EXHIBIT 99.1
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Contact: Clement B. Knapp, Jr. FOR IMMEDIATE RELEASE
President
(219) 836-5870
April 29, 2004
AMB FINANCIAL ANNOUNCES QUARTER RESULTS AND PAYMENT OF 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 first quarter ended March 31,
2004 totaled $.26 per diluted share, compared to $.33 per diluted share reported
for the quarter ended March 31, 2003. The decreased earnings per share compared
to last year resulted primarily from a decline in fee income from deposit, loan
and purchased accounts receivable related services and higher non-interest
expense. Net income for the current quarter totaled $265,000 compared to
$328,000 reported in the year earlier period. Return on average equity and
return on average assets were 8.29% and .72%, respectively, in the current
quarter compared to 11.06% and .87% in last year's comparable period.
AMB Financial Corp. also announced that it will pay a regular cash dividend of
$.06 per share for the quarter ended March 31, 2004. The dividend will be
payable on May 23, 2004 to the shareholders of record on May 9, 2004.
RESULTS FOR THE QUARTER ENDED MARCH 31, 2004
Net interest income for the current quarter totaled $1.12 million compared to
$1.07 million for last year's first quarter, an increase of 4.1%. The net
interest margin was 3.39% in the current quarter, nine basis points higher than
the 3.30% reported for the quarter ended December 31, 2003, and higher than last
year's first quarter net interest margin of 3.19%. The improvement in the margin
during the past three months was principally due to a drop in average funding
costs resulting from the continued low interest rate environment.
The average yield on interest-earning assets fell to 5.93% for the quarter ended
March 31, 2004 compared to 6.36% in last year's first quarter, but remained
stable with the quarter ended December 31, 2003. The yield on loans receivable
increased by 1 basis point to 6.21% for the quarter ended March 31, 2004
compared to the period three months ago, as a result of the decline in loan
refinance activity, but declined from 6.88% a year ago. The average cost of
interest-bearing liabilities declined to 2.56% in the current quarter, compared
to 2.63% for the quarter ended December 31, 2003 and 3.13% in last year's first
quarter. The lower funding costs were primarily the result of continued lower
deposit liability costs. The cost of deposits declined to 2.05% for the quarter
compared to 2.13% for the quarter ended December 31, 2003 and 2.67% for the
comparable quarter in 2003. 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 decreased to $352,000 in the current quarter, compared to
$390,000 reported in last year's first quarter. The decrease in non-interest
income is primarily due to a $31,000 decrease in deposit related fees, primarily
ATM fees due to the Company's closing of two casino boat ATMs. Loan related fees
also declined by $26,000 due to reduced loan refinance activity during the
quarter as compared to the prior year and service fee income, primarily related
to the Company's accounts receivable, serviced by others declined by $22,000 due
to repayment during 2003 of approximately $2.0 million of such accounts
receivable as well as a slowing in payments on certain receivables. Offsetting
these decreases in non-interest was a $13,000 increase in rental income at the
Dyer branch office location which is currently fully leased and a $27,000 gain
from the excess proceeds on a life insurance policy due to the death of one of
the Company's directors. In addition, the Company also incurred a loss of
$21,500 in the current quarter compared to a loss of $22,000 in 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 $1.07 million in the current quarter compared to
$942,000 reported for the quarter ended March 31, 2003. The increase resulted
primarily from increased staffing costs during the quarter of $85,000 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),
increased advertising costs of $28,000 to promote the Company's products and
services and increased data processing costs of $12,000 due to increased
transaction activity.
The Company recorded a provision for loan losses of $26,000 during the quarter
as compared to $48,000 during the prior year's quarter. During the current
quarter, the Bank recorded $3,000 of net loan recoveries compared to $1,000 of
net loan charge-offs in the prior year period. The Bank's general allowance for
loan losses was $559,000 at March 31, 2004, which is equal to 34.7% of net
non-performing loans and 45.3% of net loans receivable.
Income tax expense totaled $103,000 in the current quarter, an effective tax
rate of 28.0%, compared to $144,000 or an effective tax rate of 30.5% for the
quarter ended March 31, 2003. 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.
BALANCE SHEET AND CAPITAL
Total assets of the Company increased by $5.7 million to $151.7 million at March
31, 2004 from $146.0 million reported at December 31, 2003. The increase in
assets during the three-month period resulted primarily from growth in loan
balances, which totaled $123.8 million at March 31, 2004 compared to $120.2
million at December 31, 2003, an increase of $3.6 million. In addition, the
Company increased its position in purchased accounts receivable by $1.2 million
to $3.5 million at March 31, 2004. The growth in assets during the three-month
period was funded primarily by an increase in deposit balances, which increased
by $4.0 million to $112.3 million at March 31, 2004.
As of March 31, 2004, stockholders' equity in AMB Financial Corp. totaled $12.7
million. The number of common shares outstanding at March 31, 2004 was 971,147
and the book value per common share outstanding was $13.08. This book value
represents an $.11 decrease from the $13.19 book value reported at December 31,
2003 due to the repurchase of stock options from the estate of a deceased
director and the exercise of stock options from treasury stock resulting in
additional shares outstanding. The Bank's tangible, core and risk-based capital
percentages of 8.68%, 8.68% and 14.88%, respectively, at March 31, 2004 exceeded
all regulatory requirements by a significant margin.
Non-performing assets increased significantly during the past three months
totaling $2.64 million or 1.74% of total assets at March 31, 2004 compared to
$1.65 million or 1.13% of total assets at December 31, 2003. Of the $1 million
increase, two loans totaling some $550,000 were brought current on April 2,
2004. Included in non-performing assets at March 31, 2004, is a $486,000
non-residential participation loan in the process of foreclosure. A specific
reserve of $358,000 has been established by management as of this date. In April
2004, this property was sold with proceeds of $90,500 remitted to the Company.
Management believes that the remaining balance not specifically reserved of
$38,000 will be collected when a final accounting of the property is completed.
In addition, one related borrower is past due on a number of loans in the amount
of $615,000. Management has authorized the establishment of $71,000 of specific
reserves against the unsecured portion of this debt.
2
During April, the Company became aware of a collection problem with accounts
receivable purchased from an architectural firm. It appears that payments from
certain of these accounts receivable were diverted and that some of these
accounts receivable purchased by the Company are for services that have not yet
been performed, which is in violation of the purchase agreement. As of March 31,
2004, the amount purchased and past due from this customer was $533,000. Net of
a reserve retained by the Company, the Company's net exposure on this asset was
$406,000.
Management is in the process of negotiating a workout arrangement for this
asset. This arrangement may involve the conversion of the obligations of the
architectural firm into a loan secured by liens on certain real properties owned
by such firm and its principal as well as the assignment of revenues from
certain projects of the firm.
Based on the above and the possible availability of up to $125,000 from a fraud
insurance claim on this asset, management does not anticipate that the Company
will experience a material loss on this asset. However, there can be no
assurance to whether this will in fact be the case. At March 31, 2004, this
asset was classified as non-performing.
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,
(vii) legislation or regulations adversely affecting the Bank or Company, and
(viii) the success of the Company's workout programs for troubled assets.
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.)
3
AMB FINANCIAL CORP.
SELECTED FINANCIAL CONDITION DATA
(IN THOUSANDS)
Mar. 31 Dec. 31
2004 2003
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(Unaudited)
Total assets 151,674 145,965
Loans receivable, net 123,833 120,209
Mortgage-backed securities 2,961 3,155
Investment securities and interest bearing deposits 8,176 7,993
Deposits 112,297 108,334
Borrowed money 16,130 16,130
Guaranteed preferred beneficial interest
in the Company's subordinated debentures 5,000 5,000
Stockholders' equity 12,707 12,520
SELECTED OPERATIONS DATA
(IN THOUSANDS)
(UNAUDITED)
Three Months Ended
March 31
2004 2003
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Total interest income $ 1,955 $ 2,134
Total interest expense 839 1,062
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Net interest income 1,116 1,072
Provision for loan losses 26 48
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Net interest income after provision for
loan losses 1,090 1,024
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Non-interest income:
Fees and service charges 217 296
Rental Income 34 21
Gains on trading securities 42 42
Loss from investment in joint venture (22) (22)
Increase in cash surrrender value of life insurance 39 41
Gain from life insurance proceeds 27 -
Other operating income 15 12
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Total non-interest income: 352 390
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Non-interest expense:
Staffing cost 551 466
Occupancy and equipment costs 121 117
Data processing 136 124
Professional fees 47 52
Other 219 183
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Total non-interest expense 1,074 942
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Net income before income taxes 368 472
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Provision for federal & state income taxes 103 144
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Net income $ 265 $ 328
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Earnings per share
Basic $0.28 $0.36
Diluted $0.26 $0.33
4
AMB FINANCIAL CORP.
SELECTED FINANCIAL RATIOS AND OTHER DATA
(UNAUDITED)
Three Months Ended
March 31
2004 2003
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Performance Ratios:
Return on average assets 0.72% 0.87%
Return on average equity 8.29 11.06
Interest rate spread information:
Average during period 3.37 3.23
End of period 3.27 2.90
Net interest margin 3.39 3.19
Efficiency ratio 74.47 64.44
Ratio of operating expense to average total assets 2.90 2.49
Ratio of average interest earning assets to average
interest-bearing liabilities: 1.00x .99x
Weighted average common shares outstanding:
Basic 931,030 917,680
Diluted 1,012,977 997,498
At At
Mar.31 Dec. 31
2004 2003
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(Unaudited)
Quality Ratios:
Non-performing assets to total assets at end of
period 1.74% 1.13%
Allowance for loan losses to non-performing
loans 50.24 65.35
Allowance for loan losses to loans receivable, net 0.86 0.86
Capital Ratios:
Equity to total assets at end of period 8.38 8.58
Average equity to average assets 8.63 8.04
Other Data:
Number of full service offices 3 3
5
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 quarterly report of AMB Financial Corporation (the
"Company") on Form 8-K for the period ending March 31, 2004 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: April 29, 2004 /s/ Clement B. Knapp
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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 quarterly report of AMB Financial Corporation
(the Company) on Form 8-K for the period ending March 31, 2004 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: April 29, 2004 /s/ Daniel T. Poludniak
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Daniel T. Poludniak
Vice President, Treasurer
and Chief Financial Officer