JOHNSTOWN, Pa., July 17 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) reported second quarter 2007 net income of $808,000 or
$0.04 per diluted share. This represents an increase of $240,000 or 42.3%
over the second quarter 2006 net income of $568,000 or $0.03 per diluted
share. For the six month period ended June 30, 2007, the Company has now
earned $1.2 million or $0.06 per diluted share. This also represents an
increase of $128,000 or 11.6% when compared to net income of $1.1 million
or $0.05 per diluted share for the first six months of 2006. The following
table highlights the Company's financial performance for both the three and
six month periods ended June 30, 2007 and 2006:
Six Months Six Months
Second Second Ended Ended
Quarter 2007 Quarter 2006 June 30, 2007 June 30, 2006
Net income $808,000 $568,000 $1,236,000 $1,108,000
Diluted earnings
per share $ 0.04 $ 0.03 $ 0.06 $ 0.05
Allan R. Dennison, President and Chief Executive Officer, commented on
the second quarter 2007 results, "AmeriServ's improved financial
performance in the second quarter of 2007 resulted from a combination of
increased revenues and reduced non-interest expenses when compared to the
second quarter of 2006. The increase in non-interest income was driven by
the full quarter benefit of the West Chester Capital Advisors acquisition
which was completed in March of 2007. Our net interest income and net
interest margin are down when compared to last year's second quarter;
however, these important revenue items have now shown two consecutive
quarters of improvement after bottoming in the fourth quarter of 2006. The
continued growth in both loans and deposits has contributed to the
improving net interest margin trend in 2007. Finally, asset quality
continues to be sound at AmeriServ Financial as non-performing assets
amounted to only 0.47% of total loans and our loan loss reserve provided
280% coverage of non-performing assets at June 30, 2007."
The Company's net interest income in the second quarter of 2007
decreased by $178,000 from the prior year's second quarter and for the
first six months of 2007 decreased by $515,000 when compared to the first
six months of 2006. The Company's net interest margin is also down by 15
and 19 basis points, respectively for the quarter and six-month periods
ended June 30, 2007. The decline in both net interest income and net
interest margin resulted from the Company's cost of funds increasing at a
faster pace than the earning asset yield. This resulted from deposit
customer preference for higher yielding certificates of deposit and money
market accounts due to the inverted/flat yield curve with short-term
interest rates exceeding intermediate to longer term rates. As mentioned
earlier, on a quarterly basis the Company's net interest margin has
improved by four basis points in each quarter of 2007 helping to reverse a
trend of four consecutive quarters of net interest income and margin
contraction experienced in 2006.
As a result of our focus on traditional community banking, the Company
did have increased loans and deposits on our balance sheet in 2007. Total
loans outstanding averaged $596 million in the first six months of 2007, a
$45 million or 8.2% increase from the same 2006 period. This loan growth
was most evident in the commercial loan portfolio. Total deposits averaged
$761 million for the first six months of 2007, a $34 million or 4.7%
increase from the same 2006 period. These higher deposits in 2007 were due
to increased deposits from the trust company's operations and increased
certificates of deposit as customers have demonstrated a preference for
this product due to higher short-term interest rates.
The Company did not record a provision for loan losses in either the
second quarter or the first six months of 2007 due to the Company's
continuing strong asset quality. This compares to a negative loan loss
provision of $50,000 realized for the same periods in 2006. Non-performing
assets totaled $2.8 million or 0.47% of total loans at June 30, 2007. This
compares favorably to non-performing assets of $4.6 million or 0.81% of
total loans at June 30, 2006. Net charge-offs in the first six months of
2007 amounted to $181,000 or 0.06% of total loans which was down from the
net charge-offs of $219,000 or 0.08% of total loans in the same prior year
period. The allowance for loan losses provided 280% coverage of
non-performing assets at June 30, 2007 compared to 353% coverage at
December 31, 2006, and 192% coverage at June 30, 2006. The allowance for
loan losses as a percentage of total loans amounted to 1.31% at June 30,
2007. Note also that the Company has no exposure to sub-prime mortgage
loans.
The Company's non-interest income in the second quarter of 2007
increased by $324,000 from the prior year's second quarter and for the
first six months of 2007 increased by $315,000 when compared to the first
six months of 2006. The increase for both periods was due primarily to the
West Chester Capital Advisors acquisition which closed in early March of
2007. This accretive acquisition provided $329,000 of investment advisory
fees in the second quarter of 2007. Trust fees also increased by $81,000 or
2.4% for the first six months of 2007 due to continued successful new
business development efforts and an increased value for trust assets. The
fair market value of trust assets totaled $1.87 billion at June 30, 2007.
These positive items were offset by reduced deposit service charges which
declined by $57,000 due to fewer overdraft fees. Other income also declined
by $72,000 in the second quarter and $208,000 for the first six months of
2007 due largely to reduced revenues from AmeriServ Associates, a
subsidiary that was closed in the second quarter of 2006, because it no
longer fit the Company's strategic direction.
Total non-interest expense in the second quarter of 2007 decreased by
$255,000 from the prior year's second quarter and for the first six months
of 2007 declined by $440,000 when compared to the first six months of 2006.
The Company did benefit from a net favorable expense reduction of
approximately $300,000 in the second quarter of 2007 that resulted from a
combination of several items. These included a recovery on a previous
mortgage loan securitization that more than offset the costs associated
with an early retirement program that will reduce seven full-time
equivalent employees and certain costs associated with the conversion to a
new ATM network provider. Additionally as a result of the Company's
continued focus on reducing and containing non-interest expenses,
reductions were experienced in numerous expense categories despite the
inclusion of $257,000 of non-interest expenses from West Chester Capital
Advisors in the second quarter of 2007. The largest expense reductions were
experienced in professional fees, equipment expense and FDIC deposit
insurance expense.
At June 30, 2007, ASRV had total assets of $876 million and
shareholders' equity of $86 million or $3.89 per share. The Company's asset
leverage ratio remained strong at 10.36% at June 30, 2007.
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 17, 2007
(In thousands, except per share and ratio data)
(All quarterly and 2007 data unaudited)
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
2006
1QTR 2QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $540 $568 $1,108
PERFORMANCE PERCENTAGES (annualized):
Return on average assets 0.25% 0.26% 0.26%
Return on average equity 2.59 2.71 2.65
Net interest margin 3.20 3.16 3.18
Net charge-offs as a percentage of
average loans 0.09 0.07 0.08
Loan loss provision as a percentage
of average loans - (0.04) (0.02)
Efficiency ratio 92.68 92.08 92.38
PER COMMON SHARE:
Net income:
Basic $0.02 $0.03 $0.05
Average number of common shares
outstanding 22,119 22,143 22,131
Diluted 0.02 0.03 0.05
Average number of common shares
outstanding 22,127 22,153 22,139
AMERISERV FINANCIAL, INC.
(In thousands, except per share,
statistical, and ratio data)
(All quarterly and 2007 data unaudited)
2007
1QTR 2QTR
PERFORMANCE DATA AT PERIOD END:
Assets $891,559 $876,160
Investment securities 185,338 174,508
Loans 603,834 604,639
Allowance for loan losses 8,010 7,911
Goodwill and core deposit intangibles 15,119 14,903
Deposits 768,947 762,902
FHLB borrowings 15,170 4,258
Stockholders' equity 85,693 86,226
Trust assets - fair market value (B) 1,828,475 1,872,366
Non-performing assets 2,706 2,825
Asset leverage ratio 10.23% 10.36%
PER COMMON SHARE:
Book value (A) $3.87 $3.89
Market value 4.79 4.40
Market price to book value 123.88% 113.12%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 375 376
Branch locations 21 21
Common shares outstanding 22,161,445 22,167,235
2006
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT PERIOD
END:
Assets $876,393 $887,608 $882,837 $895,992
Investment securities 223,658 210,230 209,046 204,344
Loans 548,466 573,884 580,560 589,435
Allowance for loan losses 9,026 8,874 8,302 8,092
Goodwill and core deposit
intangibles 12,031 11,815 11,599 11,382
Deposits 727,987 740,979 743,687 741,755
FHLB borrowings 45,223 43,031 31,949 50,037
Stockholders' equity 84,336 84,231 86,788 84,684
Trust assets - fair market
value (B) 1,669,525 1,679,634 1,702,210 1,778,652
Non-performing assets 4,193 4,625 2,978 2,292
Asset leverage ratio 10.36% 10.54% 10.52% 10.54%
PER COMMON SHARE:
Book value $3.81 $3.80 $3.92 $3.82
Market value 5.00 4.91 4.43 4.93
Market price to book value 131.26% 129.09% 113.07% 128.98%
STATISTICAL DATA AT PERIOD
END:
Full-time equivalent
employees 375 367 364 369
Branch locations 22 22 21 21
Common shares outstanding 22,140,172 22,145,639 22,150,767 22,156,094
Note:
(A) Other comprehensive income had a negative impact of $0.28 on book
value per share at June 30, 2007.
(B) Not recognized on the balance sheet
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2007 data unaudited)
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 of 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 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 87 275 362
NET INCOME $428 $808 $1,236
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2007 data unaudited)
2006
1QTR 2QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $8,900 $9,155 $18,055
Total investment portfolio 2,279 2,259 4,538
Total Interest Income 11,179 11,414 22,593
INTEREST EXPENSE
Deposits 4,026 4,563 8,589
All borrowings 861 660 1,521
Total Interest Expense 4,887 5,223 10,110
NET INTEREST INCOME 6,292 6,191 12,483
Provision of loan losses - (50) (50)
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,292 6,241 12,533
NON-INTEREST INCOME
Trust fees 1,641 1,671 3,312
Net realized gains on loans held for
sale 23 20 43
Service charges on deposit accounts 627 651 1,278
Bank owned life insurance 256 260 516
Other income 695 666 1,361
Total Non-Interest Income 3,242 3,268 6,510
NON-INTEREST EXPENSE
Salaries and employee benefits 4,815 4,612 9,427
Net occupancy expense 655 591 1,246
Equipment expense 639 631 1,270
Professional fees 795 859 1,654
FDIC deposit insurance expense 73 74 147
Amortization of core deposit intangibles 216 216 432
Other expenses 1,665 1,794 3,459
Total Non-Interest Expense 8,858 8,777 17,635
PRETAX INCOME 676 732 1,408
Income tax expense 136 164 300
NET INCOME $540 $568 $1,108
AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2007 data unaudited)
Note: 2006 data appears before 2007.
2006 2007
SIX SIX
2QTR MONTHS 2QTR MONTHS
Interest earning assets:
Loans and loans held for sale, net
of unearned income $553,476 $551,225 $599,395 $596,176
Deposits with banks 645 726 666 625
Federal funds - - 6,355 3,389
Total investment securities 224,812 229,649 183,293 192,714
Total interest earning assets 778,933 781,600 789,709 792,904
Non-interest earning assets:
Cash and due from banks 18,549 18,889 17,445 17,264
Premises and equipment 8,307 8,462 8,822 8,779
Other assets 69,191 69,512 71,021 68,572
Allowance for loan losses (8,957) (9,013) (7,971) (8,016)
Total assets 866,023 869,450 879,026 879,503
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 57,630 56,717 56,250 57,273
Savings 85,886 86,022 73,640 73,916
Money market 169,819 172,776 183,911 189,400
Other time 313,381 304,948 345,285 336,555
Total interest bearing deposits 626,716 620,463 659,086 657,144
Borrowings:
Federal funds purchased,
securities sold under agreements
to repurchase, and other
short-term borrowings 28,570 38,623 2,367 9,282
Advanced from Federal Home Loan
Bank 972 977 3,930 2,661
Guaranteed junior subordinated
deferrable interest debentures 13,085 13,085 13,085 13,085
Total interest bearing liabilities 669,343 673,148 678,468 682,172
Non-interest bearing liabilities:
Demand deposits 106,512 105,758 105,055 103,477
Other liabilities 6,156 6,347 9,956 8,829
Stockholders' equity 84,012 84,197 85,547 85,025
Total liabilities and
stockholders' equity $866,023 $869,450 $879,026 $879,503
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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