JOHNSTOWN, Pa., Oct. 17 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) reported third quarter 2006 net income of $643,000 or
$0.03 per diluted share compared to a net loss of $10.6 million or ($0.53)
per diluted share for the third quarter of 2005. For the first nine months
of 2006, the Company reported net income of $1.8 million or $0.08 per
diluted share compared to a net loss of $9.4 million or ($0.47) per diluted
share for the first nine months of 2005. Note that for comparative purposes
the 2005 loss resulted from a restructuring that strengthened the Company's
balance sheet and reduced its risk profile. The successful completion of a
$10.3 million private placement common stock offering in the third quarter
of 2005 provided the Company with the necessary capital to execute this
balance sheet restructuring. The following table highlights the Company's
financial performance for both the three and nine month periods ended
September 30, 2006 and 2005:
Nine Months Nine Months
Third Third Ended Ended
Quarter Quarter September 30, September 30,
2006 2005 2006 2005
Net income (loss) $643,000 ($10,564,000) $1,751,000 ($9,361,000)
Diluted earnings
per share $0.03 ($0.53) $0.08 ($0.47)
At September 30, 2006, ASRV had total assets of $883 million and
stockholders' equity of $87 million or $3.92 per share. The Company's asset
leverage ratio improved to 10.52% at September 30, 2006, compared to 9.90%
at September 30, 2005.
Allan R. Dennison, President and Chief Executive Officer, commented on
the third quarter 2006 results, "AmeriServ has now demonstrated 4
consecutive quarters of improving financial performance since the balance
sheet restructuring that was completed in the third quarter of 2005. As a
result of our focus on traditional community banking, average loans
outstanding increased by $49 million or 9.4% and average deposits grew by
$45 million or 6.5% when the third quarter of 2006 is compared to the third
quarter of 2005. This growth, combined with significant reductions in both
investment securities and borrowings, has caused improvement in both net
interest income and net interest margin for the same period. Finally, ASRV
is also benefiting from lower non-interest expenses in 2006 as we began to
realize in the third quarter some of the expense savings resulting from the
termination of the regulatory Memorandum of Understanding that occurred
earlier this year."
The Company's net interest income in the third quarter of 2006
increased by $641,000 from the prior year's third quarter and for the first
nine months of 2006 increased by $838,000 when compared to the first nine
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 nine months of 2006 the net interest
margin increased by 54 basis points to 3.14% while the level of average
earning assets declined by $125 million or 13.7%. 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. Wholesale borrowings averaged only 4.1% of total assets in the
first nine months of 2006 compared to 18.5% of total assets in the first
nine months of 2005 while investment securities as a percentage of total
assets has declined from 39.0% to 25.8% during this same period. The
Company's net interest margin also benefited from increased loans in the
earning asset mix as total loans outstanding averaged $558 million in the
first nine months of 2006, a 7.3% increase from the same 2005 period. This
loan growth was driven by increased commercial loans. Total deposits
averaged $732 million for the first nine months of 2006; a 5.1% increase
from the same 2005 period. These higher deposits in 2006 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. 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 flat to
inverted yield curve in 2006.
As a result of continued sound asset quality, the Company did not
record a provision for loan losses in the third quarter of 2006 compared to
a $100,000 provision recorded in the third quarter of 2005. The Company did
experience higher net charge-offs in the third quarter of 2006 due entirely
to losses incurred on the repossession of equipment related to a loan to a
borrower in the coal mining industry. This caused net charge-offs to
average loans to total 0.39% in the third quarter of 2006 compared to 0.11%
in the third quarter of 2005. For the nine month period ended September 30,
2006, net charge-offs have amounted to $791,000 or 0.19% of total loans
compared to net charge-offs of $283,000 or 0.07% of total loans for the
same nine month period in 2005. As a result of the successful workout of
another problem credit and the previously mentioned higher net charge-offs,
non-performing assets declined during the first nine months of 2006 from
$4.3 million or 0.78% of total loans at December 31, 2005 to $3.0 million
or 0.51% of total loans at September 30, 2006. The allowance for loan
losses provided 279% coverage of non-performing assets at September 30,
2006 compared to 212% coverage at December 31, 2005. The allowance for loan
losses as a percentage of total loans amounted to 1.43% at September 30,
2006 compared to 1.66% at December 31, 2005.
The Company's non-interest income in the third quarter of 2006
increased by $2.6 million from the prior year's third quarter and for the
first nine months of 2006 increased by $2.8 million when compared to the
first nine months of 2005. Note that in the third quarter of 2005 the
Company incurred a $2.6 million loss on investment security sales in
conjunction with its balance sheet restructuring. There were no investment
security losses in 2006. Non- interest income in 2006 did benefit from
growth in trust revenues as trust fees increased by $351,000 or 7.7% for
the nine 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 6.3% to $1.7
billion at September 30, 2006. Non-interest income in 2006 also benefited
from increased revenue from bank owned life insurance due largely to the
payment of a death claim in the third quarter of 2006. These positive items
were partially offset by fewer gains realized on loan sales into the
secondary market due to weaker residential mortgage loan production in
2006. This line item has declined by $113,000 in the first nine months of
2006. Services charges have also decreased by $88,000 in 2006 due to fewer
overdraft fees.
Total non-interest expense in the third quarter of 2006 decreased by
$13.7 million from the prior year's third quarter and for the first nine
months of 2006 declined by $13.9 million when compared to the first nine
months of 2005. In the third quarter of 2005, the Company incurred $12.3
million in charges related to FHLB prepayment penalties and interest rate
hedge termination costs in conjunction with its balance sheet
restructuring. There were no such charges in 2006. Excluding these special
charges, the Company has still shown meaningful reductions in non-interest
expense as result of its ongoing focus on reducing expenses. Expense
reductions were experienced in all reported non-interest expense line items
with some of the largest year-to-date reductions occurring in professional
fees ($799,000), salaries and benefits ($208,000), other expenses
($455,000), equipment expense ($82,000) and FDIC insurance expense
($47,000). The termination of the Memorandum of Understanding earlier in
2006 was a key factor causing the Company to begin realizing in the third
quarter of 2006 expense savings within professional fees, other expenses,
and FDIC insurance. Also, the loss from discontinued operations declined
from $130,000 in the first nine months of 2005 to $0 in the first nine
months of 2006 as the Company completed the exit from its mortgage
servicing operation in 2005.
The Company recorded an income tax expense of $139,000 in the 2006
third quarter and $439,000 for the first nine months of 2006 which reflects
an estimated effective tax rate of approximately 20%. The income tax
expense recorded in 2006 compares to a $5.7 million income tax benefit
recorded in the third quarter of 2005 as a result of the sizable pre-tax
loss incurred in last year's third quarter.
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
October 17, 2006
(In thousands, except per share and ratio data)
(All quarterly and 2006 data unaudited)
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
2005
1QTR 2QTR 3QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income (loss) $833 $370 ($10,564) $(9,361)
PERFORMANCE PERCENTAGES (annualized):
Return on average assets 0.34% 0.15% (4.26)% (1.26)%
Return on average equity 3.95 1.75 (49.42) (14.71)
Net interest margin 2.75 2.63 2.43 2.60
Net charge-offs as a percentage of
average loans 0.05 0.06 0.11 0.07
Loan loss provision as a percentage of
average loans - (0.21) 0.08 (0.04)
Efficiency ratio 94.42 96.81 362.60 161.70
PER COMMON SHARE:
Net income (loss):
Basic $0.04 $0.02 $(0.53) $(0.47)
Average number of common shares
outstanding 19,721 19,726 19,785 19,744
Diluted 0.04 0.02 (0.53) (0.47)
Average number of common shares
outstanding 19,760 19,765 19,785 19,744
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
(All quarterly and 2006 data unaudited)
2006
1QTR 2QTR 3QTR
PERFORMANCE DATA AT PERIOD END:
Assets $876,393 $887,608 $882,837
Investment securities 223,658 210,230 209,046
Loans 548,466 573,884 580,560
Allowance for loan losses 9,026 8,874 8,302
Goodwill and core deposit intangibles 12,031 11,815 11,599
Deposits 727,987 740,979 743,687
FHLB borrowings 45,223 43,031 31,949
Stockholders' equity 84,336 84,231 86,788
Trust assets - fair market value (B) 1,669,525 1,679,634 1,702,210
Non-performing assets 4,193 4,625 2,978
Asset leverage ratio 10.36% 10.54% 10.52%
PER COMMON SHARE:
Book value (A) $3.81 $3.80 $3.92
Market value 5.00 4.91 4.43
Market price to book value 131.26% 129.09% 113.07%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 375 367 364
Branch locations 22 22 21
Common shares outstanding 22,140,172 22,145,639 22,150,767
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 $0.17 on book
value per share at September 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 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 of 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 investment
securities available for sale - - - -
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
INCOME BEFORE INCOME TAXES 676 732 782 2,190
Provision for income taxes 136 164 139 439
NET INCOME $540 $568 $643 $1,751
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2006 data unaudited)
2005
1QTR 2QTR 3QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $7,954 $8,105 $8,200 $24,259
Total investment portfolio 3,737 3,607 3,273 10,617
Total Interest Income 11,691 11,712 11,473 34,876
INTEREST EXPENSE
Deposits 2,845 3,188 3,290 9,323
All borrowings 2,551 2,533 2,725 7,809
Total Interest Expense 5,396 5,721 6,015 17,132
NET INTEREST INCOME 6,295 5,991 5,458 17,744
Provision of loan losses - (275) 100 (175)
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,295 6,266 5,358 17,919
NON-INTEREST INCOME
Trust fees 1,472 1,506 1,586 4,564
Net realized gains (losses) on
investment securities available for sale 78 - (2,577) (2,499)
Net realized gains on loans held for sale 72 83 27 182
Service charges on deposit accounts 584 704 723 2,011
Bank owned life insurance 250 254 256 760
Other income 692 633 643 1,968
Total Non-Interest Income 3,148 3,180 658 6,986
NON-INTEREST EXPENSE
Salaries and employee benefits 4,751 4,680 4,804 14,235
Net occupancy expense 668 592 609 1,869
Equipment expense 639 622 620 1,881
Professional fees 823 938 1,483 3,244
FDIC deposit insurance expense 71 69 76 216
Amortization of core deposit intangibles 216 216 216 648
Prepayment penalties - - 12,287 12,287
Other expenses 1,775 1,789 2,183 5,747
Total Non-Interest Expense 8,943 8,906 22,278 40,127
INCOME (LOSS) BEFORE INCOME TAXES 500 540 (16,262) (15,222)
Provision (benefit) for income taxes (398) 96 (5,689) (5,991)
Income (loss) from continuing operations 898 444 (10,573) (9,231)
Income (loss) from discontinued
operations (65) (74) 9 (130)
NET INCOME (LOSS) $833 $370 $(10,564) $(9,361)
AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2006 data unaudited)
Note: 2005 data appears before 2006.
2005 2006
NINE NINE
3QTR MONTHS 3QTR MONTHS
Interest earning assets:
Loans and loans held for sale,
net of unearned income $523,159 $520,427 $572,077 $558,176
Deposits with banks 862 801 698 669
Total investment securities 374,316 387,195 215,759 225,066
Total interest earning assets 898,337 908,423 788,534 783,911
Non-interest earning assets:
Cash and due from banks 22,128 21,520 19,146 18,975
Premises and equipment 9,306 9,504 8,088 8,337
Assets of discontinued operations 1,462 1,647 - -
Other assets 61,585 62,113 68,653 69,226
Allowance for loan losses (9,433) (9,714) (8,739) (8,922)
Total assets 983,385 993,493 875,682 871,527
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 55,693 54,513 58,551 57,329
Savings 96,935 98,652 80,663 84,235
Money market 153,278 153,854 169,022 171,525
Other time 286,108 283,895 330,900 313,598
Total interest bearing deposits 592,014 590,914 639,136 626,687
Borrowings:
Federal funds purchased,
securities sold under agreements
to repurchase, and other
short-term borrowings 79,958 85,764 26,128 34,459
Advanced from Federal
Home Loan Bank 92,669 98,234 962 972
Guaranteed junior subordinated
deferrable interest debentures 20,285 20,285 13,085 13,085
Total interest bearing liabilities 784,926 795,197 679,311 675,203
Non-interest bearing liabilities:
Demand deposits 106,119 105,732 104,361 105,292
Liabilities of discontinued
operations 356 496 - -
Other liabilities 7,180 6,984 7,059 6,584
Stockholders' equity 84,804 85,084 84,951 84,448
Total liabilities and
stockholders' equity $983,385 $993,493 $875,682 $871,527
SOURCE AmeriServ Financial, Inc.
 back to top
Related links:
http://www.ameriservfinancial.com
CONTACT:
Jeffrey A. Stopko, Senior Vice President &
Chief Financial Officer of AmeriServ Financial, Inc.,
+1-814-533-5310
|
