EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
Contact: Clement B. Knapp, Jr.
President
(219) 836-5870
January 21, 2004
AMB FINANCIAL ANNOUNCES QUARTER RESULTS
AND CASH DIVIDEND
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 fourth quarter ended December
31, 2003 totaled $.27 per diluted share, up 17.4% from the $.23 per diluted
share reported for the quarter ended December 31, 2002. The increased earnings
per share compared to last year resulted primarily from increased non-interest
income, resulting from a $92,000 loan loss settlement, as well as a slight
increase in net interest income, offset by slightly higher non-interest expense.
Net income for the current quarter totaled $271,000 compared to $235,000
reported in the year earlier period. Return on average equity and return on
average assets were 8.66% and .74%, respectively, in the current quarter
compared to 7.89% and .64% in last year's comparable period.
AMB Financial Corp. also announced an increase in its quarterly cash dividend to
$.06 per share for the quarter ended December 31, 2003, an increase of 20% from
the $.05 per share paid for the prior quarter. The dividend will be payable on
February 20, 2004 to shareholders of record on February 6, 2004.
RESULTS FOR THE QUARTER ENDED DECEMBER 31, 2003
Net interest income for the current quarter totaled $1.08 million compared to
$1.07 million for last year's fourth quarter, an increase of 1.2%. The net
interest margin was 3.30% in the current quarter, five basis points higher than
the 3.25% reported for the quarter ended September 30, 2003, and higher than
last year's fourth quarter net interest margin of 3.19%. The slight improvement
in the margin during the past three months was principally due to a drop in
average funding costs resulting from the maturity of higher costing certificates
of deposit, which exceeded the decline in the Company's average yield on
interest-earning assets.
The average yield on interest-earning assets fell to 5.93% for the quarter ended
December 31, 2003 compared to 6.07% for the quarter ended September 30, 2003 and
6.53% in last year's fourth quarter. The yield on loans receivable declined to
6.20%, compared to 6.65% three months ago, the result of heavy loan refinancing
activity. The yield on loans receivable was 6.95% for the quarter ended December
31, 2002. The average cost of interest-bearing liabilities declined to 2.63% in
the current quarter, compared 2.80% for the quarter ended September 30, 2003 and
3.32% in last year's fourth quarter. The lower funding costs were largely the
result of continued lower deposit liability costs. The cost of deposits declined
to 2.14% for the quarter compared to 2.27% for the quarter ended September 30,
2003 and 2.81% for the comparable quarter in 2002. The cost of deposits declined
as a result of both an increase in the amount of lower-cost core deposits as a
percentage of total deposits, as well as a continuing downward repricing of
certificate of deposit accounts.
Non-interest income increased to $455,000 in the current quarter, compared to
$362,000 reported in last year's fourth quarter. The increase in non-interest
income was primarily due to a settlement of $92,000 received from the Bank of
New York regarding losses on medical lease loans charged off during 2002. In
addition, during the fourth quarter, the Company sold available for sale
investment securities realizing a gain of $19,000 and disposed of a real estate
owned property at a gain of $8,000. Offsetting these increases in non-interest
income was a $26,000 decline in service fee income related to the Company's
purchase of accounts receivable, serviced by others due, in part, to repayment
throughout the year of approximately $2.0 million of such accounts receivable.
In addition, the Company also reported a loss of $28,000 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. However, 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
$1.03 million reported for the quarter ended December 31, 2002. The increase
resulted primarily from increased staffing costs during the quarter of $34,000
due to increased compensation and benefit costs (including increased ESOP
expense as a result of the increase in the price of the Company's stock between
the periods) and increased data processing costs of $16,000 due to increased
transaction activity, offset by a decrease in professional fees of $13,000.
Income tax expense totaled $163,000 in the current quarter, an effective tax
rate of 37.5%, compared to $103,000 or an effective tax rate of 30.5% for the
quarter ended December 31, 2002. Both periods were positively impacted by the
recognition of approximately $35,000 in low-income housing tax credits which
have a greater impact on the effective rate in a lower earnings period compared
to a higher earnings period.
Non-performing assets increased during the past three months to $1.65 million or
1.13% of total assets, compared to $1.44 million or .97% of total assets at
September 30, 2003. At December 31, 2002, non-performing assets totaled $1.18
million, or .79% of total assets. Included in non-performing assets at December
31, 2003, is a $485,000 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 an additional $100,000 of
specific reserve against this loan during the fourth quarter, bringing the total
specific reserve on this loan to $358,000. There is no assurance, however, that
future losses on this loan may not occur.
The Company recorded a provision for loan losses of $43,000 during the quarter
as compared to $61,000 during the prior year's quarter. During the current
quarter, the Bank recorded $9,000 of net charge-offs compared to $8,000 in net
charge-offs recorded in the quarter ended December 31, 2002. The Bank's general
allowance for loan losses was $600,000 at December 31, 2003, which is equal to
52.3% of net non-performing loans and .50% of net loans receivable.
RESULTS FOR THE YEAR ENDED DECEMBER 31, 2003
Diluted earnings per share increased by 21.6% in the current year compared to
last year, totaling $1.18 versus $.97 last year. For the year ended December 31,
2003, net income totaled $1.18 million compared to $1.0 million in calendar
2002. Return on average equity improved in the current year to 9.72% compared to
8.36% last year. The earnings improvement was due to an increase in net interest
income, a reduced loan loss provision, higher revenues from fee income,
increased earnings from trading securities and the loan loss settlement
discussed above. These improvements were offset by higher operating expenses and
increased income tax provisions.
Net interest income totaled $4.33 million for the current year, compared to
$4.15 million reported for the prior year. The net interest margin increased to
3.23% in the current year compared to 3.14% a year ago, while average interest
earning assets increased by $1.8 million. The continued low interest rate
environment led to these results as funding costs fell faster than asset yields
during the year.
Non-interest income increased by $336,000 primarily due to increased fees and
service charges of $150,000, increased gains on trading account activity of
$93,000, increased gains from the sale of real estate acquired through
foreclosure in the amount of $52,000, and the loan loss settlement of $92,000,
offset by reduced rental income from the Dyer office location of $69,000. As of
December 31, 2003, the Company has fully leased all available rental space at
the Dyer location. Non-interest expense increased by $316,000, due primarily to
increases in compensation and benefits of $160,000, occupancy and equipment
expenses of $30,000, data processing of $36,000 and professional fees of
$17,000. Loan loss provisions totaled $214,000 in the current period as compared
to $392,000 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 in the second quarter of 2002.
BALANCE SHEET AND CAPITAL
Total assets of the Company declined by $2.5 million to $146.0 million at
December 31, 2003 from $148.5 million reported at September 30, 2003. The
decline in total assets over the most recent three month period reflects the
utilization of excess liquidity to fund a reduction in deposit account balances
of $3.1 million. Deposits decreased due to more moderate interest rate pricing
on certificate of deposit accounts compared to competitors. Loan balances, which
totaled $120.2 million at December 31, 2003, were $2.8 million higher than the
$117.4 million balance three months ago. Loan balance increases were funded in
part from investment security sales and maturities as well as by existing
liquidity. Cash and cash equivalent balances declined by $2.0 million during the
three month period. Deposit balances, as mentioned above, declined by $3.1
million to $108.3 million at December 31, 2003, while total borrowings,
including the Company's subordinated debentures, increased by $942,000 to $21.1
million.
As of December 31, 2003, stockholders' equity in AMB Financial Corp. totaled
$12.5 million. The number of common shares outstanding at December 31, 2003 was
949,379 and the book value per common share outstanding was $13.19. This book
value represents an $1.19 increase from the $12.00 book value reported at
December 31, 2002. The Bank's tangible, core and risk-based capital percentages
of 8.78%, 8.78% and 15.23%, respectively, at December 31, 2003 exceeded all
regulatory requirements by a significant margin.
This new 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 selected financial information are included with this release).
2
AMB Financial Corp.
Selected Financial Condition Data
(In Thousands)
Dec. 31 Sept. 31 Dec. 31
2003 2003 2002
(Unaudited) (Unaudited)
Total assets 145,965 148,499 149,672
Loans receivable, net 120,209 117,363 114,318
Mortgage-backed securities 3,155 3,445 2,643
Investment securities and interest bearing deposits 7,993 11,693 16,458
Deposits 108,334 111,376 109,331
Borrowed money 16,130 15,187 20,297
Guaranteed preferred beneficial interest
in the Company's subordinated debentures 5,000 5,000 5,000
Stockholders' equity 12,520 12,185 11,846
Selected Operations Data
(In Thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
---- ---- ---- ----
Total interest income $ 1,943 2,177 8,235 8,847
Total interest expense 861 1,108 3,903 4,693
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Net interest income 1,082 1,069 4,332 4,154
Provision for loan losses 43 61 214 392
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Net interest income after provision for
loan losses 1,039 1,008 4,118 3,762
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Non-interest income:
Fees and service charges 267 302 1,181 1,031
Rental Income 21 15 77 146
Gains on trading securities 18 26 151 58
Gains on available for sale securities 19 -- 29 --
Loss from investment in joint venture (28) (22) (91) (88)
Gain (loss) on sale of real estate owned 8 -- 24 (28)
Increase in cash surrrender value of life insurance 32 37 151 158
Loan loss settlement 92 -- 92 --
Other operating income 26 4 57 58
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Total non-interest income: 455 362 1671 1335
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Non-interest expense:
Staffing cost 521 487 1,959 1,799
Occupancy and equipment costs 112 124 471 441
Data processing 136 120 521 485
Professional fees 60 73 248 231
Other 231 228 837 764
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Total non-interest expense 1,060 1,032 4,036 3,720
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Net income before income taxes 434 338 1,753 1,377
------- ------- ------- -------
Provision for federal & state income taxes 163 103 571 376
------- ------- ------- -------
Net income $ 271 235 1,182 1,001
======= ======= ======= =======
Earnings per share
Basic $ 0.30 $ 0.25 $ 1.31 $ 1.02
Diluted $ 0.27 $ 0.23 $ 1.18 $ 0.97
3
AMB Financial Corp.
Selected Financial Ratios and Other Data
(Unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
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Performance Ratios:
Return on average assets 0.74% 0.64% 0.78 % 0.68 %
Return on average equity 8.66 7.89 9.72 8.36
Interest rate spread information:
Average during period 3.30 3.20 3.26 3.12
End of period 3.32 3.08 3.32 3.08
Net interest margin 3.30 3.19 3.23 3.14
Efficiency ratio 74.36 72.08 68.62 67.77
Ratio of operating expense to average total assets 2.88 2.79 2.67 2.54
Ratio of average interest earning assets to average
interest-bearing liabilities: 1.00x 1.01x .99x 1.01x
Weighted average common shares outstanding:
Basic 911,726 939,994 904,283 978,694
Diluted 1,014,902 1,009,645 1,004,894 1,030,298
At At
Dec.31 Dec. 31
2003 2002
---- ----
Quality Ratios: (Unaudited)
Non-performing assets to total assets at end of
period 1.13% 0.79%
Allowance for loan losses to non-performing
loans 65.35 78.24
Allowance for loan losses to loans receivable, net 0.86 0.73
Capital Ratios:
Equity to total assets at end of period 8.58 7.91
Average equity to average assets 8.04 8.19
Other Data:
Number of full service offices 3 3
4
FOR IMMEDIATE RELEASE
Contact: Clement B. Knapp, Jr.
President
(219) 836-5870
January 21, 2004
AMB FINANCIAL ANNOUNCES ANNUAL STOCKHOLDERS MEETING
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 the Annual Stockholders Meeting will be held on April 28,
2004 at 10:30 a.m. in our Munster Office, located at 8230 Hohman Ave., Munster,
Indiana 46321.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the current report of AMB Financial Corporation (the
"Company") on Form 8-K for the period ending December 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the Report), I Clement B.
Knapp, President and Chief Executive Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
Date: January 22, 2004 /s/ Clement B. Knapp
--------------------------------
Clement B. Knapp
President and Chief Executive Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the current report of AMB Financial Corporation (the
Company) on Form 8-K for the period ending December 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the Report), I Daniel T.
Poludniak, Vice President, Treasurer and Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:
(1) The report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
Date: January 22, 2004 /s/ Daniel T. Poludniak
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Daniel T. Poludniak
Vice President, Treasurer and
Chief Financial Officer