<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
For the Quarter Ended:
---------------------
March 31, 1997 Commission File Number 0-18392
-------
Ameriana Bancorp
------------------------
Indiana 35-1782688
- ----------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
2118 Bundy Avenue, New Castle, Indiana 47362-1048
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (765) 529-2230
--------------
Securities registered pursuant to Section 12(g) of Act:
Common Stock, par value $1.00 per share
---------------------------------------
(Title of Class)
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 _XX_ NO ___
As of May 2, 1997, there were issued and outstanding
3,240,246 shares of the registrant's common stock.
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AMERIANA BANCORP AND SUBSIDIARIES
CONTENTS
PART I - FINANCIAL INFORMATION Page No.
--------
ITEM 1 - Financial Statements
Consolidated Statements of Condition
as of March 31, 1997 and December 31,
1996. . . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Income for
the Three Months Ended March 31, 1997
and 1996. . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows
for the Three Months Ended March 31,
1997 and 1996 . . . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements. . . 5
ITEM 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . 6
PART II - OTHER INFORMATION. . . . . . . . . . . . . . . 10
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 11
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PART I - ITEM I
AMERIANA BANCORP AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CONDITION
March 31 December 31
1997 1995
------------ -----------
<S> <C> <C>
ASSETS
Cash on hand and in other institutions $ 1,460,838 $ 4,939,489
Interest-bearing deposits 5,261,233 4,004,551
Investment securities held to maturity (market
value: 1997--$54,402,000; 1996--$49,794,000) 56,144,411 50,744,304
Stock in Federal Home Loan Bank (at cost, which
approximates market value) 3,331,800 3,311,500
Mortgage-backed securities held to maturity (market
value: 1997--$36,189,000; 1996--$38,710,000) 36,585,913 38,541,544
Loans receivable 287,387,782 283,704,065
Allowance for loan losses (1,105,109) (1,103,513)
------------ ------------
Net loans receivable 286,282,673 282,600,552
Real estate owned 259,036 101,401
Premises and equipment 5,957,678 5,621,332
Mortgage servicing rights 771,673 780,770
Investments in unconsolidated affiliates 1,696,695 1,746,695
Other assets 4,411,175 4,362,968
------------ ------------
$402,163,125 $396,755,106
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits $322,131,367 $318,705,367
Advances from Federal Home Loan Bank 28,138,507 26,548,603
Drafts payable 2,367,380 4,557,678
Advances by borrowers for taxes and insurance 1,194,570 951,902
Other liabilities 4,701,559 2,046,765
------------ ------------
Total Liabilities 358,533,383 352,810,315
Shareholders' Equity:
Preferred stock (5,000,000 shares authorized;
none issued) -- --
Common stock ($1.00 par value; authorized
15,000,000 shares; issued shares:
1997 - 3,259,706; 1996 - 3,291,319) 3,259,706 3,291,319
Additional paid-in capital 7,976,728 8,645,273
Retained earnings 32,393,308 32,008,199
------------ ------------
Total Shareholders' Equity 43,629,742 43,944,791
------------ ------------
$402,163,125 $396,755,106
============ ============
</TABLE>
See accompanying notes.
2<PAGE>
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AMERIANA BANCORP AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31
1997 1996
---------------------------
<S> <C> <C>
Interest Income:
Interest on loans $5,600,395 $5,362,526
Interest on mortgage-backed securities 637,774 768,297
Interest on investment securities 948,345 582,644
Other interest and dividend income 110,580 182,072
---------- ----------
Total interest income 7,297,094 6,895,539
Interest Expense:
Interest on deposits 3,910,099 3,698,457
Interest on Federal Home Loan Bank advances 380,746 290,884
---------- ----------
Total interest expense 4,290,845 3,989,341
---------- ----------
Net Interest Income 3,006,249 2,906,198
Provision For Loan Losses 36,000 18,000
---------- ----------
Net Interest Income after Provision for Loan Losses 2,970,249 2,888,198
Other Income:
Net loan servicing fees 87,412 76,973
Other fees and service charges 169,083 148,613
Brokerage and insurance commissions 264,007 290,213
Loss on investments in unconsolidated subsidiaries (50,000) (9,461)
Gains on sales of loans 117,421 43,906
Other 16,303 7,072
---------- ----------
Total other income 604,226 557,316
Other Expense:
Salaries and employee benefits 1,294,055 1,077,861
Net occupancy expense 302,331 254,469
Federal insurance premium 49,747 171,643
Data processing expense 75,819 82,663
Other 476,407 404,781
---------- ----------
Total other expense 2,198,359 1,991,417
---------- ----------
Income before Income Taxes 1,376,116 1,454,097
Income Taxes 499,425 553,782
---------- ----------
Net Income $ 876,691 $ 900,315
========== ==========
Earnings Per Share $ .27 $ .26
========== ==========
Dividends Declared Per Share $ .15 $ .14
========== ==========
Average Number of Shares Outstanding 3,288,207 3,468,949
========== ==========
</TABLE>
See accompanying notes.
3
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AMERIANA BANCORP AND SUBSIDIARIES
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31
1997 1996
-------------------------------
<S> <C> <C>
Operating Activities
Net income $ 876,691 $ 900,315
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision losses on loans and real estate owned 36,000 18,000
Depreciation and amortization 150,475 154,529
Equity in loss of limited partnership 50,000 9,461
Mortgage servicing rights amortization 29,310 34,387
Goodwill amortization 7,080 7,080
Losses (gains) on sales of real estate owned (11,192) 747
Increase in other assets (55,287) (874,009)
Increase (decrease) in drafts payable (2,190,298) 1,458,592
Increase in other liabilities 2,899,578 2,541,969
----------- -----------
Net cash provided by operating activities 1,792,357 4,251,071
Investing Activities
Purchase of investment securities held to maturity (5,400,000) (18,394,706)
Purchase of mortgage-backed securities
held to maturity -- (4,963,547)
Principal collected on mortgage-backed
securities held to maturity 1,923,058 5,126,453
Net change in loans (3,911,321) (3,915,310)
Proceeds from sales of real estate owned 39,100 65,000
Net purchases of premises and equipment (455,032) (271,974)
Mortgage servicing rights capitalized (20,213) (233,860)
Other investing activities (25,589) (179,934)
----------- ------------
Net cash used by investing activities (7,849,997) (22,767,878)
Financing Activities
Increase in NOW, MMDA and passbook deposits 100,951 3,237,958
Increase in certificates of deposit 3,338,672 9,664,275
Advances from Federal Home Loan Bank 25,900,000 12,600,000
Repayment of Federal Home Loan Bank advances (24,310,096) (719,226)
Proceeds from exercise of stock options 134,856 45,666
Purchase of common stock (835,014) (3,011,663)
Cash dividends paid (493,698) (450,228)
----------- ------------
Net cash provided by financing activities 3,835,671 21,366,782
----------- ------------
Increase (Decrease) in Cash and Cash Equivalents (2,221,969) 2,849,975
Cash and Cash Equivalents at Beginning of Period 8,944,040 9,543,323
----------- ------------
Cash and Cash Equivalents at End of Period $ 6,722,071 $12,393,298
=========== ===========
Supplemental information:
Interest paid $ 2,413,925 $ 2,230,537
Income taxes paid -- 75,000
</TABLE>
See accompanying notes.
4
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AMERIANA BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- BASIS OF PRESENTATION
The unaudited interim consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and,
therefore, do not include all information and disclosures
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the
financial statements reflect all adjustments (comprising only
normal recurring accruals) necessary to present fairly
the Company's financial position as of March 31, 1997, and the
results of operations and changes in cash flows for the
three-month periods ended March 31, 1997 and 1996. A summary of
the Company's significant accounting policies is set forth in
Note 1 of Notes to Consolidated Financial Statements in the
Company's annual report on Form 10-K for the year ended December
31, 1996.
NOTE B -- SHAREHOLDERS' EQUITY
On February 24, 1997, the Board of Directors declared a quarterly
cash dividend of $.15 per share. This dividend was paid on April
4, 1997, to shareholders of record as of March 14, 1997.
Earnings per share amounts were computed based on 3,288,207 and
3,468,949 average shares outstanding for the three-month periods
ended March 31, 1997 and 1996, respectively. The dilutive effect
on earnings per share from unexercised stock option shares is not
material.
During the quarter ended March 31, 1997, the Company acquired
52,812 shares of the Company's outstanding common stock at an
aggregate cost of $835,014 under its current stock repurchase
program.
NOTE C -- RECLASSIFICATIONS
Certain reclassifications of 1996 statements of income amounts
have been made to conform with the 1997 presentation.
5
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AMERIANA BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
-------
The largest components of the Company's total revenue and total
expense are interest income and interest expense, respectively.
Consequently, the Company's earnings are primarily dependent on
its net interest income, which is determined by (i) the
difference between rates of interest earned on interest-earning
assets and rates paid on interest-bearing liabilities
("interest rate spread"), and (ii) the relative amounts of
interest-earning assets and interest-bearing liabilities. Net
income also is significantly affected by levels of other income
and operating expenses.
Management believes that interest rate risk, i.e., the
sensitivity of income and net asset values to changes in interest
rates, is one of the most significant determinants of the
Company's ability to generate future earnings. Accordingly, the
Company has implemented a long-range plan intended to minimize
the effect of changes in interest rates on operations. The asset
and liability management policies of the Company are designed to
stabilize long-term net interest income by managing the
repricing terms, rates and relative amounts of interest-earning
assets and interest-bearing liabilities.
RESULTS OF OPERATIONS
---------------------
In the first quarter of 1997, the Company's lending activities
decreased slightly in comparison with those of the prior year,
reflecting slightly higher levels of rates offered on new loans
compared with the preceding year's first quarter. Loan
originations during the quarter totaled $25,497,778, representing
a decrease of 8.0% from originations of $27,719,386 in the same
period of 1996. Principal repayments on loans and mortgage-
backed securities decreased substantially during the first
quarter of 1997, amounting to $18,546,042 compared with
$26,607,513 in the preceding year's first quarter. The Company
sold fixed-rate mortgage loans in the amount of $5,080,894 during
the quarter ended March 31, 1997, compared with sales of
$2,366,922 during the first quarter of 1996. Increased sales
resulted from the establishment of a loan production office
through Deer Park Federal during 1996. The Company continues to
emphasize variable-rate and short-term consumer lending products.
As a result of adjustable-rate loans and liquid assets repricing
to current market rates and the effects of lower-yielding assets
acquired with borrowed funds in arbitrage transactions, the
Company's net yield on interest-earning assets decreased to 7.61%
versus 7.78% in the year-earlier period. The lower general level
of interest rates was also reflected in the cost of interest-
bearing liabilities as these rates declined to 4.93% in the
current quarter from 5.05% in the first quarter of 1996. As a
result, the Company's net interest spread declined to 2.68% for
the quarter ended March 31, 1997, compared with 2.73% for the
first quarter of 1996.
6
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AMERIANA BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following table summarizes the Company's average net
interest-earning assets and interest rate spreads during the
three-month periods ended March 31, 1997 and 1996.
<TABLE>
<CAPTION>
(Dollars in Thousands)
Three Months Ended
3/31/97 3/31/96
----------------------
<S> <C> <C>
Interest-earning assets $383,404 $354,426
Interest-bearing liabilities 347,762 316,176
-------- --------
Net interest-earning assets $ 35,642 $ 38,250
======== ========
Average yield on:
Interest-earning assets 7.61% 7.78%
Interest-bearing liabilities 4.93 5.05
---- ----
Net interest spread 2.68% 2.73%
==== ====
</TABLE>
Interest income for the period increased 5.8%, while interest
expense increased 7.6%. As a result, net interest income
increased 3.4% in the first quarter of 1997 to $3,006,249
compared with $2,906,198 in the same period last year. The
increase in net interest income resulted from a lower net
interest spread applied to a larger amount of interest-earning
assets and interest-bearing liabilities compared with the
previous year.
The provision for loan losses increased to $36,000 for the
quarter compared with $18,000 in the prior-year period. Net
charge-offs were $34,404 and $8,425 for the 1997 and 1996 first
quarters, respectively. The following table summarizes the
Company's non-performing assets:
<TABLE>
<CAPTION>
(Dollars in Thousands)
3/31/97 12/31/96 3/31/96
------- -------- -------
<S> <C> <C> <C>
Loans:
Non-accrual $ 664 $ 721 $ 929
Over 90 days delinquent 216 315 329
Real estate owned 259 101 97
------ ------ ------
Total $1,139 $1,137 $1,355
====== ====== ======
Management believes the Company has provided sufficient loan loss
reserves, amounting to $1,105,109, $1,103,513 and $1,085,613 at
March 31, 1997, December 31, 1996, and March 31, 1996,
respectively, to absorb any losses which may ultimately be
incurred on non-performing loans and the remaining loan
portfolio.
Other income for the quarter increased 8.4% to $604,226 from
$557,316 in the same period last year. The Company recorded
profits on the sale of mortgage loans in the amount of $117,421
during the current quarter
7
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<PAGE>
AMERIANA BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
compared with $43,906 during the preceding year quarter. The
increase reflected the higher volume of loans sold compared to
the previous year. Other fees and service charges reflected
increased fees from automated teller machines, fees charged for
closing loans for third parties, late charges on delinquent loans
and increased fees associated with deposit products compared with
the previous year's quarter. Brokerage and insurance commissions
decreased as customers increased their level of interest in
deposit products instead of financial instruments offered by
the Company's subsidiaries. While the Company recorded an
estimated loss on the operations of an unconsolidated affiliate
amounting to $50,000 compared with $9,461 in the prior year
quarter, it also reduced federal income tax expense by $35,000 in
1997 compared with $11,680 for the 1996 quarter in recognition of
its estimated share of tax credits to be earned by the affiliate
which is engaged in investing in low-income housing projects.
Other expense for the first quarter of 1997 totaled $2,198,359,
up 10.4% from other expense last year of $1,991,417. Salaries
and employee benefits increased 20.1%, reflecting the increased
volume of loan origination and sales activity in Deer Park's loan
production office as well as staff increases in connection with
the Bank's opening of a new branch office in January 1997. Net
occupancy expense increased by 19.6% to $302,331 also reflecting
the Company's investment in additional office locations. Federal
deposit insurance decreased to $49,747 in 1997 from $171,643 in
1996 as a result of the premium reductions brought about by
the recapitalization of the Savings Association Insurance Fund in
late 1996. Other expense increased by 17.7% to $476,407 also
reflecting marketing, supplies and other costs associated with
the new facilities.
FINANCIAL CONDITION
-------------------
The Company's principal sources of funds are cash generated from
operations, savings deposits, loan principal repayments and
advances from the Federal Home Loan Bank. As of March 31, 1997,
the Company's cash and liquid investments totaled $62,866,482 or
15.6% of total assets. This compared with $59,688,344 or 15.0%
of total assets at December 31, 1996. The Company's banking
subsidiaries' combined regulatory liquidity at March
31, 1997, was 10.0%, which exceeded the 5.0% liquidity base set
by the Office of Thrift Supervision.
The Company's banking subsidiaries, Ameriana Savings Bank and
Deer Park Federal Savings and Loan Association, have employed a
strategy to increase net interest income through the purchase of
mortgage-backed securities and other investments with the
proceeds of advances from the FHLB. During the first quarter of
1997, approximately $5,000,000 of such transactions were
completed.
The regulatory minimum net worth requirements for Ameriana
Savings Bank and Deer Park Federal Savings and Loan Association
under the most stringent of the three-tier capital regulations at
March 31, 1997, were approximately $14,108,000 and $2,882,000,
respectively. At that date, the two institutions had regulatory
net worth in excess of the minimum requirement of approximately
$19,927,000 and $2,721,000, respectively.
8
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AMERIANA BANCORP AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
At March 31, 1997, the Company's commitments for loans in process
totaled $7,349,000, primarily for single-family residential
mortgage loans. Management believes the Company's liquidity and
other sources of funds will be sufficient to fund all outstanding
commitments and other cash needs.
9
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PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
No changes have taken place in regard to the legal
proceedings disclosed in the registrant's report
on Form 10-K for the year ended December 31, 1996.
ITEM 2 - Changes in Securities
Not Applicable
ITEM 3 - Defaults in Senior Securities
Not Applicable
ITEM 4 - Submission of Matters to a Vote of Security
Holders
Not Applicable
ITEM 5 - Other Information
Not Applicable
ITEM 6 - Exhibits and Reports on Form 8-K
Not Applicable
10
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SIGNATURES
AMERIANA BANCORP AND SUBSIDIARIES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERIANA BANCORP
DATE: May 2, 1997 by /s/ Harry J. Bailey
---------------------------------
Harry J. Bailey
President and
Chief Executive Officer
(Duly Authorized Representative)
DATE: May 2, 1997 by /s/ Howard J. Pruim
--------------------------------
Howard J. Pruim
Senior Vice President-Treasurer
(Principal Financial Officer
and Accounting Officer)
11
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 1,460,838
<INT-BEARING-DEPOSITS> 5,261,233
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 96,062,124
<INVESTMENTS-MARKET> 93,922,800
<LOANS> 287,387,782
<ALLOWANCE> 1,105,109
<TOTAL-ASSETS> 402,163,125
<DEPOSITS> 322,131,367
<SHORT-TERM> 20,842,660
<LIABILITIES-OTHER> 8,263,509
<LONG-TERM> 7,295,847
<COMMON> 11,236,434
0
0
<OTHER-SE> 32,393,308
<TOTAL-LIABILITIES-AND-EQUITY> 402,163,125
<INTEREST-LOAN> 5,600,395
<INTEREST-INVEST> 1,586,119
<INTEREST-OTHER> 110,580
<INTEREST-TOTAL> 7,297,094
<INTEREST-DEPOSIT> 3,910,099
<INTEREST-EXPENSE> 4,290,845
<INTEREST-INCOME-NET> 3,006,249
<LOAN-LOSSES> 36,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,198,359
<INCOME-PRETAX> 1,376,116
<INCOME-PRE-EXTRAORDINARY> 876,691
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 876,691
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
