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Ameriana News Release
Ameriana Bancorp
2118 Bundy Avenue
P.O. Box H
New Castle, Indiana Contact: Jerome J. Gassen
47632-1048 President and Chief Executive Officer
765-529-2230-1-800-487-2118 (765)529-2230
AMERIANA BANCORP REPORTS THIRD QUARTER, YEAR-TO-DATE RESULTS
NEW CASTLE, Ind. (October 31, 2005) - Ameriana Bancorp (NASDAQ/NM: ASBI) today
announced results for the three and nine months ended September 30, 2005.
Net income for the third quarter totaled $396,000 or $0.12 per diluted
share compared with net income of $412,000 or $0.13 per diluted share reported
in the same period last year. Net income for the first nine months of 2005
totaled $1,886,000 or $0.59 per diluted share compared with net income of
$1,318,000 or $0.42 per diluted share in the year-earlier period.
Net income for the first nine months of 2005 reflected total recoveries of
$3,400,000 in the Commercial Money Center ("CMC") matter, including a payment of
$2,300,000 received during the first quarter in settlement of litigation against
one of the sureties for the lease pools and a payment of $1,100,000 received
during the second quarter in settlement of the CMC bankruptcy. These amounts
were recorded as recoveries to the allowance for loan losses, resulting in an
adjustment for loan losses of $2,997,000 for the nine months ended September 30,
2005, compared with provision for loan losses of $275,000 for the nine months
ended September 30, 2004. The provision for loan losses in the third quarter of
2005 remained low because of another, although smaller, recovery of a loan
previously charged off.
Net interest income for the third quarter was $2,526,000 compared with
$2,669,000 in the year-earlier period. Net interest income for the first nine
months of 2005 was $7,429,000 versus $8,197,000 in the comparable period last
year.
Non-accrual loans declined $4,211,000 or 60% to $2,839,000 in the third
quarter versus the second quarter of 2005 and were 51% below the year-end level
of $5,736,000. The decrease was primarily due to the foreclosure of collateral
on a commercial real estate loan, the successful restructuring of another
commercial real estate loan, and the partial charge-off of a third commercial
real estate loan.
Commenting on the results, Jerome J. Gassen, President and Chief Executive
Officer, said, "With rising interest rates throughout the year - pressuring
deposit costs and resulting in a relatively flat yield curve - Ameriana
continues to confront a difficult rate environment. We are actively working to
manage our interest rate risk and, at the same time, our asset quality measures
have continued to improve to help counter these conditions. This progress,
coupled with recent recoveries on loans and leases that were previously written
off, has provided a positive offset to the continued rate compression we have
experienced. Also, we continue to see the benefit of cost control initiatives
implemented earlier, which was particularly evident in the third quarter as
other expenses declined 5% primarily due to lower pension costs versus the same
period last year following modifications to our plan in 2004 and because of the
voluntary payment we made toward our pension liability earlier this year.
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ASBI Reports Third Quarter Results
Page 2
October 31, 2005
"During the third quarter, we achieved loan growth that reflects other
Company initiatives to build our business - with increased emphasis on
commercial lending," Gassen continued. "As we pursue these and other
initiatives, we will continue to seek further efficiencies in our operations to
help improve our overall performance going forward."
During the third quarter, Ameriana reclassified all investment securities
in its portfolio previously accounted for as "held to maturity" to "available
for sale." This new classification, which provides the Company with increased
flexibility to address changing interest rate risks or capitalize on
opportunities to generate higher interest earnings, had no effect on the
Company's earnings for the third quarter. Unrealized net losses on these
investments, however, were recorded as a reduction in shareholders' equity,
resulting in a decline in this balance compared with the earlier reported
quarters. These previously unrealized net losses reflected primarily the rising
rate environment that has existed for more than one year.
Ameriana Bancorp is a bank holding company. Through its wholly owned
subsidiary, Ameriana Bank and Trust SB, 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 SB also offers trust and investment management services. The Bank has
interests in Family Financial Holdings, Inc. and Indiana Title Insurance
Company, and owns Ameriana Insurance Agency, a full-service insurance agency.
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 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, changes in interest rates, loss
of deposits and loan demand to other financial institutions, substantial changes
in financial markets; changes in real estate value and the real estate market,
regulatory changes, possibility of unforeseen events affecting the industry
generally, the uncertainties associated with newly developed or acquired
operations, the outcome of pending litigation, and market disruptions and other
effects of terrorist activities. The Company undertakes no obligation to update
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unforeseen events, except as
required under the rules and regulations of the Securities and Exchange
Commission.
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ASBI Reports Third Quarter Results
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October 31, 2005
AMERIANA BANCORP
UNAUDITED FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
- -------------------------------------------------------- ------------------
2005 2004 2005 2004
- --------------------------------------------- -------- -------- -------
Interest income $ 5,056 $ 4,566 $ 14,550 $13,640
Interest expense 2,530 1,897 7,121 5,443
------- -------- -------- -------
Net interest income 2,526 2,669 7,429 8,197
Provision (adjustment) for loan
losses 35 75 (2,997) 275
------- ------ --------- -----
Net interest income after provision
for loan losses 2,491 2,594 10,426 7,922
Other income 949 978 3,065 3,000
Other expense 3,073 3,241 11,311 9,809
------- -------- -------- -------
Income before income taxes 367 331 2,180 1,113
Income tax (benefit) expense (29) (81) 294 (205)
-------- -------- -------- -------
Net income $ 396 $ 412 $ 1,886 $ 1,318
======= ======== ======== =======
Earnings per share:
Basic $ 0.13 $ 0.13 $ 0.60 $ 0.42
======= ======== ========= =======
Diluted $ 0.12 $ 0.13 $ 0.59 $ 0.42
======= ======== ========= =======
Weighted average shares outstanding:
Basic 3,162 3,149 3,156 3,149
======= ======== ======== =======
Diluted 3,173 3,174 3,170 3,172
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Dividends declared per share $ 0.16 $ 0.16 $ 0.48 $ 0.48
======= ======== ======== =======
SEPT. 30 DEC. 31 SEPT. 30
2005 2004 2004
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Total assets $442,216 $428,553 $434,046
Cash and cash equivalents 13,552 17,053 19,024
Investment securities held to maturity -- 158,322 160,103
Investment securities available for sale 172,358 12,032 11,975
Loans, net 209,057 196,344 198,172
Deposits 323,926 344,047 335,820
Borrowed funds 74,029 40,390 51,119
Shareholders' equity 36,748 38,643 39,131
Loans accounted for on a non-accrual basis 2,839 5,736 4,876
Book value per share 11.62 12.26 12.43
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