JOHNSTOWN, Pa., Oct. 16 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) reported third quarter 2007 net income of $874,000 or
$0.04 per diluted share. This represents an increase of $231,000 or 35.9%
over the third quarter 2006 net income of $643,000 or $0.03 per diluted
share. For the nine month period ended September 30, 2007, the Company has
earned $2.1 million or $0.10 per diluted share. This represents an increase
of $359,000 or 20.5% when compared to net income of $1.8 million or $0.08
per diluted share for the first nine months of 2006. The following table
highlights the Company's financial performance for both the three and nine
month periods ended September 30, 2007 and 2006:
Third Third Nine Months Nine Months
Quarter Quarter Ended Ended
2007 2006 September September
30, 2007 30, 2006
Net income $874,000 $643,000 $2,110,000 $1,751,000
Diluted earnings
per share $ 0.04 $ 0.03 $ 0.10 $ 0.08
At September 30, 2007, ASRV had total assets of $898 million and
shareholders' equity of $88.5 million or a book value of $3.99 per share.
The Company's asset leverage ratio remained strong at 10.44% at September
30, 2007.
Allan R. Dennison, President and Chief Executive Officer, commented on
the 2007 results, "Our focus on executing our strategic plan has caused
AmeriServ Financial to report improved financial performance for both the
third quarter and first nine months of 2007. We are better leveraging our
expense base to generate increased non-interest revenue as evidenced by the
successful acquisition of West Chester Capital Advisors earlier in 2007.
Continued solid growth in both loans and deposits has caused our net
interest income to increase for three consecutive quarters in 2007 after
bottoming in the fourth quarter of 2006. Our asset quality continues to be
sound as non-performing assets amounted to only 0.39% of total loans and
our loan loss reserve provided 289% coverage of non-performing assets at
September 30, 2007. The recent turmoil in the financial markets that led to
a reduction in interest rates positions AmeriServ Financial for further net
interest income improvement in the fourth quarter."
The Company's net interest income in the third quarter of 2007
decreased by $77,000 from the prior year's third quarter and for the first
nine months of 2007 decreased by $592,000 when compared to the first nine
months of 2006. The Company's net interest margin is also down by six and
14 basis points, respectively for the quarter and nine month periods ended
September 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 for the majority
of the past 18 months. As mentioned earlier, on a quarterly basis the
Company's net interest margin has shown improvement and stability in 2007
increasing from 2.97% in the first quarter to 3.00% in the third quarter.
This helped to reverse a trend of four consecutive quarters of net interest
income and margin contraction experienced in 2006 where the margin declined
from 3.20% to a low of 2.93% in the fourth quarter. The recent Federal
Reserve reduction in short-term interest rates and the return to a more
positively sloped yield curve positions the Company well for net interest
income and margin expansion in the fourth quarter of 2007.
As a result of execution of our community bank focused strategic plan,
the Company did have increased loans and deposits on our balance sheet in
2007. Since year-end 2006, total loans have grown by $40 million or 6.8% to
$629.6 million while total deposits have increased by $22 million or 3.0%
to $763.8 million. The loan growth was most evident in the commercial loan
portfolio with particularly strong performance during the third quarter of
2007. The deposit growth was caused by increased certificates of deposit as
customers have demonstrated a preference for this product due to higher
short-term interest rates.
The Company recorded a $150,000 provision for loan losses in the third
quarter of 2007 compared to no loan loss provision in the third quarter of
2006. For the nine month period ended September 30, 2007, the provision for
loan losses also amounted to $150,000 compared to a negative loan loss
provision of $50,000 realized for the same period in 2006. The Company did
experience higher net charge-offs in the third quarter of 2007 due almost
entirely to the $875,000 complete charge-off of a commercial loan that
resulted from fraud committed by the borrower. This caused net charge-offs
to average loans to total 0.61% in the third quarter of 2007 compared to
0.39% in the third quarter of 2006. For the nine month period ended
September 30, 2007, net charge-offs have amounted to $1.1 million or 0.25%
of total loans compared to net charge-offs of $791,000 or 0.19% of total
loans for the same nine month period in 2006. Non-performing assets totaled
$2.5 million or only 0.39% of total loans at September 30, 2007. This
compares favorably to non- performing assets of $3.0 million or 0.51% of
total loans at September 30, 2006. The allowance for loan losses provided
289% coverage of non-performing assets at September 30, 2007 compared to
353% coverage at December 31, 2006, and 279% coverage at September 30,
2006. The allowance for loan losses as a percentage of total loans amounted
to 1.13% at September 30, 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 third quarter of 2007
increased by $775,000 from the prior year's third quarter and for the first
nine months of 2007 increased by $1.1 million when compared to the first
nine months of 2006. The increase for both periods was due in part to the
West Chester Capital Advisors acquisition which closed in early March of
2007. This accretive acquisition provided $275,000 of investment advisory
fees in the third quarter of 2007 and $706,000 of fees for the nine month
period ended September 30, 2007. Trust fees also increased by $74,000 for
the third quarter 2007 and by $155,000 or 3.2% for the first nine 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 $1.85 billion at September 30, 2007. The Company also realized an
increase on gains realized on residential mortgage loan sales into the
secondary market that amounted to $90,000 for the third quarter of 2007 and
$151,000 for the first nine months of 2007. These increases reflect greater
residential mortgage production from the Company's primary market as this
has been an area of emphasis in the strategic plan. Finally, other income
increased by $259,000 in the third quarter and $51,000 for the first nine
months of 2007 due in part to a $69,000 gain realized on the sale of a
closed branch facility and a $120,000 gain realized on the sale of
equipment obtained from a lease financing arrangement. The Company also
benefited from increased fees associated with the higher residential
mortgage loan production.
Total non-interest expense in the third quarter of 2007 increased by
$209,000 from the prior year's third quarter but for the first nine months
of 2007 declined by $231,000 when compared to the first nine months of
2006. The largest factor responsible for the quarterly increase was the
inclusion of $233,000 of non-interest expenses from West Chester Capital
Advisors; the largest component of which was reflected in salaries and
employee benefits. West Chester Capital Advisors has contributed $568,000
in non-interest expenses for the nine month period ended September 30,
2007. The overall reduction in expenses for the nine month period reflects
the Company's continuing focus on containing and reducing non-interest
expenses. The largest expense reductions were experienced in equipment
expense ($223,000), professional fees ($118,000), other expenses ($466,000)
and FDIC deposit insurance expense (103,000).
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
October 16, 2007
(In thousands, except per share and ratio data)
(All quarterly and 2007 data unaudited)
2007
1QTR 2QTR 3QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $428 $808 $874 $2,110
PERFORMANCE PERCENTAGES (annualized):
Return on average assets 0.20% 0.37% 0.39% 0.32%
Return on average equity 2.05 3.79 4.00 3.30
Net interest margin 2.97 3.01 3.00 3.00
Net charge-offs as a percentage of
average loans 0.06 0.07 0.61 0.25
Loan loss provision as a percentage
of average loans - - 0.10 0.03
Efficiency ratio 94.16 88.52 87.15 89.84
PER COMMON SHARE:
Net income:
Basic $0.02 $0.04 $0.04 $0.10
Average number of common shares
outstanding 22,159 22,164 22,175 22,166
Diluted 0.02 0.04 0.04 0.10
Average number of common shares
outstanding 22,166 22,171 22,177 22,170
2006
1QTR 2QTR 3QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $540 $568 $643 $1,751
PERFORMANCE PERCENTAGES (annualized):
Return on average assets 0.25% 0.26% 0.29% 0.27%
Return on average equity 2.59 2.71 3.00 2.77
Net interest margin 3.20 3.16 3.06 3.14
Net charge-offs as a percentage of
average loans 0.09 0.07 0.39 0.19
Loan loss provision as a percentage
of average loans - (0.04) - (0.01)
Efficiency ratio 92.68 92.08 91.38 92.05
PER COMMON SHARE:
Net income:
Basic $0.02 $0.03 $0.03 $0.08
Average number of common shares
outstanding 22,119 22,143 22,148 22,137
Diluted 0.02 0.03 0.03 0.08
Average number of common shares
outstanding 22,127 22,153 22,156 22,145
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
(All quarterly and 2007 data unaudited)
2007
1QTR 2QTR 3QTR
PERFORMANCE DATA AT PERIOD END:
Assets $891,559 $876,160 $897,940
Investment securities 185,338 174,508 170,765
Loans 603,834 604,639 629,564
Allowance for loan losses 8,010 7,911 7,119
Goodwill and core deposit intangibles 15,119 14,903 14,687
Deposits 768,947 762,902 763,771
FHLB borrowings 15,170 4,258 23,482
Stockholders' equity 85,693 86,226 88,517
Trust assets - fair market value (B) 1,828,475 1,872,366 1,846,240
Non-performing assets 2,706 2,825 2,463
Asset leverage ratio 10.23% 10.36% 10.44%
PER COMMON SHARE:
Book value (A) $3.87 $3.89 $3.99
Market value 4.79 4.40 3.33
Market price to book value 123.88% 113.12% 83.44%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 375 376 358
Branch locations 21 21 20
Common shares outstanding 22,161,445 22,167,235 22,180,650
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 $0.22 on book
value per share at September 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 3QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $10,061 $10,303 $10,591 $30,955
Total investment portfolio 2,114 2,005 1,863 5,982
Total Interest Income 12,175 12,308 12,454 36,937
INTEREST EXPENSE
Deposits 5,699 5,931 5,994 17,624
All borrowings 521 364 438 1,323
Total Interest Expense 6,220 6,295 6,432 18,947
NET INTEREST INCOME 5,955 6,013 6,022 17,990
Provision for loan losses - - 150 150
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 5,955 6,013 5,872 17,840
NON-INTEREST INCOME
Trust fees 1,704 1,689 1,677 5,070
Net realized gains on loans held for sale 25 79 116 220
Service charges on deposit accounts 585 636 671 1,892
Investment advisory fees 102 329 275 706
Bank owned life insurance 258 265 479 1,002
Other income 559 594 804 1,957
Total Non-Interest Income 3,233 3,592 4,022 10,847
NON-INTEREST EXPENSE
Salaries and employee benefits 4,885 4,930 4,813 14,628
Net occupancy expense 664 615 618 1,897
Equipment expense 546 564 466 1,576
Professional fees 695 818 814 2,327
FDIC deposit insurance expense 22 22 22 66
Amortization of core deposit intangibles 216 216 216 648
Other expenses 1,645 1,357 1,824 4,826
Total Non-Interest Expense 8,673 8,522 8,773 25,968
PRETAX INCOME 515 1,083 1,121 2,719
Income tax expense 87 275 247 609
NET INCOME $428 $808 $874 $2,110
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2007 data unaudited)
2006
1QTR 2QTR 3QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $8,900 $9,155 $9,677 $27,732
Total investment portfolio 2,279 2,259 2,218 6,756
Total Interest Income 11,179 11,414 11,895 34,488
INTEREST EXPENSE
Deposits 4,026 4,563 5,143 13,732
All borrowings 861 660 653 2,174
Total Interest Expense 4,887 5,223 5,796 15,906
NET INTEREST INCOME 6,292 6,191 6,099 18,582
Provision for loan losses - (50) - (50)
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,292 6,241 6,099 18,632
NON-INTEREST INCOME
Trust fees 1,641 1,671 1,603 4,915
Net realized gains on loans held for
sale 23 20 26 69
Service charges on deposit accounts 627 651 645 1,923
Bank owned life insurance 256 260 428 944
Other income 695 666 545 1,906
Total Non-Interest Income 3,242 3,268 3,247 9,757
NON-INTEREST EXPENSE
Salaries and employee benefits 4,815 4,612 4,600 14,027
Net occupancy expense 655 591 573 1,819
Equipment expense 639 631 529 1,799
Professional fees 795 859 791 2,445
FDIC deposit insurance expense 73 74 22 169
Amortization of core deposit intangibles 216 216 216 648
Other expenses 1,665 1,794 1,833 5,292
Total Non-Interest Expense 8,858 8,777 8,564 26,199
PRETAX INCOME 676 732 782 2,190
Income tax expense 136 164 139 439
NET INCOME $540 $568 $643 $1,751
AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2007 data unaudited)
Note: 2006 data appears before 2007.
2006 2007
NINE NINE
3QTR MONTHS 3QTR MONTHS
Interest earning assets:
Loans and loans held for sale, net
of unearned income $572,077 $558,176 $612,424 $601,592
Deposits with banks 698 669 616 525
Federal funds - - 2,249 3,009
Total investment securities 215,759 225,066 176,474 187,398
Total interest earning assets 788,534 783,911 791,763 792,524
Non-interest earning assets:
Cash and due from banks 19,146 18,975 18,673 17,734
Premises and equipment 8,088 8,337 8,607 8,722
Other assets 68,653 69,226 71,506 69,550
Allowance for loan losses (8,739) (8,922) (7,808) (7,947)
Total assets 875,682 871,527 882,741 880,583
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 58,551 57,329 55,151 56,559
Savings 80,663 84,235 71,503 73,112
Money market 169,022 171,525 173,844 182,215
Other time 330,900 313,598 353,331 344,153
Total interest bearing deposits 639,136 626,687 653,829 656,039
Borrowings:
Federal funds purchased, securities
sold under agreements to repurchase,
and other short-term borrowings 26,128 34,459 6,760 8,441
Advanced from Federal Home Loan
Bank 962 972 5,499 3,607
Guaranteed junior subordinated
deferrable interest debentures 13,085 13,085 13,085 13,085
Total interest bearing liabilities 679,311 675,203 679,173 681,172
Non-interest bearing liabilities:
Demand deposits 104,361 105,292 106,055 104,336
Other liabilities 7,059 6,584 10,768 9,477
Stockholders' equity 84,951 84,448 86,745 85,598
Total liabilities and stockholders'
equity $875,682 $871,527 $882,741 $880,583
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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