SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File Number 0-23182
AMB FINANCIAL CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 35-1905382
- --------------------------------------------------------------------------------
(State or other jurisdiction I.R.S. Employer
of incorporation or Identification
organization) Number
8230 Hohman Avenue, Munster, Indiana 46321-1578
- --------------------------------------------------------------------------------
(Address of Principal executive offices) (Zip Code)
Registrant telephone number, including area code: (219) 836-5870
Check whether the issuer (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 April 30, 1998 there were 1,124,125 shares of the Registrant's common
stock issued and 963,798 shares outstanding.
Transitional Small Business Disclosure Format(check one): Yes [ ] No [X]
<PAGE>
AMB FINANCIAL CORP.
FORM 10-Q
TABLE OF CONTENTS
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Financial Condition at March 31,
1998 (Unaudited) and December 31, 1997
Consolidated Statements of Earnings for the three months ended
March 31, 1998 and 1997 (unaudited)
Consolidated Statements of Changes in Stockholders Equity,
three months ended March 31, 1998 (unaudited)
Consolidated Statements of Cash Flows for the three months
ended March 31, 1998 and 1997 (unaudited)
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II. OTHER INFORMATION
Signatures
Index to Exhibits
Earnings Per Share Analysis (Exhibit 11)
Financial Data Schedule (Exhibit 27)
<PAGE>
<TABLE>
<CAPTION>
AMB FINANCIAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Financial Condition
March 31, December 31,
1998 1997
------------ ------------
unaudited
<S> <C> <C>
Assets
Cash and amounts due from depository
institutions 2,051,009 2,510,527
Interest-bearing deposits 4,022,931 3,176,428
------------ ------------
Total cash and cash equivalents 6,073,940 5,686,955
Investment securities, available for sale, at fair value 7,713,401 8,213,614
Investment securities held for trade 2,740,107 2,412,967
Mortgage backed securities, available for sale, at fair value 3,271,595 3,494,035
Loans receivable (net of allowance for loan losses:
$433,315 at March 31, 1998 and
$410,383 at December 31, 1997) 83,140,292 77,093,229
Real Estate Owned 27,481 27,481
Stock in Federal Home Loan Bank of Indianapolis 850,400 725,400
Accrued interest receivable 566,110 533,509
Office properties and equipment- net 475,769 471,730
Prepaid expenses and other assets 1,341,798 1,136,860
------------ ------------
Total assets 106,200,893 99,795,780
============ ============
Liabilities and Stockholders' Equity
Liabilities
Deposits 74,391,392 71,700,126
Borrowed money 15,000,000 12,000,000
Advance payments by borrowers for taxes
and insurance 710,958 383,237
Other liabilities 1,122,266 942,134
------------ ------------
Total liabilities 91,224,616 85,025,497
------------ ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMB FINANCIAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Financial Condition (continued)
<S> <C> <C>
Stockholders' Equity
Preferred stock, $.01 par value; authorized
100,000 shares; none outstanding -- --
Common Stock, $.01 par value; authorized 1,900,000 shares;
1,124,125 shares issued and 963,798 shares outstanding
at March 31, 1998 and December 31, 1997 11,241 11,241
Additional paid- in capital 10,732,068 10,717,068
Retained earnings, substantially restricted 7,519,459 7,357,250
Unrealized gain on securities available for sale,
net of income taxes 70,899 71,061
Treasury stock, at cost (160,327 shares at
March 31, 1998 and December 31, 1997) (2,223,051) (2,223,051)
Common stock acquired by Employee Stock Ownership
Plan (719,440) (719,440)
Common stock awarded by Recognition and Retention Plan (414,899) (443,846)
------------ ------------
Total stockholders' equity 14,976,277 14,770,283
------------ ------------
Total liabilities and stockholders' equity 106,200,893 99,795,780
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
AMB FINANCIAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Earnings
Three Months Three Months
Ended Ended
March 31, March 31,
--------- ---------
1998 1997
unaudited unaudited
<S> <C> <C>
Interest income
Loans 1,650,719 1,422,391
Mortgage-backed securities 57,567 67,986
Investment securities 125,437 159,517
Interest-bearing deposits 62,139 31,178
Dividends on FHLB stock 15,411 10,561
--------- ---------
Total interest income 1,911,273 1,691,633
--------- ---------
Interest expense
Deposits 837,818 700,532
Borrowings 202,576 136,366
--------- ---------
Total interest expense 1,040,394 836,898
--------- ---------
Net interest income before
provision for loan losses 870,879 854,735
Provision for loan losses 22,932 5,155
--------- ---------
Net interest income after
provision for loan losses 847,947 849,580
--------- ---------
Non-interest income:
Loan fees and service charges 36,792 21,888
Commission income 4,880 9,886
Deposit related fees 73,509 39,319
Gain on sale of investment
secutities held for trade 24,086 13,490
Unrealized gain on investment
securites held for trade 128,878 48,003
Other income 44,773 25,975
--------- ---------
Total non-interest income 312,918 158,561
--------- ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMB FINANCIAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Earnings (continued)
Three Months Three Months
Ended Ended
March 31, March 31,
--------- ---------
1998 1997
unaudited unaudited
<S> <C> <C>
Non-interest expense:
Staffing costs 380,408 299,191
Advertising 23,330 24,557
Occupancy and equipment expense 87,323 87,796
Data processing 90,564 81,690
Federal deposit insurance premiums 11,589 10,423
Other operating expenses 205,371 126,130
--------- ---------
--------- ---------
Total non-interest expense 798,585 629,787
--------- ---------
Net income before income taxes 362,280 378,354
Provision for federal and state
income taxes 137,641 143,807
--------- ---------
Net income 224,639 234,547
========= =========
Earnings per share- basic $ 0.25 $ 0.24
Earnings per share- diluted $ 0.24 $ 0.23
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
AMB FINANCIAL CORP.
AND SUBSIDIARIES
Consolidated Statement of Changes in Stockholder's Equity
Accumulated Common
Additional Other Stock
Common Paid-in Retained Comprehensive Treasury Acquired
Stock Capital Earnings Income Stock by ESOP
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 $ 11,241 10,717,068 7,357,250 71,061 (2,223,051) (719,440)
Comprehensive income:
Net income 224,639
Adjustment of securities
available for sale to fair
value, net of tax effect (162)
----------- ----------- ----------- ----------- ----------- -----------
Comprehensive income 0 0 224,639 (162) 0 0
Amortization of award of
RRP stock
ESOP compensation adjustment 15,000
Dividend declared on
common stock (62,430)
----------- ----------- ----------- ----------- ----------- -----------
Balance at March 31, 1998 $ 11,241 10,732,068 7,519,459 70,899 (2,223,051) (719,440)
=========== =========== =========== =========== =========== ===========
<CAPTION>
Common
Stock
Awarded
by RRP Total
----------- -----------
<S> <C> <C>
Balance at December 31, 1997 (443,846) 14,770,283
Comprehensive income:
Net income 224,639
Adjustment of securities
available for sale to fair
value, net of tax effect (162)
----------- -----------
Comprehensive income 0 224,477
Amortization of award of
RRP stock 28,947 28,947
ESOP compensation adjustment 15,000
Dividend declared on
common stock (62,430)
----------- -----------
Balance at March 31, 1998 (414,899) 14,976,277
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMB FINANCIAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three Months Ending
March 31, March 31,
1998 1997
--------- ----------
unaudited unaudited
<S> <C> <C>
Cash flows from operating activities:
Net income $ 224,639 234,547
Adjustments to reconcile net income to
net cash from operating activities:
Depreciation 39,120 35,650
Amortization of cost of stock benefit plans 28,947 28,947
Amortization of premiums and discounts on
investment and mortgage-backed securities - net 881 19
Provision for loan losses 22,932 5,155
Increase in deferred compensation 13,336 19,084
ESOP compensation 15,000 7,663
Net gain on sale of securities (24,086) (13,490)
Unrealized gain on securities held for trade (128,878) (48,003)
Purchase of trading account securities (298,575) --
Proceeds from sales of trading account securities 124,399 112,000
Increase (decrease) in deferred income on loans (17,798) 10,345
Decrease in accrued and deferred income taxes (111,880) (76,813)
Increase in accrued interest receivable (32,601) (15,981)
Increase in accrued interest payable 19,653 31,589
Change in prepaid and accrued items, net 54,192 (59,433)
--------- ----------
Net cash provided by (for) operating activities (70,719) 271,279
--------- ----------
Cash flows from investing activities:
Proceeds from maturities of investment securities 500,000 750,000
Purchase of investment securities (1,688) (3,948,806)
Proceeds from repayments of mortgage-backed
securities 223,191 74,498
Purchase of Federal Home Loan Bank stock (125,000) --
Purchase of loans (6,477,788) (743,121)
Loan disbursements (4,892,639) (4,762,321)
Loan repayments 5,318,230 3,831,645
Property and equipment expenditures (43,159) (44,845)
--------- ----------
Net cash provided by (for) investing activities (5,498,853) (4,842,950)
--------- ----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMB FINANCIAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows (continued)
<S> <C> <C>
Cash flows from financing activities:
Deposit account receipts 33,771,382 37,009,209
Deposit account withdrawals (31,742,834) (30,380,372)
Interest credited to deposit accounts 662,718 532,879
Proceeds from borrowed money 3,000,000 --
Increase in advance payments by borrowers
for taxes and insurance 327,721 276,410
Payment of dividends (62,430) (59,219)
--------- ----------
Net cash provided by financing activities 5,956,557 7,378,907
--------- ----------
Net change in cash and cash equivalents (386,985) 2,807,236
Cash and cash equivalents at beginning of period 5,686,955 2,567,367
--------- ----------
Cash and cash equivalents at end of period $ 6,073,940 5,374,603
============ ==========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 1,020,741 805,309
Income taxes 249,521 50,209
</TABLE>
See accompanying notes to consolidated finacial statements.
<PAGE>
AMB Financial Corp.
and Subsidiaries
Notes to Consolidated Financial Statements
1. Statement of Information Furnished
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-Q instructions and Article 10 of Regulation
S-X, and in the opinion of management contains all adjustments (all of which are
normal and recurring in nature) necessary to present fairly the financial
position as of March 31, 1998, the results of operations for the three months
ended March 31, 1998 and 1997 and cash flows for the three months ended March
31, 1998 and 1997. These results have been determined on the basis of generally
accepted accounting principles. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The attached consolidated statements are those of AMB Financial Corp. (the
"Holding Company") and its consolidated subsidiaries American Savings, FSB (the
"Bank"), the Bank's wholly owned subsidiary NIFCO, Inc. , and wholly owned
subsidiary of NIFCO,Inc., Ridge Management, Inc. The results of operations for
the three month period ended March 31, 1998 is not necessarily indicative of the
results to be expected for the full year.
2. Mutual to Stock Conversion
In December 1995, the Bank's Board of Directors approved a Plan of
Conversion (the "Conversion"), providing for the Bank's conversion from a
federally chartered mutual savings bank to a federally chartered stock savings
bank with the concurrent formation of a holding company. The Holding Company
issued 1,124,125 shares of $.01 par value common stock at $10.00 per share, for
an aggregate purchase price of $11,241,250. The Conversion and sale of 1,124,125
shares of common stock of the Holding Company was completed on March 29, 1996.
Net proceeds to the Company, after conversion expenses, totaled approximately
$10,658,000.
3. Earnings Per Share
Earnings per share for the three month periods ended March 31, 1998 and
1997 were determined by dividing net income for the periods by the weighted
average number of both basic and diluted shares of common stock and common stock
equivalents outstanding (see Exhibit 11 attached). Stock options are regarded as
common stock equivalents and are considered in diluted earnings per share
calculations. Common stock equivalents are computed using treasury stock method.
ESOP shares not committed to be released to participants are not considered
outstanding for purposes of computing earnings per share amounts. Earnings per
share data for the three month period ended March 31, 1997 has been restated for
comparative purposes to reflect the implementation of Statement of Financial
Accounting Standards No. 128.
<PAGE>
4. Impact of New Accounting Standards
Employers' Disclosures about Pension and Other Employee Benefits. In
February 1998, the FASB issued Statement of Financial Accounting Standards No.
132, "Employer's Disclosures about Pensions and Other Postretirement Benefits"
("SFAS No. 132"). SFAS No. 132 alters current disclosure requirements regarding
pensions and other postretirement benefits in the financial statements of
employers who sponsor such benefit plans. The revised disclosure requirements
are designed to provide additional information to assist readers in evaluating
future costs related to such plans. Additionally, the revised disclosures are
designed to provide changes in the components of pension and benefit costs in
addition to the year end components of those factors in the resulting asset or
liability related to such plans. The statement is effective for fiscal years
beginning after December 15, 1997 with earlier application available. The
Company has not yet determined the impact of adopting this statement.
The foregoing does not constitute a comprehensive summary of all
material changes or developments affecting the manner in which the Company keeps
its books and records and performs its financial accounting responsibilities. It
is intended only as a summary of some of the recent pronouncements made by the
FASB which are of particular interest to financial institutions.
Reporting Comprehensive Income. In June 1997, the FASB issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS 130"). This statement establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains, losses) in a
full set of general-purpose financial statements. SFAS 130 is effective for
fiscal years beginning after December 15, 1997. The Company has not yet
determined the impact of adopting this statement.
Disclosures About Segments of an Enterprise and Related Information. In
June 1997, the FASB issued Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS
131") which becomes effective for fiscal years beginning after December 15,
1997. SFAS 131 establishes standards for the way that public business
enterprises report information about operating segments and requires enterprises
to report selected information about operating segments in interim financial
reports. The Company has not yet determined the impact of adopting this
statement.
The foregoing does not constitute a comprehensive summary of all
material changes or developments affecting the manner in which the Company keeps
its books and records and performs its financial accounting responsibilities. It
is intended only as a summary of some of the recent pronouncements made by the
FASB which are of particular interest to financial institutions.
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations
FINANCIAL CONDITION
March 31, 1998 compared to December 31, 1997.
Total assets of the Company increased $6.4 million, or 6.41% to $106.2 million
at March 31, 1998 compared to $99.8 million at December 31, 1997. This increase
was primarily attributable to the Company's loan growth which was funded by an
increase in both deposits and borrowed funds.
At March 31, 1998, cash and cash equivalents increased by $387,000 as liquidity
was maintained in anticipation of loan funding and for general operating
purposes.
Investment securities available for sale decreased $500,000 to $7.7 million at
March 31, 1998 as a result of proceeds from maturing U.S. Treasury securities
being utilized for lending purpose.
Loans receivable increased to $83.1 million at March 31, 1998, a $6.0 million or
7.84% increase, as new loan originations of $4.9 million and loan purchases of
$6.5 million exceeded loan repayments of $5.3 million. Loan purchases during the
first quarter were in one to four family residential first mortgage loans
located in the Midwest and Southern sections of the country.
Total deposits at March 31, 1998 increased by $2.7 million or 3.75%, as deposit
receipts of $33.8 million and interest credited of $663,000 exceeded withdrawal
activity of $31.8 million. This deposit gain was primarily attributable to a
special rate 14 month certificate of deposit program.
Borrowed funds, which consist of FHLB of Indianapolis advances, increased $3.0
million to $15.0 million at March 31, 1998. The increase in borrowed funds was
utilized to fund loan production during the period.
Stockholders' equity increased $206,000 to $15.0 million at March 31, 1998 from
$14.8 million at December 31, 1997. This increase was attributable to net income
of $225,000, and normal amortization of RRP and ESOP benefits of $44,000, which
was offset by the declaration of dividends on common stock of $63,000.
Results of Operations
The Company's results of operations depend primarily upon the level of net
interest income, which is the difference between the interest income earned on
its interest-earning assets such as loans and investments, and the costs of the
Company's interest-bearing liabilities, primarily deposits and borrowings. Net
interest income depends upon the volume of interest-earning assets and
interest-bearing liabilities and the interest rate earned or paid on them,
respectively. Results of operations are also dependent upon the level of the
Company's non-interest income, including fee income and service charges, and
affected by the level of its non-interest expenses, including its general and
administrative expenses.
<PAGE>
Comparison of Operating Results for the Quarters
Ended March 31, 1998 and 1997.
Net Income. The Company's net income for the three months ended March 31, 1998
decreased $10,000 to $225,000 as compared to $235,000 in the prior year's
quarter. This decrease was due primarily to an increase in non- interest expense
of $169,000 and an increase in loan loss provision of $18,000 offset by an
increase in net interest income of $16,000, an increase in non-interest income
of $154,000, and a decrease in income taxes of $6,000.
Interest Income. Total interest income increased $220,000 or 12.98%, for the
three months ended March 31, 1998 compared to the prior year's quarter. This
increase is chiefly due to the higher volume of interest-earning assets of $12.7
million. This higher volume is due mostly to a higher volume of loans receivable
which reflects the Company's aggressive lending efforts. During the quarter
ended March 31, 1998, the average yield on interest-earning assets decreased to
7.79% from 7.93% during the prior year's quarter. The decrease in yield on
average interest-earning assets was due primarily to current market interest
rates.
Interest Expense. Total interest expense increased $203,000 or 24.32% for the
three months ended March 31, 1998 compared to the prior year's quarter. The
increase was due primarily to an increase of $14.0 million in the average
deposits and borrowed money outstanding and, to a lesser extent, by an increase
of 21 basis points in the average cost of funds.
Provision for Loan Losses. The determination of the allowance for loan losses
involves material estimates that are susceptible to significant change in the
near term. The allowance for loan losses is maintained at a level deemed
adequate to provide for losses through charges to operating expense. The
allowance is based upon past loss experience and other factors which, in
management's judgment, deserve current recognition in estimating losses. Such
other factors considered by management include growth and composition of the
loan portfolio, the relationship of the allowance for losses to outstanding
loans, and economic conditions.
A provision for loan losses of $23,000 was recorded during the three months
ended March 31, 1998 compared to $5,000 for the same quarter a year ago. The
increase in the provision for losses on loans was due to the continuing growth
in loans receivables. Non-performing loans at March 31, 1998 continue to remain
stable, as compared to December 31, 1997, and amount to $326,000 or .39% of net
loans receivable. The allowance for loan losses at March 31, 1998 of $433,000
represents 133% of non-performing loans. The Bank will continue to review its
allowance for loan losses and make future provisions as economic and regulatory
conditions dictate. Although the Bank maintains its allowance for loan losses at
a level that it considers to be adequate to provide for losses, there can be no
assurance that future losses will not exceed estimated amounts or that
additional provisions for loan losses will not be required in future periods.
Non-Interest Income. The Company's non-interest income increased $154,000 to
$313,000 for the quarter ended March 31, 1998 compared to $159,000 for the same
quarter a year ago. The increase was due primarily from gains on the sale of
investment securities held for trade of $10,000, an increase in unrealized gain
on the Company's trading portfolio of $81,000, and an increase of $34,000 in
deposit related fees due in part to an increase in ATM usage fees.
<PAGE>
Non-Interest Expense. The Company's non-interest expense increased $169,000 to
$799,000 for the quarter ended March 31, 1998 compared to $630,000 for the same
quarter a year ago. The increase was primarily the result of increased staffing
costs of $81,000, due to bonuses of $44,000, normal salary and benefit increases
of $29,000, and the expense recognition of the ESOP of $8,000; additional data
processing costs of $9,000, and increases in professional fees of $21,000 and
other operating expenses of $58,000 due to growth of the Company's operations.
Provision for Income Taxes. The provision for income taxes decreased $6,000 to
$138,000 for the three months ended March 31, 1998 as compared to the prior year
quarter due to a decrease in pre-tax income.
Liquidity and Capital Resources
The Company's principal sources of funds are deposits, proceeds from principal
and interest payments on loans (including mortgage-backed securities), sales or
maturities of investment securities and income from operations. While scheduled
loan repayments and maturing investments are relatively predictable, deposit
flows and early loan repayments are more influenced by interest rates, floors
and caps on loan rates, general economic conditions and competition. The primary
business activity of the Company, that of making conventional mortgage loans on
residential housing, is likewise affected by economic conditions.
Federal regulations require the Bank to maintain minimum levels of liquid
assets. The required percentage has varied from time to time based upon economic
conditions and savings flows and is currently 5% of net withdrawable savings
deposits and borrowings payable on demand or in one year or less during the
preceding calendar month. Liquid assets for purposes of this ratio include cash,
certain time deposits, U.S. Government, government agency and corporate
securities and other obligations generally having remaining maturities of less
than five years. The Bank has historically maintained its liquidity ratio for
regulatory purposes at levels in excess of those required. At March 31, 1998,
the Bank's liquidity ratio for regulatory purposes was 15.67%.
The Company's most liquid assets are cash and cash equivalents, which consist of
interest-bearing deposits and short-term highly liquid investments with original
maturities of less than three months that are readily convertible to known
amounts of cash. The level of these assets is dependent on the Company's
operating, financing and investing activities during any given period. At March
31, 1998 and December 31, 1997 cash and cash equivalents totaled $6.1 million
and $5.7 million respectively.
Liquidity management for the Company is both a daily and long-term function of
the Company's management strategy. Excess funds are generally invested in
short-term investments, such as overnight deposits. If the Company requires
funds beyond its ability to generate them internally, additional funds are
available through FHLB advances.
The Company anticipates that it will have sufficient funds available to meet
current commitments. At March 31, 1998 the Company has outstanding loan
commitments totaling $1.7 million and unused lines of credit granted totaling
$5.0 million.
<PAGE>
Federally insured savings associations, such as the Bank, are required to
maintain a minimum level of regulatory capital. The OTS has established capital
standards, including a leverage ratio (or core capital) requirement and a
risk-based capital requirement applicable to such savings associations. These
capital requirements must be generally as stringent as the comparable capital
requirements for national banks. The OTS is also authorized to impose capital
requirements in excess of these standards on individual associations on a
case-by-case basis.
At March 31, 1998, the Bank had core capital equal to $9.7 million, or 9.37% of
adjusted total assets which was $5.5 million above the minimum leverage ratio
requirement of 4% in effect on that date. The Bank had total capital of $10.1
million (including $9.7 million in core capital and $400,000 in qualifying
supplementary capital) and risk-weighted assets of $57.0 million; or total
risk-based capital of 17.7% of risk-weighted assets at March 31, 1998. This
amount was $5.5 million above the 8% requirement in effect on that date.
<PAGE>
Non-Performing Assets
The following table sets forth the amounts and categories of
non-performing assets in the Company's portfolio. Loans are reviewed monthly and
any loan whose collectibility is doubtful is placed on non-accrual status. Loans
are placed on non-accrual status when principal and interest is 90 days or more
past due, unless, in the judgement of management, the loan is well
collateralized and in the process of collection. Interest accrued and unpaid at
the time a loan is placed on non-accrual status is charged against interest
income. Subsequent payments are either applied to the outstanding principal
balance or recorded as interest income, depending on the assessment of the
ultimate collectibility of the loan. Restructured loans include troubled debt
restructuring (which involved forgiving a portion of interest or principal on
any loans or making loans at a rate materially less than the market rate). At
March 31, 1998, the Company had no restructured loans.
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
-------- ---------
(Dollars in Thousands)
<S> <C> <C>
Non- accruing loans:
One to four family 321 282
Multi- family 0 21
Non- residential --- ---
Construction --- ---
Consumer 5 5
-------- ---------
Total 326 308
-------- ---------
Foreclosed assets:
One to four family 27 27
Multi-family --- ---
Non-residential --- ---
Construction --- ---
Consumer --- ---
-------- ---------
Total 27 27
-------- ---------
Total non- performing assets 353 335
======== =========
Total as a percentage of total assets 0.33% 0.34%
======== =========
</TABLE>
For the three months period ended March 31, 1998, gross interest income which
would have been recorded had the non-accruing loans been current in accordance
with their original terms amounted to $2,000.
<PAGE>
In addition to the non-performing assets set forth in the table above, as of
March 31, 1998, there were no loans with respect to which known information
about the possible credit problems of the borrowers or the cash flows of the
security properties have caused management to have concerns as to the ability of
the borrowers to comply with present loan repayment terms and which may result
in the future inclusion of such items in the non- performing asset categories.
Management has considered the Company's non-performing and "of concern" assets
in establishing its allowance for loan losses.
Recent Developments
The Company declared a cash dividend of $.07 per share, payable on May 22, 1998
to shareholders of record on May 8, 1998.
The Company announced that it has provided notice to the Offices of Thrift
Supervision (the OTS) of its intent to repurchase 5% of the outstanding shares
of common stock in the open market over a twelve month period. Subject to no
objection by the OTS, the shares will be purchased at prevailing market prices
from time to time depending upon market conditions. The repurchased shares will
become treasury stock.
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
From time to time, the Bank is a party to legal
proceedings in the ordinary course of business, wherein it
enforces its security interest. The Company and the Bank are
not engaged in any legal proceedings of a material nature at
the present time.
Item 2. CHANGES IN SECURITIES
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following items were presented to shareholders at
the Company's Annual Meeting on April 22, 1998:
1. The election of Ronald W. Borto and John C.
McLaughlin to serve as directors for terms of three years or
until successors have been elected and qualified.
2. The ratification of the appointment of Cobitz,
VandenBerg & Fennessy as auditors for the Company for the
fiscal year ending December 31, 1998.
Both of the above items were approved by shareholders
at the meeting. The election of Ronald W. Borto was approved
by a vote of 869,013 in favor and 1,508 withheld. The election
of John C. McLaughlin was approved by a vote of 869,013 in
favor and 1,508 withheld. The appointment of Cobitz,
VandenBerg & Fennessy was ratified by vote of 868,921 in
favor, 1,100 against and 500 abstaining.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Computation of earnings per share (Exhibit 11 filed
herewith)
(b) Financial Data Schedule (Exhibit 27 filed herewith)
(c) No reports on Form 8-K were filed this quarter
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
AMB FINANCIAL CORP.
-------------------
Registrant
DATE: April 30, 1998
BY: /s/Clement B. Knapp, Jr.
------------------------
Clement B. Knapp, Jr.
President and Chief Executive Officer
(Duly Authorized Representative)
BY: /s/Daniel T. Poludniak
----------------------
Daniel T. Poludniak
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit No.
11 Statement re: Computation of Earnings Per Share
27 Financial Data Schedule
<TABLE>
<CAPTION>
Three Months
Ended
March 31, 1998
<S> <C>
Net Income $ 224,639
=========
Weighted average shares outstanding
for basic EPS computation 963,798
Reducton for common shares not yet
released by Employee Stock Ownership Plan (71,944)
---------
Total weighted average common shares
outstanding for basic computation 891,854
=========
Basic earnings per share $ 0.25
=========
Total weighted average common shares
outstanding for basic computation 891,854
Common stock equivalents due to
dilutive effect of stock options 25,336
---------
Total weighted aveage common shares and
equivalents outstanding for diluted
computation 917,190
=========
Diluted earnings per share $ 0.24
=========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS LEGEND CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,051,009
<INT-BEARING-DEPOSITS> 4,022,931
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 2,740,107
<INVESTMENTS-HELD-FOR-SALE> 10,984,996
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 83,140,292
<ALLOWANCE> 433,315
<TOTAL-ASSETS> 106,200,893
<DEPOSITS> 74,391,392
<SHORT-TERM> 15,000,000
<LIABILITIES-OTHER> 1,833,224
<LONG-TERM> 0
11,241
0
<COMMON> 0
<OTHER-SE> 14,965,036
<TOTAL-LIABILITIES-AND-EQUITY> 106,200,893
<INTEREST-LOAN> 1,650,719
<INTEREST-INVEST> 260,554
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 1,911,273
<INTEREST-DEPOSIT> 837,818
<INTEREST-EXPENSE> 1,040,394
<INTEREST-INCOME-NET> 870,879
<LOAN-LOSSES> 22,932
<SECURITIES-GAINS> 152,964
<EXPENSE-OTHER> 798,585
<INCOME-PRETAX> 362,280
<INCOME-PRE-EXTRAORDINARY> 362,280
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 224,639
<EPS-PRIMARY> 0.25
<EPS-DILUTED> 0.24
<YIELD-ACTUAL> 3.55
<LOANS-NON> 326,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 410,383
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 433,315
<ALLOWANCE-DOMESTIC> 433,315
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
