JOHNSTOWN, Pa., Jan. 25 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV), as expected, reported a loss of $10.9 million or ($0.63)
per diluted share for the fourth quarter of 2004 compared to net income of
$180,000 or $0.01 per diluted share for the fourth quarter of 2003. For the
full year 2004, the Company reported a net loss of $9.7 million or ($0.66) per
diluted share compared to net income of $549,000 or $0.04 per diluted share
for the 2003 year. The following table highlights the Company's financial
performance for both the quarters and years ended December 31, 2004 and 2003:
Fourth Fourth Year Ended Year Ended
Quarter Quarter December 31, December 31,
2004 2003 2004 2003
Net income (loss) ($10,941,000) $180,000 ($9,719,000) $549,000
Diluted earnings per share (0.63) 0.01 (0.66) 0.04
The previously announced successful completion of a $25.8 million private
placement common stock offering provided the Company with the capital
necessary to execute a series of transactions in the fourth quarter of 2004
which were designed to eliminate or substantially reduce structural
impediments that were negatively impacting the Company's earnings growth.
These transactions and their related impact on fourth quarter earnings were as
follows: 1) The Company retired $125 million in Federal Home Loan Bank (FHLB)
borrowings that had a cost of approximately 6.0% and a 2010 maturity. The
Company incurred a $12.6 million pre-tax prepayment penalty to accomplish this
transaction. 2) The Company redeemed $15.3 million of its trust preferred
securities that had an 8.45% annual dividend requirement. The Company wrote-
off $476,000 of unamortized issuance costs in conjunction with this
transaction which is included within other expense. 3) The Company sold all
remaining mortgage servicing rights and took the necessary steps to terminate
operations at Standard Mortgage Corporation in Atlanta, Georgia. The Company
incurred $820,000 of closing charges as part of a $1.1 million pre-tax loss
from discontinued operations in the fourth quarter of 2004 to accomplish this
transaction. 4) The Company incurred losses of $460,000 by selling
$47 million of the longest duration securities in its investment portfolio.
These sales helped provide the funds needed to retire the FHLB borrowings and
shortened the duration of the investment securities portfolio. 5) The Company
announced the closing of its outpost branch office in Harrisburg and incurred
costs of $170,000 in conjunction with this transaction which is reflected in
other expense. The execution of these transactions combined with the capital
provided from the successful private placement common stock offering
strengthened the Company's balance sheet and reduced its risk profile. At
December 31, 2004, the Company's asset leverage ratio improved to 9.20%
compared to 7.58% at December 31, 2003.
Allan R. Dennison, President and Chief Executive Officer, commented on the
fourth quarter 2004 results, "While there was considerable cost associated
with executing these balance sheet repositioning strategies, it was absolutely
necessary for the Company to take these corrective actions. In addition to
improving the future earnings power of the Company, both the Company and
subsidiary bank's capital positions have been strengthened and cash reserves
have been restored at the Parent Company. We now have more resources to
continue our turnaround and fully focus on community banking."
The Company's provision for loan losses totaled $1,100,000 or 0.87% of
total loans in the fourth quarter of 2004. This represented an increase of
$731,000 from the fourth quarter 2003 provision of $384,000 or 0.31% of total
loans. The fourth quarter 2004 provision was slightly higher than the net
charge-offs for the quarter which totaled $1,076,000 or 0.84% of total loans.
For the full year 2004, the Company's provision for loan losses totaled
$1.7 million or 0.35% of total loans; a decrease of $1.2 million from the full
year 2003 provision of $2.9 million or 0.56% of total loans. Net charge-offs
in 2004 totaled $3.4 million or 0.68% of total loans compared to net charge-
offs of $1.2 million or 0.22% of total loans in 2003. The higher net charge-
offs in 2004 reflect $1.0 million in charge-offs in the fourth quarter on
previously identified problem credits, a $914,000 charge-off realized in the
third quarter as result of the successful sale of a $4.3 million non-
performing asset, a $625,000 write-down of a $4.8 million loan on a personal
care facility that was moved into other real estate owned in the first quarter
of 2004 and subsequently sold in the third quarter, and increased charge-offs
on consumer loans.
Overall however, the lower provision for loan losses in 2004 reflects
improvements in asset quality most evidenced by lower levels of non-performing
assets and classified loans. Specifically, successful workout efforts caused
non-performing assets to decline from $11.4 million or 2.26% of total loans at
December 31, 2003 to $3.9 million or 0.75% of total loans at December 31,
2004. The allowance for loan losses provided 254% coverage of non-performing
assets at December 31, 2004 compared to 102% coverage at December 31, 2003.
The allowance for loan losses as a percentage of total loans amounted to 1.89%
at December 31, 2004 compared to 2.32% at December 31, 2003.
The Company's net interest income in the fourth quarter of 2004 decreased
by $178,000 from the prior year fourth quarter and for the full year 2004
declined by $1.2 million when compared to 2003. The fourth quarter 2004 net
interest margin of 2.35% was up 14 basis points from the prior year fourth
quarter and up 20 basis points from the more recent third quarter of 2004.
This improved net interest margin reflects some initial benefit from the
deleverage of the higher cost borrowings during the fourth quarter of 2004.
This deleverage of the balance sheet caused a reduction in earning assets
which were $92 million lower on average when compared to the fourth quarter of
2003. It was this decline in earning assets that caused the decrease in net
interest income in the fourth quarter of 2004. The decline in net interest
income for the full year 2004 also resulted from a reduced level of earning
assets and a three basis point drop in the net interest margin to 2.28%. Loan
portfolio shrinkage experienced during the majority of 2003 was a predominant
factor contributing to both the lower level of earning assets in 2004 and the
net interest margin contraction. The Company did however experience
commercial loan growth during the latter part of the fourth quarter of 2004.
As a result of this increased commercial loan production, the December 31,
2004 total loan balance was $522 million, which was $19 million or 3.8% higher
than the $503 million total at December 31, 2003.
The Company's total non-interest income decreased by $1.1 million when the
fourth quarter of 2004 is compared to the fourth quarter of 2003. The largest
factor responsible for this decline was the previously mentioned $460,000
investment security loss as compared to a $687,000 gain realized in the fourth
quarter of 2003. Total non-interest income for the full year 2004 decreased
by $3.0 million when compared to 2003. Fewer gains realized on asset sales
was the primary factor responsible for the lower non-interest income in 2004.
Specifically, gains realized on the sale of investment securities dropped by
$3.0 million due to the higher interest rate environment in place in 2004.
This higher rate environment in 2004 also had a negative impact on new
residential mortgage origination and refinance volumes as gains realized on
the sale of mortgage loans into the secondary market decreased by $281,000 in
2004. These negative items were partially offset by a $370,000 increase in
trust fees due to continued successful union-related new business development
efforts and a $379,000 increase in other income as a result of a gain
generated on the sale of an other real estate owned property.
The Company's non-interest expense for both the fourth quarter and full
year 2004 increased by approximately $14.1 million from the same 2003 periods.
The previously discussed special charges related to the FHLB prepayment
penalty, the redemption of a portion of the trust preferred securities, and
the closure of the Harrisburg branch office were the predominant factors
causing the increased non-interest expense. The remainder of the increase
relates to higher salaries and benefits costs due to increased health
insurance premiums, higher pension costs, and the payment of a lump sum bonus
to union employees in the fourth quarter of 2004 as a result of the new
collective bargaining agreement. Expense reductions, however, were
experienced in several categories including equipment expense, professional
fees, and amortization of core deposit intangibles.
The Company's fourth quarter and full year 2004 net income performance was
favorably impacted by an increased income tax benefit. Specifically in 2004,
the Company lowered its income tax expense by a net $600,000 due to a
reduction in reserves for prior year tax contingencies.
At December 31, 2004, ASRV had total assets of $1.0 billion and
shareholders' equity of $85 million or $4.32 per share. 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 25, 2005
(In thousands, except per share and ratio data)
(All quarterly and 2004 data unaudited)
2004
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA FOR
THE PERIOD:
Net income $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:
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 (0.63) (0.66)
Average number of
common shares
outstanding 14,025,836 14,023,577 14,009,952 17,234,647 14,827,931
2003
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA FOR
THE PERIOD:
Net income $(795) $915 $249 $180 $549
PERFORMANCE PERCENTAGES
(annualized):
Return on average
equity (4.17)% 4.68% 1.31% 1.00% 0.74%
Net interest margin 2.48 2.41 2.14 2.21 2.31
Net charge-offs as a
percentage of average
loans 0.20 0.02 0.33 0.35 0.22
Loan loss provision
as a percentage of
average loans 1.19 0.40 0.30 0.31 0.56
Efficiency ratio 94.98 84.81 94.05 95.15 91.98
PER COMMON SHARE:
Net income:
Basic $(0.06) $0.07 $0.02 $0.01 $0.04
Average number of
common shares
outstanding 13,923,010 13,935,086 13,945,889 13,954,044 13,939,610
Diluted (0.06) 0.07 0.02 0.01 0.04
Average number of
common shares
outstanding 13,923,010 13,940,460 13,954,648 13,972,328 13,947,895
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical,
and ratio data)
(All quarterly and 2004 data unaudited)
2004
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT PERIOD
END
Assets $1,099,564 $1,178,406 $1,088,849 $1,009,888
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 (A) $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 $0.17 on book
value per share at December 31, 2004.
(B) Not recognized on the balance sheet
2003
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT PERIOD
END
Assets $1,190,360 $1,167,610 $1,160,915 $1,147,886
Investment securities 546,427 554,967 577,374 552,662
Loans 555,335 525,591 496,951 503,387
Allowance for loan losses 11,415 11,916 11,872 11,682
Goodwill and core deposit
intangibles 15,337 14,979 14,621 14,263
Mortgage servicing rights 2,214 1,784 1,859 1,718
Deposits 669,103 661,932 648,844 654,597
Stockholders' equity 77,864 78,884 75,188 74,270
Trust assets - fair market
value (B) 1,091,391 1,146,695 1,107,022 1,145,660
Non-performing assets 11,687 10,163 11,227 11,411
Asset leverage ratio 7.23% 7.39% 7.48% 7.58%
PER COMMON SHARE:
Book value $5.59 $5.66 $5.39 $5.32
Market value 3.50 3.80 4.17 5.00
Market price to book value 62.61% 67.14% 77.37% 93.98%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 416 427 422 413
Branch locations 23 23 23 23
Common shares outstanding 13,929,324 13,940,999 13,949,383 13,957,599
Note:
(B) Not recognized on the balance sheet
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2004 data unaudited)
2004
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $7,686 $7,675 $7,345 $7,578 $30,284
Total investment portfolio 5,228 4,943 5,352 4,284 19,807
Total Interest Income 12,914 12,618 12,697 11,862 50,091
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 6,207 5,909 5,651 5,686 23,453
Provision of loan losses 375 250 - 1,100 1,725
NET INTEREST INCOME AFTER
PROVISION
FOR LOAN LOSSES 5,832 5,659 5,651 4,586 21,728
NON-INTEREST INCOME
Trust fees 1,267 1,347 1,377 1,372 5,363
Net realized gains (loss) 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
FHLB 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 (LOSS) BEFORE INCOME TAXES 587 183 676 (15,797) (14,351)
Provision (benefit) for income
taxes 127 (53) (324) (5,588) (5,838)
Income (Loss) from continuing
operations $460 $236 $1,000 $(10,209) $(8,513)
Income (Loss) from discontinued
operations (234) 18 (258) (732) (1,206)
NET INCOME (LOSS) $226 $254 $742 $(10,941) $(9,719)
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2004 data unaudited)
2003
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $9,079 $8,589 $8,040 $7,581 $33,289
Total investment portfolio 5,660 5,630 5,035 5,372 21,697
Total Interest Income 14,739 14,219 13,075 12,953 54,986
INTEREST EXPENSE
Deposits 3,140 2,965 2,765 2,633 11,503
All other funding sources 4,956 4,827 4,618 4,456 18,857
Total Interest Expense 8,096 7,792 7,383 7,089 30,360
NET INTEREST INCOME 6,643 6,427 5,692 5,864 24,626
Provision of loan losses 1,600 525 375 375 2,875
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,043 5,902 5,317 5,489 21,751
NON-INTEREST INCOME
Trust fees 1,253 1,253 1,254 1,233 4,993
Net realized gains on investment
securities available for sale 1,278 1,420 402 687 3,787
Net realized gains on loans held
for sale 173 221 165 73 632
Service charges on deposit accounts 767 800 812 801 3,180
Bank owned life insurance 298 307 305 304 1,214
Other income 757 920 879 633 3,189
Total Non-Interest Income 4,526 4,921 3,817 3,731 16,995
NON-INTEREST EXPENSE
Salaries and employee benefits 4,517 4,482 4,520 4,478 17,997
Net occupancy expense 706 658 636 635 2,635
Equipment expense 745 684 629 636 2,694
Professional fees 887 1,037 943 913 3,780
FDIC deposit insurance expense 28 26 75 72 201
Amortization of core deposit
intangibles 358 358 358 358 1,432
Other expenses 1,763 1,811 1,772 1,817 7,163
Total Non-Interest Expense 9,004 9,056 8,933 8,909 35,902
INCOME BEFORE INCOME TAXES 565 1,767 201 311 2,844
Provision (benefit) for income taxes 183 493 (53) (13) 610
Income from continuing operations $382 $1,274 $254 $324 $2,234
Loss from discontinued operations (1,177) (359) (5) (144) (1,685)
NET INCOME (LOSS) $(795) $915 $249 $180 $549
AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2004 data unaudited)
Note: 2003 data appears before 2004.
2003 2004
TWELVE TWELVE
4QTR MONTHS 4QTR MONTHS
Interest earning assets:
Loans and loans held for sale,
net of unearned income $484,296 $516,250 $505,933 $496,912
Deposits with banks 4,753 5,294 11,608 6,276
Federal funds sold - 29 - 68
Total investment securities 573,608 542,189 453,232 527,958
Total interest earning
assets 1,062,657 1,063,762 970,773 1,031,214
Non-interest earning assets:
Cash and due from banks 22,387 22,371 21,817 21,793
Premises and equipment 11,374 11,950 10,052 10,493
Other assets 60,997 66,005 60,848 64,843
Allowance for loan losses (11,866) (11,431) (9,444) (10,674)
Total assets 1,145,549 1,152,657 1,054,046 1,117,669
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 51,881 51,872 54,769 53,502
Savings 103,390 103,450 100,054 104,187
Money market 119,787 123,845 119,997 120,280
Other time 278,618 282,838 275,718 279,458
Total interest bearing
deposits 553,676 562,005 550,538 557,427
Borrowings:
Federal funds purchased,
securities sold under
agreements to repurchase,
and other short-term
borrowings 126,600 105,780 123,393 128,017
Advanced from Federal Home
Loan Bank 250,408 265,184 154,875 208,444
Guaranteed junior
subordinated deferrable
interest debentures* 34,500 34,500 32,667 34,842
Total interest bearing
liabilities 965,184 967,469 861,473 928,730
Non-interest bearing
liabilities:
Demand deposits 103,038 104,330 105,538 106,249
Other liabilities 5,634 6,461 6,632 8,133
Stockholders' equity 71,693 74,397 80,403 74,557
Total liabilities and
stockholders' equity $1,145,549 $1,152,657 $1,054,046 $1,117,669
* In the first quarter 2004 the Company adopted FIN46R which resulted in
the deconsolidation of the capital trust subsidiary.
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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