incurred by our peer group. Deposit growth funded a $5.5 million
growth in loans and the reduction of temporary nondeposit
liabilities.
While we were confident our decision to temporarily downsize would
lead to improved financial performance, we recognized such action
could cause our common stock to be susceptible to pricing pressure
over the near term. We were also aware that acceptance by
employees was necessary to avoid a lull in employee morale,
potentially leading to a lack of customer confidence.
I am pleased to report employee attitudes have, in fact, been
elevated through an effective internal communications program.
Customer confidence also appears to remain high, as evidenced by
our recent loan and deposit growth. However, the investment
community has thus far responded cautiously, resulting in less
trading activity and slightly lower trading values.
Net income for the remainder of the year is expected to continue to
exceed our performance in 1994, excluding the gain from the sale of
branches. The impact of improvements affecting 1995's performance
is also expected to accelerate into 1996.
<PAGE>
I believe the current trading of Indiana United common shares does
not adequately reflect the significance of actions taken by
management to enhance performance. If this view is accurate,
Indiana United shares may currently represent an attractive
opportunity for existing shareholders to increase their investment
in Indiana United.
Very truly,
Robert E. Hoptry
Chairman and President
<PAGE>
INDIANA UNITED BANCORP
FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited)
(Dollars in Thousands)
June 30
1995 1994
<S> <C> <C>
ASSETS
Cash and due from banks................. 9,920 8,092
Federal funds sold...................... 7,700 300
Interest-bearing deposits............... 147 532
Securities held to maturity............. 7,764 7,802
Securities available for sale........... 81,277 102,652
Loans................................... 200,268 209,969
Less: Allowance for Loan Losses........ (2,722) (2,778)
Net Loans........................... 197,546 207,191
Premises & Equipment.................... 5,837 6,438
Other Assets............................ 3,020 3,941
Total Assets........................ 313,211 336,948
LIABILITIES
Deposits:
Non-Interest Bearing.................. 27,673 24,564
Interest Bearing...................... 232,662 266,413
Total Deposits...................... 260,335 290,977
Short-Term Borrowings................... 15,986 11,608
Long-Term Debt.......................... 6,500 8,525
Other Liabilities....................... 3,007 1,882
Total Liabilities................... 285,828 312,992
SHAREHOLDERS' EQUITY
Preferred Stock......................... 2,200 2,400
Common Stock ........................... 1,251 1,138
Additional paid in capital.............. 10,677 8,099
Unrealized loss on securities available
for sale.............................. (22) (1,435)
Retained Earnings....................... 13,277 13,754
Total Shareholders' Equity.............. 27,383 23,956
Total Liabilities and
Shareholders' Equity.............. 313,211 336,948
Return on average assets................ .76% .53%
Return on averqage common equity........ 9.21 7.26
Tier 1 captial to total assets.......... 8.62 6.94
Total capital to risk-adjusted assets... 16.52 13.69
</TABLE>
Shareholder Information
Transfer Agent
Securities Transfer Department
Mid-America Bank of Louisville
500 West Broadway, P. O. Box 1497
Louisville, KY 40202
Indiana United Bancorp is a community-focused bank and savings and
loan holding company serving eastern and southern Indiana through
its subsidiaries, Union Bank and Trust Company of Indiana, and
Regional Federal Savings Bank, New Albany.
<PAGE>
INDIANA UNITED BANCORP
<TABLE>
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(Dollars in Thousands)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest income
Loans, including Fees 4,173 3,991 8,148 7,845
Investment securities 1,417 1,527 2,924 3,119
Other 68 48 71 74
Total interest income 5,658 5,566 11,143 11,038
Interest expense
Deposits 2,560 2,454 4,882 4,983
Other 426 248 862 459
Total interest expense 2,986 2,702 5,744 5,442
Net interest income 2,672 2,864 5,399 5,596
Provision for loan losses 6 42 9 85
Net interest income after
provision for loan losses 2,666 2,822 5,390 5,511
Noninterest income
Securities gains 10 (173) 11 (152)
Other operating income 420 404 769 777
Total noninterest income 430 231 780 625
Noninterst expenses
Salaries and employee 1,113 1,182 2,242 2,368
benefits
Premises and equipment 369 390 750 770
expense
Other expenses 621 792 1,274 1,523
Total noninterest
expense 2,103 2,364 4,266 4,661
Income before income tax 993 689 1,904 1,475
Income tax expense 392 272 750 576
Net income 601 417 1,154 899
Net income per common
share 0.45 0.30 0.86 0.65
Dividends per common
share 0.16 0.15 0.32 0.29
Average common shares
outstanding 1,250,897 1,250,897 1,250,897 1,250,897
Preferred dividends 35 38 73 81
</TABLE>
Common Stock
Indiana United Bancorp's common stock is traded on the over-the-
counter market and is listed on the NASDAQ exchange under the
symbp; "IUBC". Indiana United Bancorp is also listed on the
National Market System tables in many daily papers under the symbol
Ind Utd. Primary market makers are J.J.B. Hilliard/W.L. Lyons,
Inc.; and Raffensperger, Hughes and Company, Inc.
<TABLE>
Market Value Range and Dividends
for Latest Four Quarters
<CAPTION>
1995 1995 1994 1994
Q2 Q1 Q4 Q3
<S> <C> <C> <C> <C>
High $ 23 $ 23 $ 22 3/4 $ 21 7/8
Low 20 19 1/2 19 1/8 20
Last Sale 20 1/2 22 1/2 21 21 7/8
Dividends .16 .16 .16 .15
Prices adjusted for a 10% stock dividend in December 1994.
<PAGE>
Organization
Indiana United Bancorp
201 N. Broadway, P. O. Box 87
Greensburg, IN 47240
(812)663-0157
Offices
Robert E. Hoptry
Chairman and President
Daryl R. Tressler
Vice President
Jay B. Fager
Treasurer and Chief Financial Officer
Sue Fawbush
Vice President and Secretary
Dennis M. Flackstone
Vice President, Director of Marketing
and Training
Diane L. Trout
Marketing Officer
Directors
William G. Barron
Chairman and President
Barron Homes, Inc.
Philip A. Frantz
Attorney, Partner
Coldren and Frantz
Glenn D. Higdon
President
Marlin Enterprises, Inc.
Robert E. Hoptry
Chairman and President
Indiana United Bancorp
Martin G. Wilson
Farmer
Edward J. Zoeller
President
E. M. Cummings Veneer
Subsidiaries
Regional Federal Savings Bank
Offices in New Albany, Jeffersonville
Union Bank and Trust Company of Indiana
Offices in Greensburg, Portland,
Westport, Clarksburg, Redkey
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEET AND INCOME STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> JUN-30-1995 JUN-30-1995
<CASH> 9,920 0
<INT-BEARING-DEPOSITS> 100 0
<FED-FUNDS-SOLD> 7,000 0
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 80,139 0
<INVESTMENTS-CARRYING> 7,764 0
<INVESTMENTS-MARKET> 7,812 0
<LOANS> 200,268 0
<ALLOWANCE> 2,722 0
<TOTAL-ASSETS> 313,211 0
<DEPOSITS> 260,335 0
<SHORT-TERM> 15,986 0
<LIABILITIES-OTHER> 3,007 0
<LONG-TERM> 6,500 0
<COMMON> 1,251 0
0 0
2,200 0
<OTHER-SE> 23,976 0
<TOTAL-LIABILITIES-AND-EQUITY> 313,211 0
<INTEREST-LOAN> 8,148 4,173
<INTEREST-INVEST> 2,924 1,417
<INTEREST-OTHER> 71 68
<INTEREST-TOTAL> 11,143 5,658
<INTEREST-DEPOSIT> 4,882 2,560
<INTEREST-EXPENSE> 5,744 2,986
<INTEREST-INCOME-NET> 5,399 2,672
<LOAN-LOSSES> 9 6
<SECURITIES-GAINS> 11 10
<EXPENSE-OTHER> 4,266 2,103
<INCOME-PRETAX> 1,904 993
<INCOME-PRE-EXTRAORDINARY> 1,904 993
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,154 601
<EPS-PRIMARY> .86 .45
<EPS-DILUTED> .86 .45
<YIELD-ACTUAL> 7.69 0
<LOANS-NON> 1,089 0
<LOANS-PAST> 78 0
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 2,784 0
<CHARGE-OFFS> 101 0
<RECOVERIES> 30 0
<ALLOWANCE-CLOSE> 2,722 0
<ALLOWANCE-DOMESTIC> 1,197 0
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 1,525 0
</TABLE>
