EXHIBIT 99
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Contact: Clement B. Knapp, Jr. FOR IMMEDIATE RELEASE
President
(219) 836-5870
July 23, 2003
AMB FINANCIAL ANNOUNCES SECOND QUARTER RESULTS
Munster, Indiana- AMB Financial Corp. (NASDAQ: Small Cap Market: AMFC) (the
"Company") the parent holding company for American Savings, FSB (the "Bank")
announced today that earnings per share for the second quarter ended June 30,
2003 totaled $.30 per diluted share, up 25% from the $.24 per diluted share
reported for the quarter ended June 30, 2002. The earnings per share improvement
compared to last year resulted primarily from increased net interest income as
well as increased fee income from deposit related services and from servicing
purchased accounts receivable, offset by higher non-interest expense. Net income
for the current quarter totaled $298,000 compared to $254,000 reported in the
year earlier period. Return on average equity and return on average assets were
10.06% and .80%, respectively, in the current quarter compared to 8.45% and .71%
in last year's comparable period. Earnings per share amounts for both the
current and prior year periods have been adjusted to reflect the effect of the
Company's 5-for-4 stock split paid on May 29, 2003.
RESULTS FOR THE QUARTER ENDED JUNE 30, 2003
Net interest income improved 6.1% from a year ago, totaling $1.14 million for
the current quarter compared to $1.08 million for last year's second quarter.
The net interest margin remained relatively stable over the last three-month
period, but expanded to 3.37% in the current quarter compared to last year's
second quarter net interest margin of 3.16%. The margin expansion during the
comparable quarters was primarily due to the Company's success lowering its
funding costs, as interest rates continue to remain at historically low levels.
The Company's cost of interest-bearing liabilities was 2.89% for the quarter
compared to 3.04% in the first quarter of 2003 and 3.59% for the quarter ended
June 30, 2002. The lower funding costs were principally due to the downward
repricing of certificate of deposit accounts and the success the Company has had
in gathering and retaining low-cost core deposits. Asset yields have also
declined. The yield on average interest-earning assets was 6.20% for the quarter
compared to 6.36% for the quarter ended March 31, 2003 and 6.69% in last year's
second quarter. This decline was due to low mortgage interest rates which
continue to stimulate mortgage loan refinance activity, with the Company's yield
on loans receivable declining to 6.75%, compared to 6.88% three months ago and
7.31% for the comparable quarter in 2002.
Non-interest income increased to $428,000 in the current quarter, compared to
$329,000 reported in last year's second quarter. The increase in non-interest
income is primarily due to a $27,000 increase in deposit related fees, primarily
ATM surcharge fees, $25,000 in loan related fees and a $16,000 increase in
service fee income related to the Company's program to purchase and manage the
accounts receivable of credit-worthy merchants. Results for the current quarter
include both realized and unrealized gains from trading account securities in
the amount of $45,000 as compared to $3,000 of gains reported in the prior
year's quarter. The Company also reported a profit on the sale of real estate
owned in the amount of $16,000, which did not occur during the prior year's
quarter. Offsetting these increases in non-interest income was a $36,000 decline
in rental income at the Dyer branch office location, which was previously leased
to a major tenant. The Company is currently utilizing a portion of this space to
house current lending operations and is in the process of remodeling the
remaining space to lease. In addition, the Company also reported a loss of
$18,000 in the current quarter compared to a loss of $22,000 in the prior year's
quarter, related to an investment in a low-income housing joint venture. As a
result of this investment, the Company recorded an offsetting $35,000 in federal
income tax credits during both periods, which resulted in the reduction of the
Company's effective income tax rate.
Non-interest expense totaled $1.06 million in the current quarter, compared to
$948,000 reported for the quarter ended June 30, 2002. The increase resulted
primarily from increased staffing costs during the quarter of $45,000 due to
normal compensation and increased benefit costs (including increased ESOP
expense as a result of the increase in the price of the Company's stock) and
increased occupancy and equipment costs of $23,000, primarily increases in
depreciation and taxes. In addition, data processing costs increased by $16,000
due to increased transaction activity, professional fees increased by $18,000
due to legal fees related to public company matters and other operating expenses
increased by $24,000, most notably in increased advertising, office supplies and
security costs.
Income tax expense increased to $149,000 in the current quarter from $83,000 in
the year ago quarter primarily due to increased income before taxes
Non-performing assets increased during the past three months to $1.46 million,
or .95% of total assets, compared to $1.35 million, or .87% of total assets at
March 31, 2003. At June 30, 2002, non-performing assets totaled $1.73 million,
or 1.18% of total assets. The increase in non-performing assets over the last
three month period relates to an increase in one-to-four family loans, primarily
out of state purchased loans, which became three months delinquent during the
quarter. Included in non-performing assets at June 30, 2003, is a $475,000
non-residential participation loan that remains in the process of foreclosure.
Based upon the best available information to date, management has authorized the
establishment of a specific reserve against this loan in the amount of $258,000.
There is no assurance, however, that future losses on this loan may not occur.
The Company recorded a provision for loan losses of $61,000 during the quarter
as compared to $122,000 during the prior year's quarter. The increased provision
in the prior year's quarter included $70,000 related to the lease loan problems
encountered during 2002. The Bank's general allowance for loan losses was
$688,000 at June 30, 2003, which is equal to 61.3% of net non-performing loans
and .60% of net loans receivable.
RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2003
Diluted earnings per share increased by 31.9% in the current six month period
compared to last year, totaling $.62 versus $.47 last year. For the six months
ended June 30, 2003, net income totaled $626,000 compared to $490,000 for the
comparable period last year. Return on average equity for the six months ended
June 30, 2003 was 10.63% compared to 8.22% for the six months ended June 30,
2002.
Net interest income totaled $2.3 million for the first six months of 2003,
compared to $2.1 million reported for the first six months of 2002. The net
interest margin increased to 3.31% in the current six-month period compared to
3.13% a year ago, while average interest earning assets increased as well to
$135.0 million from $130.0 million last year.
Non-interest income increased by $172,000 primarily due to increased fees and
service charges of $152,000 and increased gains on trading account activity of
$51,000 offset by reduced rental income from the Dyer office location of
$90,000. Non-interest expense increased by $276,000, due primarily to increases
in compensation and benefits of $100,000, occupancy and equipment expenses of
$26,000, professional fees of $33,000 relating to public company matters and
capital trust securities expense of $55,000. Loan loss provisions totaled
$109,000 in the current period as compared to $275,000 in the year ago period.
The increased provision in the prior year includes $180,000 related to medical
lease loans, which were subsequently charged-off during the second quarter of
2002.
BALANCE SHEET AND CAPITAL
Total assets of the Company declined by $700,000 to $154.2 million at June 30,
2003 from $154.9 million reported at March 31, 2003. Although loan activity
remained strong during the quarter, with loan originations and purchases
totaling $11.5 million, loan prepayment activity caused the balance of loans
receivable to decline slightly from $115.8 million at March 31, 2003 to $115.4
million at June 30, 2003. In addition, the balance of investment securities
declined by $1.0 million due to maturities and early call redemptions, while
mortgage-backed securities declined by $400,000. Theses declines were offset by
an increase of $500,000 in cash and interest-bearing deposits and an aggregate
increase in purchased accounts receivable of $579,000. Deposit balances
decreased by $1.2 million in the quarter, totaling $113.2 million at June 30,
2003. FHLB of Indianapolis advances were paid down by $100,000 during the
quarter and totaled $19.2 million at June 30, 2003.
As of June 30, 2003, stockholders' equity in AMB Financial Corp. totaled $12.0
million. During the most recent three-month period, the Company had repurchased
37,625 shares of stock at an average price of $12.15. The number of common
shares outstanding at June 30, 2003 was 949,379 and the book value per common
share outstanding was $12.60. This book value represents a $.60 increase from
the $12.00 book value reported at December 31, 2002. The Bank's tangible, core
and risk-based capital percentages of 7.86%, 7.86%, and 14.26%, respectively, at
June 30, 2003 exceeded all regulatory requirements by a significant margin.
This news release contains various forward-looking statements consisting of
estimates with respect to the financial condition, results of operations and
business of the Company and the Bank. These estimates are subject to various
factors that could cause actual results to differ materially from those
estimates. These factors include, but are not limited to, (i) the effect that
movements in interest rates could have on net interest income and loan
repayments, (ii) changes in customer preference for our products and services,
(iii) changes in national and local economic and market conditions, including
prevailing real estate values, (iv) higher than anticipated operating expenses,
(v) a lower level of or higher cost for deposits or a higher cost for borrowings
than anticipated, (vi) changes in accounting principles, policies or guidelines,
and (vii) legislation or regulations adversely affecting the Bank or the
Company.
American Savings, FSB is a federally chartered stock savings bank. The Bank is a
community oriented institution offering a variety of traditional deposit and
loan products. It operates three full service offices located in Dyer, Hammond
and Munster, Indiana.
(Two pages of financial data are included with this release.)
AMB FINANCIAL CORP.
SELECTED FINANCIAL CONDITION DATA
(IN THOUSANDS)
June. 30 Dec. 31
2003 2002
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(Unaudited)
Total assets 154,228 149,672
Loans receivable, net 115,386 114,318
Mortgage-backed securities 3,507 2,643
Investment securities and interest bearing deposits 18,216 16,458
Deposits 113,233 109,331
Borrowed money 19,197 20,297
Guaranteed preferred beneficial interest in junior
subordinated debentures 5,000 5,000
Stockholders' equity 11,963 11,846
SELECTED OPERATIONS DATA
(IN THOUSANDS)
(UNAUDITED)
Three Months Ended Six Months Ended
June 30 June 30
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2003 2002 2003 2002
-------- -------- -------- --------
Total interest income $ 2,104 2,228 4,237 4,448
Total interest expense 960 1,150 1,957 2,371
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Net interest income 1,144 1,078 2,280 2,077
Provision for loan losses 61 122 109 275
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Net interest income after provision for loan losses 1,083 956 2,171 1,802
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Non-interest income:
(Unaudited) Fees and service charges 294 226 590 438
Rental Income 19 55 39 129
Gains on trading securities 45 3 88 37
Gains on available for sale securities 10 10
Loss from investment in joint venture (18) (22) (40) (48)
Gain (loss) on sale of real estate owned 16 16 (28)
Increase in cash surrrender value of life insurance 39 40 80 81
Other operating income 23 27 35 37
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Total non-interest income: 428 329 818 646
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Non-interest expense:
Staffing cost 478 433 944 844
Occupancy and equipment costs 127 104 244 218
Data processing 143 127 267 252
Professional fees 76 58 128 95
Capital trust securities 64 74 129 74
Other 176 152 359 312
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Total non-interest expense 1,064 948 2,071 1,795
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Net income before income taxes 447 337 918 653
-------- -------- -------- --------
Provision for federal & state income taxes 149 83 292 163
-------- -------- -------- --------
Net income $ 298 254 626 490
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Earnings per share
Basic $ 0.33 $ 0.25 $ 0.69 $ 0.49
Diluted $ 0.30 $ 0.24 $ 0.62 $ 0.47
AMB FINANCIAL CORP.
SELECTED FINANCIAL RATIOS AND OTHER DATA
(UNAUDITED)
Three Months Ended June 30 Six Months Ended June 30
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2003 2002 2003 2002
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PERFORMANCE RATIOS:
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Return on average assets 0.80% 0.71% 0.85% 0.69%
Return on average equity 10.06 8.45 10.63 8.22
Interest rate spread information:
Average during period 3.31 3.11 3.31 3.13
End of period 2.99 2.97 2.99 2.97
Net interest margin 3.37 3.16 3.38 3.20
Efficiency ratio 68.12 67.42 67.04 65.91
Ratio of operating expense to average total assets 2.86 2.64 2.81 2.53
Ratio of average interest earning assets to average
interest-bearing liabilities: 1.02x 1.02x 1.02x 1.02x
Weighted average common shares outstanding:
Basic 905,606 1,012,102 909,473 1,008,616
Diluted 1,000,694 1,058,619 1,007,859 1,046,228
At June 30 At Dec. 31
2003 2002
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QUALITY RATIOS: (Unaudited)
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Non-performing assets to total assets at end of period 0.95% 0.79%
Allowance for loan losses to non-performing loans 68.47 78.24
Allowance for loan losses to loans receivable, net 0.82 0.73
CAPITAL RATIOS:
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Equity to total assets at end of period 7.76 7.91
Average equity to average assets 7.99 8.33
OTHER DATA:
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Number of full service offices 3 3
FOR MORE INFORMATION FOR IMMEDIATE RELEASE
Contact: Clement B. Knapp, Jr.
President
(219) 836-5870
July 23, 2003
AMB FINANCIAL CORP.
ANNOUNCES INCREASE IN CASH DIVIDEND
MUNSTER, INDIANA - AMB Financial Corp. (NASDAQ: Small Cap Market: AMFC) (the
"Company"), the parent holding company for American Savings, FSB, today
announced that it will increase its quarterly cash dividend by 4.17% to $.05 per
share from $.048 per share. The cash dividend will be paid on August 22, 2003 to
shareholders of record on August 8, 2003.
The Company recently announced a 5-for-4 stock split payable in the form of a
25% stock dividend, distributed on May 29, 2003 to shareholders of record on May
14, 2003. Following the issuance of additional shares as part of the 5-for-4
stock split, the number of common shares outstanding totaled 949,379 as of June
30, 2003.
American Savings, FSB is a federally chartered stock savings bank serving Lake
County, Indiana through three retail offices located in Dyer, Hammond and
Munster. As of June 30, 2003, the Company had assets of $154.2 million and
stockholders' equity of $12.0 million.