SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Current Report
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 30, 1998
INDIANA UNITED BANCORP
(Exact Name of Registrant as Specified in its Charter)
Indiana
(State or Other Jurisdiction of Incorporation)
0-12422 35-1562245
(Commission File Number) (I.R.S. Employee Identification No.)
201 N. Broadway, Greensburg, Indiana 47240
(Address of principal executive offices) (Zip Code)
(812) 663-0157
Registrant's telephone number, including area code
Item 2. Acquisition or Disposition of Assets
On April 30, 1998, the Registrant consummated its previously announced merger
transaction with P.T.C. Bancorp (the "Merger"). In the Merger, P.T.C.
Bancorp was merged into the Registrant and the Registrant acquired a third
banking subsidiary, Peoples Trust Company, Brookville, Indiana. The
Registrant has issued in connection with the Merger 1,136,417 additional
Common Shares.
Item 7. Financial Statements, ProForma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. As referenced in the
Current Report on Form 8-K filed with the Securities and Exchange
Commission (the "Commission") on May 13, 1998, Indiana United Bancorp
is hereby filing this Form 8-K/A to submit the following financial
statements for P.T.C. Bancorp:
(i) Independent Auditor's Report.
(ii) Consolidated Balance Sheet as of
December 31, 1997 and 1996.
(iii) Consolidated Statement of Income for the years
ended December 31, 1997 and 1996.
(iv) Consolidated Statement of Changes in
Stockholders' Equity for the years ended
December 31, 1997 and 1996
(v) Consolidated Statement of Cash Flows for the
years ended December 31, 1997 and 1996
(vi) Notes to Consolidated Financial Statements
(vii) Independent Auditor's Report. (Incorporated by
reference to Indiana United Bancorp's
Registration Statement on Form S-4 filed on
March 17, 1998).
(viii) Consolidated Balance Sheet as of
December 31, 1996 and 1995. (Incorporated by
reference to Indiana United Bancorp's
Registration Statement on Form S-4 filed on
March 17, 1998).
(ix) Consolidated Statement of Income for the years
ended December 31, 1996 and 1995. (Incorporated
by reference to Indiana United Bancorp's
Registration Statement on Form S-4 filed on
March 17, 1998).
(x) Consolidated Statement of Changes in
Stockholders' Equity for the years ended
December 31, 1996 and 1995. (Incorporated by
reference to Indiana United Bancorp's
Registration Statement on Form S-4 filed on
March 17, 1998).
(xi) Consolidated Statement of Cash Flows for the
years ended December 31, 1996 and 1995.
(Incorporated by reference to Indiana United
Bancorp's Registration Statement on Form S-4
filed on March 17, 1998).
(xii) Notes to Consolidated Financial Statements.
(Incorporated by reference to Indiana United
Bancorp's Registration Statement on Form S-4
filed on March 17, 1998).
(xiii) Consolidated Condensed Balance Sheet as of
March 31, 1998 (unaudited).
(xiv) Consolidated Condensed Statement of Income for
the three months ended March 31, 1998 and 1997
(unaudited).
(xv) Consolidated Condensed Statement of Changes in
Stockholders' Equity for the three months ended
March 31, 1998 and 1997 (unaudited).
(xvi) Consolidated Condensed Statement of Cash Flows
for the three months ended March 31, 1998 and 1997
(unaudited).
(xvii) Notes to Consolidated Condensed Financial
Statements (unaudited).
(b) Pro Forma Financial Information. As referenced in the Current
Report on Form 8-K filed with the Commission on May 13, 1998, Indiana United
Bancorp is hereby filing this Form 8-K/A to submit the following pro forma
financial information:
(i) Pro Forma Condensed Combined Financial
Information including Balance Sheet as of
December 31, 1997 and Statements of Income for
each of the years in the three-year period ended
December 31, 1997.
(ii) Pro Forma Condensed Combined Financial
Information including Balance Sheet as of
March 31, 1998 and Statement of Income for the
three months ended March 31, 1998.
(c) Exhibits:
(20) Registration statement on Form S-4 filed by
Indiana United Bancorp on March 17, 1998
incorporated by reference
(23) Consent of Crowe Chizek and Company LLP
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 hereunto duly authorized.
Date: July 13, 1998
INDIANA UNITED BANCORP
/s/Robert E. Hoptry
Chairman and Chief Executive Officer
INDEX OF FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
(i) Independent Auditor's Report.
(ii) Consolidated Balance Sheet as of
December 31, 1997 and 1996.
(iii) Consolidated Statement of Income for the years
ended December 31, 1997 and 1996.
(iv) Consolidated Statement of Changes in
Stockholders' Equity for the years ended
December 31, 1997 and 1996
(v) Consolidated Statement of Cash Flows for the
years ended December 31, 1997 and 1996
(vi) Notes to Consolidated Financial Statements
(vii) Independent Auditor's Report. (Incorporated by
reference to Indiana United Bancorp's
Registration Statement on Form S-4 filed on
March 17, 1998).
(viii) Consolidated Balance Sheet as of December 31,
1996 and 1995. (Incorporated by reference to
Indiana United Bancorp's Registration Statement
on Form S-4 filed on March 17, 1998).
(ix) Consolidated Statement of Income for the years
ended December 31, 1996 and 1995. (Incorporated
by reference to Indiana United Bancorp's
Registration Statement on Form S-4 filed on
March 17, 1998).
(x) Consolidated Statement of Changes in
Stockholders' Equity for the years ended
December 31, 1996 and 1995. (Incorporated by
reference to Indiana United Bancorp's
Registration Statement on Form S-4 filed on
March 17, 1998).
(xi) Consolidated Statement of Cash Flows for the
years ended December 31, 1996 and 1995.
(Incorporated by reference to Indiana United
Bancorp's Registration Statement on Form S-4
filed on March 17, 1998).
(xii) Notes to Consolidated Financial Statements.
(Incorporated by reference to Indiana United
Bancorp's Registration Statement on Form S-4
filed on March 17, 1998).
(xiii) Consolidated Condensed Balance Sheet as of
March 31, 1998 (unaudited).
(xiv) Consolidated Condensed Statement of Income for
the three months ended March 31, 1998 and 1997
(unaudited).
(xv) Consolidated Condensed Statement of Changes in
Stockholders' Equity for the three months ended
March 31, 1998 and 1997 (unaudited).
(xvi) Consolidated Condensed Statement of Cash Flows
for the three months ended March 31, 1998 and 1997
(unaudited).
(xvii) Notes to Consolidated Condensed Financial
Statements (unaudited).
(b) Pro Forma Financial Information.
(i) Pro Forma Condensed Combined Financial
Information including Balance Sheet as of
December 31, 1997 and Statements of Income for
each of the years in the three-year period ended
December 31, 1997.
(ii) Pro Forma Condensed Combined Financial
Information including Balance Sheet as of
March 31, 1998 and Statement of Income for the
three months ended March 31, 1998.
(c) Exhibits:
(20) Registration statement on Form S-4 filed by Indiana
United Bancorp on March 17, 1998 incorporated
by reference.
(23) Consent of Crowe Chizek and Company LLP
ITEM 7. FINANCIAL STATEMENTS
- ----------------------------
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Shareholders
P.T.C. Bancorp
Brookville, Indiana
We have audited the accompanying consolidated balance sheets of P.T.C.
Bancorp,as of December 31, 1997 and 1996, and the related consolidated
statements of income, cash flows, and changes in shareholders' equity for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of P.T.C.
Bancorp as of December 31, 1997 and 1996, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Crowe, Chizek and Company LLP
Indianapolis, Indiana
January 22, 1998
P.T.C. BANCORP
CONSOLIDATED BALANCE SHEETS
December 31, 1997 and 1996
(dollar references in thousands except share data)
- ------------------------------------------------------------------------------
1997 1996
ASSETS
Cash and cash equivalents $ 29,196 $ 26,185
Interest bearing balances with financial institutions 999 1,897
Securities available for sale, at fair value 32,362 38,376
Securities held to maturity 24,182 25,219
Loans held-for-sale 1,580 430
Loans 225,173 196,533
Allowance for loan losses (2,721) (2,000)
-------- --------
Net loans 222,452 194,533
Premises and equipment, net 3,982 3,512
Intangible assets 1,629 1,619
Accrued interest receivable and other assets 5,611 4,805
-------- --------
$321,993 $296,576
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Non-interest bearing deposits $ 26,297 $ 32,350
Interest bearing deposits 267,545 238,777
-------- --------
Total deposits 293,842 271,127
Notes payable - 500
Accrued interest payable and other liabilities 3,922 3,296
-------- --------
Total liabilities 297,764 274,923
Shareholders' equity
Preferred stock, no par value; 1,000,000 shares
authorized, no shares issued and outstanding
Common stock, $1 stated value: 2,000,000 shares
authorized, 1,026,401 and 1,024,276
shares outstanding 1,026 1,024
Additional paid-in capital 10,445 10,413
Retained earnings 12,607 10,018
Unrealized gain on securities available for sale 151 198
------- --------
Total shareholders' equity 24,229 21,653
------- --------
$321,993 $296,576
======== ========
See accompanying notes.
P.T.C. BANCORP
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 1997 and 1996
(dollar references in thousands except per share data)
- ------------------------------------------------------------------------------
1997 1996
INTEREST INCOME
Loans, including fees $19,567 $17,125
Interest on investment securities
Taxable securities 2,156 2,440
Non-taxable securities 1,260 1,191
Balances with financial institutions 90 130
Federal funds sold 510 433
------- -------
Total interest income 23,583 21,319
Interest expense
Deposits 11,883 10,837
Notes payable 28 60
------- -------
Total interest expense 11,911 10,897
------- -------
Net interest income 11,672 10,422
Provision for loan losses 1,506 828
------- ------
Net interest income after provision for loan losses 10,166 9,594
Non-interest income
Service charges on deposit accounts 1,221 1,199
Mortgage banking income 1,116 795
Securities gains 3 104
Travel commission income - 66
Other income 195 185
------- ------
Total non-interest income 2,535 2,349
Non-interest expenses
Salaries and employee benefits 4,498 4,137
Occupancy and equipment expense 1,082 832
Data processing expense 373 372
FDIC assessment 26 2
Other operating expenses 1,850 1,760
------- -------
Total non-interest expense 7,829 7,103
------- -------
Income before income taxes 4,872 4,840
Provision for income taxes 1,442 1,564
------- -------
Net income $ 3,430 $ 3,276
======= =======
Earnings per share $ 3.35 $ 3.17
======= =======
Earnings per share, assuming dilution $ 3.30 $ 3.13
======= =======
See accompanying notes.
P.T.C. BANCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1997 and 1996
(dollar references in thousands except per share data)
- ------------------------------------------------------------------------------
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,430 $ 3,276
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation 367 282
Provision for loan losses 1,506 828
Gain on sale of securities (3) (104)
Change in loans held-for-sale (1,150) 1,687
Amortization of intangible assets 231 219
Change in accrued interest receivable and other assets (577) (1,257)
Net amortization/(accretion) on securities 103 115
Change in accrued interest payable and other liabilities 626 537
------- -------
Net cash from operating activities 4,533 5,583
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment expenditures (837) (727)
Loans made to customers and principal collections thereon (29,425) (26,021)
Proceeds from sales of securities available for sale 5,501 3,737
Proceeds from maturities and principal paydowns
of securities available for sale 7,675 13,921
Proceeds from maturities and principal paydowns
of securities held to maturity 4,997 7,121
Purchases of securities available for sale (7,419) (17,615)
Purchases of securities held to maturity (4,021) (12,807)
Net change in deposits with other financial institutions 898 489
-------- --------
Net cash from investing activities (22,631) (31,902)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposit accounts 22,416 29,392
Payments on note payable (500) (500)
Dividends paid (841) (679)
Redemption of common stock - (690)
Proceeds from issuance of stock 34 507
-------- -------
Net cash from financing activities 21,109 28,030
-------- -------
NET CHANGE IN CASH AND CASH EQUIVALENTS 3,011 1,711
Cash and cash equivalents at beginning of year 26,185 24,474
-------- -------
Cash and cash equivalents at end of year $ 29,196 $ 26,185
======== ========
Cash paid during the period for:
Interest $ 11,435 $ 10,879
Income taxes 1,420 1,722
See accompanying notes
P.T.C. BANCORP
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Years ended December 31, 1997 and 1996
(dollar references in thousands except per share data)
- ------------------------------------------------------------------------------
Unrealized
gain/(loss)
Securities Total
Common Paid-in Retained Available Shareholders'
Stock Capital Earnings for Sale Equity
----- ------ -------- ------- ------
BALANCES AT JANUARY 1, 1996 $ 924 $ 7,909 $10,208 $177 $19,218
Net income 3,276 3,276
Cash dividends ($.66 per share) (679) (679)
10% stock dividend 93 2,694 (2,787) -
Redemption of shares
(22,634 shares) (23) (667) (690)
Exercise of stock options
(1,469 shares) 1 20 21
Issuance of shares to existing
shareholders (28,449 shares) 29 457 486
Change in unrealized gain/(loss) 21 21
------ ------- ------- ---- -------
BALANCE AT DECEMBER 31, 1996 $1,024 $10,413 $10,018 $198 $21,653
Net income 3,430 3,430
Cash dividend ($.82 per share) (841) (841)
Exercise of stock options
(2,125 shares) 2 32 (34)
Change in unrealized gain/(loss) (47) (47)
------ ------- ------- ----- -------
Balance at December 31, 1997 $1,026 $10,445 $12,607 $151 $24,229
====== ======= ======= ==== =======
See accompanying notes
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The consolidated financial statements include the
accounts of P.T.C. Bancorp (Company) and its wholly-owned subsidiary, People's
Trust Company (Bank). All significant inter-company transactions have been
eliminated in consolidation.
Description of Business: P.T.C. Bancorp generates mortgage, commercial, and
installment loans and receives deposits from customers located primarily in
southeastern Indiana. The majority of the Company's loans are secured by
specific items of collateral including business assets, consumer assets and
real property. More than 90% of its revenues are derived from banking
activities.
Use of Estimates in the Preparation of Financial Statements: 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, liabilities, revenues and expenses. Actual
results could differ from those estimates. Estimates that are more
susceptible to change in the near term include the allowance for loan losses
and fair values of financial instruments.
Cash and Cash Equivalents: Cash and cash equivalents include cash on hand,
amounts due from banks and federal funds sold. Generally, federal funds are
sold for one-day periods. The Company reports net cash flows for customer
loan transactions, deposit transactions, and deposits made with other
institutions.
Securities: Securities are classified by management at date of purchase as
available for sale or held to maturity. Securities classified as available
for sale are securities that might be sold in response to changes in interest
rates, changes in prepayment risk, or other similar factors, and which are
carried at fair value. The unrealized gain/(loss) on securities available for
sale is reflected as a separate component of shareholders' equity, net of tax.
Securities classified as held to maturity are securities that the Company has
both the ability and positive intent to hold to maturity and are carried at
amortized cost (cost adjusted for amortization of premium or accretion of
discounts). Interest income on securities is recognized using the level yield
basis. Gains and losses on sales of securities are computed on a specific
identification basis.
Loans Held for Sale: During the normal course of business, the Company
originates certain mortgage loans for the purpose of selling them in certain
secondary markets. These loans are carried at the lower of aggregate cost or
market value.
Loans: Loans are reported at the principal balance outstanding, net of
deferred loan fees and costs, the allowance for loan losses, and charge-offs.
Interest income is reported on the interest method and includes amortization
of net deferred loan fees and costs over the loan term.
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Interest income is not reported when full loan repayment is in doubt,
typically when payments are past due over 90 days. Interest received on such
loans is recognized on the cash basis or reported as principal reductions.
Allowance for Loan Losses: The allowance for loan losses is a valuation
allowance, increased by the provision for loan losses and decreased by
charge-offs less recoveries. Management estimates the allowance balance
required based on past loan loss experience, known and inherent risks in the
portfolio, information about specific borrower situations and estimated
collateral values, economic conditions, and other factors. Allocations of the
allowance may be made for specific loans, but the entire allowance is
available for any loan that, in management's judgment, should be charged-off.
Loan impairment is reported when full payment under the loan terms is not
expected. Impairment is evaluated in total for smaller-balance loans of
similar nature such as residential mortgage, consumer, and credit card loans,
and on an individual loan basis for other loans. If a loan is impaired, a
portion of the allowance is allocated so that the loan is reported, net, at
the present value of estimated future cash flows using the loan's existing
rate. Loans are evaluated for impairment when payments are delayed, typically
90 days or more, or when the internal grading system indicates a doubtful
classification.
Servicing Rights: Servicing rights represent the allocated value of servicing
rights retained on loans sold. Servicing rights are expensed in proportion
to, and over the period of, estimated net servicing revenues. Impairment is
evaluated based on the fair value of the rights, using groupings of the
underlying loans as to interest rates and term. Any impairment of a grouping
is reported as a valuation allowance.
Premises and Equipment: Premises and equipment are stated at cost, net of
accumulated depreciation. Depreciation is charged to operating expense over
the useful lives of assets and is computed on straight-line and accelerated
methods. Maintenance and repairs are charged to operations as incurred.
Improvements are capitalized and disposals are recorded in the year sold or
abandoned.
Intangible Assets: Intangible assets consist of goodwill and core deposit
intangibles. Goodwill is being amortized on a straight-line method over
fifteen years. The core deposit is being amortized based on the estimated
life of the deposits assumed, which is ten years.
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Stock Options: No expense for stock options is recorded, as the grant price
equals the market price of the stock at grant date. Pro forma disclosure of
net income and earnings per share are not presented because the fair value of
options granted during 1997 and 1996 is not material.
Income Taxes: Deferred tax liabilities and assets are determined at each
balance sheet date. They are measured by applying enacted tax laws to future
amounts that will result from differences in the financial statement and tax
basis of assets and liabilities. Recognition of deferred tax assets is
limited by the establishment of a valuation reserve unless management
concludes that they are more likely than not going to result in future tax
benefits to the Company. Income tax expense is the amount paid for the
current year income tax liability plus or minus the change in deferred taxes.
Dividend Restriction: Banking regulations require the maintenance of certain
capital levels and may limit the amount of dividends which may be paid by the
bank to the holding company or by the holding company to shareholders.
Earnings Per Share: Basic earnings per share is based on weighted-average
common shares outstanding. Diluted earnings per share further assumes issue
of any dilutive potential common shares. The accounting standard for
computing earnings per share was revised for 1997, and all earnings per share
previously reported are restated to follow the new standard. Earnings per
share are restated for all subsequent stock dividends and splits.
Fair Value of Financial Instruments: Fair values of financial instruments are
estimated using relevant market information and other assumptions, as more
fully disclosed in a separate note. Fair value estimates involve uncertainties
and matters of significant judgment regarding interest rates, credit risk,
prepayments, and other factors, especially in the absence of broad markets for
particular items. Changes in assumptions or in market conditions could
significantly affect the estimates.
Future Accounting Changes: New accounting standards have been issued which
will require future reporting of comprehensive income (net income plus changes
in holding gains and losses on available for sale securities) and may require
re-determination of industry segment financial information.
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 2 - SECURITIES
The amortized cost and fair values of securities available for sale are as
follows at December 31:
1997
----
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
------ ----- ------ -------
U.S. Treasury and government
agency securities $21,975 $159 $(11) $22,123
State and political subdivisions 3,407 69 - 3,476
Mortgage-backed and other
asset-backed securities 3,596 68 (33) 3,631
Corporate debt securities 1,500 - (2) 1,498
Equity securities 1,634 - - 1,634
------- ---- ---- -------
Totals $32,112 $296 $(46) $32,362
======= ==== ==== =======
1996
----
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
U.S. Treasury and government
agency securities $30,066 $255 $(43) $30,278
State and political subdivisions 1,971 64 - 2,035
Mortgage-backed and other
asset-backed securities 2,583 46 (7) 2,622
Corporate debt securities 1,906 38 (24) 1,920
Equity securities 1,521 - - 1,521
------- ------ ------ --------
Totals $38,047 $403 $(74) $38,376
======= ===== ====== =======
The amortized cost and fair values of securities held to maturity are as
follows at December 31:
1997
----
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
State and political subdivisions $22,741 $272 $(1) $23,012
Other securities 1,441 122 - 1,563
------- ------ ------ -------
Totals $24,182 $394 $(1) $24,575
======= ====== ====== =======
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 2 - SECURITIES (Continued)
1996
----
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---- ----- ------ -----
State and political subdivisions $24,188 $228 $(51) $24,365
Other securities 1,031 68 (3) 1,096
------- ---- ---- -------
Totals $25,219 $296 $(54) $25,461
======= ==== ==== =======
The amortized cost and fair value of securities at December 31, 1997, by
contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because issuers may have the right to call or prepay
obligations with or without call or prepayment penalties.
Available for Sale Held to Maturity
------------------ ----------------
Amortized Fair Amortized Fair
Cost Value Cost Value
----- ----- ---- -----
Due in one year or less $ 5,550 $ 5,525 $ 5,933 $ 5,951
Due after one year through
five years 20,323 20,498 16,655 16,896
Due after five years through
ten years 1,154 1,194 1,109 1,131
Due after ten years 50 50 485 597
------- -------- ------- --------
Total fixed maturity debt
securities $27,077 $27,267 $24,182 $24,575
Mortgage-backed securities 3,401 3,461 - -
Equity securities 1,634 1,634 - -
------- ------- ------- -------
$32,112 $32,362 $24,182 $24,575
======= ======= ======= =======
Gross gains of $15 and gross losses of $12 were realized on the sale of
available for sale securities in 1997. Gross gains of $122 and gross losses of
$18 were realized on the sale of available for sale securities in 1996.
At December 31, 1997 and 1996, securities carried at $1,631 and $2,264 were
pledged to secure public deposits and for other purposes.
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 3 - LOANS
Loans are comprised of the following classifications:
1997 1996
---- ----
Real estate-residential $ 88,619 $ 74,003
Real estate-commercial 67,903 43,370
Real estate construction 10,510 13,650
Commercial 36,115 41,655
Consumer 19,607 21,325
Other 2,793 2,875
Deferred loan fees (374) (345)
-------- --------
$225,173 $196,533
======== ========
Mortgage loans serviced for others are not reported as assets. These loans
totaled $109,268 and $86,495 at year-end 1997 and 1996. At year-end 1997 and
1996, mortgage servicing rights were $529 and $225. Activity during 1997
included $469 of additions and amortization expense of $165. There was no
mortgage servicing rights valuation allowance at year-end 1997 or 1996.
NOTE 4 - ALLOWANCE FOR LOAN LOSSES
An analysis of the allowance for loan losses follows:
1997 1996
---- ----
Beginning balance $2,000 $1,722
Provision for loan losses 1,506 828
Losses charged to the allowance (929) (726)
Recoveries credited to the allowance 144 176
------ ------
Ending balance $2,721 $2,000
====== ======
Impaired loans were as follows:
1997 1996
---- ----
Year-end loans with no allowance for loan losses allocated $238 $ -
Year-end loans with allowance for loan losses allocated - 1,300
Amount of the allowance allocated - 475
Average of impaired loans during the year 976 844
Interest income recognized during impairment 63 28
Cash-basis interest income recognized 63 28
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 5 - PREMISES AND EQUIPMENT
A summary of premises and equipment at December 31 follows:
1997 1996
---- ----
Land $ 552 $ 352
Buildings and improvements 3,888 3,738
Equipment and furniture 2,954 2,482
------ ------
Total 7,394 6,572
Less accumulated depreciation 3,412 3,060
------ ------
Total premises and equipment, net $3,982 $3,512
====== ======
NOTE 6 - DEPOSITS
Certificates of deposits in denominations of $100 or more as of December 31,
1997 and 1996 were $34,965 and $28,949.
At year-end 1997, stated maturities of time deposits were:
1998 $126,960
1999 40,584
2000 7,604
2001 2,940
2002 1,054
Thereafter 5
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 7 - BENEFIT PLANS
The Company maintains a 401(K) profit-sharing plan covering substantially all
employees. Under this plan, employer matching contributions are 50% of
employee contributions, up to 6% of eligible salary, plus a profit sharing
allocation to all eligible employees. Annual contributions are at the
discretion of the Board of Directors. Contributions provided for the 401(K)
plan and charged to operations totaled $183 and $158 in 1997 and 1996.
The Company maintains a stock option plan covering directors and executive
officers. Options are granted at no less than fair value of the Company's
stock. Accordingly, no compensation cost has been recognized. Options under
the officer plan are generally subject to a 4-year vesting schedule, and
expire five years from date of vesting. There were no options granted during
1997, and 5,060 during 1996. At year-end 1997, there were 30,731 options
outstanding under the officer plan with a weighted average exercise price of
$16.93, and range of exercise prices of $14.65 - $27.27. There were no
options granted in 1996 or 1997 under the director's plan. All remaining
shares outstanding under the director's plan were exercised during 1997.
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 8 - EARNINGS PER SHARE
1997 1996
---- ----
EARNINGS PER SHARE
Net income available to common shareholders $ 3,430 $ 3,276
========= =========
Weighted average common shares outstanding 1,025,072 1,031,922
========= =========
EARNINGS PER SHARE $ 3.35 $ 3.17
========= =========
EARNINGS PER SHARE ASSUMING DILUTION
Net income available to common
shareholders $ 3,430 $ 3,276
========= =========
Weighted average common shares
outstanding 1,025,072 1,031,922
Add: Dilutive effect of assumed
exercise of stock options 15,161 14,466
--------- ---------
Weighted average common and dilutive
potential common shares outstanding 1,040,233 1,046,388
========= =========
EARNINGS PER SHARE ASSUMING DILUTION $ 3.30 $ 3.13
========= =========
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 9 - INCOME TAXES
An analysis of the components of income taxes follows:
1997 1996
---- ----
Current income taxes $1,712 $1,552
Deferred income taxes (270) 12
------ ------
Total income taxes $1,442 $1,564
====== ======
The difference between the financial statement tax provision and amounts
computed by applying the federal income tax rate of 34% to pretax income is
reconciled as follows:
1997 1996
---- ----
Computed expected provision $1,656 $1,645
Tax effect of:
Tax-exempt interest income (602) (545)
Non-deductible interest expense 103 94
State income tax, net 280 279
Other items 5 91
------ ------
Applicable income tax $1,442 $1,564
====== ======
The net deferred tax asset is comprised of the following components:
1997 1996
---- ----
Deferred tax assets:
Allowance for loan losses $ 835 $ 550
Deferred compensation 77 56
Core deposit intangibles 81 67
Other - 5
----- -----
$ 993 $ 678
Deferred tax liabilities:
Unrealized gain on securities available for sale (99) (130)
Depreciation (78) (33)
Accretion on securities (19) (20)
Other (2) -
----- -----
$(198) $(183)
Valuation allowance - -
----- -----
Net deferred tax asset $ 795 $ 495
===== =====
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 10 - COMMITMENTS AND CONTINGENCIES
The Company, in the ordinary course of business, has loans, commitments and
contingent liabilities, such as guarantees, commitments to extend credit,
etc., which are not reflected in the accompanying consolidated balance sheets.
The Company's exposure to credit loss in the event of nonperformance by the
other party to the financial guarantees is represented by the contractual
amounts of those instruments. The Company uses the same credit policy to make
such commitments as it uses for on-balance-sheet items.
The contractual amount of these financial instruments are summarized as follows:
1997 1996
---- ----
Commitments to extend credit $27,591 $26,634
Standby letters of credit 374 2,349
The commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established under the contract.
Generally, such commitments are for no more than one year, and most are variable
rate contracts. These commitments are primarily credit card, overdraft
protection, and commercial lines of credit.
Since many commitments expire without being used, the amounts do not
necessarily represent future cash commitments. Collateral obtained upon
exercise of the commitment is determined using management's credit evaluation
of the borrower, and may include accounts receivable, inventory, property,
land and other items.
At December 31, 1997 and 1996, the Company was required by the Federal Reserve
to have $4,144 and $3,542 on deposit or as cash in hand. These reserves do
not earn interest.
NOTE 11 - RELATED PARTY TRANSACTIONS
Certain directors, officers and principal shareholders of the Company were
also customers of the Bank. The aggregate amount of loans to these persons
totaled $1,252 and $2,139 at December 31, 1997 and 1996.
Related party deposits totaled $1,739 and $1,337 at year-end 1997 and 1996.
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 12 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair value approximates carrying amount for all items except
those described below. Estimated fair value for securities is based on quoted
market values for their individual securities or for equivalent securities.
Estimated fair value for loans is based on the rates charged at year end for
new loans with similar maturities, applied until the loan is assumed to
re-price or be paid. Estimated fair value for IRA's, time CDs, and agreements
to repurchase is based on the rates paid at year end for new deposits or
borrowings, applied until maturity. Estimated fair value for other financial
instruments and off-balance-sheet loan commitments are considered nominal.
The estimated fair values of financial instruments at December 31 are as
follows:
--------- 1 9 9 7 ----------
Carrying Value Fair Value
-------------- ----------
Financial assets:
Cash and short-term investments $ 30,195 $ 30,195
Securities available for sale 32,362 32,362
Securities held to maturity 24,182 24,575
Loans 225,173 225,429
Financial liabilities:
Deposits (293,842) (294,790)
--------- 1 9 9 6 ----------
Carrying Value Fair Value
-------------- ----------
Financial assets:
Cash and short-term investments $ 28,082 $ 28,082
Securities available for sale 38,376 38,376
Securities held to maturity 25,219 25,461
Loans 196,533 196,816
Financial liabilities:
Deposits (271,127) (271,807)
Notes payable (500) (500)
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 13 - REGULATORY MATTERS
The Company and Bank are subject to regulatory capital requirements
administered by federal banking agencies. Capital adequacy guidelines and
prompt corrective action regulations involve quantitative measures of assets,
liabilities and certain off-balance-sheet items calculated under regulatory
accounting practices. Capital amounts and classifications are also subject to
qualitative judgments by regulators about components, risk weightings, and
other factors, and the regulators can lower classifications in certain cases.
Failure to meet various capital requirements can initiate regulatory action
that could have a direct material effect on the financial statements.
The prompt corrective action regulations provide five classifications,
including well capitalized, adequately capitalized, undercapitalized,
significantly undercapitalized, and critically undercapitalized, although
these terms are not used to represent overall financial condition. If
adequately capitalized, regulatory approval is required to accept brokered
deposits. If undercapitalized, capital distributions are limited, as is asset
growth and expansion, and plans for capital restoration are required.
The minimum requirements are:
Capital to Risk-
Weighted Assets
--------------- Tier 1 Capital
Total Tier 1 to Average Assets
----- ------ -----------------
Well capitalized 10% 6% 5%
Adequately capitalized 8% 4% 4%
Undercapitalized 6% 3% 3%
The actual capital levels and minimum required levels were:
Minimum Required
To Be Well
Minimum Required Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Regulations
------ ----------------- ----------------
1997 Amount Ratio Amount Ratio Amount Ratio
- ---- ------ ----- ------ ----- ------ -----
Total Capital (to Risk Weighted Assets)
Consolidated $25,099 11.8% $16,961 8.0% $21,202 10.0%
Bank $24,219 11.3% $17,097 8.0% $21,371 10.0%
Tier I Capital (to Risk Weighted Assets)
Consolidated $22,449 10.6% $ 8,481 4.0% $12,721 6.0%
Bank $21,547 10.1% $ 8,548 4.0% $12,823 6.0%
Tier 1 Capital (to Average Assets)
Consolidated $22,449 7.0% $12,813 4.0% $16,016 5.0%
Bank $21,547 6.7% $12,766 4.0% $15,958 5.0%
P.T.C. BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1997 and 1996
(dollar references in thousands)
- ------------------------------------------------------------------------------
NOTE 13 - REGULATORY MATTERS (CONTINUED)
Minimum Required
To Be Well
Minimum Required Capitalized
For Capital Under Prompt Corrective
Actual Adequacy Purposes Action Regulations
------ ----------------- ------------------
1996 Amount Ratio Amount Ratio Amount Ratio
- ---- ------ ----- ------ ----- ------ -----
Total Capital (to Risk Weighted Assets)
Consolidated $21,836 11.6% $15,055 8.0% $18,819 10.0%
Bank $21,487 11.5% $14,995 8.0% $18,744 10.0%
Tier I Capital (to Risk Weighted Assets)
Consolidated $19,836 10.5% $ 7,528 4.0% $11,291 6.0%
Bank $19,487 10.4% $ 7,498 4.0% $11,246 6.0%
Tier 1 Capital (to Average Assets)
Consolidated $19,836 6.7% $11,795 4.0% $14,744 5.0%
Bank $19,487 6.6% $11,753 4.0% $14,692 5.0%
The Company and Bank at year-end 1997 were categorized as well capitalized.
NOTE 14 - PENDING BUSINESS COMBINATION
On October 8, 1997, the Company agreed to merge with Indiana United Bancorp
(IUB). IUB is a bank and thrift holding company located in Greensburg,
Indiana. Under terms of the agreement, each outstanding common share of
P.T.C. Bancorp, including shares outstanding under option plans, will be
converted into 1.075 common shares of IUB. The proposed transaction requires
approval by regulatory authorities and shareholders of both companies. The
proposed transaction is expected to be consummated by April 1998. It is
expected to be accounted for as a pooling-of-interest.
P.T.C. Bancorp And Subsidiary
Consolidated Condensed Balance Sheet
(Dollars in thousands)
(Unaudited)
March 31 1998
Assets
Cash and due from banks $ 10,119
Federal funds sold 21,250
Investment securities
Available for sale 30,315
Held to maturity 21,452
--------
Total investment securities 51,767
Loans held for sale 4,467
Loans 222,666
Allowance for loan losses (2,819)
--------
Net loans 219,847
Premises and equipment 3,938
Other assets 6,368
--------
Total assets $317,756
========
Liabilities
Deposits
Noninterest bearing $ 29,550
Interest bearing 259,574
--------
Total deposits 289,124
Short-term borrowings 449
Federal Home Loan Bank advances -
Other liabilities 3,127
--------
Total liabilities $292,700
--------
Stockholders' Equity
Common stock, $1 stated value
Authorized - 2,000,000 shares
Issued and outstanding - 1,026,401 1,026
Paid-in capital 10,445
Retained earnings 13,428
Accumulated other comprehensive income 157
--------
Total stockholders' equity $ 25,056
--------
Total liabilities and stockholders' equity $317,756
========
See notes to consolidated condensed financial statements.
P.T.C. Bancorp and Subsidiary
Consolidated Condensed Statement of Income
(Dollars in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended March 31 1998 1997
Interest Income
Loans receivable $5,018 $4,366
Investment securities
Taxable 456 568
Tax exempt 308 327
Balances with financial institutions 17 26
Federal Funds sold 260 102
------ ------
Total interest income 6,059 5,389
------ ------
Interest Expense
Deposits 3,079 2,732
Short-term borrowings 6 -
Federal Home Loan Bank advances - 9
------ ------
Total interest expense 3,085 2,741
------ ------
Net Interest Income 2,974 2,648
Provision for loan losses 150 190
------ ------
Net Interest Income After Provision for
Loan Losses 2,824 2,458
------ ------
Other Income
Service charges on deposit accounts 287 280
Net realized gains on sales of securities - -
Other income 663 471
------ ------
Total other income 950 751
------ ------
Other Expenses
Salaries and employee benefits 1,226 1,054
Premises and equipment expenses 289 280
Data processing fees 85 83
Deposit insurance expense 9 6
Other expenses 595 522
------ ------
Total other expenses 2,204 1,945
------ ------
Net Income Before Income Tax 1,570 1,264
Income tax expense 502 389
------ ------
Net Income $1,068 $ 875
====== ======
Basic Earnings Per Share $1.04 $.85
Diluted Earnings Per Share 1.02 .84
See notes to consolidated condensed financial statements.
P.T.C. Bancorp and Subsidiary
Consolidated Condensed Statement of Changes in Stockholders' Equity
(Dollars in thousands)
(Unaudited)
1998 1997
Balances, January 1 $24,229 $21,653
Comprehensive income:
Net income 1,068 875
Other comprehensive income, net of tax
Unrealized gains(losses) on securities
available for sale
Unrealized holding gains(losses)
arising during period 6 (156)
Reclassification adjustment for gains
(losses) included in net income - -
------- -------
Comprehensive income 1,074 719
Cash dividends (247) (190)
Exercise of stock options 2
------- -------
Balances, March 31 $25,056 $22,184
======= =======
See notes to consolidated condensed financial statements.
P.T.C. Bancorp and Subsidiary
Consolidated Condensed Statement of Cash Flows
(Dollars in thousands)
(Unaudited)
Three Months Ended March 31 1998 1997
Operating Activities
Net income $ 1,068 $ 875
Adjustments to reconcile net income to net
cash provided by operating activities
Provision for loan losses 150 190
Depreciation and amortization 113 122
Securities amortization, net 21 33
Amortization of intangible assets 46 54
Net change in loans held for sale (2,887) 168
Other adjustments 26 (183)
------- --------
Net cash provided(used) by operating
activities (1,463) 1,259
------- --------
Investing Activities
Net change in deposits with other
financial institutions 999 (4,253)
Purchase of securities available for sale (2,857) (2,041)
Proceeds from maturities of securities
available for sale 4,908 2,548
Purchase of securities held to maturity (299) (2,698)
Proceeds from maturities of securities held
to maturity 3,015 1,361
Net change in loans 2,455 (5,305)
Purchase of premises and equipment (69) (398)
------- --------
Net cash provided(used) by investing
activities 8,152 (10,786)
------- --------
Financing Activities
Net change in
Deposits (4,718) (12,743)
Short-term borrowings 449
Deposits assumed in branch acquisition,
net of premium paid 6,548
Payments on note payable (92)
Cash dividends (247) (190)
Proceeds from issuance of stock 2
------- --------
Net cash used by financing activities (4,516) (6,475)
------- --------
Net Increase(Decrease)in Cash and Cash
Equivalents 2,173 (16,002)
Cash and Cash Equivalents, Beginning of Period 29,196 26,185
------- --------
Cash and Cash Equivalents, End of Period $31,369 $ 10,183
======= ========
See notes to consolidated condensed financial statements.
P.T.C. Bancorp and Subsidiary
Notes to Consolidated Condensed Financial Statements
(Dollars in thousands, except per share data)
(Unaudited)
Note 1: General
The significant accounting policies followed by P.T.C. Bancorp (PTC) and its
wholly owned subsidiary for interim financial reporting are consistent with
the accounting policies followed for annual financial reporting. All
adjustments which are in the opinion of management necessary for a fair
statement of the results for the periods reported have been included in the
accompanying consolidated financial statements.
PTC adopted Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income. Comprehensive income includes unrealized gains (losses)
on securities available for sale, net of tax. Accumulated other comprehensive
income and income tax on such income reported are as follows:
Three Months Ended
March 31,
1998 1997
Accumulated comprehensive income
Balance, January 1 $151 $ 198
Net unrealized gains (losses) 6 (156)
---- -----
Balance, March 31 $157 $ 42
==== =====
Income tax expense (benefit)
Unrealized holding gains (losses) $ 4 $(102)
Reclassification adjustments - -
==== ====
Note 2: Acquisition
On April 30, 1998, Indiana United Bancorp of Greensburg, Indiana (IUB)
acquired all of the assets of PTC through the merger of PTC with and into
IUB. Pursuant to the terms of the merger agreement, stockholders of PTC
received 1,136,417 shares of IUB common stock for shares of PTC common stock
held.
Note 3: Earnings Per Share
Three Months Ended
March 31,
1998 1997
Basic Earnings Per Share
Net income available to common shareholders $1,068 $875
Weighted average common shares outstanding 1,026,401 1,024,369
Basic Earnings Per Share $1.04 $.85
Diluted Earnings Per Share
Net income available to common shareholders $1,068 $ 875
Weighted average common shares outstanding 1,026,401 1,024,369
Add: Dilutive effect of assumed exercise of
stock options 17,560 15,157
---------- ---------
Weighted average common and dilutive
potential common shares outstanding 1,043,961 1,039,526
========= =========
Diluted Earnings Per Share $1.02 $.84
Pro Forma Combined Condensed Financial Information
The following unaudited pro forma combined condensed balance sheet as of
December 31, 1997, and the pro forma combined condensed statement of income
for each of the years in the three-year period ended December 31, 1997, give
effect to the Merger based on the historical consolidated financial
statements of Indiana United Bancorp (IUB) and its subsidiaries and the
historical consolidated financial statements of P.T.C. Bancorp (PTC) and its
subsidiary under the assumptions and adjustments set forth in the
accompanying notes to the pro forma financial statements.
The pro forma financial statements have been prepared by the managements of
IUB and PTC based upon their respective financial statements. These pro
forma statements, which include results of operations as if the Merger had
been consummated at the beginning of each period presented, may not be
indicative of the results that actually would have occurred if the Merger had
been in effect on the dates indicated or which may be obtained in the future.
The following pro forma combined condensed balance sheet and condensed
statements of income include:
(a) IUB's historical consolidated financial information.
(b) PTC's historical consolidated financial information.
(c) The combined statements of IUB and PTC, which have been designated
herein as "IUB/PTC Pro Forma Combined."
Pro Forma Combined Condensed Balance Sheet
December 31, 1997
(Unaudited)
(In thousands)
Pro Forma
Adjustments IUB/PTC
IUB PTC Increase Pro Forma
(Decrease) Combined
Assets
Cash and due from banks $ 12,609 $ 29,196 $ 41,805
Federal funds sold 31,350 31,350
Interest-bearing deposits 58 999 1,057
Investment securities
Available for sale 70,446 32,362 102,808
Held to maturity 24,182 24,182
-------- -------- --------
Total investment securities 70,446 56,544 126,990
Loans held-for-sale 1,580 1,580
Loans 247,454 225,173 472,627
Allowance for loan losses 2,731 2,721 5,452
-------- -------- --------
Net loans 244,723 222,452 467,175
Premises and equipment 6,402 3,982 10,384
Goodwill 1,629 1,629
Other assets 6,163 5,611 11,774
-------- -------- --------
Total assets $371,751 $321,993 $693,744
======== ======== ========
Liabilities
Deposits $289,821 $293,842 $583,663
Short-term borrowings 14,669 14,669
Federal Home Loan Bank
advances 10,000 10,000
Other liabilities 4,059 3,922 7,981
-------- -------- --------
Total liabilities 318,549 297,764 616,313
Guaranteed preferred
beneficial interests in
Company's subordinated
debentures 22,425 22,425
Stockholders' equity
Common stock 1,251 1,026 $ 110 2,387
Additional paid-in capital 10,677 10,445 (110) 21,012
Retained earnings 18,238 12,607 30,845
Net unrealized gain(loss) on
securities available for
sale 611 151 762
-------- -------- ----- --------
Total stockholders' equity 30,777 24,229 55,006
-------- -------- --------
Total liabilities and
stockholders' equity $371,751 $321,993 $693,744
======== ======== ===== ========
See notes to pro forma combined condensed balance sheet.
Notes to Pro Forma Combined Condensed Balance Sheet (Unaudited)
The following pro forma adjustments are necessary to record the Merger.
(1) To reflect exchange of shares of PTC common stock for shares of
IUB common stock, retaining the historical cost basis of assets,
liabilities and equity through the treatment as a pooling of
interest. A total of 1,136,417 shares of IUB common stock were
issued at the exchange ratio of 1.075 shares of IUB common stock
for each of the 1,057,132 issued and outstanding shares of PTC
common stock as of December 31, 1997 (of which 30,731 result from
the exercise of stock options during April, 1998), resulting in a
transfer to common stock from additional paid-in capital of $110,000
to reflect the increase in the aggregate stated value of the issued
and outstanding shares of IUB common stock relative to the aggregate
stated value of the currently outstanding shares of PTC common
stock.
Pro Forma Combined Condensed Statement of Income
Year Ended December 31, 1997
(Unaudited)
(In thousands, except share and per share data)
Pro Forma
Adjustments IUB/PTC
IUB PTC Increase Pro Forma
(Decrease) Combined
Interest income $26,230 $23,583 $49,813
Interest expense 13,086 11,911 24,997
------- ------- -------
Net interest income 13,144 11,672 24,816
Provision for loan losses 283 1,506 1,789
------- ------- -------
Net interest income after
provision for loan losses 12,861 10,166 23,027
Total other income 1,756 2,535 4,291
Total other expenses 8,374 7,829 16,203
------- ------- -------
Income before income taxes 6,243 4,872 11,115
Income taxes 2,468 1,442 3,910
------- ------- -------
Net income $ 3,775 $ 3,430 $ 7,205
======= ======= =======
Basic earning per share $ 3.02 $ 3.35 $ 3.06
Diluted earnings per share 3.02 3.30 3.04
Average shares outstanding -
basic 1,250,897 1,025,072 2,352,849
Average shares outstanding -
diluted 1,250,897 1,040,233 2,369,147
Pro Forma Combined Condensed Statement of Income
Year Ended December 31, 1996
(Unaudited)
(In thousands, except share and per share data)
Pro Forma
Adjustments IUB/PTC
Increase Pro
IUB PTC (Decrease) Forma
Combined
Interest income $23,967 $21,319 $45,286
Interest expense 12,006 10,897 22,903
------- ------- -------
Net interest income 11,961 10,422 22,383
Provision for loan losses 150 828 978
------- ------- -------
Net interest income after
provision for loan losses 11,811 9,594 21,405
Total other income 1,502 2,349 3,851
Total other expenses 8,619 7,103 15,722
------- ------- -------
Income before income taxes 4,694 4,840 9,534
Income taxes 2,001 1,564 3,565
------- ------- -------
Net income $ 2,693 $ 3,276 $ 5,969
======= ======= =======
Basic earning per share $ 2.11 $ 3.17 $ 2.51
Diluted earnings per share 2.11 3.13 2.49
Average shares outstanding -
basic 1,250,897 1,031,922 2,360,213
Average shares outstanding -
diluted 1,250,897 1,046,388 2,375,764
Pro Forma Combined Condensed Statement of Income
Year Ended December 31, 1995
(Unaudited)
(In thousands, except share and per share data)
Pro Forma
Adjustments IUB/PTC
Increase Pro
IUB PTC (Decrease) Forma
Combined
Interest income $22,835 $19,420 $42,255
Interest expense 11,852 9,835 21,687
------- ------- -------
Net interest income 10,983 9,585 20,568
Provision for loan losses 30 740 770
------- ------- -------
Net interest income after
provision for loan losses 10,953 8,845 19,798
Total other income 1,457 1,901 3,358
Total other expenses 8,229 6,639 14,868
------- ------- -------
Income before income taxes 4,181 4,107 8,288
Income taxes 1,652 1,200 2,852
------- ------- -------
Net income $ 2,529 $ 2,907 $ 5,436
======= ======= =======
Basic earning per share $ 1.91 $ 2.86 $ 2.26
Diluted earnings per share 1.91 2.83 2.25
Average shares outstanding -
basic 1,250,897 1,016,476 2,343,609
Average shares outstanding -
diluted 1,250,897 1,026,072 2,353,925
Pro Forma Condensed Combined Financial Information
The following unaudited pro forma combined condensed balance sheet as of
March 31, 1998, and the pro forma combined condensed statement of income for
the year ended March 31, 1998, give effect to the Merger based on the
historical consolidated financial statements of Indiana United Bancorp (IUB)
and its subsidiaries and the historical consolidated financial statements of
P.T.C. Bancorp (PTC) and its subsidiary under the assumptions and adjustments
set forth in the accompanying notes to the pro forma financial statements.
The pro forma financial statements have been prepared by the managements of
IUB and PTC based upon their respective financial statements. These pro
forma statements, which include results of operations as if the Merger had
been consummated at the beginning of each period presented, may not be
indicative of the results that actually would have occurred if the Merger had
been in effect on the dates indicated or which may be obtained in the future.
The following pro forma combined condensed balance sheet and condensed
statements of income include:
(a) IUB's historical consolidated financial information
(b) PTC's historical consolidated financial information
(c) The combined statements of IUB and PTC, which have been designated
herein as "IUB/PTC Pro Forma Combined."
Pro Forma Combined Condensed Balance Sheet
March 31, 1998
(Unaudited)
(In thousands)
Pro Forma
Adjustments IUB/PTC
Increase Pro Forma
IUB PTC (Decrease) Combined
Assets
Cash and due from banks $ 11,257 $ 8,621 $ 19,878
Federal funds sold 19,975 21,250 41,225
Interest-bearing deposits 47 1,498 1,545
Investment securities
Available for sale 70,662 30,315 100,977
Held to maturity 21,452 21,452
-------- -------- --------
Total investment
securities 70,662 51,767 122,429
Loans held for sale 4,467 4,467
Loans 253,573 222,666 476,239
Allowance for loan losses 2,803 2,819 5,622
-------- -------- --------
Net loans 250,770 219,847 470,617
Premises and equipment 6,303 3,938 10,241
Goodwill 70 5,670 5,740
Other assets 5,314 698 6,012
-------- -------- --------
Total assets $364,398 $317,756 $682,154
======== ======== ========
Liabilities
Deposits $284,021 $289,124 $573,145
Short-term borrowings 12,563 449 13,012
Federal Home Loan Bank
advances 10,000 10,000
Other liabilities 4,094 3,127 7,221
-------- -------- --------
Total Liabilities 310,678 292,700 603,378
Guaranteed preferred
beneficial interests in
Company's subordinated
debentures 22,425 22,425
Stockholders' equity
Common Stock 1,251 1,026 $ 110 2,387
Additional paid-in
capital 10,677 10,445 (110) 21,012
Retained earnings 18,668 13,428 32,096
Net unrealized gain
(loss) on securities
available for sale 699 157 856
-------- -------- ----- --------
Total stockholders'
equity 31,295 25,056 56,351
-------- -------- --------
Total liabilities and
stockholders' equity $364,398 $317,756 $682,154
======== ======== ==== ========
Notes to Pro Forma Combined Condensed Balance Sheet (Unaudited)
The following pro forma adjustments are necessary to record the Merger.
(1) To reflect exchange of shares of PTC common stock for shares of
IUB common stock, retaining the historical cost basis of assets,
liabilities and equity through the treatment as a pooling of
interest. A total of 1,136,417 shares of IUB common stock were
issued at the exchange ratio of 1.075 shares of IUB common stock
for each of the 1,057,132 issued and outstanding shares of PTC
common stock as of March 31, 1998 (of which 30,731 result from the
exercise of stock options during April, 1998), resulting in a
transfer to common stock from additional paid-in capital of
$110,000 to reflect the increase in the aggregate stated value of
the issued and outstanding shares of IUB common stock relative to
the aggregate stated value of the currently outstanding shares of
PTC common stock.
Pro Forma Combined Condensed Statement of Income
Three Months Ended March 31, 1998
(Unaudited)
(In thousands, except share and per share data)
Pro Forma IUB/PTC
Adjustments Pro
IUB PTC Increase Forma
(Decrease) Combined
Interest income $6,885 $6,059 $12,944
Interest expense 3,719 3,085 6,804
------ ------ -------
Net interest income 3,166 2,974 6,140
Provision for loan losses 123 150 273
------ ------ ------
Net interest income after
provision for loan losses 3,043 2,824 5,867
Total other income 412 950 1,362
Total other expenses 2,167 2,204 4,371
------ ------ -------
Income before income taxes 1,288 1,570 2,858
Income taxes 508 502 1,010
------ ------ -------
Net income $ 780 $1,068 $ 1,848
====== ====== =======
Basic earning per share $ .62 $ 1.04 $ .78
Diluted earnings per share .62 1.02 .78
Average shares outstanding -
basic 1,250,897 1,026,401 2,354,278
Average shares outstanding -
diluted 1,250,897 1,043,961 2,373,155