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[AMERIANA BANCORP LETTERHEAD]
Contact: Jerome J. Gassen
President and Chief Executive Officer
(765) 529-2230
AMERIANA BANCORP REPORTS FIRST QUARTER RESULTS
NEW CASTLE, Ind. (May 3, 2007) - Ameriana Bancorp (NASDAQ:ASBI) today announced
that the Company incurred a net loss of $24,000 or $0.01 per basic and diluted
share for the first quarter ended March 31, 2007. The net loss was largely a
result of a one-time charge of $273,000 ($180,000 on a tax-adjusted basis) for
severance costs related to the departure of the Company's Chief Financial
Officer in January. Excluding the one-time charge to income for the first
quarter of 2007, earnings would have been $156,000 or $0.05 per basic and
diluted share. Net income for the first quarter of 2006 was $218,000 or $0.07
per basic and diluted share.
Highlights of the first quarter included continued growth in the Company's
loan portfolio, demonstrating the positive impact of Ameriana's efforts to
expand its commercial lending activities. Ameriana also reported ongoing
improvements in credit quality during the first quarter.
Commenting on the results, Jerome J. Gassen, President and Chief Executive
Officer, said, "We are pleased to report fundamental improvements in our
operations during the first quarter, as evidenced by continued growth in our
loan portfolio - up 21% over the past year on the increasing momentum of our
commercial lending activities - and the related increase in net interest income.
At the same time, credit quality continued to improve.
"Unfortunately, our operational progress in the first quarter was obscured
by higher expenses of an unusual nature," Gassen continued. "We incurred
severance costs in connection with the departure of our CFO in the first quarter
in addition to recruiting costs associated with the hiring of two new commercial
lenders as part of our market expansion strategy in metropolitan Indianapolis.
Higher fees for litigating our complaint against RLI Insurance Co. over surety
guarantees for certain lease pools in which Ameriana had previously invested
also contributed to these costs and our net loss the quarter. With these
unexpected costs behind us, and with the fundamental improvements that are
occurring in our business operations, we anticipate year-over-year improvement
in net income throughout the balance of 2007."
Ameriana's net interest income for the quarter increased 4% to $2,333,000
compared with $2,244,000 in the year-earlier period, as growth in net
interest-earning assets offset higher funding costs, including rates paid on
deposits. Net interest margin for the first quarter was 2.61%, 35 basis points
higher than the 2.26% net interest margin in the fourth quarter of 2006 and 25
basis points above the 2.36% net interest margin in the year-earlier quarter.
Ameriana expects its net interest margin to improve over the balance of 2007 as
a result of the portfolio restructuring that occurred in 2006, from maturing
investments in 2007, and from the continued growth in loans, especially
higher-yielding commercial loans.
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ASBI Reports First Quarter Results
Page 2
May 3, 2007
Ameriana's credit quality remained relatively stable in the first quarter
and the Company has no exposure to sub-prime lending products. Non-accrual loans
were $3.5 million at March 31, 2007, compared with $3.3 million at December 31,
2006, and $3.1 million at March 31, 2006. Non-accrual loans, relative to total
loans outstanding, were 1.33% as of March 31, 2007, compared with 1.32% at
December 31, 2006, and 1.40% at March 31, 2006. Ameriana's criticized loans
declined $1.1 million to $8.8 million from December 31, 2006, and $5.1 million
from March 31, 2006. The decline was due to overall improvement related to more
focused workout activities. Ameriana's provision for loan losses was $90,000 in
the first quarter versus $75,000 in the year-earlier period.
Other income for the first quarter of 2007 was $1,039,000, up 5% from
$985,000 in the same quarter in 2006, primarily reflecting higher brokerage and
insurance commissions. Other expense for the first quarter increased to
$3,599,000 from $3,061,000 in the same quarter last year, primarily because of
severance costs related to the departure of our CFO, recruiting costs for new
commercial lenders, and higher-than-expected expenses in Ameriana's ongoing
collection litigation against RLI Insurance Co.
Ameriana's total assets were $437.0 million at March 31, 2007, compared
with $437.2 million at December 31, 2006, and $443.2 million in the year-earlier
quarter. The Company's loans (net) increased 6% to $263.0 million at March 31,
2007, from $249.3 at December 31, 2006, and were up 22% from $216.2 million at
March 31, 2006. Total investment securities declined $12.3 million from December
31, 2006, to $117.4 million at March 31, 2007, as proceeds from maturities and
paydowns on mortgage-backed securities were used to fund originations of
higher-yielding commercial loans. Deposits declined to $319.4 million at March
31, 2007, compared with $322.4 million at the end of 2006 and $339.4 million a
year earlier largely as a result of lower levels of brokered deposits and
seasonal declines in public fund deposits. Total stockholders' equity was $32.4
million at March 31, 2007, compared with $33.1 million at December 31, 2006, and
$35.6 million at March 31, 2006. Ameriana's capital position continues to exceed
all of the regulatory minimum capital levels required to be considered a
"well-capitalized" institution.
Ameriana Bancorp is a bank holding company. Through its wholly owned
subsidiary, Ameriana Bank, SB, the Company offers an extensive line of banking
services and provides a range of investments and securities products through
banking centers in the central Indiana area. Ameriana owns Ameriana Insurance
Agency, a full-service insurance agency, and has interests in Family Financial
Holdings, Inc. and Indiana Title Insurance Company. Ameriana Financial Services
offers securities and insurance products through Linsco/Private Ledger.
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 First Quarter Results
Page 3
May 3, 2007
<Table>
<Caption>
AMERIANA BANCORP
UNAUDITED FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
THREE MONTHS ENDED
MARCH 31
-------------------
2007 2006
-------- --------
Interest income $ 5,890 $ 5,333
Interest expense 3,557 3,089
-------- -------
Net interest income 2,333 2,244
Provision for loan losses 90 75
-------- -------
Net interest income after provision for loan losses 2,243 2,169
Other income 1,039 985
Other expense 3,599 3,061
-------- -------
Income (loss) before income taxes (317) 93
Income tax benefit (293) (125)
-------- -------
Net income (loss) $ (24) $ 218
======== =======
Earnings (loss) per share:
Basic $ (0.01) $ 0.07
========= =======
Diluted $ (0.01) $ 0.07
========= =======
Weighted average shares outstanding:
Basic 3,032 3,196
======== =======
Diluted 3,033 3,200
======== =======
Dividends declared per share $ 0.04 $ 0.16
======== =======
</Table>
<Table>
<Caption>
MARCH 31 DEC. 31 MARCH 31
2007 2006 2006
------- -------- -------
Total assets $436,995 $437,246 $443,245
Cash and cash equivalents 9,563 12,070 13,984
Investment securities available for sale 117,430 129,776 164,110
Loans receivable 265,706 251,888 219,136
Allowance for loan losses 2,707 2,616 2,912
------- -------- -------
Loans, net 262,999 249,272 216,224
Deposits:
Non-interest bearing 19,991 19,905 17,071
Interest bearing 299,376 302,529 322,339
------- -------- -------
319,367 322,434 339,410
Borrowed funds 76,634 74,683 58,553
Loans accounted for on a non-accrual basis 3,528 3,326 3,060
Book value per share 10.84 10.85 11.07
</Table>