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 March 31, 1998
Commission File Number: 0-10710
AMBANC CORP.
(exact name of registrant as specified in its charter)
INDIANA 35-1525227
(State or other jurisdiction (I.R.S. Employer ID No.)
of incorporation or
organization)
302 Main Street
P.O. Box 556
Vincennes, Indiana 47591-0556
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code (812) 885-6418
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:
6,999,281 common shares of stock were outstanding as of
May 15, 1998.
PAGE
AMBANC CORP.
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at
March 31, 1998 (unaudited) and
December 31, 1997
Consolidated Statements of Income for
Three months ended March 31, 1998
and 1997(unaudited)
Consolidated Statements of Cash
Flows for three months ended
March 31, 1998 and 1997 (unaudited)
Notes to Consolidated Financial
Statements (unaudited)
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial
Condition
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. Exhibits and Reports of Form 8-K
Signatures
Exhibit Index
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMBANC CORP.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
March 31, December 31,
1998 1997
ASSETS
Cash and due from banks $ 22,383 $ 37,313
Federal funds sold -- 7,440
Total cash and cash equivalents 22,383 44,753
Interest-bearing deposits in other banks 199 298
Securities available for sale at market 137,351 150,219
Loans held for sale 3,479 2,443
Loans, net of unearned income 549,575 540,433
Allowance for loan losses (5,692) (5,428)
Loans, net 543,883 535,005
Premises, furniture and equipment, net 12,992 12,934
Accrued interest receivable and other assets 13,246 13,743
TOTAL ASSETS $ 733,533 $ 759,395
LIABILITIES
Noninterest-bearing deposits $ 61,013 $ 63,641
Interest-bearing deposits 568,005 602,044
Total deposits 629,018 665,685
Short-term borrowings 11,595 6,747
Long-term debt 6,811 2,031
Accrued interest payable and other liabilities 6,634 6,577
TOTAL LIABILITIES 654,058 681,040
SHAREHOLDERS' EQUITY
Preferred stock, $10 par value, 200,000 shares
authorized, no shares issued or outstanding -- --
Common stock, $10 par value, 10,000,000
shares authorized, 6,999,425 and 6,985,712
shares issued at March 31, 1998,
and December 31, 1997 69,994 69,857
Treasury stock (684 and 34 shares at cost) (17) (1)
Retained earnings 8,503 7,422
Accumulated other comprehensive income, net
of taxes 995 1,077
TOTAL SHAREHOLDERS' EQUITY 79,475 78,355
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 733,533 $ 759,395
PAGE
AMBANC CORP.
CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands, except share data)
Three Months Ended
March 31,
1998 1997
INTEREST INCOME
Interest and fees on loans $ 11,947 $ 10,994
Interest and fees on loans
held for sale 52 47
Interest on securities
Taxable 1,403 1,746
Tax exempt 679 733
Other interest 92 84
TOTAL INTEREST INCOME 14,173 13,604
INTEREST EXPENSE
Interest on deposits 6,924 6,760
Interest on short-term borrowings 91 96
Interest on long-term debt 32 35
TOTAL INTEREST EXPENSE 7,047 6,891
NET INTEREST INCOME 7,126 6,713
Provision for loan losses 190 315
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 6,936 6,398
NONINTEREST INCOME
Income from fiduciary activities 178 194
Service charges on
deposit accounts 465 403
Gain/(loss) on securities 9 55
Other operating income 444 419
TOTAL NONINTEREST INCOME 1,096 1,071
NONINTEREST EXPENSE
Salaries and employees benefits 2,803 2,500
Occupancy expenses, net 374 341
Equipment expenses 397 316
Data processing expenses 95 123
FDIC insurance 31 7
Other operating expenses 1,395 1,172
TOTAL NONINTEREST EXPENSE 5,095 4,459
INCOME BEFORE INCOME TAXES 2,937 3,010
Income taxes 880 895
NET INCOME $ 2,057 $ 2,115
EARNINGS PER COMMON SHARE
Net income per share $ .29 $ .30
Weighted average outstanding shares 6,986,650 6,963,499
PAGE
AMBANC CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands, except share data)
Three Months Ended
March 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,057 $ 2,115
Adjustments to reconcile net income to
net cash from operating activities:
Net premium amortization and discount
accretion on securities 64 84
Depreciation 339 299
Provision for loan losses 190 315
(Gain)/loss on securities (9) (55)
(Gain)/loss on sales of assets 10 (4)
(Gain)/loss on sales of loans (73) (131)
Proceeds from sales of loans held for sale 11,927 5,276
Loans held for sale made to customers,
net of payments collected (12,890) (5,093)
Accrued interest receivable
and other assets 525 716
Accrued interest payable
and other liabilities 57 (172)
Deferred loan fees net of costs 16 (25)
NET CASH FROM OPERATING ACTIVITIES 2,213 3,325
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of securities available
for sale 0 5,791
Proceeds from maturities and calls of securities
available for sale 13,874 5,742
Purchases of securities available for sale (1,171) (6,174)
Net change in interest bearing deposits
in other banks 99 95
Loans made to customers, net of
payments collected (9,084) (12,813)
Loans purchased -- --
Proceeds from sales of loans -- --
Property and equipment expenditures (408) (801)
NET CASH FROM INVESTING ACTIVITIES 3,310 (8,160)
PAGE
AMBANC CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
(Dollar amounts in thousands, except share data)
Three Months Ended
March 31,
1998 1997
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits (36,667) 6,004
Net change in short-term borrowings 4,848 1,149
Payments on long-term debt (249) (267)
Proceeds on long-term debt 5,029 21
Net change in treasury stock (16) 2
Dividends paid (838) (696)
NET CASH FROM FINANCING ACTIVITIES (27,893) 6,213
NET CHANGE IN CASH AND CASH EQUIVALENTS (22,370) 1,378
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 44,753 32,284
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,383 $ 33,662
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period:
Interest $ 14,021 $ 13,094
Income taxes 162 8
PAGE
AMBANC CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
The Consolidated balance sheet as of March 31, 1998,
consolidated statements of income for the three month periods
ended March 31, 1998 and 1997, and the consolidated statements of
cash flows for the three month periods ended March 31, 1998 and
1997, have been prepared by the Corporation, without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and changes in cash
flows at March 31, 1998, and all periods presented, have been
made.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance
with generally accepted accounting principles have been
condensed or omitted. It is suggested that these
consolidated financial statements be read in conjunction
with the consolidated financial statements and notes thereto
included in the Corporation's December 31, 1997, annual report to
shareholders. The results of operations for the period
ended March 31, 1998, are not necessarily indicative
of the operating results for the full year.
PROPOSED ACQUISITION OF AMBANC CORP.
On April 1, 1998 the Corporation entered into a definitive
agreement to be acquired by Union Planters Corporation (UPC) in
Memphis, Tennessee. Pursuant to the proposed acquisition, the
Corporation has been offered .4841 shares of UPC common stock for
each outstanding share of the corporation. The transaction will
be accounted for under the pooling of interests method.
Consummation of the transaction is subject to regulatory and
shareholders' approval.
PAGE
AMBANC CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
NEW ACCOUNTING PRONOUNCEMENTS
The Corporation adopted Statement of Financial Accounting
Standards (FAS) 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities," effective
January 1, 1998. The adoption of FAS 125 had no effect on the
Corporation's financial statements due to no covered transactions
existing.
The Corporation adopted FAS 130, "Comprehensive Income",
effective January 1, 1998. It requires that changes in the
amounts of certain items, including foreign currency translation
adjustments and gains and losses on certain securities be shown
in the financial statements. FAS 130 does not require a specific
format for the financial statement in which comprehensive income
is reported, but does require that an amount representing total
comprehensive income be reported in that statement. All prior
year financial statements have been reclassified for comparative
purposes.
The following is a summary of the Corporation's total
comprehensive income for the interim three month periods ended
March 31, 1998 and 1997 under FAS 130:
Three Months Ended
March 31,
1998 1997
Net income $ 2,057 $ 2,115
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses)
arising during period (87) (1,056)
Reclassification adjustment for (gains)
losses included in net income 5 (68)
Other comprehensive income (82) (1,124)
COMPREHENSIVE INCOME $ 1,975 $ 991
FAS 131, "Disclosures about Segments of an Enterprise and Related
Information", was issued in June 1997. This statement is
effective for fiscal years beginning after December 15, 1997, and
will change the way corporations report information about
products, services and segments of their business in their annual
financial statements and requires them to report selected segment
information in their quarterly reports issued to shareholders.
Management has not yet determined the effect, if any, of FAS 131
disclosures on the consolidated financial statements.
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
FINANCIAL STATEMENT RECLASSIFICATIONS
Certain other items in the prior years financial statements have
been reclassified to correspond with the current presentations.
ITEM 2.
RESULTS OF OPERATIONS
Net interest income is the principal source of the
Corporation's earnings and represents the difference
between interest income on loans and securities over
interest costs of deposits and borrowed funds. Income
from certain earning assets is exempt from federal income
tax and, as is customary in the banking industry, changes in
net interest income are analyzed on a fully tax-equivalent
basis. Under this method, and throughout this discussion,
nontaxable income on loans and investments is adjusted to
an amount which represents the equivalent earnings if such
earnings were subject to federal tax. The marginal tax
rate used to restate nontaxable income was 34%.
Three Months Ended
March 31, Increase
1998 1997 (Decrease)
Interest income $ 14,173 $ 13,604 4.18 %
Adjusted for tax-
exempt income 414 417 (0.72)
Tax-equivalent
interest income 14,587 14,021 4.04
Interest expense 7,047 6,891 2.26
Net interest income $ 7,540 $ 7,130 5.75 %
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
Net interest income increased $413 or 5.75% for the three
months ended March 31, 1998, compared to the three months
ended March 31, 1997. This $410 increase was a combination of a
$563 increase in interest income offset by a $156 increase in
interest expense. The $563 increase in interest income was
composed of an increase of $378 due to increased volume of
average interest-earning assets and an increase of $188 due to
increased rates received on these interest-earning assets. The
$156 increase in interest expense was a combination of an
decrease of $(160) due to decreased volume of average interest-
bearing liabilities and an increase of $316 due to rate increases
on these interest-bearing liabilities.
The Corporation's average assets for the first three months of
1998 increased $26,499 or 3.71% to $741,007 from $714,508. The
percent of average earning assets to total average assets has
decreased to 93.96% or $696,222 for the first three months of
1998 from 94.92% or $678,181 for the first three months of 1997.
This decreasing trend is due primarily to a substantial
investment in our branch network since the beginning of 1997.
Net interest margin increased .13% to 4.40% for the first three
months of 1998 from 4.27% for the first three months of 1997.
This increase is due to the cost of average interest-bearing
liabilities decreasing (.02%) from 4.80% for the first three
months of 1997 to 4.78% for the first three months of 1998 while
the yield on average earning assets increased .11% from 8.39% for
the first three months of 1997 to 8.50% for the first three
months of 1998. Although the Corporation continues to place
emphasis on increasing the net interest margin, it has proven
increasingly difficult with increased emphasis on rates by the
competition.
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
The provision for loan losses decreased $125 or 39.68% to $190
during the first three months of 1998 compared to $315 during the
first three months of 1997. The smaller provision was due to an
overall improvement in loan quality and a net loan recovery in
the first quarter of 1998.
The allowance for loan losses at March 31, 1998, was $5,692 or
1.04% of total loans less unearned income as compared to $5,428
or 1.00% of total loans less unearned income at December 31,
1997. During the first three months of 1998, loans charged off
were $164 and recoveries from previously written off loans were
$238, thus a net recovery for the first three months of 1998 of
$74 was realized. The adequacy of the allowance for loan losses
is analyzed by management of each subsidiary bank based upon
review of identified loans with more than a normal degree of
risk, historical loan loss percentage by type of loan and present
and forecasted economic conditions. Management's analysis
indicates that the allowance for loan loss at March 31, 1998, is
adequate to cover potential losses on identified loans with
credit problems and historical losses on the remaining loan
portfolio. The following are the various classifications of
problem loans with their outstanding balances and percent of
total loans less unearned income at March 31, 1998, and December
31, 1997:
March 31, 1998 December 31, 1997
Nonaccrual loans $1,992 .36% $ 649 .12%
Loans past due 90 days 331 .06 1,976 .37
Performing restructured loans 2,355 .43 2,421 .45
OREO 915 .17 729 .13
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
A summary of the activity in the allowance for loan losses
account for the first three months ending March 31, 1998 and
1997 was:
1998 1997
Balance, January 1 $5,428 $5,630
Provision for loan losses 190 315
Loans charged off (164) (605)
Recoveries of loans previously
charged off 238 82
Balance, March 31, $5,692 $5,422
Noninterest income for the three months ended March 31, 1998,
increased 2.33% or $25 to $1,096 from $1,071 in 1997. Income
from fiduciary services decreased $16 or 8.25% to $178 from $194
in 1997. This decrease is primarily due to timing of billings in
1998 compared to 1997 and does not necessarily reflect a decline
in this line of business. The commissions for selling securities
through an affiliation with PrimeVest are included in fiduciary
activities income. This service was provided to customers at
both bank subsidiaries for the first time in 1997. Service
charges on deposit accounts increased $62 or 15.38% to $465 in
1998 compared to $403 in 1997 and is mainly due to increased
charges on non-sufficient funds checks. Security gains were down
$46 for the first three months of 1998 compared to the first
three months of 1997. During 1997, the Corporation instituted a
plan of selling small investment pieces to reduce carrying
expenses and to extending maturities on securities that would
mature within the next year. Other operating income increased
5.97% or $25 to $444 for the three months ended March 31, 1998,
from $419 for the same three months in 1997. This increase is
due primarily to increases in letter of credit and mortgage
servicing fees.
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
Noninterest expense for the three months ended March 31, 1998,
was $5,095 as compared to $4,459 for the three months ended March
31, 1997, for an increase of $636 or 14.26%. Salaries and
employee benefits are the largest portion of noninterest expense
and increased $303 or 12.12% in the first three months of 1998
compared to the same period in 1997. This increase is due in
part to the Corporation adding three new branches during 1997 and
a fourth in 1998. Although the new Terre Haute branch did not
officially open for business until April of 1998, the Corporation
incurred significant start-up costs in the first quarter of 1998.
The major increases in employee benefits were in medical
insurance and expenses related to SARs outstanding.
Occupancy expenses were up $33 or 9.68% and equipment expenses
were up $81 or 25.63% in the first three months of 1998 compared
to 1997. The additions to the branch structure added
significantly to these expenses. The branches added in 1997 will
have more depreciation in 1998, due to the half-year convention
used in the first year of service for many fixed assets. In
addition, the new Terre Haute facility will add expenses that
have not impacted prior financial statements.
The subsidiary banks have been assigned the classification of
least risk by the FDIC and as such are subject to the lowest
deposit insurance rates available from the Bank Insurance Fund
(BIF) and the Savings Association Insurance Fund (SAIF). These
rates are set to remain constant until the year 2000 and are
.0129% for BIF and .0243% for SAIF.
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
Other operating expenses increased $223 or 19.03% to $1,395 for
the first three months of 1998 from $1,172 for the same period in
1997. This increase represents the shifting of a considerable
amount of overhead to the holding company where it is charged
back to the subsidiaries and reclassified as other operating
expenses. Had this shift not occurred, increases in salaries and
benefits, occupancy, equipment and data processing expenses would
have been greater, reflective of the increased investment in both
branch structure and new technologies.
Income before income taxes was down $73 or 2.43% to $2,937 for
the first three months of 1998 from $3,010 for the first three
months of 1997. The net income for the first three months ended
March 31, 1998, was down $58 or 2.74% to $2,057 as compared to
$2,115 for the three months ended March 31, 1997. Earnings per
share were $.29 and $.30 for the quarters ending March 31, 1998
and 1997. Based upon annualized net income the return on average
assets for the first three months of 1998 was off slightly at
1.13% compared to 1.20% in 1997.
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
The following schedule shows selected financial amounts and ratios for
the three months ended March 31, 1998 and 1997.
Three Months Ended
March 31,
1998 1997
AVERAGE BALANCE SHEET DATA
Total assets $ 741,007 $ 714,508
Earning assets 696,222 678,181
Securities 143,222 168,921
Loans 544,098 500,169
Allowance for loan losses 5,400 5,455
Goodwill 1,570 1,738
Deposits 647,069 627,805
Shareholders' equity 78,870 72,510
END OF PERIOD BALANCE SHEET DATA
Total assets $ 733,533 $ 726,579
Securities 137,351 163,552
Loans 549,575 506,782
Allowance for loan losses 5,692 5,422
Goodwill 1,556 1,724
Deposits 629,018 639,560
Shareholders' equity 79,475 72,479
INCOME DATA
Net interest income(t.e. basis) $ 7,540 $ 7,130
Provision for loan losses 190 315
Noninterest income 1,096 1,071
Noninterest expense 5,095 4,459
Net income 2,057 2,115
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
Three Months Ended
March 31,
1998 1997
PER SHARE DATA
Net income $ .29 $ .30
Cash dividends .12 .10
Book value at end of period 11.36 10.36
Tangible book value at end
of period 11.13 10.11
Stock price at end of period 29.75 17.14
Weighted average
shares 6,986,779 6,964,161
Weighted average
treasury shares 129 662
SELECTED RATIOS
Return on average assets 1.13% 1.20%
Return on average equity 10.72 11.87
Net interest margin(t.e.basis) 4.40 4.27
Efficiency ratio 61.97 57.28
Net charge-offs to average loans (.01) .10
Allowance for loan losses
to loans 1.04 1.07
Nonaccrual loans to loans .36 .25
Loans past due 90 days or
more to loans .06 .37
Performing restructured loans
to loans .43 .79
OREO to loans .16 .08
Tier 1 leverage capital 10.41 10.03
Tier 1 capital 13.59 13.34
Total capital 14.60 14.35
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
FINANCIAL CONDITION
Total assets have decreased $25,862 or 3.41% to $733,533 at March
31, 1998, from $759,395 at December 31, 1997. Total noninterest-
bearing deposits have decreased $2,628 or 4.13% and interest-
bearing deposits have decreased $34,039 or 5.65% at March 31,
1998, from December 31, 1997 for a total decrease in deposits of
$36,667 or 5.51%. The reduction in deposit totals are reflective
of both strong competition and tighter pricing controls. While
the level of deposits has decreased, price controls and an
increasing percentage of loans in proportion to total earning
assets had a positive impact on the net interest margin.
Securities available for sale before the mark-to-market have
decreased $12,758 or 8.59% to $135,777 at March 31, 1998, from
$148,535 at December 31, 1997. Securities available for sale at
market indicates a decrease of $12,868 or 8.57% at March 31,
1998, from December 31, 1997. This market valuation change is
the result of normal repricing of investment securities in
different rate environments and accounted for $82 of the
reduction in the valuation of securities available for sale on
the balance sheet.
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
Loans held for sale represent qualifying fixed rate mortgage
loans that are available for sale into the secondary market.
Fixed rate real estate mortgage loan rates were low enough that
the Corporation has experienced a heavy demand for these loans
during the three months ended March 31, 1998. In general,
current rate volatility on these loans is making it necessary to
sell them as soon as they are booked. The following is the
detail of activity in the loans held for sale between year end
and March 31, 1998:
Balance December 31, 1997 $ 2,443
New loans booked (net of payments) 12,963
Loans sold (11,927)
Total at March 31, 1998 $ 3,479
The sale of loans to the secondary market has provided $73 of net
gains on sales during the first three months of 1998 and the
Corporation is servicing $113,009 of real estate loans sold to
the secondary market as of March 31, 1998.
Loans have increased $9,142 or 1.69% at March 31, 1998, from
December 31, 1997. The following shows the balance and percent
of total by loan classification as of the end of the periods:
3-31-98 12-31-97
% of % of
Balance Total Balance Total
Commercial $237,559 43.23% $224,468 41.53%
Agricultural 64,926 11.81 55,267 10.23
Real estate 132,278 24.07 147,016 27.20
Installment 111,650 20.32 110,252 20.40
Credit cards 3,162 .57 3,430 .63
Total $549,575 $540,433
The types of loans outstanding as a percentage of total loans has
remained very stable between year end 1997 and March 31, 1998.
The demand for new commercial loans has been the strongest,
reflecting the current level of economic development in this
region. The increase in agricultural loans coupled with the
decrease in real estate loans is primarily due to a change made
to more accurately classify some of the company's agricultural
real estate loans during the first three months of the year. The
additional drop in real estate loans came as a result of a shift
from adjustable to fixed rate loans, which are generally sold
after they are booked.
PAGE
AMBANC CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
As of and for the three months ended March 31, 1998
(Dollar amounts in thousands, except share data)
Total shareholders' equity, including the unrealized gain on
securities available for sale, increased $1,120 or 1.43% to
$79,475 at March 31, 1998, from $78,355 at December 31, 1997.
The change in the adjustment for securities available for sale
caused total equity to decrease $82 or (.07%) at March 31, 1998,
from December 31, 1997. This decrease is the after-tax effect of
the mark-to-market adjustment on securities available for sale
which was a positive $995 at March 31, 1998, and was a positive
$1,077 at December 31, 1997. The Corporation's regulators have
issued guidelines stating that the unrealized gain or loss on
securities available for sale, other than those related to mutual
funds (FAS 115 adjustments), should not be included in
shareholders' equity for capital ratio calculations. Total
shareholders' equity, excluding the FAS 115 adjustments, was
$77,179 at December 31, 1997, and increased $1,198 or 1.55% to
$78,376 at March 31, 1998. This increase was due to net income
of $2,057 less dividends paid of $838 less $4 related to a
decrease in the mark-to-market on mutual funds and $16 related to
treasury stock.
Capital adequacy in the banking industry is evaluated primarily
by the use of three required capital ratios based on three
separate calculations: Tier 1 Leverage Capital, Tier 1 Capital
and Total Capital. The Corporation's capital ratios at March 31,
1998, and December 31, 1997, were:
March 31, 1998 December 31, 1997
Tier 1 Leverage Capital 10.41% 10.40%
Tier 1 Capital 13.59% 13.37%
Total Capital 14.60% 14.33%
PAGE
AMBANC CORP.
As of and for the three months ended March 31, 1998
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Other than ordinary routine litigation incidental to the
business, there are no material pending legal proceedings to
which the Corporation or its subsidiaries are a party or of which
any of their property is the subject.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule for March 31, 1998.
(b) No Form 8-K was filed with the SEC during the quarter
ended March 31, 1998.
PAGE
AMBANC CORP.
As of and for the three months ended March 31, 1998
SIGNATURES
Pursuant to the requirements 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.
AMBANC CORP.
(Registrant)
DATE: May 14, 1998 BY: R. Watson
Robert G. Watson
Chairman of the Board,
President and C.E.O.
DATE: May 14, 1998 BY: Troy D. Stoll
Troy D. Stoll, CPA
Secretary, Treasurer and C.F.O.
PAGE
AMBANC CORP.
As of and for the three months ended March 31, 1998
EXHIBIT INDEX
EXHIBITS PAGE
27 Financial Data Schedule for March
31, 1998.