JOHNSTOWN, Pa., April 16 /PRNewswire-FirstCall/ --
AmeriServ Financial, Inc. (Nasdaq: ASRV) today reported first quarter 2002 net
income of $626,000 or $0.05 per share on a diluted basis, comparable to the
net income of $696,000 or $0.05 per diluted share reported in the first
quarter of 2001. On a linked quarter basis, the Company experienced
substantial earnings growth as the fourth quarter 2001 net income totaled
$401,000 or $0.03 per diluted share.
The Company's deposits averaged $684 million in the first quarter of 2002,
which represented an increase of $24 million or 3.7% when compared to the
first quarter of 2001. This strong growth in deposits occurred after
considering the third quarter 2001 strategic sale of approximately $15 million
of deposits associated with the Company's Coalport Branch. Factors
contributing to the overall gross $39 million deposit growth included:
$12 million of deposits from the Company's two new union niche offices,
$6 million from the full service community office opened in State College, the
acquisition of $8 million of escrow deposits from our mortgage banking
operation, and increased market share within the Company's core Cambria County
market. A series of strategically focused advertising campaigns to capture
business from the Company's largest Cambria County competitor, who was
recently acquired by an out-of-state headquartered bank holding company, has
been instrumental in moving deposit market share. The most recent example of
such a program resulted in the addition of 1,067 new customers and
approximately $1.4 million in new deposits in the first quarter of 2002.
These new deposits reflect the success of an intensive seven-week marketing
campaign in which the Company partnered with Seven Springs, a local resort, to
offer a free weekend stay for opening a new AmeriServ Financial checking
account.
The Company's total non-interest income in the first quarter of 2002
increased by $318,000 or 7.3% from the first quarter of 2001 due primarily to
increased revenue from investment security gains, deposit service charges,
bank owned life insurance and fixed annuity sales. The Company realized
$637,000 of gains on the sale of mortgage-backed securities that were
experiencing rapid prepayments in the first quarter of 2002. The Company also
benefited from a $209,000 or 45% increase in deposit service charges due to
the fourth quarter 2001 implementation of a first in the market overdraft
privilege program. The revenue contribution from the financial services unit
increased by $164,000 in the first quarter of 2002 as a result of increased
fixed annuity sales. Annuity sales volume in the first quarter 2002 amounted
to $4.9 million compared to $6.1 million in all of 2001; the re-focused
financial services unit, which was formed in October 1997, has now been
profitable for two consecutive quarters. These positive items were partially
offset by a $339,000 decrease in other income due to the Company's receipt of
a $300,000 payment for the legal rights to its former name in Western
Pennsylvania in the first quarter of 2001.
The Company's net interest income in the first quarter of 2002 declined by
$532,000 from the prior year first quarter due to a combination of a lower net
interest margin and a reduced level of earning assets. A 13 basis point
reduction in the net interest margin was caused by reduced earning asset
yields resulting from accelerated mortgage related asset prepayments
particularly in the first two months of the quarter. The Company did
experience a noticeable slowing of prepayments during the month of March.
This is projected to continue into the second quarter due to the recent
increases in mortgage rates, resulting in reduced refinancing activity. The
decline in the level of earning assets was due to a $92 million reduction in
the investment securities portfolio. This decline resulted from the Company's
decision to delever its balance sheet in the fourth quarter of 2001. As a
result of this action, the Company's level of Federal Home Loan Bank advances
and short term borrowings to total assets averaged 32.5% in the first quarter
of 2002 compared to 37.7% in the first quarter of 2001. Looking into the
second quarter of 2002, the Company expects to get significant cost of funds
relief beginning in April when an $80 million interest rate swap that has
fixed the cost of certain borrowings at 6.92% will mature. Assuming a minimum
300 basis point reduction in cost due to the expiration of this interest rate
swap, the Company will realize a $2.4 million interest expense reduction over
a twelve-month period.
The Company's total non-interest expense in the first quarter of 2002
decreased by $325,000 or 3.2% from the first quarter of 2001. The Company
benefited from a $325,000 reduction in amortization expense on intangible
assets due to the adoption of Statement of Financial Accounting Standards
# 142 which requires that goodwill no longer be amortized but reviewed
annually for impairment. As a result of the previously mentioned slow down in
mortgage prepayment speeds in March 2002, the Company realized a favorable
$123,000 partial reversal of mortgage servicing impairment charge due to
improved value of its mortgage servicing rights. The first quarter 2002
represents the first improvement in mortgage servicing rights value since the
third quarter 2000.
The Company built its loan loss reserve during the first quarter of 2002
as the loan loss provision totaled $540,000 or 0.37% of total loans compared
to net charge-offs of $84,000 or 0.06% of total loans. The first quarter 2002
provision was $225,000 higher than the 2001 first quarter provision and is
reflective of the more difficult economic environment since September 2001.
This is evidenced by a higher national unemployment rate of 5.5% in March 2002
as compared to 4.3% in March 2001. Net charge-offs were $144,000 lower due to
a significant $415,000 recovery that was collected on a 1998 charged-off
commercial loan. The strengthening of the allowance for loan losses that
resulted from the higher provision and lower net charge-offs was consistent
with the guidance provided by the Company in its 2001 Annual Report. The
Company's level of non-performing assets totaled $9.1 million or 1.55% of
total loans at March 31, 2002 compared to $10.0 million or 1.67% of total
loans at December 31, 2001 and $5.2 million or 0.90% of total loans at
March 31, 2001. Of the Company's March 31, 2002 total non-performing assets,
$5.8 million are in the commercial loan portfolio with the remaining
$3.3 million related to residential mortgage loans. The Company will provide
a detailed update on its asset quality in the webcast conference call. (See
log-in instructions later in this release.)
The Company remains committed to its previously announced earnings range
of $0.36 to $0.38 for net income per share and its range of $0.45 to $0.47 for
cash net income per share for the year 2002. The Company also intends to
maintain its annual common stock cash dividend at the current $0.36 per share.
Based upon a current share price of $5.00, this represents a strong 7.2%
yield. At March 31, 2002, ASRV had total assets of $1.2 billion and
shareholders' equity of $78 million or $5.69 per share.
Orlando Hanselman, Chairman, President and CEO, Jeryl Graham, Executive
Vice President and COO, and Jeffrey Stopko, Senior Vice President and CFO will
host a conference call that will be webcast live over the Internet on
April 25, 2002 at 2:00 PM EDT. Mr. Hanselman will recap his presentation that
will be made to shareholders at the Company's annual meeting, scheduled for
Tuesday April 23, 2002, and will also address the Company's first quarter
performance. To listen live over the Internet to the webcast simply log on to
http://www.videonewswire.com/ameriserv/042502 or to participate in the
conference call dial 800-233-2795 and use password AMERISERV.
AmeriServ Financial, Inc., a financial holding company (pursuant to the
Gramm-Leach-Bliley Act), is the parent of AmeriServ Financial and AmeriServ
Trust and Financial Services Company in Johnstown; Standard Mortgage
Corporation in Atlanta, Georgia; AmeriServ Associates of State College; and
AmeriServ Life Insurance Company in Arizona. The Company's AmeriServ
Financial subsidiary also has retail mortgage operations based in Greensburg,
State College, and Altoona. The AmeriServ Financial customer reach is
extensive beyond its primary dominant market of Cambria and Somerset Counties.
Standard Mortgage Company has a mortgage servicing operation based in Atlanta,
Georgia. AmeriServ Associates, the consulting subsidiary, has clients in the
financial services industry that are located in Pennsylvania, Ohio and
Michigan. AmeriServ Trust and Financial Services, with $1.2 billion of client
assets under management, has union investor clients in Pennsylvania, Ohio,
Michigan, West Virginia and Indiana.
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.
AMERISERV FINANCIAL, INC.
Nasdaq NMS: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA (A)
April 16, 2002
(In thousands, except per share and ratio data)
2002
1QTR
PERFORMANCE DATA FOR THE PERIOD:
Net interest income $6,583
Net interest income tax equivalency adjustment 15
Net income 626
PERFORMANCE PERCENTAGES (annualized):
Return on average equity 3.16%
Net interest margin 2.35
Net charge-offs as a percentage of average loans 0.06
Loan loss provision as a percentage
of average loans 0.37
Net overhead expense as a percentage
of tax equivalent net interest income 80.13
Efficiency ratio 88.34
PER COMMON SHARE:
Net income:
Basic $0.05
Average number of common shares outstanding 13,689,478
Diluted 0.05
Average number of common shares outstanding 13,712,382
Cash dividends declared 0.09
CASH PERFORMANCE RESULTS: (B)
Earnings $922
Diluted earnings per common share 0.07
Return on average equity 4.67%
Efficiency ratio 85.16
2001
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA
FOR THE PERIOD:
Net interest
income $7,115 $7,176 $6,867 $7,040 $28,198
Net interest
income tax
equivalency
adjustment 269 322 251 181 1,023
Net income 696 638 240 401 1,975
PERFORMANCE PERCENTAGES
(annualized):
Return on average
equity 3.60% 3.26% 1.18% 1.86% 2.44%
Net interest
margin 2.48 2.47 2.35 2.49 2.45
Net charge-offs
as a percentage
of average
loans 0.16 0.65 0.06 0.17 0.26
Loan loss
provision as a
percentage of
average loans 0.22 0.24 0.22 0.27 0.24
Net overhead
expense as a
percentage of
tax equivalent
net interest
income 80.31 80.71 88.75 85.33 83.71
Efficiency
ratio 87.59 87.04 93.56 91.17 89.94
PER COMMON SHARE:
Net income:
Basic $0.05 $0.05 $0.02 $0.03 $0.15
Average number
of common
shares 13,495,422 13,543,592 13,588,753 13,637,279 13,566,712
Diluted 0.05 0.05 0.02 0.03 0.15
Average number
of common
shares 13,497,986 13,559,755 13,629,424 13,639,201 13,570,214
Cash
dividends
declared 0.09 0.09 0.09 0.09 0.36
CASH PERFORMANCE
RESULTS: (B)
Earnings $1,307 $1,251 $862 $1,020 $4,440
Diluted earnings
per share 0.10 0.09 0.06 0.07 0.33
Return on
average
equity 6.78% 6.40% 4.29% 4.73 5.50%
Efficiency
ratio 81.76 80.91 88.06 85.48 84.16
NOTES:
(A) All quarterly data unaudited.
(B) For 2002, cash performance results exclude amortization related to
core deposit intangibles which, except in the calculation of the
efficiency ratio, are net of applicable income tax effects. For
2001, cash performance results exclude amortization related to both
goodwill and core deposit intangibles. While mortgage servicing
impairment charges are non-cash at the time of recognition, they are
by industry definition not excluded from cash performance.
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
2002
1QTR
PERFORMANCE DATA AT PERIOD END
Assets $1,213,764
Investment securities 532,349
Loans 585,085
Loans held for sale 2,539
Allowance for loan losses 6,286
Goodwill and core deposit intangibles 16,968
Deposits 680,435
Stockholders' equity 78,051
Trust assets 1,198,480
Non-performing assets 9,105
Asset leverage ratio 7.54%
PER COMMON SHARE:
Book value (A) $5.69
Market value 4.96
Market price to book value 87.17%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 468
Branch locations 24
Common shares outstanding 13,709,329
2001
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA
AT PERIOD END
Assets $1,297,811 $1,341,375 $1,300,891 $1,198,859
Investment securities 624,226 654,716 620,212 498,626
Loans 572,613 564,364 584,120 593,301
Loans held for sale 2,934 6,559 2,510 6,180
Allowance for
loan losses 6,023 5,462 5,692 5,830
Goodwill and core
deposit intangibles 19,375 18,692 18,009 17,326
Deposits 657,944 666,373 650,169 676,346
Stockholders' equity 80,211 78,349 85,369 79,490
Trust assets 1,274,667 1,268,313 1,320,154 1,226,722
Non-performing assets 5,158 3,820 5,538 10,044
Asset leverage ratio 6.63% 6.58% 7.05% 7.12%
PER COMMON SHARE:
Book value (A) $5.94 $5.78 $6.28 $5.83
Market value 4.56 5.15 4.60 4.80
Market price to
book value 76.80% 89.07% 73.27% 82.38%
STATISTICAL DATA
AT PERIOD END:
Full-time equivalent
employees 464 461 468 475
Branch locations 23 23 23 24
Common shares
outstanding 13,502,693 13,550,193 13,596,946 13,642,411
NOTES:
(A) Other comprehensive income had a negative impact of $0.14 on book
value per share at March 31, 2002.
AMERISERV FINANCIAL, INC.
Nasdaq NMS: ASRV
Average Balance Sheet Data (In thousands)
(Quarterly Data Unaudited)
Note: 2001 data appears before 2002.
2001 2002
THREE THREE
MONTHS MONTHS
Interest earning assets:
Loans and loans held for sale, net
of unearned income $568,364 $584,426
Deposits with banks 11,954 18,478
Federal funds sold 516 1,703
Total investment securities 588,867 497,841
Total interest earning assets 1,169,701 1,102,448
Non-interest earning assets:
Cash and due from banks 21,768 22,014
Premises and equipment 13,412 13,467
Other assets 66,681 68,534
Allowance for loan losses (6,028) (6,101)
Total assets $1,265,534 $1,200,362
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand $46,564 $48,557
Savings 91,433 94,916
Money market 137,421 134,884
Other time 298,921 303,206
Total interest bearing deposits 574,339 581,563
Borrowings:
Federal funds purchased, securities sold under
agreements to repurchase, and other short-term
borrowings 51,188 21,244
Advanced from Federal Home Loan Bank 425,732 368,966
Guaranteed junior subordinated deferrable
interest debentures 34,500 34,500
Long-term debt 1,332 -
Total interest bearing liabilities 1,087,091 1,006,273
Non-interest bearing liabilities:
Demand deposits 85,404 102,632
Other liabilities 14,645 11,062
Stockholders' equity 78,394 80,395
Total liabilities and stockholders' equity $1,265,534 $1,200,362
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Quarterly data unaudited)
2002
INTEREST INCOME 1QTR
Interest and fees on loans $10,562
Total investment portfolio 6,698
Total Interest Income 17,260
INTEREST EXPENSE
Deposits 4,288
All other funding sources 6,389
Total Interest Expense 10,677
NET INTEREST INCOME 6,583
Provision for loan losses 540
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,043
NON-INTEREST INCOME
Trust fees 1,279
Net realized gains on investment securities
available for sale 637
Net realized gains on loans and loans held for sale 124
Service charges on deposit accounts 674
Net mortgage servicing fees 92
Bank owned life insurance 554
Other income 1,288
Total Non-interest Income 4,648
NON-INTEREST EXPENSE
Salaries and employee benefits 5,145
Net occupancy expense 739
Equipment expense 783
Professional fees 750
FDIC deposit insurance expense 29
Amortization of core deposit intangibles 358
Impairment charge (credit) for mortgage
servicing rights (123)
Wholesale mortgage production exit costs (26)
Other expenses 2,280
Total Non-interest Expense 9,935
INCOME BEFORE INCOME TAXES 756
Provision for income taxes 130
NET INCOME $626
2001
INTEREST YEAR
INCOME 1QTR 2QTR 3QTR 4QTR TO DATE
Interest and
fees on
loans $11,699 $11,119 $11,058 $11,010 $44,886
Total
investment
portfolio 9,475 9,878 9,507 7,913 36,773
Total Interest
Income 21,174 20,997 20,565 18,923 81,659
INTEREST EXPENSE
Deposits 5,970 5,547 5,375 4,650 21,542
All other
funding
sources 8,089 8,274 8,323 7,233 31,919
Total Interest
Expense 14,059 13,821 13,698 11,883 53,461
NET INTEREST
INCOME 7,115 7,176 6,867 7,040 28,198
Provision for
loan losses 315 330 315 390 1,350
NET INTEREST
INCOME AFTER
PROVISION FOR
LOAN LOSSES 6,800 6,846 6,552 6,650 26,848
NON-INTEREST
INCOME
Trust fees 1,247 1,204 1,114 1,194 4,759
Net realized
gains on
investment
securities
available
for sale 381 253 179 1,100 1,913
Net realized
gains on loans
and loans held
for sale 176 170 186 186 718
Service charges
on deposit
accounts 465 482 523 705 2,175
Net mortgage
servicing fees 121 88 92 48 349
Bank owned life
insurance 313 308 313 313 1,247
Gain on sale
of branch - - 1,396 - 1,396
Other income 1,627 1,151 1,508 1,232 5,518
Total Non-interest
Income 4,330 3,656 5,311 4,778 18,075
NON-INTEREST
EXPENSE
Salaries and
employee
benefits 4,847 4,716 4,877 5,145 19,585
Net occupancy
expense 751 651 641 715 2,758
Equipment
expense 812 685 684 759 2,940
Professional
fees 683 682 678 893 2,936
FDIC deposit
insurance
expense 31 31 29 31 122
Amortization of
goodwill and
core deposit
intangibles 683 683 683 683 2,732
Impairment charge
for mortgage
servicing
rights 367 141 1,636 366 2,510
Wholesale mortgage
production
exit costs - (103) (152) (19) (274)
Other expenses 2,086 2,222 2,552 2,367 9,227
Total Non-interest
Expense 10,260 9,708 11,628 10,940 42,536
INCOME BEFORE
INCOME TAXES 870 794 235 488 2,387
Provision
(benefit) for
income taxes 174 156 (5) 87 412
NET INCOME $696 $638 $240 $401 $1,975
SOURCE AmeriServ Financial, Inc.
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Related links:
http://ameriservfinancial.com
CONTACT:
Jeffrey Stopko, Senior Vice President and CFO
of AmeriServ Financial, +1-814-533-5310
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