JOHNSTOWN, Pa., July 22 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) returned to profitability by reporting net income for the
second quarter of 2003 of $915,000 or $0.07 per diluted share. When compared
to net income of $408,000 or $0.03 per diluted share reported in the second
quarter of 2002, this represents an increase of $507,000 or over 100%. This
financial performance reflects continued progress in the Company's turnaround
and the first quarter of profitability after net losses experienced in the
three previous quarters. Specifically, the Company reported a net loss of
$4.2 million in the third quarter of 2002, a net loss of $2 million in the
fourth quarter of 2002, and a net loss of $795,000 in the first quarter of
2003. As a result of the positive second quarter 2003 performance, the
Company is also now profitable for the six month period ended June 30, 2003
with net income of $120,000 or $0.01 per diluted share. The following table
highlights the Company's financial performance for both the three and six
month periods ended June 30, 2003 and 2002:
(Logo: http://www.newscom.com/cgi-bin/prnh/20020717/ASRVLOGO )
Second Second Six Months Six Months
Quarter Quarter Ended Ended
2003 2002 June 30, 2003 June 30, 2002
Net income $915,000 $408,000 $120,000 $1,034,000
Diluted earnings
per share 0.07 0.03 0.01 0.08
At June 30, 2003, ASRV had total assets of $1.17 billion and shareholders'
equity of $76 million or $5.48 per share. The Company continues to be
considered well capitalized for regulatory purposes with an asset leverage
ratio at June 30, 2003 of 7.10%, compared to a regulatory minimum of 5.0%.
The Company's provision for loan losses totaled $534,000 or 0.40% of total
loans in the second quarter of 2003. This represented a decrease of $281,000
from the second quarter 2002 provision of $815,000 or 0.56% of total loans.
The second quarter 2003 provision exceeded net charge-offs for the quarter
that totaled $33,000 or 0.02% of total loans, which resulted in the Company
further building its allowance for loan losses to $11.9 million at June 30,
2003. Non-performing assets totaled $10.2 million or 1.93% of total loans at
June 30, 2003. This represented a decrease of $1.5 million from the March 31,
2003 level of $11.7 million but an increase of $3.2 million from the December
31, 2002 total of $7.0 million. The Company's largest non-performing asset is
a $4.8 million commercial mortgage loan to a borrower in the personal care
industry that 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.
The Company's loan loss reserve coverage of non-performing assets amounted to
117% at June 30, 2003 compared to 144% at December 31, 2002 and 97% at June
30, 2002. The allowance for loan losses as a percentage of total loans
increased to 2.27% at June 30, 2003 compared to 1.75% at December 31, 2002 and
0.92% at June 30, 2002.
The Company's net interest income in the second quarter of 2003 decreased
by $873,000 from the prior year second quarter due to a reduced level of
earning assets and a decline in the net interest margin to 2.41%. Loan
portfolio shrinkage experienced in the first half of 2003 was the predominant
factor contributing to both the lower level of earning assets and the net
interest margin contraction. The overall net decrease in loans reflects
continuing prepayment pressures caused by the historically low interest rate
environment and the Company's internal focus on improving asset quality. The
Company completed the restructuring of its lending division during the second
quarter of 2003 and is now better positioned to generate increased new loan
production in the second half of the year. When analyzing more recent
quarterly trends, both the net interest income and net interest margin
declines were not as severe. Specifically, between the first and second
quarter of 2003, the Company's net interest income declined by $213,000 and
the net interest margin dropped by seven basis points.
The Company's total non-interest income in the second quarter of 2003 was
slightly better than the prior year second quarter as it increased by $71,000
or 1.4%. Items that favorably impacted second quarter 2003 performance were
net realized gains from investment security sales, higher deposit service
charges, and increased gains on residential mortgage loan sales into the
secondary market. Gains on the sale of investment securities increased by
$106,000 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. A similar increase occurred in deposit service charges due
to higher levels of overdraft fees and checking service charges. These
positive items more than offset a decline in other income resulting from the
Company's decision to exit the merchant card business in the fourth quarter of
2002.
The Company's total non-interest expense in the second quarter of 2003
decreased by $1.3 million or 11.5% from the second quarter of 2002 due to the
Company's continued focus on reducing and containing expenses. This decline
was the primary factor responsible for the Company's increased earnings.
Salaries and employee benefits dropped by $411,000 as on average there were 42
fewer full-time equivalent employees when compared to the second quarter of
2002. Other expenses also declined by $481,000 due to cost cutting in numerous
expense categories, some of the larger of which included advertising expense
and merchant card expense. The dramatic downsizing of the mortgage servicing
asset in the first quarter of 2003 reduced the impact of lower mortgage rates
on the Company's performance. Specifically, the Company's impairment charge
on mortgage servicing rights amounted to $254,000 in the second quarter of
2003; a reduction of $533,000 when compared to the $787,000 impairment charge
recognized in the second quarter of 2002. As a result of the sale of 69% of
the Company's mortgage servicing portfolio and the impairment charges
recognized during the first half of 2003, the value of the Company's mortgage
servicing rights declined from $6.9 million at December 31, 2002 to
$1.8 million at June 30, 2003.
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.
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA (A)
July 22, 2003
(In thousands, except per share and ratio data)
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)% 4.84% 0.32%
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
Net overhead expense as a
percentage of tax equivalent
net interest income 91.97 73.61 82.54
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
2002
1QTR 2QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $626 $408 $1,034
PERFORMANCE PERCENTAGES
(annualized):
Return on average equity 3.16% 2.04% 2.59%
Net interest margin 2.35 2.63 2.49
Net charge-offs as a
percentage of average loans 0.06 1.09 0.58
Loan loss provision as a
percentage of average loans 0.37 0.56 0.47
Net overhead expense as a
percentage of tax equivalent
net interest income 80.13 82.34 81.29
Efficiency ratio 88.34 89.52 88.96
PER COMMON SHARE:
Net income:
Basic $0.05 $0.03 $0.08
Average number of common
shares outstanding 13,689,478 13,748,179 13,718,990
Diluted 0.05 0.03 0.08
Average number of common
shares outstanding 13,712,382 13,778,716 13,745,459
Cash dividends declared 0.09 0.09 0.18
NOTES:
(A) All quarterly data unaudited.
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
2003
1QTR 2QTR
PERFORMANCE DATA AT PERIOD END
Assets $1,190,360 $1,167,610
Investment securities 546,427 544,967
Loans 555,335 525,591
Allowance for loan losses 11,415 11,916
Goodwill and core deposit intangibles 15,337 14,979
Mortgage servicing rights 2,214 1,784
Deposits 669,103 661,932
Stockholders' equity 75,364 76,384
Trust assets 1,091,391 1,146,695
Non-performing assets 11,687 10,163
Asset leverage ratio 6.94% 7.10%
PER COMMON SHARE:
Book value (A) $5.41 $5.48
Market value 3.50 3.80
Market price to book value 64.69% 69.35%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 416 427
Branch locations 23 23
Common shares outstanding 13,929,324 13,940,999
2002
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA
AT PERIOD END
Assets $1,213,764 $1,202,086 $1,182,678 $1,175,550
Investment securities 532,349 493,322 491,861 505,778
Loans 587,624 600,778 594,285 572,977
Allowance for loan
losses 6,286 5,518 5,757 10,035
Goodwill and core
deposit intangibles 16,968 16,610 16,252 15,894
Mortgage servicing
rights 8,315 7,566 5,146 6,917
Deposits 680,435 705,662 674,573 669,929
Stockholders' equity 78,051 82,491 79,711 77,756
Trust assets 1,198,480 1,190,834 1,082,311 1,057,816
Non-performing assets 9,105 5,668 5,407 6,964
Asset leverage ratio 7.54% 7.46% 7.00% 6.84%
PER COMMON SHARE:
Book value (A) $5.69 $6.00 $5.77 $5.59
Market value 4.96 4.58 2.45 2.85
Market price to book
value 87.17% 76.37% 42.45% 50.98%
STATISTICAL DATA AT
PERIOD END:
Full-time equivalent
employees 468 464 445 422
Branch locations 24 24 24 23
Common shares
outstanding 13,709,329 13,754,342 13,811,595 13,898,302
NOTES:
(A) Other comprehensive income had a positive impact of $0.30 on book
value per share at June 30, 2003.
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Quarterly data unaudited)
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
2002
YEAR
INTEREST INCOME 1QTR 2QTR TO
DATE
Interest and fees on loans $10,562 $10,434 $20,996
Total investment portfolio 6,698 6,637 13,335
Total Interest Income 17,260 17,071 34,331
INTEREST EXPENSE
Deposits 4,288 4,215 8,503
All other funding sources 6,389 5,549 11,938
Total Interest Expense 10,677 9,764 20,441
NET INTEREST INCOME 6,583 7,307 13,890
Provision for loan losses 540 815 1,355
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,043 6,492 12,535
NON-INTEREST INCOME
Trust fees 1,279 1,235 2,514
Net realized gains on investment
securities available for sale 637 1,314 1,951
Net realized gains on loans and
loans held for sale 124 141 265
Service charges on deposit accounts 674 694 1,368
Net mortgage servicing fees 92 123 215
Bank owned life insurance 554 317 871
Other income 1,288 1,200 2,488
Total Non-interest Income 4,648 5,024 9,672
NON-INTEREST EXPENSE
Salaries and employee benefits 5,145 5,128 10,273
Net occupancy expense 739 750 1,489
Equipment expense 783 768 1,551
Professional fees 750 847 1,597
FDIC deposit insurance expense 29 29 58
Amortization of core deposit
intangibles 358 358 716
Impairment charge for mortgage
servicing rights (123) 787 664
Wholesale mortgage production exit
costs (26) (14) (40)
Other expenses 2,280 2,403 4,683
Total Non-interest Expense 9,935 11,056 20,991
INCOME BEFORE INCOME TAXES 756 460 1,216
Provision for income taxes 130 52 182
NET INCOME $626 $408 $1,034
AMERISERV FINANCIAL, INC.
Nasdaq NMS: ASRV
Average Balance Sheet Data (In thousands)
(Quarterly Data Unaudited)
Note: 2002 data appears before 2003.
2002 2003
SIX SIX
2QTR MONTHS 2QTR MONTHS
Interest earning assets:
Loans and loans held for
sale, net of unearned
income $584,090 $584,258 $525,935 $541,528
Deposits with banks 16,544 17,511 4,002 5,621
Federal funds sold 277 990 35 18
Total investment securities 502,245 500,043 531,834 514,836
Total interest earning
assets 1,103,156 1,102,802 1,061,806 1,062,003
Non-interest earning assets:
Cash and due from banks 22,683 22,348 21,533 22,545
Premises and equipment 13,219 13,343 12,123 12,300
Other assets 67,554 68,045 69,670 70,453
Allowance for loan losses (6,246) (6,174) (11,703) (10,988)
Total assets $1,200,366 $1,200,364 $1,153,429 $1,156,313
Interest bearing
liabilities:
Interest bearing deposits:
Interest bearing demand $49,680 $49,118 $52,491 $51,520
Savings 102,287 98,602 103,238 102,678
Money market 131,349 133,117 124,827 126,529
Other time 303,327 303,266 284,879 287,046
Total interest bearing
deposits 586,643 584,103 565,435 567,773
Borrowings:
Federal funds purchased,
securities sold under
agreements to repurchase,
and other short-term
borrowings 48,603 34,924 102,264 97,958
Advanced from Federal
Home Loan Bank 333,488 351,226 264,861 266,509
Guaranteed junior
subordinated deferrable
interest debentures 34,500 34,500 34,500 34,500
Total interest bearing
liabilities 1,003,234 1,004,753 967,060 966,740
Non-interest bearing
liabilities:
Demand deposits 107,429 105,031 104,057 105,952
Other liabilities 9,238 10,150 6,473 7,082
Stockholders' equity 80,465 80,430 75,839 76,539
Total liabilities and
stockholders' equity $1,200,366 $1,200,364 $1,153,429 $1,156,313
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, Inc.,
+1-814-533-5310
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