GROWING
RELATIONSHIPS
Indiana United Bancorp
Financial Report
September 30, 1996
Dear Shareholders and Friends:
A year ago, my third quarter message anticipated legislation providing for
structural changes within the banking and thrift industries and suggested
thrifts would incur a substantial one-time assessment relating to these
changes. I also estimated Regional Bank could incur a pre-tax charge of as
much as $800,000.
The 1997 omnibus spending package enacted on September 30, together with
companion legislation enacted earlier in the quarter, completed this
legislative process. As a result, the net income of Regional Bank and
Indiana United was reduced by $474,000 in the third quarter, which is
equivalent to a pre-tax charge of $782,000.
Even after absorbing these non-recurring expenses, net income per common
share for the first nine months of 1996, increased $.06 over the same
period last year.
Excluding non-recurring charges, Indiana United posted a very strong
quarter. Earnings per share of $.63 surpassed the similar prior year
period by 34%, while year to date earnings exceeded the first nine months
of 1995 by 33%. This performance enabled Indiana United, on September 30,
to redeem all remaining preferred stock, allowing future earnings to accrue
solely to holders of our common shares.
The systemic changes created by current legislation are good for banking
and good for the long-term prospects of Indiana United. For example,
assuming continuation of Regional Bank's current deposit growth rate, the
new FDIC assessment formula will reduce its insurance premiums by $540,000
over the next three years, and by $250,000 or more annually thereafter.
I expect fourth quarter earnings to exceed the strong performance posted in
the ending quarter of 1995, and believe fiscal 1997 will extend the
excellent performance trends achieved in 1996.
Sincerely,
/s/ Robert E. Hoptry
Robert E. Hoptry
Chairman and President
October 8, 1996
CONSOLIDATED BALANCE SHEET
(Dollars in thousands, except per share amounts)
(Unaudited) September 30
1996 1995
Assets
Cash and due from banks $ 7,935 $ 8,200
Federal funds sold 6,000 3,475
Interest-bearing deposits 137 147
Securities held to maturity 7,868
Securities available for sale 85,042 74,850
Loans 215,028 204,574
Less: Allowance for loan losses (2,823) (2,720)
Net loans 212,205 201,854
Premises and equipment 5,926 5,937
Federal Home Loan Bank stock 1,138 1,138
Other assets 3,014 2,798
Total assets $321,397 $306,267
Liabilities
Noninterest bearing deposits $ 23,046 $ 22,978
Interest-bearing deposits 247,985 233,128
Total deposits 271,031 256,106
Short-term borrowings 14,778 13,294
Long-term debt 5,500 6,500
Other liabilities 3,350 2,975
Total liabilities 294,659 278,875
Shareholders' equity
Preferred stock 2,000
Common stock 1,251 1,251
Paid-in capital 10,677 10,677
Unrealized loss on securities available for sale (298) (195)
Retained earnings 15,108 13,659
Total shareholders' equity 26,738 27,392
Total liabilities and shareholders' equity $321,397 $306,267
Return on average assets .77% .78%
Return on average common equity 8.82 9.28
Before non-recurring charges:
Return on average assets .97 .78
Return on average common equity 11.21 9.28
SHAREHOLDER INFORMATION Indiana United Bancorp is a community-focused
Transfer Agent bank and savings and loan holding company
Securities Transfer Department serving eastern and southern Indiana through
Mid-America Bank of Louisville its subsidiaries, Union Bank and Trust
500 West Broadway, P.O. Box 1497 Company of Indiana, Greensburg, and Regional
Louisville, Kentucky 40202 Federal Savings Bank, New Albany.
CONSOLIDATED STATEMENT OF INCOME
(Dollar amounts in thousands, except per share amounts)
(Unaudited) Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Interest income
Loans, including fees $4,639 $4,362 $13,458 $12,510
Investment securities 1,367 1,336 3,976 4,260
Other 64 86 258 157
Total interest income 6,070 5,784 17,692 16,927
Interest expense
Deposits 2,775 2,713 8,025 7,595
Other 293 347 843 1,209
Total interest expense 3,068 3,060 8,868 8,804
Net interest income 3,002 2,724 8,824 8,123
Provision for loan losses 30 9 90 18
Net interest income after
provision for loan losses 2,972 2,715 8,734 8,105
Noninterest income
Securities gains - 5 - 16
Other operating income 359 329 1,093 1,098
Total noninterest income 359 334 1,093 1,114
Noninterest expense
Salaries and employee benefits 1,118 1,140 3,378 3,382
Premises and equipment expense 365 362 1,124 1,112
FDIC special assessment 545 - 545 -
Other expenses 534 500 1,561 1,775
Total noninterest expense 2,562 2,002 6,608 6,269
Income before income tax 769 1,047 3,219 2,950
Income tax expense on bad debt
reserve recapture 145 - 145 -
Income tax expense 306 417 1,275 1,166
Net income $ 318 $ 630 $ 1,799 $ 1,784
Net income per common share $0.25 $0.47 $1.40 $1.34
Net income per common share
before non-recurring charges 0.63 0.47 1.78 1.34
Dividends per common share $0.21 $0.17 $0.61 $0.49
Avg common shares outstanding 1,250,897 1,250,897 1,250,897 1,250,897
Preferred stock dividends $ 8 $ 35 $ 50 $ 108
Common Stock
Indiana United Bancorp's common stock is traded on the over-the-counter market
and is listed on the NASDAQ exchange under the symbol "IUBC". Indiana United
Bancorp is also listed on the National Market System tables in many daily
papers under the symbol Ind Utd.
Primary market makers are J.J.B. Hilliard/W.L. Lyons, Inc.; and NatCity
Investments, Inc.
Market Value Range and Dividends
for Latest Four Quarters
1996 1996 1996 1995
Q3 Q2 Q1 Q4
High $27 $25 1/2 $26 1/4 $28
Low 25 23 1/4 24 1/4 25
Last Sale 25 3/4 24 1/2 24 1/4 25
ORGANIZATION
Indiana United Bancorp
201 N. Broadway, P.O. Box 87
Greensburg, IN 47240
(812) 663-0157
Officers
Robert E. Hoptry
Chairman and President
Daryl R. Tressler
Vice President
Michael K. Bauer
Vice President
Jay B. Fager
Treasurer and Chief Financial Officer
Sue Fawbush
Vice President and Secretary
Dennis M. Flack
Vice President, Director of Marketing
and Training
Dawn M. Schwering
Marketing Coordinator
Suzanne Kendall
Auditor
Directors
William G. Barron
Chairman and President
Wm. G. Barron Enterprises
Philip A. Frantz
Attorney, Partner
Coldren and Frantz
Glenn D. Higdon
President
Marlin Enterprises, Inc.
Robert E. Hoptry
Chairman and President
Indiana United Bancorp
Martin G. Wilson
Farmer
Edward J. Zoeller
President
E.M. Cummings Veneer
Subsidiaries
Regional Federal Savings Bank
Offices in New Albany, Jeffersonville
Union Bank and Trust Company of Indiana
Offices in Greensburg, Portland,
Westport, Clarksburg, Redkey