JOHNSTOWN, Pa., July 15 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) reported second quarter 2008 net income of $1,516,000
or $0.07 per diluted share. This represents an increase of $708,000 or
87.6% over the second quarter 2007 net income of $808,000 or $0.04 per
diluted share. For the six month period ended June 30, 2008, the Company
has now earned $2,745,000 or $0.13 per diluted share. This also represents
an increase of $1.5 million or over 122% when compared to net income of
$1,236,000 or $0.06 per diluted share for the first six months of 2007. The
following table highlights the Company's financial performance for the both
the three and six month periods ended June 30, 2008 and 2007:
Six Months Six Months
Second Second Ended Ended
Quarter 2008 Quarter 2007 June 30, 2008 June 30, 2007
Net income $1,516,000 $808,000 $2,745,000 $1,236,000
Diluted earnings
per share $0.07 $0.04 $0.13 $0.06
Allan R. Dennison, President and Chief Executive Officer, commented on
the second quarter 2008 financial results, "The strong earnings growth that
AmeriServ Financial has achieved in 2008 resulted from the execution of our
community bank focused strategic plan and the actions we have taken over
the past several years to conservatively position our balance sheet. Our
improved net interest margin, good asset quality, and strong capital levels
provide AmeriServ with better financial ability to work through this period
of economic uncertainty and turmoil within the financial markets."
The Company's net interest income in the second quarter of 2008
increased by $953,000 from the prior year's second quarter and for the
first six months of 2008 increased by $1.7 million or 14.5% when compared
to the first six months of 2007. The Company's net interest margin is also
up sharply by 57 and 46 basis points, respectively for the quarter and
six-month periods ended June 30, 2008. The Company's balance sheet
positioning allowed it to benefit from the significant Federal Reserve
reductions in short-term interest rates and the return to a more
traditional positively sloped yield curve. As a result of these changes,
the Company's interest expense on deposits and borrowings declined at a
faster rate than the interest income on loans and investment securities.
These factors, combined with greater average loans outstanding over the
past 12 months, caused the increased net interest income and margin in
2008. Overall, net interest income has now increased for six consecutive
quarters and the Company believes its balance sheet is well positioned for
continuation of a lower interest rate environment in 2008.
The Company recorded a $1,375,000 provision for loan losses in the
second quarter of 2008 and a $1,525,000 provision for the six month period
ended June 30, 2008 compared to no loan loss provision for either period in
2007. When determining the provision for loan losses, the Company considers
a number of factors some of which include periodic credit reviews,
delinquency and charge- off trends, concentrations of credit, loan volume
trends and broader local and national economic trends. The higher loan
provision in 2008 was caused by the Company's decision to strengthen its
allowance for loan losses due to higher net charge-offs and the downgrade
of the rating classification of a few specific performing commercial loans
due to the slowing economy. Net charge- offs in the second quarter of 2008
amounted to $721,000 or 0.46% of total loans compared to net charge-offs of
$99,000 or 0.07% of total loans in the second quarter of 2007. The higher
second quarter 2008 net charge-offs were primarily due to a $786,000 charge
down on a commercial real estate apartment property which the Company took
ownership of and transferred to other real- estate owned during the
quarter. For the six month period ended June 30, 2008, net charge-offs have
amounted to $814,000 or 0.26% of total loans compared to net charge-offs of
$181,000 or 0.06% of total loans for the same six month period in 2007.
Non-performing assets increased moderately since the first quarter of 2008
but are still lower than the year-end 2007 level. Non-performing assets
totaled $3.7 million or 0.60% of total loans at June 30, 2008 compared to
$5.3 million or 0.83% of total loans at December 31, 2007. Overall, the
allowance for loan losses provided 214% coverage of non- performing assets
and was 1.28% of total loans at June 30, 2008 compared to 137% of
non-performing assets and 1.14% of total loans at December 31, 2007. Note
also that the Company has no exposure to sub-prime mortgage loans in either
the loan or investment portfolios.
The Company's non-interest income in the second quarter of 2008
increased by $1.8 million from the prior year's second quarter and for the
first six months of 2008 increased by $2.4 million when compared to the
first six months of 2007. The largest item causing the increase in 2008 was
a $1.6 million increase in revenue from bank owned life insurance due to
the payment of two death claims. The remainder of the increase in
non-interest income was driven by increases in almost all reported
non-interest revenue categories. Trust fees increased by $48,000 for the
2008 quarterly period and by $134,000 or 4.0% for the six-month period due
to continued successful new business development efforts. The fair market
value of trust assets totaled $1.8 billion at June 30, 2008. Deposit
service charges also increased by $171,000 for the 2008 quarterly period
and $320,000 or 26.2% for the six-month period due to increased overdraft
fees and greater service charge revenue that resulted from a realignment of
the bank's checking accounts to include more fee based products. The
Company also recorded an increase on gains realized on residential mortgage
loan sales into the secondary market that amounted to $42,000 for the
second quarter of 2008 and $106,000 for the six month period ended June 30,
2008. This increase reflects improved residential mortgage production from
the Company's primary market as this has been an area of emphasis in the
Company's strategic plan. Other income increased by $271,000 for the 2008
six-month period due primarily to a gain realized on the mandatory
redemption of shares of VISA stock that occurred in the first quarter of
2008 and increased revenue from financial services activities. Finally,
these positive items were partially offset by a $137,000 loss realized on
the sale of $18 million of investment securities in the second quarter of
2008. The Company took advantage of the positively sloped yield curve to
position the investment portfolio for better future earnings by selling
some of the lower yielding securities in the portfolio and replacing them
with higher yielding securities with a modestly longer duration.
Total non-interest expense in the second quarter of 2008 increased by
$503,000 from the prior year's second quarter and for the first six months
of 2008 increased by $609,000 or 3.5% when compared to the first six months
of 2007. The higher 2008 second quarter expenses were due to a $552,000
increase in other expenses, a $92,000 increase in professional fees, and a
$91,000 charge on the prepayment of $6 million of Federal Home Loan Bank
Advances. Note that the increase in other expenses was largely caused by
the non- recurrence of a favorable $400,000 recovery on a previous mortgage
loan securitization that was realized in the second quarter of 2007. The
$91,000 FHLB debt prepayment charge resulted from the Company's decision to
retire some higher cost advances and replace them with lower cost current
market rate advances in order to reduce ongoing interest expense. These
negative items were partially offset by expense decreases recorded in
salaries and employee benefits and equipment expense as a result of the
Company's continuing focus on containing and reducing non-interest
expenses. For the first six months of 2008, salaries and employee benefits
costs are down by $173,000 or 1.8% due to a 23 or 6.1% reduction in total
full-time equivalent employees and reduced medical insurance premiums. The
$265,000 reduction in equipment expense resulted from the benefits achieved
on the migration to a new core data processing operating system and
mainframe processor.
ASRV had total assets of $877 million and shareholders' equity of $92.2
million or a book value of $4.22 per share at June 30, 2008. The Company
further built its capital during the second quarter of 2008 and the asset
leverage ratio grew to 10.47%. During the first quarter of 2008, the
Company repurchased 354,500 shares of its common stock at an average price
of $3.11 in conjunction with the terms of the Company's stock buyback
program that was announced on January 22, 2008. The Company did not
repurchase any additional shares during the second quarter.
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: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA
July 15, 2008
(In thousands, except per share and ratio data)
(All quarterly and 2008 data unaudited)
2008
1QTR 2QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $1,229 $1,516 $2,745
PERFORMANCE PERCENTAGES (annualized):
Return on average assets 0.55% 0.71% 0.63%
Return on average equity 5.43 6.64 6.04
Net interest margin 3.32 3.58 3.45
Net charge-offs as a percentage of
average loans 0.06 0.46 0.26
Loan loss provision as a percentage
of average loans 0.10 0.89 0.49
Efficiency ratio 82.87 73.20 77.67
PER COMMON SHARE:
Net income:
Basic $0.06 $0.07 $0.13
Average number of common shares
outstanding 22,060 21,847 21,954
Diluted 0.06 0.07 0.13
Average number of common shares
outstanding 22,062 21,848 21,955
2007
1QTR 2QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $428 $808 $1,236
PERFORMANCE PERCENTAGES (annualized):
Return on average assets 0.20% 0.37% 0.28%
Return on average equity 2.05 3.79 2.93
Net interest margin 2.97 3.01 2.99
Net charge-offs as a percentage of
average loans 0.06 0.07 0.06
Loan loss provision as a percentage
of average loans - - -
Efficiency ratio 94.16 88.52 91.28
PER COMMON SHARE:
Net income:
Basic $0.02 $0.04 $0.06
Average number of common shares
outstanding 22,159 22,164 22,162
Diluted 0.02 0.04 0.06
Average number of common shares
outstanding 22,166 22,171 22,168
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
(All quarterly and 2008 data unaudited)
2008
1QTR 2QTR
PERFORMANCE DATA AT PERIOD
END:
Assets $902,349 $877,230
Investment securities 151,967 148,819
Loans 632,934 623,798
Allowance for loan losses 7,309 7,963
Goodwill and core deposit
intangibles 14,254 14,038
Deposits 682,459 722,913
FHLB borrowings 106,579 40,214
Stockholders' equity 91,558 92,248
Non-performing assets 3,050 3,717
Asset leverage ratio 9.78% 10.47%
PER COMMON SHARE:
Book value (A) $4.19 $4.22
Market value 2.79 2.98
Market price to book value 66.62% 70.59%
Trust assets - fair market
value (B) 1,838,029 1,813,231
STATISTICAL DATA AT PERIOD
END:
Full-time equivalent
employees 350 353
Branch locations 19 18
Common shares outstanding 21,842,691 21,850,773
2007
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT PERIOD
END:
Assets $891,559 $876,160 $897,940 $904,878
Investment securities 185,338 174,508 170,765 163,474
Loans 603,834 604,639 629,564 636,155
Allowance for loan losses 8,010 7,911 7,119 7,252
Goodwill and core deposit
intangibles 15,119 14,903 14,687 14,470
Deposits 768,947 762,902 763,771 710,439
FHLB borrowings 15,170 4,258 23,482 82,115
Stockholders' equity 85,693 86,226 88,517 90,294
Non-performing assets 2,706 2,825 2,463 5,280
Asset leverage ratio 10.23% 10.36% 10.44% 9.74%
PER COMMON SHARE:
Book value $3.87 $3.89 $3.99 $4.07
Market value 4.79 4.40 3.33 2.77
Market price to book value 123.88% 113.12% 83.44% 68.07%
Trust assets - fair market
value (B) 1,828,475 1,872,366 1,846,240 1,883,307
STATISTICAL DATA AT PERIOD
END:
Full-time equivalent
employees 375 376 358 351
Branch locations 21 21 20 19
Common shares outstanding 22,161,445 22,167,235 22,180,650 22,188,997
Note:
(A) Other comprehensive income had a negative impact of $0.17 on book
value per share at June 30, 2008.
(B) Not recognized on the balance sheet
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2008 data unaudited)
2008
1QTR 2QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $10,462 $9,862 $20,324
Total investment portfolio 1,820 1,588 3,408
Total Interest Income 12,282 11,450 23,732
INTEREST EXPENSE
Deposits 4,499 3,861 8,360
All borrowings 1,048 623 1,671
Total Interest Expense 5,547 4,484 10,031
NET INTEREST INCOME 6,735 6,966 13,701
Provision for loan losses 150 1,375 1,525
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,585 5,591 12,176
NON-INTEREST INCOME
Trust fees 1,790 1,737 3,527
Net realized losses on investment
securities available for sale - (137) (137)
Net realized gains on loans held for
sale 89 121 210
Service charges on deposit accounts 734 807 1,541
Investment advisory fees 226 218 444
Bank owned life insurance 249 1,923 2,172
Other income 750 674 1,424
Total Non-Interest Income 3,838 5,343 9,181
NON-INTEREST EXPENSE
Salaries and employee benefits 4,830 4,812 9,642
Net occupancy expense 661 653 1,314
Equipment expense 431 414 845
Professional fees 769 910 1,679
FHLB prepayment penalty - 91 91
FDIC deposit insurance expense 22 20 42
Amortization of core deposit
intangibles 216 216 432
Other expenses 1,850 1,909 3,759
Total Non-Interest Expense 8,779 9,025 17,804
PRETAX INCOME 1,644 1,909 3,553
Income tax expense 415 393 808
NET INCOME $1,229 $1,516 $2,745
2007
1QTR 2QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $10,061 $10,303 $20,364
Total investment portfolio 2,114 2,005 4,119
Total Interest Income 12,175 12,308 24,483
INTEREST EXPENSE
Deposits 5,699 5,931 11,630
All borrowings 521 364 885
Total Interest Expense 6,220 6,295 12,515
NET INTEREST INCOME 5,955 6,013 11,968
Provision for loan losses - - -
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,955 6,013 11,968
NON-INTEREST INCOME
Trust fees 1,704 1,689 3,393
Net realized gains (losses) on
investment securities available for
sale - - -
Net realized gains on loans held for
sale 25 79 104
Service charges on deposit accounts 585 636 1,221
Investment advisory fees 102 329 431
Bank owned life insurance 258 265 523
Other income 559 594 1,153
Total Non-Interest Income 3,233 3,592 6,825
NON-INTEREST EXPENSE
Salaries and employee benefits 4,885 4,930 9,815
Net occupancy expense 664 615 1,279
Equipment expense 546 564 1,110
Professional fees 695 818 1,513
FDIC deposit insurance expense 22 22 44
Amortization of core deposit
intangibles 216 216 432
Other expenses 1,645 1,357 3,002
Total Non-Interest Expense 8,673 8,522 17,195
PRETAX INCOME 515 1,083 1,598
Income tax expense (benefit) 87 275 362
NET INCOME $428 $808 $1,236
AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2008 data unaudited)
Note: 2007 data appears before 2008.
2007 2008
SIX SIX
2QTR MONTHS 2QTR MONTHS
Interest earning assets:
Loans and loans held for sale,
net of unearned income $599,395 $596,176 $621,395 $625,989
Deposits with banks 666 625 446 395
Federal funds 6,355 3,389 - 212
Total investment securities 183,293 192,714 149,889 161,676
Total interest earning assets 789,709 792,904 771,730 788,272
Non-interest earning assets:
Cash and due from banks 17,445 17,264 17,056 17,495
Premises and equipment 8,822 8,779 9,101 8,993
Other assets 71,021 68,572 72,596 72,780
Allowance for loan losses (7,971) (8,016) (7,350) (7,329)
Total assets 879,026 879,503 863,133 880,211
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 56,250 57,273 65,495 64,902
Savings 73,640 73,916 70,976 69,822
Money market 183,911 189,400 105,308 104,744
Other time 345,285 336,555 350,229 348,681
Total interest bearing deposits 659,086 657,144 592,008 588,149
Borrowings:
Federal funds purchased,
securities sold under agreements
to repurchase, and other
short-term borrowings 2,367 9,282 35,822 56,409
Advanced from Federal Home Loan
Bank 3,930 2,661 11,822 11,770
Guaranteed junior subordinated
deferrable interest debentures 13,085 13,085 13,085 13,085
Total interest bearing liabilities 678,468 682,172 652,737 669,413
Non-interest bearing liabilities:
Demand deposits 105,055 103,477 109,316 109,980
Other liabilities 9,956 8,829 9,220 9,374
Stockholders' equity 85,547 85,025 91,860 91,444
Total liabilities and
stockholders' equity $879,026 $879,503 $863,133 $880,211
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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