JOHNSTOWN, Pa., July 18 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) reported second quarter 2006 net income of $568,000 or
$0.03 per diluted share. This represented an increase of $198,000 or 53.5%
over the second quarter 2005 net income of $370,000 or $0.02 per diluted
share. For the six month period ended June 30, 2006, the Company has now
earned $1.1 million or $0.05 per diluted share. This compares to net income
of $1.2 million or $0.06 per diluted share for the first six months of
2005. Note that for comparative purposes the 2005 results included a
one-time income tax benefit of $475,000. There was no such tax benefit in
2006. The following table highlights the Company's financial performance
for both the three and six month periods ended June 30, 2006 and 2005:
Second Second Six Months Six Months
Quarter Quarter Ended Ended
2006 2005 June 30, 2006 June 30, 2005
Income before taxes $732,000 $427,000 $1,408,000 $829,000
Net income $568,000 $370,000 $1,108,000 $1,203,000
Diluted earnings
per share $ 0.03 $ 0.02 $ 0.05 $ 0.06
At June 30, 2006, ASRV had total assets of $888 million and
shareholders' equity of $84 million or $3.80 per share. The Company's asset
leverage ratio improved to 10.54% at June 30, 2006, compared to 9.92% at
June 30, 2005.
Allan R. Dennison, President and Chief Executive Officer, commented on
the second quarter 2006 results, "AmeriServ's improved financial
performance in the second quarter of 2006 resulted from a combination of
increased revenues and reduced non-interest expenses when compared to the
second quarter of 2005. Average loans outstanding increased by $35 million
or 6.7% and average deposits grew by $22 million or 3.0% in the second
quarter of 2006 as a result of our focus on traditional community banking.
This growth combined with significant reductions in both investment
securities and borrowings due to our successful balance sheet restructuring
completed in the second half of 2005 caused our net interest income to
increase by $200,000 and our net interest margin to improve by 53 basis
points to 3.16%. Finally, our Trust Company continued to be a strong
contributor to the improved earnings as our revenue growth in that business
line approximated 11% in the second quarter of 2006."
The Company's net interest income in the second quarter of 2006
increased by $200,000 from the prior year's second quarter and for the
first six months of 2006 increased by $197,000 when compared to the first
six months of 2005. This improvement reflects the benefits from an
increased net interest margin which more than offset a reduced level of
earning assets. Specifically, for the first six months of 2006 the net
interest margin increased by 49 basis points to 3.18% while the level of
average earning assets declined by $132 million or 14.4%. Both of these
items reflect the deleverage of high cost debt from the Company's balance
sheet which has resulted in lower levels of both borrowed funds and
investment securities. The Company's net interest margin also benefited
from increased loans in the earning asset mix as total loans outstanding
averaged $551 million in the first six months of 2006 a 6.2% increase from
the same 2005 period. This loan growth was most evident in the commercial
loan portfolio. Total deposits averaged $726 million for the first six
months of 2006, a 4.4% increase from the same 2005 period due primarily to
increased deposits from the trust company's operations. This deposit growth
also allowed the Company to further reduce FHLB borrowings as these
wholesale borrowings averaged only 4.6% of total assets in the first six
months of 2006 compared to 19.0% of total assets in the first six months of
2005. Overall, the Company has been able to generate increased net interest
income from a smaller but stronger balance sheet despite the negative
impact resulting from a flatter yield curve in 2006.
As a result of continued sound asset quality, the Company was able to
reverse a small portion of its allowance for loan losses into earnings in
the second quarter of 2006. This loan loss provision benefit amounted to
$50,000 in the second quarter of 2006 which was lower than a similar
negative loan loss provision of $275,000 reversed into earnings in the
second quarter of 2005. Non-performing assets have remained in a range of
$3.3 to $4.6 million for the past six quarters and ended the second quarter
of 2006 at $4.6 million or 0.81% of total loans. Classified loans have
declined from $20.2 million at December 31, 2005 to $17.7 million at June
30, 2006. Net charge-offs in the first six months of 2006 amounted to
$219,000 or 0.08% of total loans which was up from the net charge-offs of
$138,000 or 0.05% of total loans in the same prior year period. The
allowance for loan losses provided 192% coverage of non-performing assets
at June 30, 2006 compared to 212% coverage at December 31, 2005. The
allowance for loan losses as a percentage of total loans amounted to 1.55%
at June 30, 2006 compared to 1.66% at December 31, 2005.
The Company's non-interest income in the second quarter of 2006
increased by $88,000 from the prior year's second quarter and for the first
six months of 2006 increased by $182,000 when compared to the first six
months of 2005. Strong growth in trust revenue was the main factor
responsible for the total growth in non-interest income for both periods.
Trust fees increased by $165,000 or 11.0% for the quarterly period and by
$334,000 or 11.2% for the six month period due to continued successful new
business development efforts in both the union and traditional trust
product lines. Over the past year, the fair market value of trust assets
has grown by 12.9% to $1.68 billion at June 30, 2006. This positive item
was partially offset by fewer gains realized on asset sales in 2006.
Specifically, there was a $63,000 quarterly decrease and a $112,000 decline
for the six month period in gains realized on loan sales into the secondary
market due to weaker residential mortgage loan production in 2006.
Additionally, the Company realized no gains on investment security sales in
2006 compared to $78,000 of investment security gains realized in 2005.
As a result of the Company's continued focus on reducing and containing
non-interest expenses, total non-interest expense in the second quarter of
2006 decreased by $129,000 from the prior year's second quarter and for the
first six months of 2006 declined by $214,000 when compared to the first
six months of 2005. Expense reductions were experienced in numerous
categories including professional fees, other expenses, and salaries and
benefits expense due to fewer employees. This improved expense performance
in the second quarter occurred despite the Company absorbing the final
closure costs associated with its investment advisory subsidiary which
approximated $100,000. Also, the loss from discontinued operations declined
from $139,000 in the first six months of 2005 to $0 in the first half of
2006 as the Company completed the exit from its mortgage servicing
operation in 2005.
The Company recorded an income tax expense of $164,000 in the 2006
second quarter and $300,000 for the first six months of 2006 which reflects
an estimated effective tax rate of approximately 22%. This is higher than
the Company's 2005 income tax expense as the prior year performance was
favorably impacted by an income tax benefit. Specifically in the first
quarter of 2005, the Company lowered its income tax expense by $475,000 due
to a reduction in reserves for prior year tax contingencies as a result of
the successful conclusion of an IRS examination on several open tax years.
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 NMS: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA
(In thousands, except per share and ratio data)
(All quarterly and 2006 data unaudited)
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
2005
1QTR 2QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $833 $370 $1,203
PERFORMANCE PERCENTAGES (annualized):
Return on average assets 0.34% 0.15% 0.24%
Return on average equity 3.95 1.75 2.85
Net interest margin 2.75 2.63 2.69
Net charge-offs as a percentage of
average loans 0.05 0.06 0.05
Loan loss provision as a percentage
of average loans - (0.21) (0.11)
Efficiency ratio 94.42 96.81 95.60
PER COMMON SHARE:
Net income:
Basic $0.04 $0.02 $0.06
Average number of common shares
outstanding 19,721 19,726 19,724
Diluted 0.04 0.02 0.06
Average number of common shares
outstanding 19,760 19,765 19,762
AMERISERV FINANCIAL, INC.
(In thousands, except per share,
statistical, and ratio data)
(All quarterly and 2006 data unaudited)
2006
1QTR 2QTR
PERFORMANCE DATA AT PERIOD END:
Assets $876,393 $887,608
Investment securities 223,658 210,230
Loans 548,466 573,884
Allowance for loan losses 9,026 8,874
Goodwill and core deposit
intangibles 12,031 11,815
Deposits 727,987 740,979
FHLB borrowings 45,223 43,031
Stockholders' equity 84,336 84,231
Trust assets - fair market
value (B) 1,669,525 1,679,634
Non-performing assets 4,193 4,625
Asset leverage ratio 10.36% 10.54%
PER COMMON SHARE:
Book value (A) $3.81 $3.80
Market value 5.00 4.91
Market price to book value 131.26% 129.09%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 375 367
Branch locations 22 22
Common shares outstanding 22,140,172 22,145,639
2005
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT PERIOD END:
Assets $996,450 $996,786 $901,194 $880,176
Investment securities 381,124 385,398 253,082 231,924
Loans 527,344 522,437 544,900 550,602
Allowance for loan losses 9,856 9,480 9,435 9,143
Goodwill and core deposit
intangibles 12,896 12,680 12,464 12,247
Deposits 725,369 691,740 698,297 712,655
FHLB borrowings 160,388 191,904 90,437 64,171
Stockholders' equity 83,720 86,267 85,022 84,474
Trust assets - fair market
value (B) 1,465,028 1,487,496 1,600,968 1,606,978
Non-performing assets 3,819 3,334 3,323 4,316
Asset leverage ratio 9.77% 9.92% 9.90% 10.24%
PER COMMON SHARE:
Book value $4.24 $4.37 $3.85 $3.82
Market value 5.61 5.35 4.35 4.38
Market price to book value 132.35% 122.36% 113.07% 114.65%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent
employees 394 383 384 378
Branch locations 22 22 22 22
Common shares outstanding 19,722,884 19,729,678 22,105,786 22,112,273
Note:
(A) Other comprehensive income had a negative impact of $0.25 on book
value per share at June 30, 2006.
(B) Not recognized on the balance sheet
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2006 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 investment
securities available for sale - - -
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
INCOME BEFORE INCOME TAXES 676 732 1,408
Provision for income taxes 136 164 300
NET INCOME $540 $568 $1,108
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2006 data unaudited)
2005
1QTR 2QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $7,954 $8,105 $16,059
Total investment portfolio 3,737 3,607 7,344
Total Interest Income 11,691 11,712 23,403
INTEREST EXPENSE
Deposits 2,845 3,188 6,033
All borrowings 2,551 2,533 5,084
Total Interest Expense 5,396 5,721 11,117
NET INTEREST INCOME 6,295 5,991 12,286
Provision of loan losses - (275) (275)
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,295 6,266 12,561
NON-INTEREST INCOME
Trust fees 1,472 1,506 2,978
Net realized gains on investment
securities available for sale 78 - 78
Net realized gains on loans held for
sale 72 83 155
Service charges on deposit accounts 584 704 1,288
Bank owned life insurance 250 254 504
Other income 692 633 1,325
Total Non-Interest Income 3,148 3,180 6,328
NON-INTEREST EXPENSE
Salaries and employee benefits 4,751 4,680 9,431
Net occupancy expense 668 592 1,260
Equipment expense 639 622 1,261
Professional fees 823 938 1,761
FDIC deposit insurance expense 71 69 140
Amortization of core deposit
intangibles 216 216 432
Other expenses 1,775 1,789 3,564
Total Non-Interest Expense 8,943 8,906 17,849
INCOME BEFORE INCOME TAXES 500 540 1,040
Provision (benefit) for income taxes (398) 96 (302)
Income from continuing operations 898 444 1,342
Loss from discontinued operations (65) (74) (139)
NET INCOME $833 $370 $1,203
AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2006 data unaudited)
Note: 2005 data appears before 2006.
2005 2006
SIX SIX
2QTR MONTHS 2QTR MONTHS
Interest earning assets:
Loans and loans held for sale, net
of unearned income $518,735 $519,060 $553,476 $551,225
Deposits with banks 524 922 645 726
Total investment securities 391,072 393,483 224,812 229,649
Total interest earning assets 910,331 913,465 778,933 781,600
Non-interest earning assets:
Cash and due from banks 20,290 21,216 18,549 18,889
Premises and equipment 9,523 9,603 8,307 8,462
Assets of discontinued operations 1,718 1,775 - -
Other assets 61,513 62,343 69,191 69,512
Allowance for loan losses (9,841) (9,854) (8,957) (9,013)
Total assets 993,534 998,548 866,023 869,450
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 54,089 53,923 57,630 56,717
Savings 99,410 99,509 85,886 86,022
Money market 163,391 154,142 169,819 172,776
Other time 288,499 282,791 313,381 304,948
Total interest bearing deposits 605,389 590,365 626,716 620,463
Borrowings:
Federal funds purchased, securities
sold under agreements to repurchase,
and other short-term borrowings 68,212 88,666 28,570 38,623
Advanced from Federal Home Loan
Bank 101,011 101,017 972 977
Guaranteed junior subordinated
deferrable interest debentures 20,285 20,285 13,085 13,085
Total interest bearing liabilities 794,897 800,333 669,343 673,148
Non-interest bearing liabilities:
Demand deposits 106,234 105,538 106,512 105,758
Liabilities of discontinued
operations 612 624 - -
Other liabilities 6,959 6,829 6,156 6,347
Stockholders' equity 84,832 85,224 84,012 84,197
Total liabilities and
stockholders' equity $993,534 $998,548 $866,023 $869,450
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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