JOHNSTOWN, Pa., July 20 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) completed its fifth consecutive quarter of profitability
by reporting net income for the second quarter of 2004 of $254,000 or $0.02
per diluted share. For the six month period ended June 30, 2004, the Company
has now earned $480,000 or $0.03 per diluted share which represents an
increase over the net income of $120,000 or $0.01 per diluted share reported
for the six month period ended June 30, 2003. The following table highlights
the Company's financial performance for both the three and six month periods
ended June 30, 2004 and 2003:
Second Second Six Months Six Months
Quarter Quarter Ended Ended
2004 2003 June 30, 2004 June 30, 2003
Net income $254,000 $915,000 $480,000 $120,000
Diluted earnings 0.02 0.07 0.03 0.01
per share
Allan R. Dennison, President and Chief Executive Officer, commented, "The
AmeriServ Turnaround continues in spite of the volatility of financial
markets. We are pleased to see progress in deposit growth, the slowing of
erosion in the loan portfolio, the decline in the level of non-performing
assets, and the decline in non-interest expense. In the few months since I
have joined the Company, I am impressed with the commitment of our employees
to maintain our focus as a community bank and to take the necessary steps to
improve the performance of this Company."
The Company's provision for loan losses totaled $259,000 or 0.21% of total
loans in the second quarter of 2004. This represented a decrease of $275,000
from the second quarter 2003 provision of $534,000 or 0.40% of total loans.
For the first six months of 2004, the Company's provision for loan losses
totaled $643,000 or 0.26% of total loans, a decrease of $1.6 million from the
provision of $2.2 million or 0.80% of total loans recorded in the first six
months of 2003. Net charge-offs in the first half of 2004 totaled
$1.2 million or 0.48% of total loans compared to net charge-offs of $312,000
or 0.11% of total loans in the first half of 2003. The higher net charge-offs
in the first six months of 2004 reflect a $625,000 write-down of a
$4.8 million loan on a personal care facility that was moved into other real
estate owned and increased charge-offs on small business commercial loans.
Overall, however, the lower provision for loan losses in 2004 reflects
improvements in asset quality most evidenced by lower levels of classified
loans and non-performing assets. While the Company is pleased with this early
improvement in asset quality, it continues to closely monitor the portfolio
given its existing level of non-performing assets and problem credits.
Non-performing assets totaled $10.2 million at June 30, 2004, which
represented a decrease of $3.3 million or 24.7% from the March 31, 2004 level
of $13.5 million. This decline resulted primarily from successful work-out
efforts on problem credits which included the collection of over $2 million on
the personal care facility housed in other real estate owned. The Company's
allowance for loan losses totaled $10.9 million at June 30, 2004 providing
108% coverage of non-performing assets. Overall, the allowance for loan
losses as a percentage of total loans amounted to 2.18% at June 30, 2004
compared to 2.32% at December 31, 2003, and 2.27% at June 30, 2003.
The Company's net interest income in the second quarter of 2004 decreased
by $521,000 from the prior year second quarter and for the first six months of
2004 declined by $956,000 when compared to the first six months of 2003. This
decline resulted from a reduced level of earning assets and a 13 basis point
drop in the net interest margin to 2.32% for the first half of 2004. Loan
portfolio shrinkage experienced during the majority of 2003 was a predominant
factor contributing to both the lower level of earning assets and the net
interest margin contraction. While the Company has generated increased new
commercial loan production in 2004, the effects of heightened pay-offs
continue to constrain the size of total loans outstanding. A strategic focus
on deposit generation has caused the Company to experience a rebuilding and
growth of deposits since the low point reached in the third quarter of 2003.
The Company's total non-interest income declined by approximately
$1.5 million when both the second quarter and first six months of 2004 are
compared to the same 2003 periods. Fewer gains realized on asset sales was
the primary factor responsible for the lower non-interest income in 2004.
Specifically, gains realized on the sale of investment securities dropped by
$1.3 million in the second quarter of 2004 and by $1.7 million for the six
month period due to the higher interest rate environment in place in 2004.
This higher rate environment in 2004 also had a negative impact on new
residential mortgage origination and refinance volumes as gains realized on
the sale of mortgage loans into the secondary market decreased by $106,000 in
the second quarter and $239,000 for the six month period ended June 30, 2004.
This lower level of new mortgage origination activity in 2004 was also the
main factor responsible for the decrease in other non-interest income. These
negative items were partially offset by a $108,000 or 4.3% increase in trust
fees due to continued successful union related new business development
efforts. Also the Company benefited from the non-recurrence of a $758,000
loss on the sale of approximately 70% of its mortgage-servicing portfolio in
the first quarter of 2003. This significant downsizing of the
mortgage-servicing asset reduced the level of interest rate risk and earnings
volatility of the Company.
The Company's non-interest expense in the second quarter of 2004 favorably
decreased by $830,000 from the prior year second quarter and for the first six
months of 2004 declined by $1.3 million when compared to the first six months
of 2003. The largest factor causing the six month decrease was a net
favorable change of $784,000 in the impairment charge on mortgage servicing
rights as the higher interest rate environment and reduced mortgage
refinancing activity caused an improvement in the value of the Company's
remaining mortgage servicing rights. The Company also benefited from the
non-recurrence in 2004 of a $199,000 goodwill impairment loss associated with
the write-off of all goodwill within the mortgage-banking segment in the first
quarter of 2003. Excluding these impairment related charges, the remaining
total non-interest expenses were still down by $296,000 between the first half
of 2003 and first half of 2004 reflecting the Company's continued focus on
reducing and containing expenses. Expense reductions were experienced in
numerous categories including equipment expense, professional fees, and other
expenses.
At June 30, 2004, ASRV had total assets of $1.178 billion and
shareholders' equity of $67 million or $4.81 per share. The Company is well
capitalized for regulatory purposes with an asset leverage ratio at June 30,
2004 of 7.71%, compared to a regulatory minimum of 5.0%.
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.
Nasdaq NMS: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA (A)
July 20, 2004
(In thousands, except per share and ratio data)
2004
1QTR 2QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $226 $254 $480
PERFORMANCE PERCENTAGES
(annualized):
Return on average equity 1.21% 1.41% 1.31%
Net interest margin 2.39 2.25 2.32
Net charge-offs as a percentage
of average loans 0.48 0.48 0.48
Loan loss provision as a
percentage of average loans 0.31 0.21 0.26
Efficiency ratio 93.83 94.80 94.29
PER COMMON SHARE:
Net income:
Basic $0.02 $0.02 $0.03
Average number of common
shares outstanding 13,962,010 13,969,211 13,965,611
Diluted 0.02 0.02 0.03
Average number of common
shares outstanding 14,025,836 14,023,577 14,023,450
Cash dividends declared 0.00 0.00 0.00
2003
1QTR 2QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE
PERIOD:
Net income (loss) $(795) $915 $120
PERFORMANCE PERCENTAGES
(annualized):
Return on average equity (4.17)% 4.68% 0.31%
Net interest margin 2.48 2.41 2.45
Net charge-offs as a percentage
of average loans 0.20 0.02 0.11
Loan loss provision as a
percentage of average loans 1.19 0.40 0.80
Efficiency ratio 94.98 84.81 89.69
PER COMMON SHARE:
Net income (loss):
Basic $(0.06) $0.07 $0.01
Average number of common
shares outstanding 13,923,010 13,935,086 13,929,082
Diluted (0.06) 0.07 0.01
Average number of common
shares outstanding 13,923,010 13,940,460 13,933,861
Cash dividends declared 0.00 0.00 0.00
NOTES:
(A) All quarterly data unaudited.
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
2004
1QTR 2QTR
PERFORMANCE DATA AT PERIOD END
Assets $1,099,564 $1,178,406
Investment securities 504,980 581,553
Loans 503,404 500,522
Allowance for loan losses 11,379 10,932
Goodwill and core deposit intangibles 13,905 13,547
Mortgage servicing rights 1,493 1,642
Deposits 656,348 670,941
Stockholders' equity 77,721 67,213
Trust assets - fair market value 1,256,064 1,246,458
Non-performing assets 13,482 10,155
Asset leverage ratio 7.75% 7.71%
PER COMMON SHARE:
Book value (A) $5.57 $4.81
Market value 6.10 5.55
Market price to book value 109.52% 115.50%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 415 412
Branch locations 23 23
Common shares outstanding 13,965,737 13,972,424
2003
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT PERIOD END
Assets $1,190,360 $1,167,610 $1,160,915 $1,147,886
Investment
securities 546,427 554,967 577,374 552,662
Loans 555,335 525,591 496,951 503,387
Allowance for loan
losses 11,415 11,916 11,872 11,682
Goodwill and core
deposit intangibles 15,337 14,979 14,621 14,263
Mortgage servicing
rights 2,214 1,784 1,859 1,718
Deposits 669,103 661,932 648,844 654,597
Stockholders' equity 77,864 78,884 75,188 74,270
Trust assets -- fair
market value 1,091,391 1,146,695 1,107,022 1,145,660
Non-performing
assets 11,687 10,163 11,227 11,411
Asset leverage ratio 7.23% 7.39% 7.48% 7.58%
PER COMMON SHARE:
Book value (A) $5.59 $5.66 $5.39 $5.32
Market value 3.50 3.80 4.17 5.00
Market price to
book value 62.61% 67.14% 77.37% 93.98%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent
employees 416 427 422 413
Branch locations 23 23 23 23
Common shares
outstanding 13,929,324 13,940,999 13,949,383 13,957,599
NOTES:
(A) Other comprehensive income had a negative impact of $0.61 on book
value per share at June 30, 2004.
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Quarterly data unaudited)
2004
YEAR
INTEREST INCOME 1QTR 2QTR TO DATE
Interest and fees on loans $7,691 $7,679 $15,370
Total investment portfolio 5,228 4,943 10,171
Total Interest Income 12,919 12,622 25,541
INTEREST EXPENSE
Deposits 2,543 2,529 5,072
All other funding sources 4,164 4,180 8,344
Total Interest Expense 6,707 6,709 13,416
NET INTEREST INCOME 6,212 5,913 12,125
Provision for loan losses 384 259 643
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,828 5,654 11,482
NON-INTEREST INCOME
Trust fees 1,267 1,347 2,614
Net realized gains on
investment securities
available for sale 937 111 1,048
Net realized gains on
loans and loans held for sale 40 115 155
Service charges on deposit
accounts 730 716 1,446
Net mortgage servicing fees 52 47 99
Bank owned life insurance 275 276 551
Other income 764 893 1,657
Total Non-interest Income 4,065 3,505 7,570
NON-INTEREST EXPENSE
Salaries and employee benefits 4,915 4,803 9,718
Net occupancy expense 757 699 1,456
Equipment expense 704 687 1,391
Professional fees 804 833 1,637
FDIC deposit insurance expense 72 71 143
Amortization of core deposit
intangibles 358 358 716
Impairment charge (credit) for
mortgage servicing rights 100 (264) (164)
Other expenses 1,961 1,769 3,730
Total Non-interest Expense 9,671 8,956 18,627
INCOME BEFORE INCOME TAXES 222 203 425
Provision (benefit) for
income taxes (4) (51) (55)
NET INCOME $226 $254 $480
2003
YEAR
INTEREST INCOME 1QTR 2QTR TO DATE
Interest and fees on loans $9,083 $8,595 $17,678
Total investment portfolio 5,660 5,631 11,291
Total Interest Income 14,743 14,226 28,969
INTEREST EXPENSE
Deposits 3,140 2,965 6,105
All other funding sources 4,956 4,827 9,783
Total Interest Expense 8,096 7,792 15,888
NET INTEREST INCOME 6,647 6,434 13,081
Provision for loan losses 1,659 534 2,193
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,988 5,900 10,888
NON-INTEREST INCOME
Trust fees 1,253 1,253 2,506
Net realized gains on
investment securities
available for sale 1,278 1,420 2,698
Net realized gains on
loans and loans held for sale 173 221 394
Service charges on deposit
accounts 767 800 1,567
Net mortgage servicing fees 71 77 148
Gain (loss) on sale of
mortgage servicing (758) - (758)
Bank owned life insurance 298 307 605
Other income 913 1,017 1,930
Total Non-interest Income 3,995 5,095 9,090
NON-INTEREST EXPENSE
Salaries and employee benefits 4,789 4,717 9,506
Net occupancy expense 752 701 1,453
Equipment expense 817 750 1,567
Professional fees 903 1,058 1,961
FDIC deposit insurance expense 28 26 54
Amortization of core
deposit intangibles 358 358 716
Impairment charge (credit)
for mortgage servicing
rights 366 254 620
Goodwill impairment loss 199 - 199
Other expenses 1,908 1,922 3,830
Total Non-interest Expense 10,120 9,786 19,906
INCOME (LOSS) BEFORE
INCOME TAXES (1,137) 1,209 72
Provision (benefit) for
income taxes (342) 294 (48)
NET INCOME (LOSS) $(795) $915 $120
AMERISERV FINANCIAL, INC.
Nasdaq NMS: ASRV
Average Balance Sheet Data (In thousands)
(Quarterly Data Unaudited)
Note: 2003 data appears before 2004.
2003 2004
SIX SIX
2QTR MONTHS 2QTR MONTHS
Interest earning assets:
Loans and loans held
for sale, net of
unearned income $525,935 $541,528 $495,519 $495,623
Deposits with banks 4,002 5,621 5,117 4,845
Federal funds sold 35 18 47 137
Total investment
securities 531,834 514,836 554,425 548,093
Total interest
earning assets 1,061,806 1,062,003 1,055,108 1,048,698
Non-interest earning assets:
Cash and due
from banks 21,533 22,545 21,221 21,667
Premises and
equipment 12,123 12,300 10,580 10,781
Other assets 69,670 70,453 69,903 68,181
Allowance for
loan losses (11,703) (10,988) (11,258) (11,358)
Total assets $1,153,429 $1,156,313 $1,145,554 $1,137,969
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing
demand $52,491 $51,520 $53,266 $52,552
Savings 103,238 102,678 106,627 105,928
Money market 124,827 126,529 118,704 119,567
Other time 284,879 287,046 279,128 276,684
Total interest
bearing deposits 565,435 567,773 557,725 554,731
Borrowings:
Federal funds
purchased,
securities sold
under agreements
to repurchase,
and other
short-term
borrowings 102,264 97,958 134,982 131,693
Advanced from Federal
Home Loan Bank 264,861 266,509 226,050 226,430
Guaranteed junior
subordinated
deferrable
interest
debentures * 34,500 34,500 35,567 35,567
Total interest
bearing
liabilities 967,060 966,740 954,324 948,421
Non-interest bearing liabilities:
Demand deposits 104,057 105,952 107,295 106,820
Other liabilities 3,973 4,582 11,273 8,826
Stockholders' equity 78,339 79,039 72,662 73,902
Total liabilities and
stockholders'
equity $1,153,429 $1,156,313 $1,145,554 $1,137,969
* - In the first quarter 2004 The Company adopted FIN46R which resulted in
the deconsolidation of the capital trust subsidiary.
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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