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[AMERIANA BANCORP LETTERHEAD]
Contact: Harry J. Bailey
President and Chief Executive Officer
(765) 529-2230
AMERIANA BANCORP REPORTS $2.3 MILLION RECOVERY FROM
AMERICAN MOTORIST INSURANCE COMPANY
--------------------------------
COMPANY ALSO REPORTS FOURTH QUARTER RESULTS
NEW CASTLE, Ind. (February 11, 2005) - Ameriana Bancorp (NASDAQ/NM:
ASBI) today reported that it has received a previously announced settlement with
American Motorist Insurance Company ("AMICO") in the amount of $2.3 million that
had been held in escrow. This settlement represents a partial recovery against
approximately $5.5 million in equipment lease payment streams from a pool of
leases originated by Commercial Money Center ("CMC"), in which the Company
invested in 2001 and which were guaranteed by AMICO. Afterward, CMC declared
bankruptcy and AMICO denied responsibility for the unpaid balance on the basis
of fraud by CMC.
Ameriana's litigation continues against the second surety, RLI
Insurance Co., which guaranteed Ameriana's lease payment streams of a comparable
amount from a second pool of leases.
Separately, Ameriana also reported results for the fourth quarter and
year ended December 31, 2004. Net income for the fourth quarter of 2004 totaled
$108,000 or $0.03 per diluted share compared with net income of $615,000 or
$0.19 per diluted share in the year-earlier period. For the year ended December
31, 2004, net income was $1,426,000 or $0.45 per diluted share versus $2,418,000
or $0.77 per diluted share in 2003.
Net interest income for the fourth quarter of 2004 was $2,568,000
versus $3,064,000 in the year-earlier period. The provision for loan losses was
$117,000 in the fourth quarter of 2003 versus $100,000 in the same quarter last
year. Net interest income for 2004 was $10,765,000 versus $13,030,000 in 2003.
The provision for loan losses in 2004 was $392,000, down significantly from
$6,440,000 in the prior year as 2003 charges to fully reserve and write off
investments in its two troubled lease pools did not recur in 2004.
Non-performing assets at the end of 2004 declined to $5,736,000 from $8,383,000
at the end of 2003.
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ASBI Reports Year-end Results
Page 2
February 11, 2005
Commenting on the results, Harry J. Bailey, President and Chief
Executive Officer, said, "Throughout the past year, we continued to face a
number of market challenges that affected our results, primarily in the area of
building our loan portfolio, which, in turn, provides the engine for growth in
our net interest income. Real estate lending in 2004, first mortgage loans in
particular, clearly was disappointing and reflected a continued downdraft in
this sector. This industry-wide slowdown had a ripple effect on our results for
2004, not only limiting our opportunity to generate higher interest income from
loans, it caused a shift in the mix of lower-yielding income from investments,
put further pressure on our net interest margin, and reduced gains on sales of
loans $1,569,000 year over year."
Bailey noted that other issues make comparisons between 2004 and 2003
more difficult. In 2003, Ameriana sold its two Ohio branches in a transaction
that generated $5,511,000 in other income. Also in 2003, the Company terminated
its exposure to further potential principal loss on $10,900,000 million of
equipment lease payment streams related to two pools of leases originated by
Commercial Money Center ("CMC") by fully reserving and writing off those
investments completely. This action added $5,890,000 to the provision for loan
losses in 2003.
"Although 2004 was challenging from an operational standpoint, we did
register notable success in several areas that we believe will benefit us in the
coming year," Bailey added. "First and foremost, we negotiated a settlement with
one of the sureties for the CMC lease payment streams, which resulted in a
recovery of $2.3 million. Also, we continued to focus on cost reductions,
resulting in slightly lower other expenses for the year as we began to see the
initial impact of the efficiencies we have implemented. We expect both of these
factors to help our results in the coming year as we continue to face some
market resistance in building our loan portfolio."
Ameriana Bancorp is a bank holding company. Through its wholly owned
subsidiary, Ameriana Bank and Trust, the Company offers an extensive line of
banking services and provides a range of investments and securities products
through branches in the central Indiana area. As its name implies, Ameriana Bank
and Trust also offers trust and investment management services, has interests in
Family Financial Holdings, Inc. and Indiana Title Insurance Company, and owns
Ameriana Insurance Agency, a full-service insurance agency.
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ASBI Reports Year-end Results
Page 3
February 11, 2005
This news release contains forward-looking statements within the
meaning of the federal securities laws. Statements in this release that are not
strictly historical are forward-looking and are based upon current expectations
that may differ materially from actual results. These forward-looking
statements, identified by words such as "anticipate," "believe," "intend,"
"will" and "expect," involve risks and uncertainties that could cause actual
results to differ materially from those anticipated by the statements made
herein. These risks and uncertainties involve general economic trends and
changes in interest rates, increased competition, changes in consumer demand for
financial services, the possibility of unforeseen events affecting the industry
generally, the uncertainties associated with newly developed or acquired
operations, the amount of losses incurred from the liquidation of certain of the
Company's investments, the eventual outcome of litigation to enforce certain
surety agreements, and market disruptions and other effects of terrorist
activities. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements. The Company undertakes no obligation to release revisions to these
forward-looking statements publicly to reflect events or circumstances after the
date hereof or to reflect the occurrence of unforeseen events, except as
required to be reported under the rules and regulations of the Securities and
Exchange Commission.
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AMERIANA BANCORP
UNAUDITED FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31 DECEMBER 31
--------------------------- ---------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Interest income $ 4,691 $ 4,860 $ 18,331 $ 23,096
Interest expense 2,123 1,796 7,566 10,066
------------ ----------- ----------- -----------
Net interest income 2,568 3,064 10,765 13,030
Provision for loan losses 117 100 392 6,440
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 2,451 2,964 10,373 6,590
Other income 961 1,170 3,961 10,540
Other expense 3,572 3,406 13,381 13,602
------------ ----------- ----------- -----------
Income (loss) before income taxes (160) 728 953 3,528
Income taxes (benefit) (268) 113 (473) 1,110
------------ ----------- ----------- -----------
Net income (loss) $ 108 $ 615 $ 1,426 $ 2,418
============ =========== =========== ===========
Earnings (loss) per share:
Basic $ 0.03 $ 0.20 $ 0.45 $ 0.77
============ =========== =========== ===========
Diluted $ 0.03 $ 0.19 $ 0.45 $ 0.77
============ =========== =========== ===========
Weighted average shares:
Basic 3,151 3,148 3,149 3,148
============ =========== =========== ===========
Diluted 3,180 3,159 3,181 3,152
============ =========== =========== ===========
Dividends declared per share $ 0.16 $ 0.16 $ 0.64 $ 0.64
============ =========== =========== ===========
DEC. 31 DEC. 31
2004 2003
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Total assets $ 428,553 $ 402,453
Cash and cash equivalents 17,053 14,549
Investment securities available for sale 158,322 137,788
Investment securities held to maturity 12,032 --
Loans, net 196,344 204,141
Deposits 344,047 345,744
Borrowed funds 40,390 10,230
Shareholders' equity 38,643 38,874
Non-performing loans 5,736 8,383
Book value per share 12.26 12.35