[AMERIANA BANCORP LETTERHEAD]
Contact: Jerome J. Gassen
President and Chief Executive Officer
(765) 529-2230
AMERIANA BANCORP REPORTS RESULTS FOR SECOND QUARTER OF 2009
NEW CASTLE, Ind. (July 31, 2009) - Ameriana Bancorp (NASDAQ: ASBI), parent
company for Ameriana Bank, today reported a net loss of $466,000 or $0.16 per
basic and diluted share for the second quarter ended June 30, 2009, compared
with net income of $383,000 or $0.13 per basic and diluted share for the second
quarter of 2008. The Company's second quarter net loss primarily reflected
higher credit costs as Ameriana continues to respond to the current economic
environment, which has produced ongoing deterioration in home values and
increasing pressure on borrowers. These higher credit costs resulted in an
increased provision for loan losses of $615,000, a total of $379,000 in net
losses and write downs on other real estate owned ("OREO") properties, as well
as $136,000 in other net expenses associated with OREO. Additionally, Ameriana
recorded a $225,000 expense as a result of the industry-wide special assessment
for FDIC insurance, more than offsetting a previously announced $192,000 gain on
the sale of the Company's interest in Family Financial Holdings. For the first
six months of 2009, Ameriana's net loss was $579,000 or $0.19 per basic and
diluted share compared with net income of $766,000 or $0.26 per basic and
diluted share in the same period last year.
Commenting on the announcement, Jerome J. Gassen, President and Chief
Executive Officer, said, "The extended downturn in the national economy
continues to take a toll on borrowers, as indicated in the increased levels of
our non-performing and classified loans over the past three months. We are
active in our collection efforts and in working with borrowers where possible
for reasonable solutions, but the ongoing decline in asset values - with little
sign of near-term relief - often makes acceptable resolution of problem loans
impossible, leading to an increase in our provision for loan losses as we have
set higher amounts of general and specific reserves. These pressures also have
resulted in an increase in OREO and OREO-related expenses, primarily reflecting
legacy credits that predate our current administration policies and processes
initiated in 2006. Further, the disposition of OREO is now more difficult due to
depressed real estate conditions and the scarcity of homebuyers. We remain
unsure whether the current credit cycle has bottomed or when economic conditions
may begin to exhibit sustainable improvements, but we are encouraged by signs
that housing inventory is coming down, mortgage volume is improving, consumer
sentiment is rising and business inventories have reached very lean levels.
Until these improvements lead to a real recovery in the housing market and home
prices, we expect credit costs will remain at elevated levels."
ASBI Reports Second Quarter 2009 Results
Page 2
July 31, 2009
Gassen noted that the Company's higher net interest income and
continued loan growth in the second quarter underscores Ameriana's greater focus
on commercial lending - efforts recently capped by the approval of Ameriana
Bank's application to convert its charter to an Indiana commercial bank. The
Bank's expanded footprint in fast-growing suburban areas to the north and east
of Indianapolis also has contributed to loan growth of 9% during the past 12
months. Over that same period, Ameriana has seen deposits increase 19%,
reflecting an increase in core deposits, largely related to the opening of three
new banking centers in the Indianapolis area since October 2008, as well as an
increase in short-term municipal deposits.
"We are very pleased with the momentum building at our newest banking
centers," Gassen continued. "Although these new offices in Carmel, Fishers and
Westfield have a temporary negative impact on earnings as they ramp up
operationally and establish a wider customer base, they are exceeding our
expectations for attracting new deposits and are proving themselves as sound
investments for Ameriana's long-term growth. Clearly, our customers have shown a
strong affinity for the improvements we have incorporated in these new centers,
where the atmosphere and decor embody the Ameriana brand experience and raise
the bar in the way banks provide customer-centered service, convenience and
comfort. We created this experience to appeal to today's fast-paced society and
differentiate Ameriana banking in a crowded and competitive landscape." Gassen
noted the near-term focus also will be on improving the operations of these
newest banking centers.
The Company's executive team has moved aggressively to reduce operating
expenses in light of current conditions. In addition to the benefit from those
efforts, staff attrition has allowed the Company to eliminate a number of
positions, saving an estimated $500,000 in compensation costs on an annualized
basis.
Although Ameriana increased net interest income for the second quarter
of 2009 over the prior quarter, net interest margin on a fully tax-equivalent
basis declined to 2.86%, or 13 basis points lower than the first quarter of
2009. This was primarily a result of strategies designed to enhance the Bank's
balance sheet liquidity in the face of challenging economic conditions by
increasing cash and cash equivalents, which provide a lower yield.
Also reflective of the continuing weak economy, the total of the Bank's
non-performing loans and OREO increased to $10.4 million at June 30, 2009, from
$9.9 million at March 31, 2009, and $7.5 million as of June 30, 2008. As part of
its efforts to manage credit issues, the Company increased the allowance for
loan losses to $3.6 million, or 1.07% of total loans as of June 30, 2009, from
$3.2 million or 0.95% of total loans at March 31, 2009.
ASBI Reports Second Quarter 2009 Results
Page 3
July 31, 2009
Ameriana Bancorp is a bank holding company. Through its wholly owned
subsidiary, Ameriana Bank, 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 Bank owns Ameriana
Insurance Agency, a full-service insurance agency, Ameriana Financial Services,
which offers securities and insurance products through LPL Financial (Member
FINRA/SIPC), and Ameriana Investment Management.
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, 2008, 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.
ASBI Reports Second Quarter 2009 Results
Page 4
July 31, 2009
AMERIANA BANCORP
Unaudited Financial Highlights
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ ------------------------------
2009 2008 2009 2008
------------- ------------- ------------- -------------
Interest income $ 5,580 $ 5,859 $ 11,403 $ 11,794
Interest expense 2,530 2,846 5,312 6,056
------------- ------------- ------------- -------------
Net interest income 3,050 3,013 6,091 5,738
Provision for loan losses 615 221 953 592
------------- ------------- ------------- -------------
Net interest income after provision for loan
losses 2,435 2,792 5,138 5,146
Other income 1,020 1,020 1,798 2,161
Other expense 4,343 3,471 8,198 6,863
------------- ------------- ------------- -------------
Income (loss) before income taxes (888) 341 (1,262) 444
Income tax benefit 422 42 683 322
------------- ------------- ------------- -------------
Net income (loss) $ (466) $ 383 $ (579) $ 766
============= ============= ============= =============
Earnings (loss) per share:
Basic $ (0.16) $ 0.13 $ (0.19) $ 0.26
============= ============= ============= =============
Diluted $ (0.16) $ 0.13 $ (0.19) $ 0.26
============= ============= ============= =============
Weighted average shares outstanding:
Basic 2,989 2,989 2,989 2,989
============= ============= ============= =============
Diluted 2,989 2,989 2,989 2,989
============= ============= ============= =============
Dividends declared per share $ 0.04 $ 0.04 $ 0.08 $ 0.08
============= ============= ============= =============
June 30, Dec. 31, June 30,
2009 2008 2008
------------- ------------- -------------
Total assets $ 489,436 $ 463,502 $ 453,828
Cash and cash equivalents 27,156 8,449 22,684
Investment securities available for sale 64,852 75,371 67,311
Loans receivable 339,466 325,525 311,068
Allowance for loan losses 3,643 2,990 2,909
------------- ------------- -------------
Loans, net 335,823 322,535 308,159
Allowance for loan losses as a percentage of
loans receivable 1.07% 0.92% 0.94%
Non-performing loans $ 4,407 $ 6,219 $ 3,492
Allowance for loan losses as a percentage of
non-performing loans 82.7% 48.1% 83.3%
Deposits:
Non-interest-bearing $ 28,325 $ 22,070 $ 23,712
Interest-bearing 345,454 302,336 290,832
------------- ------------- -------------
373,779 324,406 314,544
Borrowed funds $ 74,235 $ 97,735 $ 98,735
Shareholders' equity 33,090 33,776 32,910
Book value per share 11.07 11.30 11.01