JOHNSTOWN, Pa., Jan. 24 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) returned to profitability in the fourth quarter of 2005 by
reporting net income of $220,000 or $0.01 per diluted share which compared
favorably to the net loss of $10.9 million or ($0.64) per diluted share
reported in the fourth quarter of 2004. For the full year 2005, the Company
reported a reduced net loss of $9.1 million or ($0.45) per share when compared
to the net loss of $9.7 million or ($0.66) per share for the 2004 year. The
following table highlights the Company's financial performance for both the
quarters and years ended December 31, 2005 and 2004:
Fourth Fourth Year Ended Year Ended
Quarter Quarter December 31, December 31,
2005 2004 2005 2004
Net income (loss) $220,000 ($10,941,000) ($9,141,000) ($9,719,000)
Diluted earnings
per share 0.01 (0.64) (0.45) (0.66)
Allan R. Dennison, President and Chief Executive Officer, commented on the
fourth quarter 2005 results, "All phases of our previously announced balance
sheet restructuring were successfully completed by the end of 2005. This
included, within the fourth quarter, the redemption at par of $7.2 million of
high coupon trust preferred securities for which the Company incurred a
$210,000 charge to write-off related unamortized issuance costs. AmeriServ
began to realize the benefits of a traditional community bank balance sheet in
the fourth quarter of 2005 as our net interest margin improved to 3.21%. This
represented an increase of 78 basis points over the third quarter 2005
performance and an increase of 86 basis points when compared to the 2004
fourth quarter net interest margin of 2.35%. We will now be able to fully
focus on community banking and our growing trust company in order to drive
meaningful earnings improvement in 2006.
The Company did not record a provision for loan losses in the fourth
quarter of 2005 compared to a provision of $1.1 million or 0.87% of total
loans in the fourth quarter of 2004. Net charge-offs were also lower in the
fourth quarter of 2005 amounting to $292,000 or 0.21% of total loans compared
to net charge-offs of $1.1 million or 0.84% of total loans in the prior year
fourth quarter. For the full year 2005, the Company recorded a negative loan
loss provision of $175,000 compared to a provision of $1.8 million for 2004 or
a net favorable change of $1.9 million. The overall reduced provision in 2005
resulted from a sustained improvement in asset quality. Net charge-offs in
2005 totaled $575,000 or only 0.11% of total loans compared to net charge-offs
of $3.4 million or 0.68% of total loans in 2004. Non-performing assets have
remained in a range of $3.3 to $5.0 million for the past six quarters ending
the 2005 year at $4.3 million or 0.78% of total loans. As a result of these
asset quality improvements and a reduced loan loss reserve, the allowance for
loan losses provided 212% coverage of non-performing assets at December 31,
2005 compared to 254% coverage at December 31, 2004. The allowance for loan
losses as a percentage of total loans amounted to 1.66% at December 31, 2005.
The Company's net interest income in the fourth quarter of 2005 increased
by $679,000 from the prior year fourth quarter and for the full year 2005
increased by $646,000 when compared to the full year 2004. This increase
reflects the benefit of an improved net interest margin that has more than
offset a sizable decline in the level of average earning assets. The improved
net interest margin has resulted from the balance sheet restructuring measures
executed in both the fourth quarter of 2004 and the third quarter of 2005.
This balance sheet restructuring was facilitated by the successful private
placement of $36.1 million of common stock over the past 15 months and
included the prepayment of $225 million of high cost Federal Home Loan Bank
(FHLB) borrowings and related interest rate hedges, and the retirement of
$22.5 million of 8.45% coupon trust preferred securities. Consequently, for
the fourth quarter of 2005 the net interest margin increased by 86 basis
points to 3.21% while the level of average earning assets declined by
$184 million when compared to the fourth quarter of 2004. For the full year
2005 the net interest margin increased by 48 basis points to 2.76% while the
level of average earning assets declined by $153 million when compared to the
full year 2004. For both the fourth quarter and full year 2005, the decline
in average assets was attributable to the sale of investment securities, the
proceeds of which were used to repay the FHLB debt. The Company's net
interest income, margin and average earning assets did benefit from increased
loans in the earning asset mix as total loans outstanding averaged
$525 million in 2005 a $28 million or 5.7% increase from 2004. This loan
growth was most evident in the commercial loan portfolio. Deposits continued
their recovery from the low point reached in the fourth quarter of 2004.
Total deposits averaged $700 million in 2005, a $37 million or 5.5% increase
from 2004 due largely to increased deposits from the trust company's
operations. This deposit growth also allowed the Company to further reduce
FHLB borrowings as these borrowings amounted to only 7.3% of total assets at
December 31, 2005 compared to 25.0% of total assets at December 31, 2004.
The Company's non-interest income in the fourth quarter of 2005 increased
by $580,000 from the prior year fourth quarter but for the full year 2005
declined by $3.8 million when compared to 2004. The fourth quarter 2005
improvement was due to no losses realized on investment security sales in the
fourth quarter of 2005 compared to $460,000 of losses realized on investment
security sales in the fourth quarter of 2004. Also, trust fees increased by
$193,000 or 14.1% due to continued successful new business development
efforts. The largest factor responsible for the full year 2005 $3.8 million
decline in non-interest income was $2.5 million of losses on investment
security sales associated with the third quarter balance sheet restructuring.
The Company had realized investment security gains of $816,000 in 2004 thus
causing a net unfavorable change of $3.3 million. Other income declined by
$915,000 for the full year 2005 as the Company benefited from $578,000 of
additional gains on the sale of other real estate owned properties in 2004.
Lower mortgage production related revenues also contributed to the decrease in
other income in 2005 and a $142,000 decline in gains on loan sales into the
secondary market. These items overshadowed a $766,000 or 14.3% increase in
trust fees for the full year 2005 due to continued successful new business
development efforts and the full benefit of new customer fee schedules that
were implemented in the fourth quarter of 2004.
The Company's non-interest expense in the fourth quarter of 2005 decreased
by $13.7 million from the prior year fourth quarter and for the full year 2005
declined by $671,000 when compared to 2004. The fourth quarter 2004 included
$12.6 million of FHLB debt prepayment penalties related to the retirement of
$125 million of FHLB convertible advances. The Company incurred a similar
charge of $12.3 million in the third quarter of 2005 related to the prepayment
of all remaining $100 million of FHLB convertible advances and the termination
of all interest rate hedges associated with this FHLB debt. The fourth
quarter of 2004 also included a $476,000 charge to write-off unamortized
issuance costs related to the $15.3 million of trust preferred securities that
were retired last year. The Company's fourth quarter 2005 expenses included a
charge of $210,000 to write-off unamortized issuance costs related to the
$7.2 million of trust preferred securities that were retired in the fourth
quarter of 2005. Aside from these balance sheet restructuring related costs,
professional fees were up by $545,000 for the full year 2005 due to costs
associated with implementing Sarbanes-Oxley Section 404. The Company did
benefit from reduced amortization of core deposit intangibles that decreased
by $285,000 for the full year 2005 and a $153,000 reduction in occupancy and
equipment expenses due to cost savings from closure of the Company's
Harrisburg branch office and lower property taxes. Also, the loss from
discontinued operations declined by $735,000 in the fourth quarter of 2005 and
by $1.1 million for the full year 2005 as a result of the closure of the
unprofitable mortgage servicing operation. Overall, excluding all balance
sheet restructuring related charges, the Company's ongoing focus on reducing
expenses resulted in lower non-interest expenses in 2005 despite the
additional costs associated with implementing Sarbanes-Oxley Section 404.
The Company recognized an income tax benefit of approximately $5.9 million
for both the full year 2005 and 2004 due to the pre-tax losses incurred in
both years and the Company's belief that it will generate sufficient earnings
in future periods to utilize these net operating loss carryforwards. In 2005
and 2004, the Company also lowered its income tax expense by approximately
$475,000 and $700,000, respectively, due to a reduction in reserves for prior
year tax contingencies as a result of the successful conclusion of an IRS
examination on several open tax years.
At December 31, 2005, ASRV had total assets of $880 million and
shareholders' equity of $85 million or $3.82 per share. The Company's asset
leverage ratio improved to 10.24% at December 31, 2005 compared to 9.20% at
December 31, 2004. AmeriServ Financial, Inc., is the parent of AmeriServ
Financial Bank and AmeriServ Trust & Financial Services in Johnstown,
AmeriServ Associates of State College, and AmeriServ Life Insurance Company.
This news release may contain forward-looking statements that involve
risks and uncertainties, as defined in the Private Securities Litigation
Reform Act of 1995, including the risks detailed in the Company's Annual
Report and Form 10-K to the Securities and Exchange Commission. Actual
results may differ materially.
NASDAQ NMS: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA
January 24, 2006
(In thousands, except per share and ratio data)
(All quarterly and 2005 data unaudited)
2005
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA
FOR THE PERIOD:
Net income (loss) $833 $370 ($10,564) $220 $(9,141)
PERFORMANCE PERCENTAGES
(annualized):
Return on average
equity 3.95% 1.75% (49.42)% 1.03% (10.77)%
Net interest margin 2.75 2.63 2.43 3.21 2.76
Net charge-offs
as a percentage
of average loans 0.05 0.06 0.11 0.21 0.11
Loan loss
provision as a
percentage of
average loans - (0.21) 0.08 - (0.03)
Efficiency ratio 94.42 96.81 362.60 96.65 143.54
PER COMMON SHARE:
Net income (loss):
Basic $0.04 $0.02 $(0.53) $0.01 $(0.45)
Average
number of
common shares
outstanding 19,720,827 19,726,345 19,785,455 22,109,065 20,340,459
Diluted 0.04 0.02 (0.53) 0.01 (0.45)
Average number
of common
shares
outstanding 19,760,049 19,764,647 19,785,455 22,123,011 20,340,459
2004
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA
FOR THE PERIOD:
Net income (loss) $226 $254 $742 $(10,941) $(9,719)
PERFORMANCE PERCENTAGES
(annualized):
Return on average
equity 1.21% 1.41% 4.21% (54.13)% (13.04)%
Net interest margin 2.39 2.25 2.15 2.35 2.28
Net charge-offs
as a percentage
of average loans 0.48 0.48 0.92 0.84 0.68
Loan loss
provision as a
percentage of
average loans 0.31 0.21 - 0.87 0.35
Efficiency ratio 93.83 94.80 96.89 295.04 138.03
PER COMMON SHARE:
Net income (loss):
Basic $0.02 $0.02 $0.05 $(0.64) $(0.66)
Average number of
common shares
outstanding 13,962,010 13,969,211 13,975,838 17,208,353 14,783,297
Diluted 0.02 0.02 0.05 (0.64) (0.66)
Average number
of common
shares
outstanding 14,025,836 14,023,577 14,009,952 17,208,353 14,783,297
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
(All quarterly and 2005 data unaudited)
2005
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT
PERIOD END:
Assets $996,450 $996,786 $901,194 $880,176
Investment securities 381,124 385,398 253,082 231,924
Loans 527,344 522,437 544,900 550,602
Allowance for loan losses 9,856 9,480 9,435 9,143
Goodwill and core deposit
intangibles 12,896 12,680 12,464 12,247
Mortgage servicing rights - - - -
Deposits 725,369 691,740 698,297 712,655
Stockholders' equity 83,720 86,267 85,022 84,474
Trust assets - fair market
value (B) 1,465,028 1,487,496 1,600,968 1,606,978
Non-performing assets 3,819 3,334 3,323 4,316
Asset leverage ratio 9.77% 9.92% 9.90% 10.24%
PER COMMON SHARE:
Book value (A) $4.24 $4.37 $3.85 $3.82
Market value 5.61 5.35 4.35 4.38
Market price to book value 132.35% 122.36% 113.07% 114.65%
STATISTICAL DATA AT
PERIOD END:
Full-time equivalent employees 394 383 384 378
Branch locations 22 22 22 22
Common shares outstanding 19,722,884 19,729,678 22,105,786 22,112,273
2004
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT
PERIOD END:
Assets $1,099,564 $1,178,406 $1,088,849 $1,009,976
Investment securities 504,980 581,553 488,617 401,019
Loans 503,404 500,522 506,551 521,416
Allowance for loan losses 11,379 10,932 9,827 9,893
Goodwill and core deposit
intangibles 13,905 13,547 13,329 13,112
Mortgage servicing rights 1,493 1,642 1,395 -
Deposits 656,348 670,941 659,176 644,391
Stockholders' equity 77,721 67,213 73,471 85,219
Trust assets - fair market
value (B) 1,256,064 1,246,458 1,228,126 1,309,362
Non-performing assets 13,482 10,155 5,047 3,894
Asset leverage ratio 7.75% 7.71% 7.85% 9.20%
PER COMMON SHARE:
Book value $5.57 $4.81 $5.26 $4.32
Market value 6.10 5.55 5.00 5.17
Market price to book value 109.52% 115.50% 95.13% 119.62%
STATISTICAL DATA AT
PERIOD END:
Full-time equivalent employees 415 412 409 406
Branch locations 23 23 23 23
Common shares outstanding 13,965,737 13,972,424 13,978,726 19,717,841
Note:
(A) Other comprehensive income had a negative impact of $0.18 on book
value per share at December 31, 2005.
(B) Not recognized on the balance sheet
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2005 data unaudited)
2005
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $7,954 $8,105 $8,200 $8,688 $32,947
Total investment portfolio 3,737 3,607 3,273 2,301 12,918
Total Interest Income 11,691 11,712 11,473 10,989 45,865
INTEREST EXPENSE
Deposits 2,845 3,188 3,290 3,662 12,985
All other funding sources 2,551 2,533 2,725 959 8,768
Total Interest Expense 5,396 5,721 6,015 4,621 21,753
NET INTEREST INCOME 6,295 5,991 5,458 6,368 24,112
Provision of loan losses - (275) 100 - (175)
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,295 6,266 5,358 6,368 24,287
NON-INTEREST INCOME
Trust fees 1,472 1,506 1,586 1,565 6,129
Net realized gains (losses) on
investment securities
available for sale 78 - (2,577) - (2,499)
Net realized gains on loans
held for sale 72 83 27 27 209
Service charges on deposit
accounts 584 704 723 689 2,700
Bank owned life insurance 250 254 256 257 1,017
Other income 692 633 643 685 2,653
Total Non-Interest Income 3,148 3,180 658 3,223 10,209
NON-INTEREST EXPENSE
Salaries and employee benefits 4,751 4,680 4,804 4,827 19,062
Net occupancy expense 668 592 609 683 2,552
Equipment expense 639 622 620 628 2,509
Professional fees 823 938 1,483 998 4,242
FDIC deposit insurance expense 71 69 76 73 289
Amortization of core deposit
intangibles 216 216 216 217 865
Prepayment penalties - - 12,287 - 12,287
Other expenses 1,775 1,789 2,183 1,867 7,614
Total Non-Interest Expense 8,943 8,906 22,278 9,293 49,420
INCOME (LOSS) BEFORE INCOME
TAXES 500 540 (16,262) 298 (14,924)
Provision (benefit) for income
taxes (398) 96 (5,689) 89 (5,902)
Income (loss) from continuing
operations $898 $444 $(10,573) $209 $(9,022)
Income (loss) from discontinued
operations (65) (74) 9 11 (119)
NET INCOME (LOSS) $833 $370 $(10,564) $220 $(9,141)
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly data unaudited)
2004
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $7,691 $7,679 $7,346 $7,581 $30,297
Total investment portfolio 5,228 4,943 5,352 4,284 19,807
Total Interest Income 12,919 12,622 12,698 11,865 50,104
INTEREST EXPENSE
Deposits 2,543 2,529 2,628 2,636 10,336
All other funding sources 4,164 4,180 4,418 3,540 16,302
Total Interest Expense 6,707 6,709 7,046 6,176 26,638
NET INTEREST INCOME 6,212 5,913 5,652 5,689 23,466
Provision of loan losses 384 259 - 1,115 1,758
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,828 5,654 5,652 4,574 21,708
NON-INTEREST INCOME
Trust fees 1,267 1,347 1,377 1,372 5,363
Net realized gains (losses) on
investment securities
available for sale 937 111 228 (460) 816
Net realized gains on loans
held for sale 40 115 108 88 351
Service charges on deposit
accounts 730 716 692 668 2,806
Bank owned life insurance 275 276 279 278 1,108
Other income 690 796 1,385 697 3,568
Total Non-Interest Income 3,939 3,361 4,069 2,643 14,012
NON-INTEREST EXPENSE
Salaries and employee benefits 4,710 4,605 4,706 4,992 19,013
Net occupancy expense 712 653 620 651 2,636
Equipment expense 648 630 611 689 2,578
Professional fees 796 827 1,091 983 3,697
FDIC deposit insurance expense 72 71 72 72 287
Amortization of core deposit
intangibles 358 358 218 216 1,150
Prepayment penalties - - - 12,637 12,637
Other expenses 1,888 1,693 1,726 2,786 8,093
Total Non-Interest Expense 9,184 8,837 9,044 23,026 50,091
INCOME BEFORE INCOME TAXES 583 178 677 (15,809) (14,371)
Provision (benefit) for income
taxes 126 (55) (324) (5,592) (5,845)
Income (loss) from continuing
operations $457 $233 $1,001 $(10,217) $(8,526)
Income (loss) from discontinued
operations (231) 21 (259) (724) (1,193)
NET INCOME (LOSS) $226 $254 $742 $(10,941) $(9,719)
AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2005 data unaudited)
Note: 2004 data appears before 2005.
2004 2005
TWELVE TWELVE
4QTR MONTHS 4QTR MONTHS
Interest earning assets:
Loans and loans held for sale,
net of unearned income $505,933 $496,912 $540,325 $525,401
Deposits with banks 11,608 6,276 816 770
Federal funds sold - 68 - -
Total investment securities 453,232 527,958 246,096 351,955
Total interest earning assets 970,773 1,031,214 787,237 878,126
Non-interest earning assets:
Cash and due from banks 21,817 21,793 21,235 21,449
Premises and equipment 10,052 10,493 8,949 9,365
Assets of discontinued operations 2,320 2,891 821 1,135
Other assets 58,528 61,952 66,040 63,401
Allowance for loan losses (9,444) (10,674) (9,311) (9,613)
Total assets 1,054,046 1,117,669 874,971 963,863
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 54,769 53,502 55,244 54,695
Savings 100,054 104,187 91,324 96,819
Money market 119,997 120,280 166,168 156,932
Other time 275,718 279,458 288,108 284,951
Total interest bearing deposits 550,538 557,427 600,844 593,397
Borrowings:
Federal funds purchased,
securities sold under
agreements to repurchase, and
other short-term borrowings 123,393 128,017 55,316 78,152
Advanced from Federal Home
Loan Bank 154,875 208,444 993 73,924
Guaranteed junior subordinated
deferrable interest debentures 32,667 34,842 16,525 19,345
Total interest bearing
liabilities 861,473 928,730 673,678 764,818
Non-interest bearing liabilities:
Demand deposits 105,538 106,249 110,876 107,018
Liabilities of discontinued
operations 649 498 222 379
Other liabilities 5,983 7,635 5,974 6,780
Stockholders' equity 80,403 74,557 84,221 84,868
Total liabilities and
stockholders' equity $1,054,046 $1,117,669 $874,971 $963,863
SOURCE AmeriServ Financial, Inc.
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Related links:
http://www.ameriservfinancial.com
CONTACT:
Jeffrey A. Stopko, Senior Vice President &
Chief Financial Officer of AmeriServ Financial, Inc.,
+1-814-533-5310
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