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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2007

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------------

For the transition period from  to

Commission File Number: 0-18392



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AMERIANA BANCORP

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Indiana                                                        |  | 35-1782688                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|2118 Bundy Avenue, New Castle, Indiana   |  | 47362-1048
|(Address of Principal Executive Offices) |  | (Zip Code)

Registrants telephone number, including area code: (765) 529-2230

Not Applicable

(Former name, former
address and former fiscal year, if changed since last report)



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Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. (See definition of accelerated filer and large accelerated filer in rule 12b-2
of the exchange act).

Large accelerated filer ̈Accelerated filer ̈Non-accelerated
filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act).    Yes ̈No  x

At August 13, 2007, the registrant had 2,988,952 shares of its common stock outstanding.



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##### Table of Contents

AMERIANA BANCORP

Table of Contents



|                              |  |          |  |                                                                                                           |  |         
|----------------------------- |  | -------- |  | --------------------------------------------------------------------------------------------------------- |  | --------
|                              |  |          |  |                                                                                                           |  | Page No.
|Part I. Financial Information |  |         
|                              |  |          | 
|                              |  | Item 1.  |  | Financial Statements (Unaudited)                                                                          |  |         
|                              |  |          | 
|                              |  |          |  | Consolidated Condensed Balance Sheets at June 30, 2007 and December 31, 2006                              |  | 1       
|                              |  |          | 
|                              |  |          |  | Consolidated Condensed Statements of Operations for the Three and Six Months Ended June 30, 2007 and 2006 |  | 2       
|                              |  |          | 
|                              |  |          |  | Consolidated Condensed Statements of Shareholders Equity for the Six Months Ended June 30, 2007          |  | 3       
|                              |  |          | 
|                              |  |          |  | Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 30, 2007 and 2006           |  | 4       
|                              |  |          | 
|                              |  |          |  | Notes to Consolidated Condensed Financial Statements                                                      |  | 6       
|                              |  |          | 
|                              |  | Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                     |  | 8       
|                              |  |          | 
|                              |  | Item 3.  |  | Quantitative and Qualitative Disclosure about Market Risk                                                 |  | 19      
|                              |  |          | 
|                              |  | Item 4.  |  | Controls and Procedures                                                                                   |  | 20      
|                              | 
|Part II. Other Information    |  |         
|                              |  |          | 
|                              |  | Item 1.  |  | Legal Proceedings                                                                                         |  | 21      
|                              |  |          | 
|                              |  | Item 1A. |  | Risk Factors                                                                                              |  | 21      
|                              |  |          | 
|                              |  | Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                               |  | 21      
|                              |  |          | 
|                              |  | Item 3.  |  | Defaults upon Senior Securities                                                                           |  | 21      
|                              |  |          | 
|                              |  | Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                       |  | 21      
|                              |  |          | 
|                              |  | Item 5.  |  | Other Information                                                                                         |  | 22      
|                              |  |          | 
|                              |  | Item 6.  |  | Exhibits                                                                                                  |  | 22      
|                              | 
|Signatures                    |  |         



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##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM I  FINANCIAL STATEMENTS

Ameriana Bancorp

Consolidated Condensed Balance Sheets

(In thousands, except share data)



|                                                                                                  |  |              |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ---------------- | - | ------- | -
|                                                                                                  |  | June 30,2007 |         |   | December 31,2006 |  
|                                                                                                  |  | (Unaudited)  |         |   |                  |  
|Assets                                                                                            |  |              |         |   |                  |   |         |  
|Cash on hand and in other institutions                                                            |  | $            | 4,948   |   |                  | $ | 7,986   |  
|Interest-bearing demand deposits                                                                  |  |              | 6,538   |   |                  |   | 4,084   |  
|                                                                                                  |  |              |         |   |                  |   |         |  
|Cash and cash equivalents                                                                         |  |              | 11,486  |   |                  |   | 12,070  |  
|Investment securities available for sale                                                          |  |              | 93,702  |   |                  |   | 129,776 |  
|Loans, net of allowance for loan losses of $2,730 and $2,616                                      |  |              | 271,199 |   |                  |   | 249,272 |  
|Premises and equipment                                                                            |  |              | 7,554   |   |                  |   | 7,346   |  
|Stock in Federal Home Loan Bank                                                                   |  |              | 5,637   |   |                  |   | 5,646   |  
|Goodwill                                                                                          |  |              | 564     |   |                  |   | 564     |  
|Cash value of life insurance                                                                      |  |              | 22,344  |   |                  |   | 21,937  |  
|Other assets                                                                                      |  |              | 10,907  |   |                  |   | 10,635  |  
|                                                                                                  |  |              |         |   |                  |   |         |  
|Total assets                                                                                      |  | $            | 423,393 |   |                  | $ | 437,246 |  
|                                                                                                  |  |              |         |   |                  |   |         |  
|Liabilities and Shareholders Equity                                                              |  |              |         |   |                  |   |         |  
|Liabilities                                                                                       |  |              |         |   |                  |   |         |  
|Deposits                                                                                          |  |              |         |   |                  |   |         |  
|Noninterest-bearing                                                                               |  | $            | 20,630  |   |                  | $ | 19,905  |  
|Interest-bearing                                                                                  |  |              | 298,175 |   |                  |   | 302,529 |  
|                                                                                                  |  |              |         |   |                  |   |         |  
|Total deposits                                                                                    |  |              | 318,805 |   |                  |   | 322,434 |  
|Borrowings                                                                                        |  |              | 66,094  |   |                  |   | 74,683  |  
|Drafts payable                                                                                    |  |              | 1,365   |   |                  |   | 2,097   |  
|Other liabilities                                                                                 |  |              | 5,558   |   |                  |   | 4,908   |  
|                                                                                                  |  |              |         |   |                  |   |         |  
|Total liabilities                                                                                 |  |              | 391,822 |   |                  |   | 404,122 |  
|                                                                                                  |  |              |         |   |                  |   |         |  
|Commitments and contingencies                                                                     |  |              |         |   |                  |   |         |  
|Shareholders equity                                                                              |  |              |         |   |                  |   |         |  
|Preferred stock  5,000,000 shares authorized and unissued                                        |  |              |        |   |                  |   |        |  
|Common stock, $1.00 par valueAuthorized 15,000,000 shares Issued  3,213,952 and 3,213,952 shares |  |              | 3,214   |   |                  |   | 3,214   |  
|Outstanding  2,988,952 and 3,051,948 shares                                                      |  |              |         |   |                  |   |         |  
|Additional paid-in capital                                                                        |  |              | 1,039   |   |                  |   | 1,039   |  
|Retained earnings                                                                                 |  |              | 31,866  |   |                  |   | 32,152  |  
|Accumulated other comprehensive loss                                                              |  |              | (1,550  | ) |                  |   | (1,090  | )
|Treasury stock at cost  225,000 and 162,004 shares                                               |  |              | (2,998  | ) |                  |   | (2,191  | )
|                                                                                                  |  |              |         |   |                  |   |         |  
|Total shareholders equity                                                                        |  |              | 31,571  |   |                  |   | 33,124  |  
|                                                                                                  |  |              |         |   |                  |   |         |  
|Total liabilities and shareholders equity                                                        |  | $            | 423,393 |   |                  | $ | 437,246 |  
|                                                                                                  |  |              |         |   |                  |   |         |  

See notes to consolidated condensed financial statements.



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##### Table of Contents

Ameriana Bancorp

Consolidated Condensed Statements of Operations

(In thousands, except share data)

(Unaudited)



|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|-------------------------------------------------------- |  | -------------------------- | ----- | - | ------------------------ | - | ----- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                         |  | Three Months EndedJune 30, |       |   | Six Months EndedJune 30, |  
|                                                         |  | 2007                       |       |   | 2006                     |   |       | 2007 |  |   | 2006   |  
|Interest Income                                          |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Interest and fees on loans                               |  | $                          | 4,869 |   |                          | $ | 3,892 |      |  | $ | 9,397  |   |  | $ | 7,630  |  
|Interest on mortgage-backed securities                   |  |                            | 424   |   |                          |   | 459   |      |  |   | 862    |   |  |   | 927    |  
|Interest on investment securities                        |  |                            | 602   |   |                          |   | 934   |      |  |   | 1,391  |   |  |   | 1,874  |  
|Other interest and dividend income                       |  |                            | 128   |   |                          |   | 189   |      |  |   | 263    |   |  |   | 376    |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Total interest income                                    |  |                            | 6,023 |   |                          |   | 5,474 |      |  |   | 11,913 |   |  |   | 10,807 |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Interest Expense                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Interest on deposits                                     |  |                            | 2,749 |   |                          |   | 2,591 |      |  |   | 5,486  |   |  |   | 5,041  |  
|Interest on borrowings                                   |  |                            | 809   |   |                          |   | 679   |      |  |   | 1,629  |   |  |   | 1,318  |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Total interest expense                                   |  |                            | 3,558 |   |                          |   | 3,270 |      |  |   | 7,115  |   |  |   | 6,359  |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Net Interest Income                                      |  |                            | 2,465 |   |                          |   | 2,204 |      |  |   | 4,798  |   |  |   | 4,448  |  
|Provision for loan losses                                |  |                            | 90    |   |                          |   | 75    |      |  |   | 180    |   |  |   | 150    |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Net Interest Income After Provision for Loan Losses      |  |                            | 2,375 |   |                          |   | 2,129 |      |  |   | 4,618  |   |  |   | 4,298  |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Other Income                                             |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Other fees and service charges                           |  |                            | 435   |   |                          |   | 462   |      |  |   | 828    |   |  |   | 870    |  
|Brokerage and insurance commissions                      |  |                            | 277   |   |                          |   | 201   |      |  |   | 601    |   |  |   | 483    |  
|Loss on sale of available for sale investment securities |  |                            | (11   | ) |                          |   |      |      |  |   | (11    | ) |  |   |       |  
|Gains on sales of loans and servicing rights             |  |                            | 14    |   |                          |   | 26    |      |  |   | 20     |   |  |   | 41     |  
|Increase in cash value of life insurance                 |  |                            | 219   |   |                          |   | 189   |      |  |   | 407    |   |  |   | 376    |  
|Other                                                    |  |                            | 59    |   |                          |   | 73    |      |  |   | 188    |   |  |   | 166    |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Total other income                                       |  |                            | 993   |   |                          |   | 951   |      |  |   | 2,033  |   |  |   | 1,936  |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Other Expense                                            |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Salaries and employee benefits                           |  |                            | 2,025 |   |                          |   | 2,024 |      |  |   | 4,250  |   |  |   | 3,910  |  
|Net occupancy expense                                    |  |                            | 222   |   |                          |   | 195   |      |  |   | 443    |   |  |   | 412    |  
|Furniture and equipment expense                          |  |                            | 185   |   |                          |   | 179   |      |  |   | 363    |   |  |   | 354    |  
|Legal and professional fees                              |  |                            | 217   |   |                          |   | 178   |      |  |   | 526    |   |  |   | 315    |  
|Data processing expense                                  |  |                            | 152   |   |                          |   | 144   |      |  |   | 287    |   |  |   | 266    |  
|Printing and office supplies                             |  |                            | 65    |   |                          |   | 81    |      |  |   | 111    |   |  |   | 131    |  
|Advertising and marketing expense                        |  |                            | 90    |   |                          |   | 50    |      |  |   | 148    |   |  |   | 122    |  
|Other                                                    |  |                            | 411   |   |                          |   | 440   |      |  |   | 839    |   |  |   | 842    |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Total other expense                                      |  |                            | 3,367 |   |                          |   | 3,291 |      |  |   | 6,967  |   |  |   | 6,352  |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Income (Loss) Before Income Taxes                        |  |                            | 1     |   |                          |   | (211  | )    |  |   | (316   | ) |  |   | (118   | )
|Income taxes (benefit)                                   |  |                            | 24    |   |                          |   | (216  | )    |  |   | (269   | ) |  |   | (341   | )
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Net Income (Loss)                                        |  | $                          | (23   | ) |                          | $ | 5     |      |  | $ | (47    | ) |  | $ | 223    |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Basic Earnings (Loss) Per Share                          |  | $                          | (0.01 | ) |                          | $ | 0.00  |      |  | $ | (0.02  | ) |  | $ | 0.07   |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Diluted Earnings (Loss) Per Share                        |  | $                          | (0.01 | ) |                          | $ | 0.00  |      |  | $ | (0.02  | ) |  | $ | 0.07   |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  
|Dividends Declared Per Share                             |  | $                          | 0.04  |   |                          | $ | 0.16  |      |  | $ | 0.08   |   |  | $ | 0.32   |  
|                                                         |  |                            |       |   |                          |   |       |      |  |   |        |   |  |   |        |  

See notes to consolidated condensed financial statements.



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##### Table of Contents

Ameriana Bancorp

Consolidated Condensed Statements of Shareholders Equity

(In thousands, except per share data)

(Unaudited)



|                                                                              |  |             |       |                          |   |                  |  |   |                                    |   |  |               |        |   |       |   |        |   |  |   |        |  
|----------------------------------------------------------------------------- |  | ----------- | ----- | ------------------------ | - | ---------------- |  | - | ---------------------------------- | - |  | ------------- | ------ | - | ----- | - | ------ | - |  | - | ------ | -
|                                                                              |  | CommonStock |       | AdditionalPaid-inCapital |   | RetainedEarnings |  |   | AccumulatedOther ComprehensiveLoss |   |  | TreasuryStock |        |   | Total |  
|Balance at December 31, 2006                                                  |  | $           | 3,214 |                          | $ | 1,039            |  | $ | 32,152                             |   |  | $             | (1,090 | ) |       | $ | (2,191 | ) |  | $ | 33,124 |  
|Net loss                                                                      |  |             |      |                          |   |                 |  |   | (47                                | ) |  |               |       |   |       |   |       |   |  |   | (47    | )
|Change in accumulated other comprehensive income related to retirement plan   |  |             |       |                          |   |                  |  |   |                                    |   |  |               | (182   | ) |       |   |        |   |  |   | (182   | )
|Change in unrealized loss on available-for-sale securities, net of income tax |  |             |      |                          |   |                 |  |   |                                   |   |  |               | (278   | ) |       |   |       |   |  |   | (278   | )
|                                                                              |  |             |       |                          |   |                  |  |   |                                    |   |  |               |        |   |       |   |        |   |  |   |        |  
|Comprehensive loss                                                            |  |             |       |                          |   |                  |  |   |                                    |   |  |               |        |   |       |   |        |   |  |   | (507   | )
|Dividends declared ($0.08 per share)                                          |  |             |      |                          |   |                 |  |   | (239                               | ) |  |               |       |   |       |   |       |   |  |   | (239   | )
|Common stock purchased                                                        |  |             |      |                          |   |                 |  |   |                                   |   |  |               |       |   |       |   | (807   | ) |  |   | (807   | )
|                                                                              |  |             |       |                          |   |                  |  |   |                                    |   |  |               |        |   |       |   |        |   |  |   |        |  
|Balance at June 30, 2007                                                      |  | $           | 3,214 |                          | $ | 1,039            |  | $ | 31,866                             |   |  | $             | (1,550 | ) |       | $ | (2,998 | ) |  | $ | 31,571 |  
|                                                                              |  |             |       |                          |   |                  |  |   |                                    |   |  |               |        |   |       |   |        |   |  |   |        |  

See notes to consolidated condensed financial statements.



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##### Table of Contents

Ameriana Bancorp

Consolidated Condensed Statements of Cash Flows

(In thousands)

(Unaudited)



|                                                            |  |                          |         |   |      |   |         |  
|----------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | ------- | -
|                                                            |  | Six Months EndedJune 30, |        
|                                                            |  | 2007                     |         |   | 2006 |  
|Operating Activities                                        |  |                          |         |   |      |   |         |  
|Net income (loss)                                           |  | $                        | (47     | ) |      | $ | 223     |  
|Items not requiring (providing) cash                        |  |                          |         |   |      |   |         |  
|Provision for losses on loans                               |  |                          | 180     |   |      |   | 150     |  
|Depreciation and amortization                               |  |                          | 474     |   |      |   | 634     |  
|Increase in cash value of life insurance                    |  |                          | (407    | ) |      |   | (376    | )
|Mortgage loans originated for sale                          |  |                          | (1,248  | ) |      |   | (2,493  | )
|Proceeds from sale of mortgage loans                        |  |                          | 1,260   |   |      |   | 2,238   |  
|Gains on sale of loans and servicing rights                 |  |                          | (20     | ) |      |   | (41     | )
|Loss on sale of other real estate owned                     |  |                          | 12      |   |      |   |         |  
|Loss from sales of available for sale securities            |  |                          | 11      |   |      |   |         |  
|Decrease in drafts payable                                  |  |                          | (732    | ) |      |   | (474    | )
|Increase in accrued interest payable                        |  |                          | 331     |   |      |   |        |  
|Other adjustments                                           |  |                          | (325    | ) |      |   | (65     | )
|                                                            |  |                          |         |   |      |   |         |  
|Net cash used in operating activities                       |  |                          | (511    | ) |      |   | (204    | )
|                                                            |  |                          |         |   |      |   |         |  
|Investing Activities                                        |  |                          |         |   |      |   |         |  
|Purchase of securities                                      |  |                          | (192    | ) |      |   | (272    | )
|Proceeds/principal from sale of securities                  |  |                          | 11,561  |   |      |   |        |  
|Proceeds/principal from maturity/calls of securities        |  |                          | 20,750  |   |      |   | 8,250   |  
|Principal collected on mortgage-backed securities           |  |                          | 3,405   |   |      |   | 4,631   |  
|Net change in loans                                         |  |                          | (22,495 | ) |      |   | (5,747  | )
|Proceeds from sales of other real estate owned              |  |                          | 395     |   |      |   |        |  
|Net purchases of premises and equipment                     |  |                          | (550    | ) |      |   | (501    | )
|Redemption/(purchase) of Federal Home Loan Bank stock       |  |                          | 9       |   |      |   | 1,052   |  
|Purchase of investment in Ameriana Capital Trust I          |  |                          |        |   |      |   | (310    | )
|Other investing activities                                  |  |                          | (2      | ) |      |   | 621     |  
|                                                            |  |                          |         |   |      |   |         |  
|Net cash provided by investing activities                   |  |                          | 12,881  |   |      |   | 7,724   |  
|                                                            |  |                          |         |   |      |   |         |  
|Financing Activities                                        |  |                          |         |   |      |   |         |  
|Net change in demand and savings deposits                   |  |                          | 2,026   |   |      |   | (15,411 | )
|Net change in certificates of deposit                       |  |                          | (5,655  | ) |      |   | 10,534  |  
|Net change in short-term borrowings                         |  |                          | (17,000 | ) |      |   | (25,000 | )
|Proceeds from long-term borrowings                          |  |                          | 20,000  |   |      |   | 10,000  |  
|Repayment of long-term borrowings                           |  |                          | (11,589 | ) |      |   | (3,685  | )
|Proceeds from issuance of subordinated debentures           |  |                          |        |   |      |   | 10,310  |  
|Purchase of common stock                                    |  |                          | (807    | ) |      |   | (604    | )
|Exercise of stock options                                   |  |                          |        |   |      |   | 371     |  
|Tax benefit from stock options exercised                    |  |                          |        |   |      |   | 43      |  
|Net change in advances by borrowers for taxes and insurance |  |                          | 310     |   |      |   | 36      |  
|Cash dividends paid                                         |  |                          | (239    | ) |      |   | (1,022  | )
|                                                            |  |                          |         |   |      |   |         |  
|Net cash used in financing activities                       |  |                          | (12,954 | ) |      |   | (14,428 | )
|                                                            |  |                          |         |   |      |   |         |  
|Change in Cash and Cash Equivalents                         |  |                          | (584    | ) |      |   | (6,908  | )
|Cash and Cash Equivalents at Beginning of Year              |  |                          | 12,070  |   |      |   | 14,270  |  
|                                                            |  |                          |         |   |      |   |         |  
|Cash and Cash Equivalents at End of Quarter                 |  | $                        | 11,486  |   |      | $ | 7,362   |  
|                                                            |  |                          |         |   |      |   |         |  



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Ameriana Bancorp

Consolidated Condensed Statements of Cash Flows

(In thousands)

(Unaudited)



|                          |  |                          |       |      |   |      
|------------------------- |  | ------------------------ | ----- | ---- | - | -----
|                          |  | Six Months EndedJune 30,
|                          |  | 2007                     |       | 2006
|Supplemental information: |  |                          |       |      |   |      
|Interest paid             |  | $                        | 6,785 |      | $ | 6,048
|Income taxes paid         |  |                          |      |      |   |     

See notes to consolidated condensed financial statements.



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AMERIANA BANCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

NOTE A  BASIS OF PRESENTATION

The consolidated
financial statements include the accounts of Ameriana Bancorp (the Company) and its wholly-owned subsidiary, Ameriana Bank, SB (the Bank). The Bank has three direct wholly-owned subsidiaries, Ameriana Insurance Agency,
Ameriana Financial Services, Inc., and Ameriana Investment Management, Inc.

The unaudited interim consolidated condensed financial
statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all information and disclosures required by generally accepted accounting principles (GAAP) for complete financial statements.
In the opinion of management, the financial statements reflect all adjustments (comprised only of normal recurring adjustments and accruals) necessary to present fairly the Companys financial position and results of operations and cash flows.
The results of operations for the period are not necessarily indicative of the results to be expected in the full year. These statements should be read in conjunction with the consolidated financial statements and related notes which are included in
the Companys Annual Report on Form 10-K for the year ended December 31, 2006.

NOTE B  SHAREHOLDERS EQUITY

On May 17, 2007, the Board of Directors declared a quarterly cash dividend of $0.04 per share. This dividend, totaling $120,000, was accrued for
payment to shareholders of record on June 15, 2007, and was paid on July 6, 2007.

No stock options were exercised during the
second quarter of 2007.

NOTE C  EARNINGS PER SHARE

Earnings per share were computed as follows:



|                                                                                                          |  |                                                               |     |   |                       |           |                 |   |       |        |  |                       |   |                 |           |  |   |     
|--------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------- | --- | - | --------------------- | --------- | --------------- | - | ----- | ------ |  | --------------------- | - | --------------- | --------- |  | - | ----
|                                                                                                          |  | (In thousands, except share data) Three Months Ended June 30,
|                                                                                                          |  | 2007                                                          |     |   | 2006                 
|                                                                                                          |  | Income                                                        |     |   | WeightedAverageShares |           | Per ShareAmount |   |       | Income |  | WeightedAverageShares |   | Per ShareAmount
|Basic Earnings (Loss) per Share: Income (loss) available to common shareholders                           |  | $                                                             | (23 | ) |                       | 2,988,952 |                 | $ | (0.01 | )      |  | $                     | 5 |                 | 3,205,070 |  | $ | 0.00
|                                                                                                          |  |                                                               |     |   |                       |           |                 |   |       |        |  |                       |   |                 |           |  |   |     
|Effect of dilutive stock options                                                                          |  |                                                               |    |   |                       |          |                 |   |       |        |  |                       |  |                 | 4,768     |  |   |     
|                                                                                                          |  |                                                               |     |   |                       |           |                 |   |       |        |  |                       |   |                 |           |  |   |     
|Diluted Earnings (Loss) Per Share: Income (loss) available to common shareholders and assumed conversions |  | $                                                             | (23 | ) |                       | 2.988,952 |                 | $ | (0.01 | )      |  | $                     | 5 |                 | 3,209,838 |  | $ | 0.00
|                                                                                                          |  |                                                               |     |   |                       |           |                 |   |       |        |  |                       |   |                 |           |  |   |     



|                                                                                                          |  |                                                             |     |   |                       |           |                 |   |       |        |  |                       |     |                 |           |  |   |     
|--------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------- | --- | - | --------------------- | --------- | --------------- | - | ----- | ------ |  | --------------------- | --- | --------------- | --------- |  | - | ----
|                                                                                                          |  | (In thousands, except share data) Six Months Ended June 30,
|                                                                                                          |  | 2007                                                        |     |   | 2006                 
|                                                                                                          |  | Income                                                      |     |   | WeightedAverageShares |           | Per ShareAmount |   |       | Income |  | WeightedAverageShares |     | Per ShareAmount
|Basic Earnings (Loss) per Share: Income (loss) available to common shareholders                           |  | $                                                           | (47 | ) |                       | 3,010,331 |                 | $ | (0.02 | )      |  | $                     | 223 |                 | 3,200,441 |  | $ | 0.07
|                                                                                                          |  |                                                             |     |   |                       |           |                 |   |       |        |  |                       |     |                 |           |  |   |     
|Effect of dilutive stock options                                                                          |  |                                                             |    |   |                       |          |                 |   |       |        |  |                       |    |                 | 4,899     |  |   |     
|                                                                                                          |  |                                                             |     |   |                       |           |                 |   |       |        |  |                       |     |                 |           |  |   |     
|Diluted Earnings (Loss) Per Share: Income (loss) available to common shareholders and assumed conversions |  | $                                                           | (47 | ) |                       | 3,010,331 |                 | $ | (0.02 | )      |  | $                     | 223 |                 | 3,205,340 |  | $ | 0.07
|                                                                                                          |  |                                                             |     |   |                       |           |                 |   |       |        |  |                       |     |                 |           |  |   |     

Options to purchase 222,782 and 276,357 shares of common stock at exercise prices of $12.43 to
$18.30 and $14.25 to $18.30 per share were outstanding at June 30, 2007 and 2006, respectively, but were not included in the computation of diluted earnings per share because the options were anti-dilutive.



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NOTE D  FUTURE ACCOUNTING MATTERS

Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS
No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting standards, and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We do not expect the adoption of SFAS No. 157 to have a material impact on our financial condition or results of operations.

Accounting for Uncertainty in Income taxes

In June 2006, the FASB
issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of SFAS No. 109, Accounting for Income Taxes (Interpretation No. 48). Interpretation No. 48 clarifies the accounting for uncertainty in
income taxes in financial statements and prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken. It also provides guidance on de-recognition,
classification, interest and penalties, accounting in interim periods, disclosure and transition. Interpretation No. 48 is effective for the Company beginning January 1, 2007. We have evaluated the requirements of Interpretation
No. 48 and determined that it did not have a material effect on our financial condition or results of operations.

Split-dollar life insurance
agreements

In September 2006, the Emerging Issues Task Force Issue 064 (EITF 06-4), Accounting for Deferred Compensation and Postretirement
Benefit Aspects of Endorsement SplitDollar Life Insurance Arrangements, was ratified. EITF 06-4 addresses accounting for separate agreements which split life insurance policy benefits between an employer and employee. The Issue requires the
employer to recognize a liability for future benefits payable to the employee under these agreements. The effects of applying EITF 06-4 must be recognized through either a change in accounting principle through an adjustment to equity or through the
retrospective application to all prior periods. For calendar year companies, EITF 06-4 is effective beginning January 1, 2008. Early adoption is permitted as of January 1, 2007. The Company is evaluating and has not yet determined the
impact the new standard is expected to have on its financial position.

Fair Value Option for Financial Assets and Financial Liabilities

On February 15, 2007, the FASB issued its Statement No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an Amendment
of FASB Statement No. 115. FAS 159 permits entities to elect to report most financial assets and liabilities at their fair value with changes in fair value included in net income. The fair value option may be applied on an
instrument-by-instrument or instrument class-by-class basis. The option is not available for deposits withdrawable on demand, pension plan assets and obligations, leases, instruments classified as stockholders equity, investments in
consolidated subsidiaries and variable interest entities and certain insurance policies. The new standard is effective at the beginning of the Companys fiscal year beginning January 1, 2008, and early application may be elected in certain
circumstances. The Company expects to first apply the new standard at the beginning of its 2008 fiscal year. The Company is currently evaluating and has not yet determined the impact the new standard is expected to have on its financial position,
results of operations or cash flows.

NOTE E  TRUST PREFERRED SECURITIES

During March 2006, the Company completed a private placement of $10 million in trust preferred securities through Ameriana Capital Trust I (the
Trust), a statutory business trust formed by the Company. The securities were sold pursuant to an applicable exemption from registration under the Securities Act of 1933, as amended. The proceeds from the issuance, along with the
Companys $310,000 capital contribution for the Trusts common securities, were used to acquire $10.3 million in subordinated debentures issued by the Company, which constitute the sole asset of the Trust. Because the Trust is not
consolidated with the Company, pursuant to FASB Interpretation No. 46, the Companys financial statements reflect the subordinated debt issued to the Trust. Interest payments are payable quarterly at a rate of the average of 6.71% and
three-month LIBOR plus 150 basis points for the first five years. After



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the first five years, the subordinated debentures bear interest at a rate of equal to the three-month LIBOR rate plus 150 basis points. The Company has the
option to defer interest payments from time to time for a period not to exceed 20 consecutive quarters. The rate at June 30, 2007 was 6.78244%. The subordinated debt matures on March 15, 2036 and can be called at par anytime after
March 15, 2011.

NOTE F  RETIREMENT PLAN

The following table summarizes the components of net periodic pension cost:



|                                                |  |                            |    |                          |   |      |  |      |     |  |   |    
|----------------------------------------------- |  | -------------------------- | -- | ------------------------ | - | ---- |  | ---- | --- |  | - | ---
|                                                |  | Three Months EndedJune 30, |    | Six Months EndedJune 30,
|$ in thousands                                  |  | 2007                       |    | 2006                     |   | 2007 |  | 2006
|Service cost                                    |  | $                          | 8  |                          | $ | 7    |  | $    | 17  |  | $ | 15 
|Interest cost                                   |  |                            | 29 |                          |   | 32   |  |      | 59  |  |   | 63 
|Amortization of actuarial loss                  |  |                            | 3  |                          |   | 19   |  |      | 5   |  |   | 38 
|Amortization of unrecognized prior service cost |  |                            | 15 |                          |   | 15   |  |      | 30  |  |   | 30 
|                                                |  |                            |    |                          |   |      |  |      |     |  |   |    
|Net periodic pension cost                       |  | $                          | 55 |                          | $ | 73   |  | $    | 111 |  | $ | 146
|                                                |  |                            |    |                          |   |      |  |      |     |  |   |    

Net periodic pension cost is recorded as a component of employee benefits in the Consolidated Condensed Statements
of Operations. The plan assumptions are evaluated annually and are updated as necessary. The discount rate assumption reflects the yield on a portion of high quality fixed-income instruments that have a similar duration to the plans
liabilities.

NOTE G  CHANGE IN ACCOUNTING PRINCIPLE

The Company or one of its subsidiaries files income tax returns in the U.S. federal and Indiana jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local examinations by tax
authorities for years before 2003.

The Company adopted the provisions of the Financial Accounting Standards Board (FASB) Interpretation
No. 48 (FIN 48), Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109,on January 1, 2007. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a
result of the implementation of FIN 48, the Company did not identify any uncertain tax positions that it believes should be recognized in the financial statements.

ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Managements Discussion and Analysis of Financial Condition and Results of Operations (the MD&A) is designed to provide a reader of our financial statements with a narrative on our financial condition, results of
operations, liquidity, critical accounting policies, off-balance sheet arrangements and the future impact of accounting standards. We believe it is useful to read our MD&A in conjunction with the consolidated financial statements contained in
Part I in this Quarterly Report on Form 10-Q (this Form 10-Q), our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, and our other reports on Forms 10-Q and 8-K and other publicly available information.



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FORWARD-LOOKING STATEMENTS

This Form 10-Q may contain certain forward-looking statements within the meaning of the federal securities laws. These statements are not historical facts, rather statements based on Ameriana
Bancorps current expectations regarding its business strategies, intended results and future performance. Forward-looking statements are preceded by terms such as expects, believes, anticipates,
intends and similar expressions. Such statements are subject to certain risks and uncertainties including changes in economic conditions in the Companys market area, changes in policies by regulatory agencies, the outcome of
litigation, fluctuations in interest rates, demand for loans in the Companys market area, and competition that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Additional
factors that may affect our results are discussed in the Form 10-K, including in the section titled Risk Factors, and in this Form 10-Q under Part II, Item 1A -Risk Factors. The Company cautions readers not to place
undue reliance on any such forward-looking statements, which speak only as of the date made. The Company advises readers that the factors listed above could affect the Companys financial performance and could cause the Companys actual
results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect events or circumstances after the date of such
statements or to reflect the occurrence of anticipated or unanticipated events.

Who We Are

Ameriana Bancorp (the Company) is an Indiana chartered bank holding company organized in 1987 by Ameriana Savings Bank, FSB (the
Bank). The Company is subject to regulation and supervision by the Federal Reserve Bank. The Bank began banking operations in 1890. On June 29, 2002, the Bank converted to an Indiana savings bank and adopted the name, Ameriana Bank
and Trust, SB. In August 2006, the Bank closed its Trust Department and adopted its present name. The Bank is subject to regulation and supervision by the Federal Deposit Insurance Corporation (the FDIC), and the Indiana Department of
Financial Institutions (the DFI). Our deposits are insured to applicable limits by the Deposit Insurance Fund administered by the FDIC. References in this Form 10-Q to we, us, and our refer to Ameriana
Bancorp and/or the Bank, as appropriate.

We are headquartered in New Castle, Indiana. We conduct business through our main office at 2118
Bundy Avenue, New Castle, Indiana and through nine branch offices located in New Castle, Middletown, Knightstown, Morristown, Greenfield, Anderson, Avon, McCordsville and New Palestine, Indiana, and through our commercial loan production office in
Carmel, Indiana.

The Bank has three wholly owned subsidiaries, Ameriana Insurance Agency (AIA), Ameriana Financial Services,
Inc. (AFS) and Ameriana Investment Management, Inc. (AIMI). AIA provides insurance sales from offices in New Castle, Greenfield and Avon, Indiana. AFS offers debt protection products through its ownership of an interest in
Family Financial Holdings, Incorporated, Columbus, Indiana. In 2002, AFS acquired a 20.9% ownership interest in Indiana Title Insurance Company, LLC through which it offers title insurance. AFS also operates a brokerage facility in conjunction with
Linsco/Private Ledger. AIMI manages the Banks investment portfolio. The Company holds a minority interest in a limited partnership, House Investments, organized to acquire and manage real estate investments which qualify for federal tax
credits.

What We Do

The Bank
is a community-oriented financial institution. Our principal business consists of attracting deposits from the general public and investing those funds primarily in mortgage loans on single-family residences, multi-family loans, construction loans,
commercial real estate loans, and, to a lesser extent, commercial and industrial loans, small business lending, home improvement loans, and consumer loans. We have from time to time purchased loans and loan participations in the secondary market. We
also invest in various federal and government agency obligations and other investment securities permitted by applicable laws and regulations, including mortgage-backed, municipal and equity securities. We offer customers in our market area



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time deposits with terms from three months to seven years, interest-bearing and non interest-bearing checking accounts, savings accounts and money market
accounts. Our primary source of borrowings is Federal Home Loan Bank (FHLB) advances. Through our subsidiaries, we engage in insurance and brokerage activities.

Our primary source of income is net interest income, which is the difference between the interest income earned on our loan and investment portfolios and
the interest expense incurred on our deposits and borrowing portfolios. Our loan portfolio typically earns more interest than the investment portfolio, and our deposits typically have a lower average rate than FHLB advances. Several factors affect
our net interest income. These factors include the loan, investment, deposit, and borrowing portfolio balances, their composition, the length of their maturity, re-pricing characteristics, liquidity, credit, and interest rate risk, as well as market
and competitive conditions.

Overview of the Three and Six Months Ended June 30, 2007

During the first six months of 2007, the Company recorded improved net interest income that resulted primarily from significant growth of the
commercial loan portfolio and from the balance sheet restructuring strategy initiated in the last quarter of 2006. Earnings were negatively impacted in the first quarter of 2007 by major operating expenses, which resulted in a slight net loss for
the first three months of the year. A substantial tax liability related to the Companys restructuring of its Bank Owned Life Insurance (BOLI) produced a similar slight net loss for the second quarter of 2007.



| |  |  | A net loss of $23,000 was recorded for the three months ended June 30, 2007, compared to net income of $5,000 for the same period in 2006. A net loss of
$47,000 was sustained for the six months ended June 30, 2007, compared to net income of $223,000 for the six months ended June 30, 2006.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The first quarter of 2007 included a severance cost of $273,000 related to a change in management that had an after-tax impact of approximately $180,000 on the
Companys earnings.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Additionally, operating expense for the three months ended March 31, 2007, also included recruiting expense related to our expansion of commercial lending in
metropolitan Indianapolis, and continuing fees for litigating our complaint against RLI Insurance Co. over surety guarantees for certain lease pools in which Ameriana Bank had previously invested.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An income tax liability of $219,000 recorded during the second quarter of 2007 resulted from a BOLI program restructuring that was designed to improve the mix of
policies covering insured current and inactive employees, change carriers to improve the credit ratings of the issuers, and improve the overall yield of the portfolio of policies.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A continuing balance sheet management strategy that provided positive results in the first six months of 2007 was the redeployment of funds from lower-yielding
investment securities into higher-yielding commercial loans. This strategy was the primary reason that the net interest margin improved 35 basis points from the last quarter of 2006 to 2.61% for the first quarter of 2007, and then gained an
additional 14 basis points in the second quarter of 2007 to 2.75%. Net interest margin for the six months ended June 30, 2007, was 2.68%, compared to 2.34% for the same period of 2006.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financial and Strategic Issues

The
improvement in overall credit quality that was achieved in 2006 continued during the first six months of 2007. While the total of $3.3 million in non-accrual loans at June 30, 2007 was unchanged from the total at December 31, 2006, the
level of classified loans declined $0.8 million, or 8.1%, to $9.7 million at June 30, 2007. The percentage of classified loans to total risk-based capital was 23.3% at June 30, 2007, compared to 38.8% a year earlier. The decline was a
result of improved work-out strategies undertaken by the Bank. Significant focus on underwriting, and a portfolio risk approach should allow the Bank to manage credit risk effectively.

Our net interest margin will continue to be impacted by actions of the Federal Reserve. After 13 prior increases of 0.25% each, the Federal Reserve
raised the Federal funds target rate four additional times in 0.25% increments during the first six months of 2006. The Federal Reserve then held the rate at 5.25%, where it remained at the end of the second quarter of 2007. The U.S. Treasury yield
curve remained relatively flat through



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most of 2006 and the first six months of 2007, which negatively impacted most financial institutions. Our interest-bearing liabilities re-price to current
market conditions faster than our interest-earning assets, which can potentially decrease our net interest margin in a rising interest rate environment. The expected improvement in the mix of interest-earning assets in 2007, with the reinvestment of
funds from lower-yielding investment securities into commercial loans, will have a positive impact on our net interest margin.

As part of
the corporate plan, the Companys short and long-term action plans include:



| |  |  | Recruiting seasoned commercial lenders, credit analysts and key risk managers.
| | - |  | ------------------------------------------------------------------------------



| |  |  | Diversifying the loan portfolio by reducing the concentration in commercial real estate and expanding commercial, residential real estate and consumer lending.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Focusing on retail banking activities, including emphasis on transactional deposit growth, expanding customer relationships as measured by products per household,
and acquisition of new customer relationships.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Improving the efficiency ratio of the Company.
| | - |  | ----------------------------------------------



| |  |  | Reducing the size of the investment portfolio as a percentage of total assets.
| | - |  | ------------------------------------------------------------------------------

We will continue to focus on these strategies in the second half of 2007 in order to continue the improvements realized in 2006 that were also carried forward through the first six months of 2007.

CRITICAL ACCOUNTING POLICIES

The accounting and
reporting policies of the Company are maintained in accordance with accounting principles generally accepted in the United States and conform to general practices within the banking industry. The Companys significant accounting policies are
described in detail in the Notes to the Companys Consolidated Financial Statements in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2006. The preparation of financial statements in conformity with
generally accepted accounting principles (GAAP) requires management to make estimates and assumptions. The financial position and results of operations can be affected by these estimates and assumptions, and such estimates and
assumptions are integral to the understanding of reported results. Critical accounting policies are those policies that management believes are the most important to the portrayal of the Companys financial condition and results, and they
require management to make estimates that are difficult, subjective or complex. We consider the allowance for loan losses and mortgage servicing rights to be our critical accounting policies.

Allowance for Loan Losses. The allowance for loan losses provides coverage for probable losses inherent in the Companys loan
portfolio. Management evaluates the adequacy of the allowance for credit losses each quarter based on changes, if any, in underwriting activities, the loan portfolio composition (including product mix and geographic, industry or customer-specific
concentrations), trends in loan performance, regulatory guidance and economic factors. This evaluation is inherently subjective, as it requires the use of significant management estimates. Many factors can affect managements estimates of
specific and expected losses, including volatility of default probabilities, rating migrations, loss severity and economic and political conditions. The allowance is increased through provisions charged to operating earnings and reduced by net
charge-offs.

The Company determines the amount of the allowance based on relative risk characteristics of the loan portfolio. The
allowance recorded for commercial loans is based on reviews of individual credit relationships and an analysis of the migration of commercial loans and actual loss experience. The allowance recorded for non-commercial loans is based on an analysis
of loan mix, risk characteristics of the portfolio, fraud loss and bankruptcy experiences and historical losses, adjusted for current trends, for each loan category or group of loans. The allowance for loan losses relating to impaired loans is based
on the loans observable market price, the collateral for certain collateral-dependent loans, or the discounted cash flows using the loans effective interest rate.



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Regardless of the extent of the Companys analysis of customer performance, portfolio trends or risk
management processes, certain inherent but undetected losses are probable within the loan portfolio. This is due to several factors, including inherent delays in obtaining information regarding a customers financial condition or changes in
their unique business conditions, the subjective nature of individual loan evaluations, collateral assessments and the interpretation of economic trends. Volatility of economic or customer-specific conditions affecting the identification and
estimation of losses for larger, non-homogeneous credits and the sensitivity of assumptions utilized to establish allowances for homogenous groups of loans are among other factors considered. The Company estimates a range of inherent losses related
to the existence of these exposures. The estimates are based upon the Companys evaluation of imprecision risk associated with the commercial and consumer allowance levels and the estimated impact of the current economic environment.

Mortgage Servicing Rights. Mortgage servicing rights (MSRs) associated with loans originated and sold, where
servicing is retained, are capitalized and included in other intangible assets in the consolidated balance sheet. The value of the capitalized servicing rights represents the present value of the future servicing fees arising from the right to
service loans in the portfolio. Critical accounting policies for MSRs relate to the initial valuation and subsequent impairment tests. The methodology used to determine the valuation of MSRs requires the development and use of a number of estimates,
including anticipated principal amortization and prepayments of that principal balance. Events that may significantly affect the estimates used are changes in interest rates, mortgage loan prepayment speeds and the payment performance of the
underlying loans. The carrying value of the MSRs is periodically reviewed for impairment based on a determination of fair value. Impairment, if any, is recognized through a valuation allowance and is recorded as amortization of intangible assets.

FINANCIAL CONDITION

Total assets of
$423.4 million at June 30, 2007, represented a decrease of $13.8 million from the December 31, 2006 total of $437.2 million. The decrease resulted primarily from managements decision to reduce the size of the investment portfolio and
to use the proceeds from the investment securities available for sale portfolio to paydown Federal Home Loan Bank borrowings.

Cash and
cash equivalents declined slightly from $12.1 million at December 31, 2006 to $11.5 million at June 30, 2007, as the proceeds were used to fund normal business operations. Maturities of securities issued by U.S. government agencies, cash
flows from mortgage-backed securities, and withdrawals from mutual funds decreased the size of the investment securities portfolio by $36.1 million to $93.7 million at June 30, 2007 from $129.8 million at December 31, 2006. The proceeds
from the investment securities portfolio were used to fund loan portfolio growth and reduce the Companys level of borrowings.

Net
loans increased $21.9 million, or 8.8%, during the six-month period to $271.2 million, mostly due to increases in both the commercial loan portfolio and the portfolio of residential real estate first mortgages. The commercial loan growth of $11.3
million, or 9.2%, to $133.8 million was achieved primarily through the addition of highly-seasoned commercial lenders as part of the Banks Indianapolis metropolitan market expansion strategy.

The residential real estate first mortgage loan portfolio growth of $10.1 million, or 9.6%, to $114.8 million, included one $3.9 million purchase of
fixed-rate loans, and only $787,000 of sales into the secondary market. As a result of a recent modification to our strategy, it is expected that a substantially larger dollar amount of residential loans will be sold during the last six months of
2007. The residential mortgage loan strategy is reviewed on a regular basis to ensure that it remains consistent with the Banks overall balance sheet management objectives.

Total deposits declined $3.6 million, or 1.1%, during the first six months of 2007 to $318.8 million, with higher-costing certificate of deposit accounts
experiencing a decline of $5.7 million. The combined total for checking, savings, and money market accounts was up $2.1 million for the period. The Banks markets remained very competitive for deposit products and the Bank continued to utilize
pricing strategies designed to produce an acceptable marginal cost for both existing and new deposits.



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Borrowings decreased by $8.6 million during the first six months of 2007 to $66.1 million, as the Bank
applied cash flows from the investment portfolio that were in excess of amounts needed to fund the loan portfolio growth during the period. Wholesale funding strategies and sources are continuously being analyzed in an effort to control the cost of
this alternative to organic deposit account funding.

Total shareholders equity declined $1.5 million during the six months ended
June 30, 2007, with $807,000 of that total being the Companys cost to acquire the final 63,000 shares of the 225,000 shares of common stock approved for repurchase by the Board of Directors and announced on May 2, 2006. The net loss
for the first half of the year of $47,000, dividend payments of $239,000, and adjustments that did not flow through the statement of operations that resulted from a net decrease in the market value of the available for sale investment securities or
costs associated with the Company retirement plan, were also part of the total reduction of equity during the period.

RESULTS OF OPERATIONS

Second Quarter of 2007 compared to the Second Quarter of 2006

The Company experienced a net loss of $23,000, or $(0.01) per diluted share, for the second quarter of 2007, compared to net income of $5,000, or $0.00
per diluted share, for the second quarter of 2006. Although the $28,000 difference in net income between the two three-month periods was not that significant, there were two major component differences:



| |  |  | The Company produced a $261,000, or 11.8%, increase in net interest income resulting from a 44 basis point improvement in net interest margin from 2.31% to 2.75%.
The improvement in net interest income was accomplished with a lower average earning asset total for the second quarter of 2007.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | For the second quarter of 2007, the Company recorded $24,000 of income tax expense, compared to an income tax benefit of $216,000 for the same period a year
earlier. This difference of $240,000 was due primarily to the $219,000 tax liability booked in the second quarter of 2007 that resulted from the restructuring of the BOLI program.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Interest Income

Net interest income on a
fully tax equivalent basis increased $344,000 to $2.6 million for the second quarter of 2007 compared to $2.3 million for the same period of 2006. The Company improved its net interest margin on a fully tax equivalent basis by 44 basis points to
2.75% for the second quarter of 2007 from 2.31% for the second quarter of 2006. The improvement in net interest income and net interest margin was accomplished primarily through the balance sheet restructuring strategy implemented in November of
2006, coupled with the significant loan growth that included both commercial and residential first mortgage loans. A higher average cost of funds for the second quarter of 2007 compared to the same period in 2006, which was typical for the industry
as the competition for deposits heightened, had a negative impact on efforts to further improve the net interest margin.

Tax-exempt
interest was $341,000 for the second quarter of 2007 compared to $178,000 for the second quarter of 2006. Our tax-exempt interest was from bank-qualified municipal securities and municipal loans. The tax equivalent adjustments were $175,000 and
$92,000 for the second quarters of 2007 and 2006, respectively.



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##### Table of Contents

Provision for Loan Losses

The following table sets forth an analysis of the Banks allowance for loan losses for the periods indicated:



|                                  |  |                                                  |       |   |      |   |       |  
|--------------------------------- |  | ------------------------------------------------ | ----- | - | ---- | - | ----- | -
|                                  |  | (Dollars in thousands)Three Months EndedJune
30, |      
|                                  |  | 2007                                             |       |   | 2006 |  
|Balance at beginning of quarter   |  | $                                                | 2,707 |   |      | $ | 2,912 |  
|Provision for loan losses         |  |                                                  | 90    |   |      |   | 75    |  
|Charge-offs                       |  |                                                  | (84   | ) |      |   | (35   | )
|Recoveries                        |  |                                                  | 17    |   |      |   | 41    |  
|                                  |  |                                                  |       |   |      |   |       |  
|Net recoveries (charge-offs)      |  |                                                  | (67   | ) |      |   | 6     |  
|                                  |  |                                                  |       |   |      |   |       |  
|Balance at end of period          |  | $                                                | 2,730 |   |      | $ | 2,993 |  
|                                  |  |                                                  |       |   |      |   |       |  
|Allowance to total loans          |  |                                                  | 1.00  | % |      |   | 1.32  | %
|                                  |  |                                                  |       |   |      |   |       |  
|Allowance to non-performing loans |  |                                                  | 82.23 | % |      |   | 66.82 | %
|                                  |  |                                                  |       |   |      |   |       |  

We had a provision of $90,000 in the second quarter of 2007 compared to $75,000 for the same
period in 2006. The increase in provision expense was primarily due to additional reserves for the increase in the loan portfolio, specifically in commercial loans, which carry a higher risk of default, and an increase in net charge-offs, offset by
a decrease in classified and non-performing loans.

The following table summarizes the Companys non-performing loans:



|                                                      |  |                                 |       |   |      |   |       |  
|----------------------------------------------------- |  | ------------------------------- | ----- | - | ---- | - | ----- | -
|                                                      |  | (Dollars in thousands) June 30, |      
|                                                      |  | 2007                            |       |   | 2006 |  
|Loans accounted for on a non-accrual basis            |  | $                               | 3,320 |   |      | $ | 4,459 |  
|Accruing loans contractually past due 90 days or more |  |                                 |      |   |      |   | 20    |  
|                                                      |  |                                 |       |   |      |   |       |  
|Total of non-accrual and 90 days past due loans       |  | $                               | 3,320 |   |      | $ | 4,479 |  
|                                                      |  |                                 |       |   |      |   |       |  
|Percentage of total net loans                         |  |                                 | 1.22  | % |      |   | 2.00  | %
|                                                      |  |                                 |       |   |      |   |       |  
|Other non-performing assets (1)                       |  | $                               | 806   |   |      | $ | 1,537 |  
|                                                      |  |                                 |       |   |      |   |       |  

---

|(1) | Other non-performing assets represent property acquired through foreclosure or repossession. This property is carried at the lower of its fair market value or the principal balance
of the related loan.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Non-accrual loans declined $1.1 million from June 30, 2006 to $3.3 million at June 30, 2007.
This decrease was primarily due to the sale of one non-accrual loan totaling $1.4 million that occurred in the fourth quarter of 2006. Other non-performing assets decreased to $0.8 million at June 30, 2007 from $1.5 million at March 31,
2006. The decrease was primarily due to the fourth quarter 2006 sale of a $1.1 million commercial real estate property acquired through foreclosure.

Other Income

The $42,000 increase in total other income for the second quarter of 2007, compared to the same period
in 2006, resulted from an increase of $76,000 in brokerage and insurance commissions, which was partially offset by a $27,000 decline in other fees and service charges related primarily to trust services fees. During 2006, the Company discontinued
offering trust services. The improvement in brokerage and insurance commissions was mainly due to significantly higher commission income from the investment center that resulted from increased sales.



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##### Table of Contents

Other Expense

The $76,000 increase in total other expense in the second quarter of 2007, compared to the second quarter of 2006, resulted primarily from increases in legal and professional fees, and advertising and marketing.



| |  |  | The $39,000 increase in legal and professional fees was due primarily to costs associated with the continuing litigation related to the RLI Insurance Company. See
Part II, Item-1 Legal Proceedings for additional detail on legal proceedings.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A $40,000 increase in advertising and marketing expense related to a major initiative of re-branding the Company.
| | - |  | -----------------------------------------------------------------------------------------------------------------

Income Tax Expense

The increase in income
taxes from a tax benefit of $216,000 for the second quarter of 2006 to an income tax expense of $24,000 for the same period of 2007, related primarily to the $219,000 income tax liability resulting from the restructuring of the Companys BOLI
program.

We have a deferred state tax asset that is primarily the result of operating losses sustained since 2003 for state tax purposes.
We started recording a valuation allowance against our current period state income tax benefit in 2005 due to our concern that we may not be able to use more than the tax asset already recorded on the books without modifying the use of AIMI, our
investment subsidiary. Operating income from AIMI is not subject to state income taxes under current state law, and is the primary reason for the tax asset.

Six Months Ended June 30, 2007 compared to the Six Months Ended June 30, 2006

The Company sustained a net
loss of $47,000, or $(0.02) per diluted share, for the six months ended June 30, 2007, compared to net income of $223,000, or $0.07 per diluted share, for the same period of 2006. The $270,000 difference in net income and $0.09 reduction in
earnings per share was primarily a result of increases in total other expense and income taxes that exceeded the improvements made in net interest income and total other income:



| |  |  | The $350,000 growth in net interest income was accomplished through a significant improvement in net interest margin that produced a benefit that exceeded a
corresponding negative impact from a lower level of average earning assets.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Total other income increased $97,000, primarily as a result of significant growth in brokerage and insurance commissions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------



| |  |  | The $615,000 increase in total other expense resulted primarily from three factors: (1) an increased expense for salaries and employee benefits arising from
the liability for severance pay recorded in the first quarter; (2) higher staffing levels in commercial lending and credit review; and (3) a significant increase in legal fees related to the RLI Insurance Company litigation.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An increase of $240,000 in income taxes was due primarily to the $219,000 tax liability booked in the second quarter of 2007 that resulted from the restructuring of
the BOLI program.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Interest Income

Net interest income on a fully tax equivalent basis increased $512,000 to $5.1 million for the six months ended June 30, 2007, compared to $4.6 million for the same period of 2006. The Company improved its net
interest margin on a fully tax equivalent basis by 34 basis points to 2.68% for the first half of 2007 from 2.34% for the first half of 2006. The improvement in net interest income and net interest margin was accomplished primarily through the
balance sheet restructuring strategy implemented in November of 2006, coupled with the significant loan growth that included both commercial and residential first mortgage loans. A higher average cost of funds for the first half of 2007 compared to
the same period in 2006, which was typical for the industry as the competition for deposits heightened, had a negative impact on efforts to further improve the net interest margin.



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##### Table of Contents

Tax-exempt interest was $671,000 for the first half of 2007 compared to $356,000 for the first half of
2006. Our tax-exempt interest was from bank-qualified municipal securities and municipal loans. The tax equivalent adjustments were $345,000 and $183,000 for the first half of 2007 and 2006, respectively.

Provision for Loan Losses

The following table
sets forth an analysis of the Banks allowance for loan losses for the periods indicated:



|                                |  |                                                 |       |   |      |   |       |  
|------------------------------- |  | ----------------------------------------------- | ----- | - | ---- | - | ----- | -
|                                |  | (Dollars in thousands) Six Months EndedJune 30, |      
|                                |  | 2007                                            |       |   | 2006 |  
|Balance at beginning of quarter |  | $                                               | 2,616 |   |      | $ | 2,835 |  
|Provision for loan losses       |  |                                                 | 180   |   |      |   | 150   |  
|Charge-offs                     |  |                                                 | (108  | ) |      |   | (81   | )
|Recoveries                      |  |                                                 | 42    |   |      |   | 89    |  
|                                |  |                                                 |       |   |      |   |       |  
|Net recoveries (charge-offs)    |  |                                                 | (66   | ) |      |   | 8     |  
|                                |  |                                                 |       |   |      |   |       |  
|Balance at end of period        |  | $                                               | 2,730 |   |      | $ | 2,993 |  
|                                |  |                                                 |       |   |      |   |       |  

We had a provision of $180,000 in the first six months of 2007 compared to $150,000 for the same
period in 2006. The increase in provision expense was primarily due to additional reserves for the increase in the loan portfolio, specifically in commercial loans, which carry a higher risk of default, and an increase in net charge-offs, offset by
a decrease in classified and non-performing loans.

Other Income

The $97,000 increase in total other income for the first half of 2007, compared to the same period in 2006, resulted from an increase of $118,000 in
brokerage and insurance commissions, which was partially offset by a $42,000 decline in other fees and service charges related primarily to trust services fees. During 2006, the Company discontinued offering trust services. The improvement in
brokerage and insurance commissions was mainly due to significantly higher commission income from the investment center that resulted from increased sales.

Other Expense

The $615,000 increase in total other expense for the first six months of 2007, compared to the same
period of 2006, resulted primarily from higher total salaries and employee benefits expense and a significant increase in legal and professional fees.



| |  |  | The $340,000 increase in salaries and employee benefits resulted primarily from the $273,000 liability for severance pay recorded in the first quarter, and from
higher staffing levels in commercial lending and credit review.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The $211,000 increase in legal and professional fees was due primarily to a significant increase in costs associated with the continuing litigation related to the
RLI Insurance Company. See Part II, Item 1  Legal Proceedings for additional detail on legal proceedings.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Income Tax Expense

Although the loss before income taxes increased from $118,000 for the six months ended
June 30, 2006, to $316,000 for the same period of 2007, the income tax benefit recorded in the second half of 2007 actually decreased by $72,000 to $269,000 from $341,000 for the same period in 2006. This change in income tax benefit was
related primarily to the $219,000 income tax liability that resulted from the restructuring of the Companys BOLI program in 2007.



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##### Table of Contents

It should be noted that the income tax benefits recorded by the Company result primarily from a
substantial portfolio of municipal securities, and a significant portfolio of BOLI policies, which produce tax-exempt income.

OFF-BALANCE SHEET
ARRANGEMENTS

In the normal course of operations, we engage in a variety of financial transactions that, in accordance with GAAP, are
not recorded in our financial statements. These transactions involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers requests for funding and take the form of
loan commitments and lines of credit.

For the six months ended June 30, 2007, we did not engage in any off-balance sheet transactions
reasonably likely to have a material effect on our financial condition, results of operations or cash flows.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability to meet current and future obligations of a short-term nature. Historically, funds provided by operations,
loan repayments and new deposits have been our principal sources of liquid funds. In addition, we have the ability to obtain funds through the sale of mortgage loans, through borrowings from the FHLB system, through the brokered certificates market,
and securities sold under agreements to repurchase. We regularly adjust the investments in liquid assets based upon our assessment of (1) expected loan demand, (2) expected deposit flows, (3) yields available on interest-earning
deposits and securities and (4) the objectives of our asset/liability program.

At June 30, 2007, we had $2.5 million in loan
commitments outstanding and $36.7 million of available commercial and home equity lines of credit. Certificates of deposit due within one year of June 30, 2007, totaled $155.3 million, or 48.7% of total deposits. If these maturing certificates
of deposit do not remain with us, other sources of funds must be used, including other certificates of deposit, brokered CDs, securities sold under agreements to repurchase, and other borrowings. Depending on market conditions, we may be required to
pay higher rates on such deposits or other borrowings than the rates that we are now paying on those certificates of deposit that are due within one year of June 30, 2007. However, based on past experiences we believe that a significant portion
of the certificates of deposit will remain. We also have the ability to attract and retain deposits by adjusting the interest rates offered.

Our primary investing activity, the origination and purchase of loans, produced growth of $21.9 million in net loans receivable for the first six months of 2007, with $3.9 million coming from the purchase of one package of residential
mortgage loans. In the first six months of 2006, we experienced an increase of $5.2 million in net loans receivable, and the growth included the purchase of one package of $1.9 million of residential mortgage loans.

Financing activities consist primarily of activity in retail deposit accounts and FHLB advances. Deposit flows are affected by the overall level of
interest rates, the interest rates and products we offer, and our local competitors and other factors. Total deposits declined by $3.6 million and FHLB advances were reduced by $8.6 million during the first six months of 2007. There were no brokered
certificates at either June 30, 2007 or December 31, 2006.

In March 2006, the Company completed a private placement of $10.0
million in trust preferred securities. The proceeds from the private placement are included in Borrowings on the Consolidated Condensed Balance Sheets. The proceeds were used initially for paying down short-term borrowings and were also used to fund
the stock repurchase program. We paid $239,000 in cash dividends to our shareholders for the six-month period ended June 30, 2007, compared to $1.0 million for the same period of 2006. The dividend rates were $0.08 per share and $0.32 per share
for the first six months of 2007 and 2006, respectively.

The Bank is subject to various regulatory capital requirements set by the FDIC
including a risk-based capital measure. The Company is also subject to similar capital requirements set by the Federal Reserve Bank. The risk-based capital guidelines include both a definition of capital and a framework for calculating risk-weighted
assets by assigning balance sheet assets and off-balance sheet items to broad risk categories. At June 30, 2007, both the Company and the Bank exceeded all of their regulatory capital requirements and were considered well
capitalized under regulatory guidelines.



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AVAILABLE INFORMATION

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended, are made available free of charge on our website, www.ameriana.com, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission. Information
on our website should not be considered a part of this Form 10-Q.



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##### Table of Contents

ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Interest Rate Risk
(IRR) is the risk to earnings and capital arising from movements in interest rates. IRR can result from:



| |  |  | timing differences in the maturity/repricing of an institutions assets, liabilities, and off-balance sheet contracts;
| | - |  | ----------------------------------------------------------------------------------------------------------------------



| |  |  | the effect of embedded options, such as call or convertible options, loan prepayments, interest rate caps, and deposit withdrawals;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



| |  |  | unexpected shifts of the yield curve; and
| | - |  | -----------------------------------------



| |  |  | differences in the behavior of lending and funding rates, sometimes referred to as basis risk. An example would occur if floating rate assets and liabilities, with
otherwise identical repricing characteristics, were based on market indexes that were imperfectly correlated.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
Asset-Liability Committee and the Board of Directors review our exposure to interest rate changes and market risk quarterly. This review is accomplished by the use of a cash flow simulation model using detailed securities, loan, deposit, borrowings
and market information to estimate fair values of assets and liabilities using discounted cash flows. We monitor IRR from two perspectives:



| |  |  | Economic value at risk  long-term exposure
| | - |  | -------------------------------------------

The difference between the Banks estimated fair value of assets and the estimated fair value of liabilities is the fair value of equity, also referred to as net present value of equity (NPV). The
change in the NPV is calculated at different interest rate levels. This measures our IRR exposure from movements in interest rates and the resulting change in the NPV.



| |  |  | Earnings at risk  near-term exposure
| | - |  | -------------------------------------

The model also tests the impact various interest rate scenarios have on net interest income over a stated period of time (one year, for example). See Interest Rate Scenarios below.

We recognize that effective management of IRR includes an understanding of when potential adverse changes in interest rates will flow through the income
statement. Accordingly, we manage our position so that exposure to net interest income is monitored over both a one year planning horizon (accounting perspective) and a longer term strategic horizon (economic perspective).

Our objective is to manage our exposure to IRR, bearing in mind that we will always be in the business of taking on rate risk and that complete rate risk
immunization is not possible. Also, it is recognized that as exposure to IRR is reduced, so too may the net interest margin be reduced.

Interest
Rate Scenarios

Effect of change in net interest income for Year 1 and Year 2

(Dollars in thousands)



|                  |  |                               |        |                           |   |           |  |             |        |  |           |    |  |       |   
|----------------- |  | ----------------------------- | ------ | ------------------------- | - | --------- |  | ----------- | ------ |  | --------- | -- |  | ----- | --
|                  |  | Projected Net Interest Income |        | % Change From Year 1 Base |  
|                  |  | Down 200 bp                   |        | Base                      |   | Up 200 bp |  | Down 200 bp |        |  | Up 200 bp |   
|                  |  |                               |        |                          
|June 30, 2007     |  |                               |        |                           |   |           |  |             |        |  |           |    |  |       |   
|Year 1            |  | $                             | 11,095 |                           | $ | 11,271    |  | $           | 11,198 |  | (1.56     | )% |  | (0.65 | )%
|Year 2            |  | $                             | 11,288 |                           | $ | 11,555    |  | $           | 10,998 |  | 0.15      | %  |  | (2.42 | )%
|                  |  |                               |        |                           |  
|December 31, 2006 |  |                               |        |                           |   |           |  |             |        |  |           |    |  |       |   
|Year 1            |  | $                             | 10,289 |                           | $ | 10,434    |  | $           | 10,517 |  | (1.39     | )% |  | 0.80  | % 
|Year 2            |  | $                             | 10,703 |                           | $ | 11,074    |  | $           | 11,051 |  | 2.58      | %  |  | 5.92  | % 



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##### Table of Contents

The results from modeling our balance sheet structure as of June 30, 2007, incorporating current
replacement assumptions, indicate that our overall IRR exposure increased slightly from December 31, 2006 as we utilized strategies designed to grow net interest income. It should be noted, though, that our IRR exposure has been maintained well
within acceptable levels. The substantial increase in projected base net interest income at June 30, 2007, compared to December 31, 2006, is reflective primarily of the Companys improvement in net interest margin over the six month
period.

Management plans to remain highly focused on developing additional strategies designed to further grow net interest income, and
also intends to add interest rate risk hedge positions if it is determined to be necessary to keep the Company within reasonable risk levels.

ITEM 4  CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried out
an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our principal executive
officer and principal financial officer concluded that our disclosure controls and procedures are effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as
amended, (1) is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms and (2) is accumulated and communicated to our management, including our principal executive and principal
financial officers as appropriate to allow timely discussions regarding required disclosures. It should be noted that the design of our disclosure controls and procedures is based in part upon certain reasonable assumptions about the likelihood of
future events, and there can be no reasonable assurance that any design of disclosure controls and procedures will succeed in achieving its stated goals under all potential future conditions, regardless of how remote, but our principal executive and
financial officers have concluded that our disclosure controls and procedures are, in fact, effective at a reasonable assurance level. In addition, based on that evaluation, no change in the Companys internal control over financial reporting
occurred during the quarter ended June 30, 2007 that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.



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##### Table of Contents

PART II - OTHER INFORMATION

ITEM 1  LEGAL PROCEEDINGS

As previously reported, the Bank has been involved in litigation
relating to its interests in two pools of equipment leases originated by Commercial Money Center, Inc. (CMC), a California-based equipment leasing company that is now in bankruptcy. In June and September 2001, the Bank purchased the
income streams from two separate pools of commercial leases totaling $12.0 million. The leases within the pools were supported by surety bonds issued by American Motorist Insurance Company (AMICO) and RLI Insurance Company
(RLI), each rated at least A by A.M. Best at the time of the purchase. The bonds guaranteed payment of all amounts due under the leases in the event of default by the lessee. Each pool was sold under the terms of a Sales and
Servicing Agreement, which provided for the insurers to service the leases. In each case, the insurers assigned their servicing rights and responsibilities to Commercial Servicing Corporation, (CSC), a California-based company, which is
now in bankruptcy. When the lease pools went into default, notice was given to each insurer. AMICO made payments pursuant to the leases under a reservation of rights. RLI paid nothing. Both insurers claimed that they were defrauded by CMC, the
originator of the leases. Both denied responsibility for payment. The Bank has now settled all claims it has against AMICO arising from the pool of leases it bonded. The litigation continues against RLI. The pool of leases bonded by RLI consists of
approximately $6 million worth of lease payments.

During 2005, the Bank collected $1.1 million from the Trustee in the CMC/CSC
bankruptcies. These funds were applied to the balance owed in the RLI pool. Some of the lessees in that pool continued to pay through April of 2007. The Bank received $16,000 in payments during the six months ended June 30, 2007, compared to
$62,000 for the same period in 2006. We do not now expect to receive additional payments on these leases. It is the Banks intent to continue to aggressively pursue its claims against RLI for the principal and interest owed plus attorneys
fees, litigation expenses, and damages, and these amounts continue to increase. It is unlikely that the RLI litigation will be resolved in 2007.

ITEM 1A  RISK FACTORS

In addition to the other information set forth in this report, you should
carefully consider the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2006 which could materially affect our business, financial condition or future results. The
risks described in our Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business,
financial condition and/or operating results.

ITEM 2  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable

ITEM 3  DEFAULTS UPON SENIOR SECURITIES

Not Applicable

ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual Meeting of the Stockholders
of the Company was held on May 17, 2007. The results of the vote were as follows:

1. The following individuals were elected as
directors:



|                    |  |            |  |           |  |               
|------------------- |  | ---------- |  | --------- |  | --------------
|                    |  | Term       |  | Votes For |  | Votes Withheld
|Jerome J. Gassen    |  | Three Year |  | 1,834,734 |  | 553,250       
|Donald C. Danielson |  | Three Year |  | 1,840,531 |  | 547,453       



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##### Table of Contents

2. The appointment of BKD, LLP as independent auditors of Ameriana Bancorp for the year ending
December 31, 2007 was ratified by the stockholders as follows:



|          |  |         |  |        
|--------- |  | ------- |  | -------
|For       |  | Against |  | Abstain
|2,323,646 |  | 44,827  |  | 7,820  

ITEM 5  OTHER INFORMATION

Not Applicable

ITEM 6  EXHIBITS



No.

DescriptionExhibit 31,

Rule 13a-14(a)/15d-14(a) CertificationsExhibit 32,

Section 1350 Certifications




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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                      |  |  |  |                                                                                                                 
|--------------------- |  |  |  | ----------------------------------------------------------------------------------------------------------------
|                      |  |  |  | AMERIANA BANCORP                                                                                                
|                      |  | 
|DATE: August 13, 2007 |  |  |  | /s/ Jerome J. Gassen                                                                                            
|                      |  |  |  | Jerome J. Gassen                                                                                                
|                      |  |  |  | President and Chief Executive Officer                                                                           
|                      |  |  |  | (Duly Authorized Representative)                                                                                
|                      |  | 
|DATE: August 13, 2007 |  |  |  | /s/ John J. Letter                                                                                              
|                      |  |  |  | John J. Letter                                                                                                  
|                      |  |  |  | Senior Vice President-Treasurer and Chief Financial
Officer (Principal Financial Officer and Accounting Officer)