JOHNSTOWN, Pa., April 22 /PRNewswire-FirstCall/ --
AmeriServ Financial, Inc. (Nasdaq: ASRV) today reported a net loss for the
first quarter of 2003 amounting to ($795,000) or ($0.06) per diluted share
compared to net income of $626,000 or $0.05 per diluted share reported in the
first quarter of 2002. The Company achieved meaningful progress in its
turnaround as the size of the net loss declined sharply when compared to the
two most recent quarters. Specifically, the Company reported a net loss of
$4.2 million in the third quarter of 2002 and a net loss of $2 million in the
fourth quarter of 2002. The first quarter 2003 loss was due primarily to an
increased provision for loan losses and a loss realized on the sale of a
significant portion of its mortgage servicing asset.
(Photo: http://www.newscom.com/cgi-bin/prnh/20020717/ASRVLOGO )
At March 31, 2003, ASRV had total assets of $1.2 billion and shareholders'
equity of $75 million or $5.41 per share. The Company continues to be
considered well capitalized for regulatory purposes with an asset leverage
ratio at March 31, 2003 of 6.94%, compared to a regulatory minimum of 5.0%.
The Company's provision for loan losses totaled $1.7 million or 1.19% of
total loans in the first quarter of 2003. This represented an increase of
$1.1 million from the first quarter 2002 provision of $540,000 or 0.37% of
total loans. The first quarter 2003 provision exceeded net charge-offs for
the quarter that totaled $279,000 or 0.20% of total loans. The actions taken
to further build the allowance for loan losses in the first quarter of 2003
reflect deterioration in credit quality that was evidenced by a higher level
of classified loans and non-performing assets. Non-performing assets
increased from $7.0 million at December 31, 2002 to $11.7 million at March 31,
2003 due primarily to the transfer of a $4.8 million commercial mortgage loan
into non-accrual status. As discussed in the Company's 2002 Annual Report and
Form 10-K, this loan is to a borrower in the personal care industry and 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. As a result of the
higher level of non-performing assets, the Company's loan loss reserve
coverage of non-performing assets amounted to 98% at March 31, 2003 compared
to 144% at December 31, 2002 and 69% at March 31, 2002. The allowance for
loan losses as a percentage of total loans, however, increased to 2.06% at
March 31, 2003 compared to 1.75% at December 31, 2002 and 1.07% at March 31,
2002.
The Company's net interest income in the first quarter of 2003 increased
by $64,000 from the prior year first quarter due to a 13 basis point
improvement in the net interest margin to 2.48%. This increase in the net
interest margin was partially offset by a reduced level of earning assets due
to loan portfolio shrinkage experienced in the first quarter of 2003. The
overall net loan paydowns reflect continuing prepayment pressures caused by
the historically low interest rate environment. When analyzing more recent
trends, both net interest income and net interest margin displayed stability.
Specifically, between the fourth quarter of 2002 and the first quarter of
2003, the Company's net interest income declined by only $37,000 and the net
interest margin improved by one basis point. This demonstrated net interest
margin stability is noteworthy given the recent industry trends of net
interest margin contraction.
The Company's total non-interest income in the first quarter of 2003
decreased by $653,000 from the first quarter of 2002 due primarily to a
$758,000 loss realized on the sale of approximately 69% of the Company's
mortgage servicing portfolio. Largely as a result of this sale, the value of
the Company's mortgage servicing rights declined from $6.9 million at December
31, 2002 to $2.2 million at March 31, 2003. This downsizing of the mortgage
servicing asset reduces the level of interest rate risk and earnings
volatility at the Company and contributes to a more conservatively positioned
balance sheet. Non-interest income was also negatively impacted by a $254,000
drop in revenue from bank owned life insurance due to the receipt of a death
benefit for an employee insured under the program in the prior year first
quarter. These negative items were partially mitigated by net realized gains
from investment security sales and higher deposit service charges. Gains on
the sale of investment securities increased by $641,000 as the Company took
advantage of the volatility in the market to shorten the investment portfolio
duration and also capture profits on certain securities that had risks of
accelerated prepayment in today's low interest rate environment. These
increased gains also helped offset a $366,000 mortgage servicing impairment
charge recorded in the first quarter of 2003. This non-cash impairment charge
reflects a decline in the value of the remaining mortgage servicing rights due
to increased prepayment speeds resulting from unprecedented mortgage
refinancing activity. Specifically, the Mortgage Bankers Association
Refinance Index reached in excess of 8000 in March 2003; the highest level
ever recorded.
The Company's total non-interest expense in the first quarter of 2003
increased by $185,000 from the first quarter of 2002. Non-interest expenses,
exclusive of the mortgage servicing rights impairment charge /credit and a
goodwill impairment loss, however, declined by $503,000 from the first quarter
of 2002 and by a more significant $816,000 from the fourth quarter of 2002 due
to the Company's focus on reducing expenses. Salaries and employee benefits
dropped by $356,000 as there were 52 fewer full-time equivalent employees when
compared to the first quarter of 2002. Other expenses also declined by
$372,000 due to cost cutting in numerous expense categories some of the larger
of which included advertising expense and merchant card expense. The Company
did recognize a $199,000 goodwill impairment loss in the first quarter of 2003
due to the write-off of the goodwill associated with the mortgage banking
segment.
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.
AMERISERV FINANCIAL, INC.
NASDAQ NMS: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA (NOTE: A)
April 22, 2003
(In thousands, except per share and ratio data)
2003
PERFORMANCE DATA FOR THE PERIOD: 1QTR
Net income (loss) ($795)
PERFORMANCE PERCENTAGES (annualized):
Return on average equity (4.17)%
Net interest margin 2.48
Net charge-offs as a percentage
of average loans 0.20
Loan loss provision as a percentage
of average loans 1.19
Net overhead expense as a percentage of
tax equivalent net interest income 91.97
Efficiency ratio 94.98
PER COMMON SHARE:
Net Income (Loss):
Basic $(0.06)
Average number of common shares
outstanding 13,923,010
Diluted (0.06)
Average number of common shares
outstanding 13,923,010
Cash dividends declared 0.00
NOTES:
(A) All quarterly data unaudited.
2002
YEAR
1QTR 2QTR 3QTR 4QTR TO DATE PERFORMANCE
DATA FOR THE
PERIOD:
$626 $408 ($4,224) ($1,962) ($5,152) Net income
(loss)
PERFORMANCE
PERCENTAGES
(annualized):
3.16% 2.04% (20.19)% (9.80)% (6.37)% Return on
average
equity
2.35 2.63 2.48 2.47 2.51 Net interest
margin
0.06 1.09 2.08 0.17 0.85 Net charge-
offs as a
percentage
of average
loans
0.37 0.56 2.24 3.06 1.56 Loan loss
provision as
a percentage
of average
loans
80.13 82.34 147.87 78.87 97.23 Net overhead
expense as a
percentage of
tax
equivalent
net interest
income
88.34 89.52 127.78 87.98 98.39 Efficiency
ratio
PER COMMON
SHARE:
Net Income
(Loss):
$0.05 $0.03 $(0.31) $(0.14) $(0.37) Basic
13,689,478 13,748,179 13,799,547 13,887,932 13,781,878 Average
number
of common
shares
outstanding
0.05 0.03 (0.31) (0.14) (0.37) Diluted
13,712,382 13,778,716 13,800,897 13,889,196 13,789,482 Average number
of common
shares
outstanding
0.09 0.09 0.09 0.03 0.30 Cash dividends
declared
AMERISERV FINANCIAL, INC.
--CONTINUED--
(In thousands, except per share, statistical, and ratio data)
2003
PERFORMANCE DATA
AT PERIOD END: 1QTR
Assets $1,190,360
Investment securities 546,427
Loans and loans held for sale 555,335
Allowance for loan losses 11,415
Goodwill and core deposit intangibles 15,337
Mortgage servicing rights 2,214
Deposits 669,103
Stockholders' equity 75,364
Trust assets 1,091,391
Non-performing assets 11,687
Asset leverage ratio 6.94%
Per common share:
Book value (A) $5.41
Market value 3.50
Market price to book value 64.69%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 416
Branch locations 23
Common shares outstanding 13,929,324
2002
PERFORMANCE DATA
1QTR 2QTR 3QTR 4QTR AT PERIOD END:
$1,213,764 $1,202,086 $1,182,678 $1,175,550 Assets
532,349 493,322 491,861 505,778 Investment securities
587,624 600,778 594,285 572,977 Loans and loans held
for sale
6,286 5,518 5,757 10,035 Allowance for loan
losses
16,968 16,610 16,252 15,894 Goodwill and core
deposit intangibles
8,315 7,566 5,146 6,917 Mortgage servicing
rights
680,435 705,662 674,573 669,929 Deposits
78,051 82,491 79,711 77,756 Stockholders' equity
1,198,480 1,190,834 1,082,311 1,057,816 Trust assets
9,105 5,668 5,407 6,964 Non-performing assets
7.54% 7.46% 7.00% 6.84% Asset leverage ratio
Per common share:
$5.69 $6.00 $5.77 $5.59 Book value (A)
4.96 4.58 2.45 2.85 Market value
87.17% 76.37% 42.45% 50.98% Market price to book
value
STATISTICAL DATA AT
PERIOD END:
468 464 445 422 Full-time equivalent
employees
24 24 24 23 Branch locations
13,709,329 13,754,342 13,811,595 13,898,302 Common shares
outstanding
NOTES:
(A) Other comprehensive income had a positive impact of $0.30 on book
value per share at March 31, 2003.
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Quarterly data unaudited)
2003
INTEREST INCOME 1QTR
Interest and fees on loans $9,083
Total investment portfolio 5,660
Total Interest Income 14,743
INTEREST EXPENSE
Deposits 3,140
All other funding sources 4,956
Total Interest Expense 8,096
NET INTEREST INCOME 6,647
Provision for loan losses 1,659
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 4,988
NON-INTEREST INCOME
Trust fees 1,253
Net realized gains on investment securities
available for sale 1,278
Net realized gains on loans and loans
held for sale 173
Service charges on deposit accounts 767
Net mortgage servicing fees 71
Loss on sale of mortgage servicing (758)
Bank owned life insurance 298
Other income 913
Total Non-Interest Income 3,995
NON-INTEREST EXPENSE
Salaries and employee benefits 4,789
Net occupancy expense 752
Equipment expense 817
Professional fees 903
FDIC deposit insurance expense 28
Amortization of core deposit intangibles 358
Impairment charge(credit) for mortgage
servicing rights 366
Goodwill impairment loss 199
Wholesale mortgage production exit costs -
Restructuring costs -
Other expenses 1,908
Total Non-Interest Expense 10,120
INCOME (LOSS) BEFORE INCOME TAXES (1,137)
Provision (benefit) for income taxes (342)
NET INCOME (LOSS) $(795)
2002
YEAR
1QTR 2QTR 3QTR 4QTR TO DATE INTEREST INCOME
$10,562 $10,434 $10,191 $9,835 $41,022 Interest and fees on loans
6,698 6,637 6,011 5,647 24,993 Total investment portfolio
17,260 17,071 16,202 15,482 66,015 Total Interest Income
INTEREST EXPENSE
4,288 4,215 4,015 3,535 16,053 Deposits
6,389 5,549 5,393 5,263 22,594 All other funding sources
10,677 9,764 9,408 8,798 38,647 Total Interest Expense
6,583 7,307 6,794 6,684 27,368 NET INTEREST INCOME
540 815 3,380 4,530 9,265 Provision for loan losses
NET INTEREST INCOME AFTER
PROVISION FOR
6,043 6,492 3,414 2,154 18,103 LOAN LOSSES
NON-INTEREST INCOME
1,279 1,235 1,077 1,081 4,672 Trust fees
Net realized gains on
investment securities
637 1,314 1,356 987 4,294 available for sale
124 141 160 354 779 Net realized gains on loans
and loans held for sale
674 694 732 806 2,906 Service charges on deposit
accounts
92 123 97 101 413 Net mortgage servicing fees
- - - - - Loss on sale of mortgage
servicing
554 317 309 311 1,491 Bank owned life insurance
1,288 1,200 1,198 1,446 5,132 Other income
4,648 5,024 4,929 5,086 19,687 Total Non-Interest Income
NON-INTEREST EXPENSE
5,145 5,128 5,342 4,982 20,597 Salaries and employee
benefits
739 750 682 689 2,860 Net occupancy expense
783 768 741 752 3,044 Equipment expense
750 847 1,057 1,189 3,843 Professional fees
29 29 28 30 116 FDIC deposit insurance
expense
358 358 358 358 1,432 Amortization of core
deposit intangibles
(123) 787 3,034 - 3,698 Impairment charge (credit)
for mortgage servicing
rights
- - - - - Goodwill impairment loss
(26) (14) - - (40) Wholesale mortgage
production exit costs
- - 920 - 920 Restructuring costs
2,280 2,403 2,843 2,371 9,897 Other expenses
9,935 11,056 15,005 10,371 46,367 Total Non-Interest
Expense
756 460 (6,662) (3,131) (8,577) INCOME (LOSS) BEFORE INCOME
TAXES
130 52 (2,438) (1,169) (3,425) Provision (benefit) for
income taxes
$626 $408 $(4,224) $(1,962) $(5,152) NET INCOME (LOSS)
AMERISERV FINANCIAL, INC.
Nasdaq NMS: ASRV
Average Balance Sheet Data (In thousands)
(Quarterly Data Unaudited)
2002 2003
THREE THREE
MONTHS MONTHS
Interest earning assets:
Loans and loans held for
sale, net of unearned income $584,426 $557,123
Deposits with banks 18,478 7,240
Federal funds sold 1,703 -
Total investment securities 497,841 497,836
Total interest earning assets 1,102,448 1,062,199
Non-interest earning assets:
Cash and due from banks 22,014 23,557
Premises and equipment 13,467 12,477
Other assets 68,534 71,235
Allowance for loan losses (6,101) (10,272)
TOTAL ASSETS $1,200,362 $1,159,196
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand $48,557 $50,550
Savings 94,916 102,116
Money market 134,884 128,232
Other time 303,206 289,213
Total interest bearing
deposits 581,563 570,111
Borrowings:
Federal funds purchased,
securities sold under
agreements to
repurchase,
and other short-term
borrowings 21,244 93,652
Advances from Federal
Home Loan Bank 368,966 268,156
Guaranteed junior
subordinated deferrable
interest debentures 34,500 34,500
Total interest bearing
liabilities: 1,006,273 966,419
Non-interest bearing liabilities:
Demand deposits 102,632 107,847
Other liabilities 11,062 7,692
Stockholders' equity 80,395 77,238
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,200,362 $1,159,196
SOURCE AmeriServ Financial, Inc.
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Related links:
http://www.ameriservfinancial.com
Photo Notes:
NewsCom:
http://www.newscom.com/cgi-bin/prnh/20020717/ASRVLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, +1-888-776-6555 or +1-212-782-2840
CONTACT:
Jeffrey A. Stopko, Senior Vice President &
Chief Financial Officer of AmeriServ Financial, +1-814-533-5310
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