JOHNSTOWN, Pa., Jan. 27 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) completed its third consecutive quarter of profitability
by reporting net income for the fourth quarter of 2003 of $180,000 or $0.01
per diluted share. This represents significant improvement and a dramatic
turnaround from the net loss of $2.0 million or $0.14 per share reported in
the fourth quarter of 2002. As a result of the Company's success in achieving
three consecutive quarters of profitability, the Company is also profitable
for the year ended December 31, 2003 with net income of $549,000 or $0.04 per
diluted share compared to a net loss of $5.2 million or $0.37 per share for
the year ended December 31, 2002. The continuation of the turnaround
contributed to the improved level of performance in virtually every facet of
the operation. The following table highlights the Company's financial
performance for both the quarters and years ended December 31, 2003 and 2002:
Fourth Fourth Year Year
Quarter Quarter Ended Ended
2003 2002 Dec. 31, 2003 Dec. 31, 2002
Net income (loss) $180,000 ($1,962,000) $549,000 ($5,152,000)
Diluted earnings
(loss) per share 0.01 (0.14) 0.04 (0.37)
At December 31, 2003, ASRV had total assets of $1.15 billion and
shareholders' equity of $72 million or $5.14 per share. The Company is well
capitalized for regulatory purposes with an asset leverage ratio at December
31, 2003 of 7.29%, compared to a regulatory minimum of 5.0%.
The Company's provision for loan losses totaled $384,000 or 0.31% of total
loans in the fourth quarter of 2003. This represented a decrease of $4.1
million from the fourth quarter 2002 provision of $4.5 million or 3.06% of
total loans. For the full year 2003, the Company's provision for loan losses
totaled $3.0 million or 0.56% of total loans; a decrease of $6.3 million from
the full year 2002 provision of $9.3 million or 1.56% of total loans. Net
charge-offs also experienced a decline dropping from $5.1 million or 0.85% of
total loans for the full year 2002 to $1.2 million or 0.22% of total loans in
2003.
The Company's allowance for loan losses totaled $11.7 million at December
31, 2003 providing 102% coverage of non-performing assets. Non-performing
assets totaled $11.4 million at December 31, 2003, which represented an
increase of $4.4 million from the December 31, 2002 level of $7.0 million.
Comparable with other quarter-ends in 2003, the Company's largest non-
performing asset continues to be a $4.8 million commercial mortgage loan to a
borrower in the personal care industry. This loan is supported by an 80%
guarantee by the U.S. Department of Agriculture and is secured by a first
mortgage on the personal care facility. If the government guaranteed portion
of this commercial mortgage were excluded from the non-performing asset
totals, the loan loss reserve coverage of non-performing assets would amount
to 154% at December 31, 2003. Overall, the allowance for loan losses as a
percentage of total loans increased to 2.32% at December 31, 2003 compared to
1.75% at December 31, 2002 due to an increase in the allowance for loan losses
and a decline in total loans outstanding.
The Company's net interest income in the fourth quarter of 2003 decreased
by $816,000 from the prior year fourth quarter due to a reduced level of
earning assets and a 26 basis point decline in the net interest margin to
2.21%. When the full year 2003 is compared to 2002, net interest income
declined by $2.7 million also due to a lower level of earning assets and 20
basis point drop in the net interest margin to 2.31%. Loan portfolio
shrinkage experienced during 2003 was a predominant factor contributing to
both the lower level of earning assets and the net interest margin
contraction. The overall net decrease in average loans outstanding on both an
annual and quarterly basis reflects significant prepayments caused by the low
interest rate environment and the Company's internal focus on improving asset
quality. The Company completed the restructuring of its lending division
during the third quarter of 2003 and did report for the first time in six
quarters modest growth in total loans between September 30, 2003 and December
31, 2003. This fourth quarter 2003 stabilization of balances in the loan
portfolio combined with a slow down in premium amortization on the Company's
mortgage backed securities resulted in a seven basis point sequential quarter
increase in the net interest margin from 2.14% in the third quarter of 2003 to
2.21% in the fourth quarter of 2003.
The Company's total non-interest income in the fourth quarter of 2003
declined by $1.2 million from the prior year fourth quarter due primarily to
fewer gains realized on asset sales. These included: a $300,000 decrease in
gains on investment security sales, a $281,000 decline in gains realized on
the sale of mortgage loans into the secondary market, and the non-recurrence
of a $185,000 gain realized on the sale of the merchant card business in the
fourth quarter of 2002. The Company's decision to exit the merchant card
business also was a factor contributing to the decline in other income. These
negative items were partially offset by a $152,000 or 14.1% increase in trust
fees due to successful union related new business development efforts. The
items responsible for the quarterly decline also contributed to a $2.8 million
reduction in non-interest income when the full year 2003 is compared to the
full year 2002. Additionally, a $758,000 loss realized on the sale of
approximately 69% of the Company's mortgage servicing portfolio in the first
quarter of 2003 also had a negative impact on the full year 2003 performance.
This significant downsizing of the mortgage-servicing asset reduced the level
of interest rate risk and earnings volatility of the Company and contributes
to a more conservatively positioned balance sheet at December 31, 2003 when
compared to the prior year end.
The Company's total non-interest expense in the fourth quarter of 2003
favorably decreased by $1.1 million when compared to the prior year fourth
quarter due to the Company's continued focus on reducing and containing
expenses. For the full year 2003, non-interest expense totaled $38.3 million,
which represented a decline of $8.1 million or 17.4% from the $46.4 million
non-interest expense level reported for the 2002 year. One of the largest
factors causing the decrease was a $3.3 million reduction in impairment
charges on mortgage servicing rights due to the sale of a significant portion
of the mortgage-servicing asset in the first quarter of 2003. The value of
the Company's mortgage servicing rights has declined from $6.9 million at
December 31, 2002 to $1.7 million at December 31, 2003. The Company also
recorded in the third quarter of 2002 a $920,000 restructuring charge
associated with implementing its earnings improvement program. There was no
such charge in 2003. The Company is realizing the benefits of the earnings
improvement program and its ongoing focus on reducing expenses as evidenced by
salaries and employee benefits dropping by $1.7 million or 8.1% for the full
year 2003. On average there were 32 fewer full-time equivalent employees in
2003 when compared to the full year 2002. Other expenses also declined by $2.4
million due to cost cutting in numerous expense categories, some of the larger
of which included advertising expense, merchant card expense, business
development expense and education expenses.
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, including the risks detailed in the Company's Annual
Report and Form 10-K to the Securities and Exchange Commission as defined in
the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially.
Nasdaq NMS: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA (A)
January 27, 2004
(In thousands, except per share and ratio data)
2003
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA
FOR THE PERIOD:
Net income
(loss) $(795) $915 $249 $180 $549
PERFORMANCE
PERCENTAGES
(annualized):
Return on average
equity (4.17)% 4.84% 1.35% 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 (loss):
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
Cash dividends
declared 0.00 0.00 0.00 0.00 0.00
2002
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA
FOR THE PERIOD:
Net income (loss) $626 $408 $(4,224) $(1,962) $(5,152)
PERFORMANCE
PERCENTAGES
(annualized):
Return on average
equity 3.16% 2.04% (20.19)% (9.80)% (6.37)%
Net interest
margin 2.35 2.63 2.48 2.47 2.51
Net charge-offs as
a percentage of
average loans 0.06 1.09 2.08 0.17 0.85
Loan loss provision
as a percentage of
average loans 0.37 0.56 2.24 3.06 1.56
Efficiency ratio 88.34 89.52 127.78 87.98 98.39
PER COMMON SHARE:
Net income (loss):
Basic $0.05 $0.03 $(0.31) $(0.14) $(0.37)
Average number of
common shares
outstanding 13,689,478 13,748,179 13,799,547 13,887,932 13,781,878
Diluted 0.05 0.03 (0.31) (0.14) (0.37)
Average number
of common
shares
outstanding 13,712,382 13,778,716 13,799,547 13,887,932 13,781,878
Cash dividends
declared 0.09 0.09 0.09 0.03 0.30
NOTES:
(A) All quarterly data unaudited.
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
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 546,427 544,967 577,374 552,662
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 75,364 76,384 72,688 71,770
Trust assets - fair
market value 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 6.94% 7.10% 7.19% 7.29%
PER COMMON SHARE:
Book value (A) $5.41 $5.48 $5.21 $5.14
Market value 3.50 3.80 4.17 5.00
Market price to
book value 64.69% 69.35% 80.03% 97.24%
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
2002
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA
AT PERIOD END
Assets $1,213,764 $1,202,086 $1,182,678 $1,175,550
Investment
securities 532,349 493,322 491,861 505,778
Loans 587,624 600,778 594,285 572,977
Allowance for
loan losses 6,286 5,518 5,757 10,035
Goodwill and core
deposit intangibles 16,968 16,610 16,252 15,894
Mortgage servicing
rights 8,315 7,566 5,146 6,917
Deposits 680,435 705,662 674,573 669,929
Stockholders' equity 78,051 82,491 79,711 77,756
Trust assets - fair
market value 1,248,545 1,234,372 1,079,204 1,057,816
Non-performing assets 9,105 5,668 5,407 6,964
Asset leverage ratio 7.54% 7.46% 7.00% 6.84%
PER COMMON SHARE:
Book value (A) $5.69 $6.00 $5.77 $5.59
Market value 4.96 4.58 2.45 2.85
Market price to
book value 87.17% 76.37% 42.45% 50.98%
STATISTICAL DATA AT
PERIOD END:
Full-time equivalent
employees 468 464 445 422
Branch locations 24 24 24 23
Common shares
outstanding 13,709,329 13,754,342 13,811,595 13,898,302
NOTES:
(A) Other comprehensive income had a negative impact of $0.07 on book
value per share at December 31, 2003.
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Quarterly data unaudited)
2003
YEAR
INTEREST INCOME 1QTR 2QTR 3QTR 4QTR TO DATE
Interest and
fees on loans $9,083 $8,595 $8,044 $7,585 $33,307
Total investment
portfolio 5,660 5,631 5,035 5,372 21,698
Total Interest
Income 14,743 14,226 13,079 12,957 55,005
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 6,647 6,434 5,696 5,868 24,645
Provision for
loan losses 1,659 534 384 384 2,961
NET INTEREST
INCOME AFTER
PROVISION FOR
LOAN LOSSES 4,988 5,900 5,312 5,484 21,684
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
and loans held
for sale 173 221 165 73 632
Service charges
on deposit
accounts 767 800 812 801 3,180
Net mortgage
servicing fees 71 77 55 46 249
Gain (loss) on
sale of mortgage
servicing (758) - - - (758)
Bank owned life
insurance 298 307 305 304 1,214
Other income 913 1,017 989 713 3,632
Total Non-interest
Income 3,995 5,095 3,982 3,857 16,929
NON-INTEREST
EXPENSE
Salaries and
employee
benefits 4,789 4,717 4,729 4,688 18,923
Net occupancy
expense 752 701 682 681 2,816
Equipment expense 817 750 692 692 2,951
Professional fees 903 1,058 951 906 3,818
FDIC deposit
insurance expense 28 26 75 72 201
Amortization of
core deposit
intangibles 358 358 358 358 1,432
Impairment charge
(credit) for
mortgage
servicing
rights 366 254 (230) - 390
Goodwill
impairment loss 199 - - - 199
Other expenses 1,908 1,922 1,855 1,862 7,547
Total
Non-interest
Expense 10,120 9,786 9,112 9,259 38,277
INCOME (LOSS)
BEFORE INCOME
TAXES (1,137) 1,209 182 82 336
Provision
(benefit) for
income taxes (342) 294 (67) (98) (213)
NET INCOME
(LOSS) $(795) $915 $249 $180 $549
2002 YEAR
INTEREST INCOME 1QTR 2QTR 3QTR 4QTR TO DATE
Interest and
fees on loans $10,562 $10,434 $10,191 $9,835 $41,022
Total investment
portfolio 6,698 6,637 6,011 5,647 24,993
Total Interest
Income 17,260 17,071 16,202 15,482 66,015
INTEREST EXPENSE
Deposits 4,288 4,215 4,015 3,535 16,053
All other
funding sources 6,389 5,549 5,393 5,263 22,594
Total Interest
Expense 10,677 9,764 9,408 8,798 38,647
NET INTEREST
INCOME 6,583 7,307 6,794 6,684 27,368
Provision for
loan losses 540 815 3,380 4,530 9,265
NET INTEREST
INCOME AFTER
PROVISION FOR
LOAN LOSSES 6,043 6,492 3,414 2,154 18,103
NON-INTEREST
INCOME
Trust fees 1,279 1,235 1,077 1,081 4,672
Net realized
gains on
investment
securities
available
for sale 637 1,314 1,356 987 4,294
Net realized gains
on loans and
loans held
for sale 124 141 160 354 779
Service charges
on deposit
accounts 674 694 732 806 2,906
Net mortgage
servicing fees 92 123 97 101 413
Bank owned life
insurance 554 317 309 311 1,491
Other income 1,288 1,200 1,198 1,446 5,132
Total Non-
interest Income 4,648 5,024 4,929 5,086 19,687
NON-INTEREST
EXPENSE
Salaries and
employee
benefits 5,145 5,128 5,342 4,982 20,597
Net occupancy
expense 739 750 682 689 2,860
Equipment expense 783 768 741 752 3,044
Professional fees 750 847 1,057 1,189 3,843
FDIC deposit
insurance expense 29 29 28 30 116
Amortization of
core deposit
intangibles 358 358 358 358 1,432
Impairment charge
(credit) for
mortgage
servicing
rights (123) 787 3,034 - 3,698
Wholesale mortgage
production exit
costs (26) (14) - - (40)
Restructuring costs - - 920 - 920
Other expenses 2,280 2,403 2,843 2,371 9,897
Total Non-
interest
Expense 9,935 11,056 15,005 10,371 46,367
INCOME (LOSS)
BEFORE INCOME
TAXES 756 460 (6,662) (3,131) (8,577)
Provision
(benefit) for
income taxes 130 52 (2,438) (1,169) (3,425)
NET INCOME (LOSS) $626 $408 $(4,224) $(1,962) $(5,152)
AMERISERV FINANCIAL, INC.
Nasdaq NMS: ASRV
Average Balance Sheet Data (In thousands)
(Quarterly Data Unaudited)
Note: 2002 data appears before 2003.
2002 2003
TWELVE TWELVE
4QTR MONTHS 4QTR MONTHS
Interest earning
assets:
Loans and loans
held for sale, net
of unearned income $582,327 $585,646 $484,296 $516,250
Deposits with banks 9,034 14,859 4,753 5,294
Federal funds sold 63 542 - 29
Total investment
securities 484,810 492,146 573,608 542,189
Total interest
earning assets 1,076,234 1,093,193 1,062,657 1,063,762
Non-interest
earning assets:
Cash and due
from banks 24,148 22,700 22,387 22,371
Premises and equipment 12,913 13,165 11,374 11,950
Other assets 66,041 67,359 60,997 66,005
Allowance for
loan losses (6,113) (5,997) (11,866) (11,431)
Total assets $1,173,223 $1,190,420 $1,145,549 $1,152,657
Interest bearing
liabilities:
Interest bearing
deposits:
Interest bearing
demand $50,853 $49,681 $51,881 $51,872
Savings 101,179 100,454 103,390 103,450
Money market 127,482 129,902 119,787 123,845
Other time 295,163 300,683 278,618 282,838
Total interest
bearing deposits 574,677 580,720 553,676 562,005
Borrowings:
Federal funds
purchased, securities
sold under agreements
to repurchase, and
other short-term
borrowings 86,440 56,633 126,600 105,780
Advanced from Federal
Home Loan Bank 283,131 322,557 250,408 265,184
Guaranteed junior
subordinated
deferrable interest
debentures 34,500 34,500 34,500 34,500
Total interest
bearing liabilities 978,748 994,410 965,184 967,469
Non-interest
bearing liabilities:
Demand deposits 106,507 105,830 103,038 104,330
Other liabilities 8,520 9,356 5,634 6,461
Stockholders' equity 79,448 80,824 71,693 74,397
Total liabilities
and stockholders'
equity $1,173,223 $1,190,420 $1,145,549 $1,152,657
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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