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[AMERIANA BANCORP LOGO]
Contact: Jerome J. Gassen
President and Chief Executive Officer
(765) 529-2230
AMERIANA BANCORP REPORTS NET INCOME OF $383,000 OR $0.13 PER SHARE
FOR THE QUARTER ENDED MARCH 31, 2008
NEW CASTLE, Ind. (May 1, 2008) - Ameriana Bancorp (NASDAQ:ASBI) today
announced net income of $383,000 or $0.13 per basic and diluted share for the
quarter ended March 31, 2008, reversing a net loss of $24,000 or $0.01 per basic
and diluted share in the year-earlier period.
The quarter included continued growth in Ameriana's loan portfolio and
ongoing improvement in its net interest margin, both of which contributed to
higher net interest income for the quarter. Also, in the first quarter of 2008,
the Company reported a reduction in other expense as well as a benefit from the
resolution of a long-standing tax issue. These overall improvements were
partially offset by a higher provision for loan losses in the first quarter
compared with the same period last year, as Ameriana maintained a conservative
posture toward potential risk in its loan portfolio in light of current economic
pressures and the recent rise in the level of non-performing loans.
Commenting on the results, Jerome J. Gassen, President and Chief Executive
Officer, said, "We are pleased that our growth strategies continue to translate
into improved business fundamentals, leading to ongoing loan and deposit growth
in the first quarter of 2008 and extending the success we achieved last year.
These accomplishments are particularly noteworthy considering the current
competitive environment. Furthermore, our higher net interest margin for the
first quarter demonstrates the positive impact of our asset and liability
management efforts, and our ability to react quickly to declining interest rate
levels. We believe this progress, coupled with the acceleration of our expansion
activities, gives us a solid start to 2008 and provides the foundation for
improved performance over the longer term."
Ameriana's higher earnings for the first quarter of 2008 reflects growth
in the Company's loan portfolio. A greater focus on commercial lending remains
at the heart of this success, contributing a 20% increase in the Company's
commercial loan portfolio over the past year and driving a 12% overall increase
in the total loan portfolio since March 31, 2007.
In terms of physical expansion, Gassen noted that Ameriana recently
announced plans to open two new full-service banking centers in Hamilton County,
which lies just north of Marion County and Indianapolis. The new offices in
Fishers and Carmel, expected to open in October 2008 and January 2009,
respectively, will enhance Ameriana's presence in one of the fastest growing
areas of Indiana, considerably increase its footprint in the Indianapolis area,
and boost the Company's overall visibility in this market.
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ASBI Reports First Quarter Results
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May 1, 2008
Net interest income for the first quarter of 2008 increased 17% to
$2,725,000 from $2,333,000 in the year-earlier period. This reflected the
positive effects of the Company's balance sheet restructuring strategies that
began in late 2006, Ameriana's increased emphasis on commercial lending and its
higher yields, and efforts to reduce funding costs quickly in a declining-rate
environment. Net interest margin on a fully tax-equivalent basis for the first
quarter was 2.97%, up seven basis points from 2.90% in the fourth quarter of
2007 and 36 basis points ahead of 2.61% in the year-earlier quarter.
Although the Company has no exposure to sub-prime lending products in its
loan portfolio, the Company's overall credit quality showed the increasing
pressure of current macroeconomic conditions in the first quarter.
Non-performing loans at March 31, 2008 totaled $4,557,000, up $1,919,000 from
$2,638,000 at December 31, 2007 and $1,028,000 from $3,529,000 at March 31,
2007. The increase from December 31, 2007 was related primarily to five real
estate development loans in the Hancock County, Indiana area totaling $1,275,000
that represented two long-time lending relationships. Ameriana increased its
provision for loan losses to $371,000 for the first quarter compared with
$90,000 in the year-earlier period to reflect the increase in non-performing
loans and the growth in the loan portfolio. The Company's allowance for loan
losses totaled 0.97% of total loans as of March 31, 2008, versus 0.90% at
December 31, 2007 and 1.02% at March 31, 2007.
Other income for the first quarter of 2008 was $1,141,000, up 16% from
$985,000 in the same quarter in 2007, primarily due to higher commissions from
insurance sales and a $49,000 pre-tax gain from the partial redemption of the
Company's equity interest in Visa realized through Visa's recent initial public
offering. Other expense for the first quarter declined 4% to $3,392,000 from
$3,545,000 in the same quarter last year, largely due to lower compensation
costs this year reflecting severance costs incurred last year, lower legal and
professional fees with the mid-2007 conclusion of the Company's litigation with
RLI, and non-recurring recruiting costs incurred in the first quarter of 2007.
For the first quarter of 2008, the Company's earnings included a $280,000
income tax benefit. This was due primarily to the significant amount of
tax-exempt interest on municipal securities, tax-exempt income from increases in
the cash value of life insurance, and a $150,000 reversal of an income tax
liability recorded in prior years that resulted from a favorable tax court
ruling regarding the application of the Tax Equity and Fiscal Responsibility Act
penalty to investment subsidiaries of commercial banks.
Ameriana's total assets were $445,306,000 at March 31, 2008, up 4% from
$426,791,000 at December 31, 2007, and up 2% from $436,995,000 at March 31,
2007. The Company's loan portfolio increased 1% to $298,467,000 at March 31,
2008 from $296,951,000 at December 31, 2007 and was up 12% from $265,706,000 at
March 31, 2007. Investment securities totaled $80,147,000 at March 31, 2008, up
20% from $66,692,000 at December 31, 2007, but down 32% from $117,430,000 at
March 31, 2007, as proceeds from the repositioning and reduction of the
Company's investment portfolio last year were used to support Ameriana's growing
focus on higher-yielding commercial loans. The growth of the investment
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ASBI Reports First Quarter Results
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May 1, 2008
securites portfolio in the first quarter of 2008 came from the addition of $15
million of Fannie Mae mortgage-backed securities funded at an attractive spread
with FHLB fixed-rate advances.
Total deposits rose 2% to $322,402,000 at March 31, 2008, from
$314,746,000 at December 31, 2007, and were up 1% from $319,366,000 at March 31,
2007. Shareholders' equity totaled $33,180,000 at March 31, 2008, versus
$33,989,000 at December 31, 2007, and $32,396,000 at March 31, 2007. The
decrease in capital for the first quarter of 2008 was a result of the Company
recording a liability for post-retirement benefits as required under EITF Issues
06-04 and 06-10. 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 LPL Financial (Member
FINRA/SIPC).
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. For discussion of these and other risks that
may cause actual results to differ from expectations, refer to the Company's
Annual Report on Form 10-K for the year ended December 31, 2007, on file with
the Securities and Exchange Commission, including the section entitled "Risk
Factors." 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
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May 1, 2008
<Table>
<Caption>
AMERIANA BANCORP
UNAUDITED FINANCIAL HIGHLIGHTS
(In thousands, except per share amounts)
THREE MONTHS ENDED
MARCH 31
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2008 2007
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Interest income $5,935 $5,890
Interest expense 3,210 3,557
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Net interest income 2,725 2,333
Provision for loan losses 371 90
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Net interest income after provision for loan losses 2,354 2,243
Other income 1,141 985
Other expense 3,392 3,545
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Income (loss) before income taxes 103 (317)
Income tax benefit (280) (293)
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Net income (loss) $ 383 $ (24)
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Basic and diluted earnings (loss) per share $ 0.13 $(0.01)
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Weighted average shares outstanding:
Basic 2,989 3,032
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Diluted 2,989 3,032
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Dividends declared per share $ 0.04 $ 0.04
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</Table>
<Table>
<Caption>
MARCH 31 DEC. 31 MARCH 31
2008 2007 2007
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Total assets $445,306 $427,134 $436,996
Cash and cash equivalents 17,272 17,173 9,563
Investment securities available for sale 80,147 66,692 117,430
Loans receivable 298,467 296,951 265,706
Allowance for loan losses 2,909 2,677 2,707
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Loans, net 295,558 294,274 262,999
Allowance for loan losses as a percentage of loans receivable 0.97% 0.90% 1.02%
Non-performing loans $ 4,557 $ 2,638 $ 3,529
Allowance for loan losses as a percentage of non-performing loans 63.8% 101.5% 76.7%
Deposits:
Non-interest bearing 23,206 20,429 19,991
Interest bearing 299,196 294,317 299,376
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322,402 314,746 319,367
Borrowed funds 81,235 68,513 76,634
Shareholders' equity 33,180 33,989 32,396
Loans accounted for on a non-accrual basis 4,157 2,638 3,528
Book value per share 11.10 11.37 10.84
</Table>
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