Ameriana Bancorp Reports Net Income of $383,000 or $0.13 Per Share for the Quarter Ended June 30, 2008
NEW CASTLE, Ind.--(Business Wire)--
Ameriana Bancorp (NASDAQ:ASBI) today announced net income of
$383,000 or $0.13 per basic and diluted share for the quarter ended
June 30, 2008, versus a net loss of $23,000 or $0.01 per basic and
diluted share in the year-earlier period. For the first six months of
2008, Ameriana posted net income of $766,000 or $0.26 per basic and
diluted share compared with a net loss of $47,000 or $0.02 per basic
and diluted share in the same period last year.
Highlights of the quarter included continued growth in Ameriana's
loan portfolio and improvement in its net interest margin, each of
which contributed to higher net interest income for the quarter. Also,
credit quality improved versus the first quarter of the year, as
indicated by a declining level of non-performing loans both in dollars
and as a percentage of the end-of-period loans. Despite the progress
with non-performing loans, the Company recorded a higher provision for
loan losses in the second quarter compared with the same period last
year (although lower than in the first quarter of 2008), primarily to
compensate for charge-offs needed to reflect the fair value of
repossessed property entering the final phase of the collection cycle,
and due to continued loan growth.
Commenting on the announcement, Jerome J. Gassen, President and
Chief Executive Officer, said, "The Company's second quarter results
show the ongoing positive impact of our growth strategies, which are
driving improved business fundamentals and consistent earnings growth
- accomplishments that are particularly gratifying considering the
current competitive and economic environment. These strategies have
centered on transforming Ameriana from a traditional thrift into a
full-service financial institution with a strong commercial focus. Our
asset/liability efforts in response to declining interest rates have
continued to increase our net interest income and net interest margin.
This continuing progress, along with our accelerated expansion
activities, provides a solid operating platform for what we expect
will be improved performance in the second half of the year and over
the longer term."
Ameriana's higher earnings for the first half of 2008 reflected
growth in the Company's loan portfolio and its increased focus on
commercial lending. Since June 30, 2007, the Company's loan portfolio
has increased 14%, including a 26% increase in commercial loans.
Notwithstanding that past loan growth, lending has slowed somewhat in
the face of current economic headwinds and more conservative
underwriting by the secondary market. However, the Company's loan
pipeline remains at a reasonable level.
The Company remains on track to open new full-service banking
centers in Fishers and Carmel in October 2008 and January 2009,
respectively. These new banking centers, both located in Hamilton
County, will enhance Ameriana's presence and visibility in one of the
fastest growing areas of Indiana and increase its footprint in the
Indianapolis area.
Ameriana's net interest income for the second quarter of 2008
increased 22% to $3,013,000 from $2,465,000 in the year-earlier
period. This reflected loan growth with Ameriana's increased emphasis
on commercial lending and the higher yields it provides, the Company's
balance sheet restructuring strategies that began in late 2006, and
efforts to reduce funding costs quickly in a declining-rate
environment. Net interest income for the first half of 2008 increased
20% to $5,738,000 versus $4,798,000 in the comparable period last year
and, as for the quarter, reflected loan growth and an improved net
interest margin.
The Company's net interest margin on a fully tax-equivalent basis
for the second quarter increased to 3.19%, up 22 basis points from
2.97% in the first quarter of 2008, and 44 basis points higher than
2.75% in the year-earlier quarter. For the first half of 2008, the net
interest margin rose 40 basis points to 3.08% from 2.68% for the
year-earlier period.
Non-performing loans at June 30, 2008 totaled $3,492,000, down
$1,065,000 from $4,557,000 at March 31, 2008, and up $172,000 from
$3,320,000 at June 30, 2007. As a percentage of the total
end-of-period loans, non-performing loans declined to 1.12% at June
30, 2008, versus 1.53% at March 31, 2008, and 1.21% at June 30, 2007.
The decline in non-performing loans from the first quarter of 2008
reflected primarily the migration of a single commercial credit from
non-performing to other real estate owned (OREO) as the Company
assumed control of the property. There were no significant additions
to non-performing loans during the second quarter. Ameriana has no
direct exposure to sub-prime loans in its loan portfolio.
OREO totaled $4,026,000 at June 30, 2008, up $1,320,000 from
$2,706,000 at March 31, 2008, and up $3,320,000 from $806,000 at June
30, 2007. As a percentage of the total end-of-period assets, OREO
increased to 0.89% at June 30, 2008, versus 0.61% at March 31, 2008,
and 0.19% at June 30, 2007. The increase in OREO during the second
quarter of 2008 was due primarily to the transfer of the previously
mentioned commercial credit, after reflecting a charge-off to
write-down the property to its current appraised value.
Ameriana's provision for loan losses for the second quarter was
$221,000, down from $371,000 in the first quarter of 2008, but up from
$90,000 in the year-earlier period to reflect growth in the loan
portfolio and a recent rise in the level of net charge-offs,
particularly in the second quarter of 2008 associated with the
transfer of property to OREO. The Company's allowance for loan losses
totaled 0.94% of total loans as of June 30, 2008, versus 0.97% at
March 31, 2008, and 1.00% at June 30, 2007. The allowance for loan
losses totaled 83.3% of non-performing loans as of June 30, 2008, up
from 63.8% at March 31, 2008, and 82.2% at June 30, 2007.
Other income for the second quarter of 2008 was $1,022,000, up 3%
from $993,000 in the same quarter in 2007. Other income for the first
half of 2008 increased 6% to $2,164,000 from $2,033,000 in the
year-earlier period, primarily reflecting an $84,000 increase in
brokerage and insurance commissions, a $35,000 increase in fees and
service charges from deposit accounts, and a $50,000 larger increase
in cash surrender value of life insurance compared with the
year-earlier period. Additionally, in the first half of 2008, the
Company realized $60,000 in gains from the sale of certain municipal
securities, and a $49,000 gain from the partial redemption of the
Company's equity interest in Visa realized through Visa's recent
initial public offering.
Other expense for the second quarter rose 3% to $3,473,000 from
$3,367,000 in the same quarter last year. Other expense for the first
six months of 2008 totaled $6,866,000, down 1% from $6,967,000 in the
first half of 2007, largely due to a $304,000 reduction in legal and
professional fees this year with the mid-2007 conclusion of the
Company's litigation with RLI.
For the second quarter of 2008, the Company's earnings included a
$42,000 income tax benefit, due primarily to tax-exempt income from
bank-owned life insurance (BOLI) and tax-exempt income from municipal
securities and loans. For the first half of 2008, the income tax
benefit was $322,000, reflecting a $150,000 reversal of an income tax
liability recorded in prior years that resulted from a favorable tax
court ruling regarding the application of the Tax Equity and Fiscal
Responsibility Act penalty to investment subsidiaries of commercial
banks, in addition to the significant amount of tax-exempt interest on
municipal securities and tax-exempt income from increases in the cash
value of BOLI.
Ameriana's total assets were $453,829,000 at June 30, 2008, up 6%
from $426,791,000 at December 31, 2007, and up 7% from $423,393,000 at
June 30, 2007. The Company's loan portfolio increased 5% to
$311,067,000 at June 30, 2008, from $296,950,000 at December 31, 2007,
and was up 14% from $273,929,000 at June 30, 2007. Investment
securities totaled $67,311,000 at June 30, 2008, up 1% from
$66,692,000 at December 31, 2007, but down 28% from $93,702,000 at
June 30, 2007, as proceeds from the repositioning and reduction of the
Company's investment portfolio last year were used to support
Ameriana's growing focus on higher-yielding commercial loans.
Total deposits of $314,544,000 at June 30, 2008, were virtually
unchanged from $314,746,000 at December 31, 2007, and were down 1%
from $318,805,000 at June 30, 2007. Although total deposits declined
over those periods, strategies employed by management resulted in a
favorable change in the mix of deposits with a reduction in the more
rate-sensitive and higher-costing certificates of deposit and an
increase in the more-stable and lower-costing checking and money
market accounts.
Shareholders' equity totaled $32,909,000 at June 30, 2008, versus
$33,646,000 at December 31, 2007, and $31,571,000 at June 30, 2007.
The decrease in capital in the first half of 2008 was primarily a
result of the Company recording a liability of $1,141,000 effective
January 1, 2008, for post-retirement benefits as required under EITF
Issues 06-04 and 06-10. Ameriana's capital position continues to
exceed all of the regulatory minimum capital levels required to be
considered a "well-capitalized" institution.
Ameriana Bancorp is a bank holding company. Through its wholly
owned subsidiary, Ameriana Bank, SB, the Company offers an extensive
line of banking services and provides a range of investments and
securities products through banking centers in the central Indiana
area. Ameriana owns Ameriana Insurance Agency, a full-service
insurance agency, and has interests in Family Financial Holdings, Inc.
and Indiana Title Insurance Company. Ameriana Financial Services
offers securities and insurance products through LPL Financial (Member
FINRA/SIPC).
This news release contains forward-looking statements within the
meaning of the federal securities laws. Statements in this release
that are not strictly historical are forward-looking and are based
upon current expectations that may differ materially from actual
results. These forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those anticipated by the statements made herein. These risks and
uncertainties involve general economic trends, changes in interest
rates, loss of deposits and loan demand to other financial
institutions, substantial changes in financial markets, changes in
real estate value and the real estate market, regulatory changes,
possibility of unforeseen events affecting the industry generally, the
uncertainties associated with newly developed or acquired operations,
the outcome of pending litigation, and market disruptions and other
effects of terrorist activities. For discussion of these and other
risks that may cause actual results to differ from expectations, refer
to the Company's Annual Report on Form 10-K for the year ended
December 31, 2007, on file with the Securities and Exchange
Commission, including the section entitled "Risk Factors." The Company
undertakes no obligation to update these forward-looking statements to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unforeseen events, except as required under the
rules and regulations of the Securities and Exchange Commission.
-0-
*T
AMERIANA BANCORP
Unaudited Financial Highlights
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
2008 2007 2008 2007
-------- --------- --------- ---------
Interest income $5,858 $ 6,023 $ 11,793 $ 11,913
Interest expense 2,845 3,558 6,055 7,115
-------- --------- --------- ---------
Net interest income 3,013 2,465 5,738 4,798
Provision for loan losses 221 90 592 180
-------- --------- --------- ---------
Net interest income after
provision for loan losses 2,792 2,375 5,146 4,618
Other income 1,022 993 2,164 2,033
Other expense 3,473 3,367 6,866 6,967
-------- --------- --------- ---------
Income (loss) before income
taxes 341 1 444 (316)
Income tax (benefit) (42) 24 (322) (269)
-------- --------- --------- ---------
Net income (loss) $ 383 $ (23) $ 766 $ (47)
======== ========= ========= =========
Net income (loss) per share:
Basic $ 0.13 $ (0.01) $ 0.26 $ (0.02)
======== ========= ========= =========
Diluted $ 0.13 $ (0.01) $ 0.26 $ (0.02)
======== ========= ========= =========
Weighted average shares
outstanding:
Basic 2,989 2,989 2,989 3,010
======== ========= ========= =========
Diluted 2,989 2,989 2,989 3,010
======== ========= ========= =========
Dividends declared per share $ 0.04 $ 0.04 $ 0.08 $ 0.08
======== ========= ========= =========
June 30, Dec. 31, June 30,
2008 2007 2007
--------- --------- ---------
Total assets $453,829 $426,791 $423,393
Cash and cash equivalents 22,683 17,172 11,486
Investment securities available
for sale 67,311 66,692 93,702
Loans receivable 311,067 296,950 273,929
Allowance for loan losses 2,909 2,677 2,730
--------- --------- ---------
Loans, net 308,158 294,273 271,199
Allowance for loan losses as a
percentage of loans receivable 0.94% 0.90% 1.00%
Non-performing loans $ 3,492 $ 2,638 $ 3,320
Allowance for loan losses as a
percentage of non-performing
loans 83.3% 101.5% 82.2%
Deposits:
Non-interest-bearing $ 23,588 $ 20,429 $ 20,630
Interest-bearing 290,956 294,317 298,175
--------- --------- ---------
314,544 314,746 318,805
Borrowed funds $ 98,735 $ 68,513 $ 66,094
Shareholders' equity 32,909 33,646 31,571
Loans accounted for on a non-
accrual basis 2,543 2,638 3,320
Book value per share 11.01 11.26 10.56
*T
Ameriana Bancorp
Jerome J. Gassen, 765-529-2230
President and Chief Executive Officer
Copyright Business Wire 2008
