Ameriana Bancorp Reports Second Quarter Results.Business Editors NEW CASTLE, Ind.--(BUSINESS WIRE)--Aug. 2, 2002 Ameriana Bancorp (Nasdaq:ASBI ASBI American Segmental Bridge Institute ) today announced results for the second quarter and six months ended June 30, 2002. Net income for the quarter totaled $600,000 or $0.19 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared with net income of $780,000 or $0.25 per diluted share reported in the same period last year. Net interest income for the quarter was $2,551,000 compared with $2,905,000 in the year-earlier period, while the provision for loan losses amounted to $150,000 versus $90,000 in the same quarter last year. For the first half of 2002, the Company incurred a net loss totaling $1,451,000 or $0.46 per diluted share compared with net income of $1,834,000 or $0.58 per diluted share in the year-earlier period. This loss largely reflected charges in the first quarter of the year related to the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of its investment portfolio and the increase in reserves for loan losses. Net interest income for the first half was $6,049,000 versus $6,134,000 in the comparable period last year, while the provision for loan losses amounted to $1,400,000 compared with $180,000 in the year-earlier period. Harry J. Bailey, President and Chief Executive Officer, noted that the Company's lower earnings for the second quarter was due primarily to lower interest income from investments following the liquidation of its investment portfolio and the delay involved in reinvesting those proceeds into less interest-rate sensitive investments. "While the planned liquidation of our investment portfolio occurred in late March, we did not fully accomplish the redeployment re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. of those proceeds until the end of the second quarter," he said. "This diligence reflected our desire to invest cautiously so as to avoid any unnecessary exposure to rising interest rates, when that occurs, and to minimize the volatility in future interest income. Also, considering recent turmoil in the financial markets, we thought it prudent to approach this task in a deliberate way. Considering that our loan volume has remained solid throughout this process, combined with higher interest rate margins in the second quarter (and the prospects that this improvement will continue in the second half of the year), we expect to see interest income rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective in the third quarter now that we have completed our reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. activities." Bailey also noted that the Company has maintained its conservative stance with respect to its reserve for loan losses in light of the protracted pro·tract tr.v. pro·tract·ed, pro·tract·ing, pro·tracts 1. To draw out or lengthen in time; prolong: disputants who needlessly protracted the negotiations. 2. downturn in the general economy over the past year. In the first quarter of 2002, Ameriana strengthened its reserves as a precaution for potentially bad loans and leases receivable as non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. increased to $10,715,000 at March 31, 2002. In the second quarter, non-performing assets were $10,996,000 and, accordingly, the Company has maintained a higher provision for loan losses versus the same quarter last year. The higher amount of non-performing loans in 2002 primarily reflects one lease receivables pool and one commercial real estate loan. The non-performing leases stem from a 2001 transaction in which Ameriana participated with other banks across the country to provide equipment lease financing to certain lessors. Ameriana's $12,003,000 participation, of which $11,114,000 is currently outstanding, was covered by surety bonds surety bond An insurance fee required before a duplicate security is issued to replace one that has been lost. The fee is approximately 4% of the market value of the security to be replaced. issued by major insurance companies that guaranteed payment of all amounts due under the lease in event of default by the lessee One who rents real property or Personal Property from another. A lessee of land is a tenant. Cross-references Landlord and Tenant. lessee n. the person renting property under a written lease from the owner (lessor). . When the lessees subsequently defaulted on the leases, Ameriana began to make recoveries from certain sureties subject to the reservation of rights reservation of rights Health insurance A term referring to a situation arising when there is a question as to whether a medical service is covered; usually the insurer is obliged to defend a claim while a coverage issue between insurer and policyholder is being resolved , and these leases remain classified as current. However, one surety An individual who undertakes an obligation to pay a sum of money or to perform some duty or promise for another in the event that person fails to act. surety n. has refused to honor As a verb, to accept a bill of exchange, or to pay a note, check, or accepted bill, at maturity. To pay or to accept and pay, or, where a credit so engages, to purchase or discount a draft complying with the terms of the draft. its obligation under leases with outstanding balances of approximately $5,600,000. Ameriana has filed suit against this surety seeking specific performance under its surety agreement. The non-performing commercial loan is for a condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. project that is collateralized both by real estate and personal guarantees of the borrowers. None of these assets have been written off. "We believe that our efforts to enforce the surety agreements on our lease receivables pool will be successful, efforts that also are being pressed by other participating lenders in other jurisdictions," Bailey continued. "However, so long as these circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or continue, our earnings will be affected as we forego income on these assets, and our balance sheet will reflect the higher amounts of non-performing loans." Bailey noted that Americana's regulatory capital continued to be well above required levels at June 30, 2002. Ameriana Bancorp is a bank holding company. Through its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Ameriana Bank and Trust, the Company offers an extensive line of banking services and provides a range of investments and securities products through branches in central Indiana and in the greater Cincinnati, Ohio “Cincinnati” redirects here. For other uses, see Cincinnati (disambiguation). Cincinnati is a city in the U.S. state of Ohio and the county seat of Hamilton County. area. As its name implies, Ameriana Bank and Trust also offers trust and investment management services, has interests in Family Financial Life Insurance Company and Indiana Title Insurance Company, and owns Ameriana Insurance Agency, a full-service insurance agency. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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, identified by words such as "could," "believe," "think," "risk," "precautionary pre·cau·tion·ar·y also pre·cau·tion·al adj. Of, relating to, or constituting a precaution: taking precautionary measures; gave precautionary advice. Adj. 1. ," and "signs," 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 and changes in interest rates, increased competition, changes in consumer demand for financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, the amount of losses incurred from the liquidation of certain of the Company's investments, and market disruptions Market Disruption A situation where markets cease to function in a regular manner, typically characterized by rapid and large market declines. Market disruptions can result from both physical threats to the stock exchange or a unusual trading (as in a crash). and other effects of terrorist activities. The Company undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of unforeseen events, except as required to be reported to be spoken of; to be mentioned, whether favorably or unfavorably. See also: Report under the rules and regulations of the Securities and Exchange Commission.
AMERIANA BANCORP
Unaudited Financial Highlights
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30 June 30
------------------- --------------------
2002 2001 2002 2001
-------- -------- -------- --------
Interest income $ 7,476 $ 9,237 $ 16,068 $ 18,996
Interest expense 4,775 6,242 10,019 12,862
-------- -------- -------- --------
Net interest income 2,701 2,995 6,049 6,134
Provision for loan losses 150 90 1,400 180
-------- -------- -------- --------
Net interest income after
provision for loan losses 2,551 2,905 4,649 5,954
Other income 1,187 870 2,122 1,992
Loss on disposition
of investments -- -- 3,212 --
Other expense 3,056 2,713 6,280 5,416
-------- -------- -------- --------
Income (loss) before
income taxes 682 1,062 (2,721) 2,530
Income taxes (benefit) 82 282 (1,270) 697
-------- -------- -------- --------
Net income (loss) $ 600 $ 780 $ (1,451) $ 1,833
======== ======== ======== ========
Earnings (loss) per share:
Basic $ 0.19 $ 0.25 $ (0.46) $ 0.58
======== ======== ======== ========
Diluted $ 0.19 $ 0.25 $ (0.46) $ 0.58
======== ======== ======== ========
Weighted average shares:
Basic 3,147 3,147 3,147 3,147
======== ======== ======== ========
Diluted 3,155 3,147 3,154 3,147
======== ======== ======== ========
Dividends declared per
share $ 0.16 $ 0.15 $ 0.32 $ 0.30
======== ======== ======== ========
June 30 Dec. 31 June 30
2002 2001 2001
-------- -------- --------
Total assets $511,531 $552,079 $507,158
Cash and other investments 18,524 11,801 15,252
Investment securities 111,593 140,629 76,875
Loans, net 339,626 347,465 372,810
Deposits 408,232 412,413 382,668
Borrowed funds 55,603 88,583 75,583
Shareholders' equity 41,396 42,895 42,600
Non-performing loans 10,996 3,179 1,849
Book value per share 13.15 13.63 13.54
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