JOHNSTOWN, Pa., Oct. 19 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) completed its sixth consecutive quarter of profitability
by reporting net income for the third quarter of 2004 of $742,000 or $0.05 per
diluted share. This represents an increase of $493,000 or $0.03 per share
over the third quarter 2003 performance. For the nine month period ended
September 30, 2004, the Company has now earned $1.2 million or $0.09 per
diluted share which represents a sizable increase over the net income of
$369,000 or $0.03 per diluted share reported for the nine month period ended
September 30, 2003. The following table highlights the Company's financial
performance for both the three and nine-month periods ended September 30, 2004
and 2003:
Third Third Nine Months Nine Months
Quarter Quarter Ended Ended
2004 2003 September 30, 2004 September 30, 2003
Net income $742,000 $249,000 $1,222,000 $369,000
Diluted earnings
per share 0.05 0.02 0.09 0.03
Allan R. Dennison, President and Chief Executive Officer, commented on the
third quarter 2004 results, "Dramatic improvement in asset quality, growth in
non-interest income and continued cost controls enabled AmeriServ to continue
its positive trend in earnings. This positive earnings trend combined with
the recently completed $12.6 million private placement of common stock are
positive developments for the AmeriServ Turnaround. The Board of Directors,
management and employees remain focused on improving earnings and
strengthening the balance sheet of this Company."
As a result of asset quality improvements, the Company did not provide a
provision for loan losses in the third quarter of 2004. This represented a
decrease of $384,000 from the provision provided in the third quarter of 2003.
For the first nine months of 2004, the Company's provision for loan losses
totaled $643,000 or 0.17% of total loans, a decrease of $1.9 million from the
provision of $2.6 million or 0.64% of total loans recorded in the first nine
months of 2003. Net charge-offs in the first nine months of 2004 totaled
$2.3 million or 0.63% of total loans compared to net charge-offs of $740,000
or 0.18% of total loans in the first nine months of 2003. The higher net
charge-offs in 2004 reflect a $914,000 charge-off realized in the third
quarter as result of the successful sale of a $4.3 million non-performing
asset, a $625,000 write-down of a $4.8 million loan on a personal care
facility that was moved into other real estate owned in the first quarter of
2004 and subsequently sold in the third quarter, and increased charge-offs on
consumer loans. Overall, however, the lower provision for loan losses in 2004
reflects improvements in asset quality most evidenced by lower levels of non-
performing assets and classified loans. Specifically, successful workout
efforts caused non-performing assets to decline from $11.4 million or 2.26% of
total loans at December 31, 2003 to $5.0 million or 1.00% of total loans at
September 30, 2004. The allowance for loan losses provided 195% coverage of
non-performing assets at September 30, 2004 compared to 102% coverage at
December 31, 2003. The allowance for loan losses as a percentage of total
loans amounted to 1.94% at September 30, 2004 compared to 2.32% at
December 31, 2003.
The Company's net interest income in the third quarter of 2004 decreased
by $44,000 from the prior year third quarter and for the first nine months of
2004 declined by $1.0 million when compared to the first nine months of 2003.
The third quarter 2004 net interest margin of 2.15% was comparable with the
prior year third quarter net interest margin of 2.14%. The decline for the
nine-month period resulted from a reduced level of earning assets and an eight
basis point drop in the net interest margin to 2.26%. 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 have constrained
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 increased by $194,000 when the
third quarter of 2004 is compared to the third quarter of 2003. Factors
causing the increase included a $123,000 increase in trust fees due to
continued successful union related new business development efforts and a
$463,000 increase in other income as a result of a gain generated on the sale
of the Company's largest other real estate owned property. These positive
items were partially offset be fewer gains realized on investment security
sales and residential mortgage loan sales and lower fees from deposit service
charges. Total non-interest income for the nine-month period ended
September 30, 2004 decreased by $1.3 million when compared to the first nine
months of 2003. 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 $1.8 million 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 $296,000 for the nine month
period ended September 30, 2004. These negative items were partially offset
by a $231,000 or 6.1% increase in trust fees and the previously mentioned gain
on the sale of the other real estate owned property. 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.
The Company's non-interest expense in the third quarter of 2004 increased
by $439,000 from the prior year third quarter but for the first nine months of
2004 decreased by $840,000 when compared to the first nine months of 2003.
The largest factor causing the quarterly increase was a net unfavorable change
of $368,000 in the impairment charge on mortgage servicing rights. However,
for the nine month period ended September 30, 2004, the higher interest rate
environment and reduced mortgage refinancing activity caused a net favorable
change of $416,000 in the impairment charge on 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 $225,000 between the first nine months of 2004 and first nine
months of 2003 reflecting the Company's continued focus on reducing and
containing expenses. Expense reductions were experienced in numerous
categories including equipment expense, professional fees, amortization of
core deposit intangibles, and other expenses.
The Company's third quarter and first nine months of 2004 net income
performance was favorably impacted by an increased income tax benefit.
Specifically in the third quarter of 2004, the Company lowered its income tax
expense by $450,000 due to a reduction in reserves for prior year tax
contingencies.
At September 30, 2004, ASRV had total assets of $1.1 billion and
shareholders' equity of $73 million or $5.26 per share. The Company is well
capitalized for regulatory purposes with an asset leverage ratio at
September 30, 2004 of 7.85%.
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)
October 19, 2004
(In thousands, except per share and ratio data)
2004
YEAR
1QTR 2QTR 3QTR TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $226 $254 $742 $1,222
PERFORMANCE PERCENTAGES
(annualized):
Return on average equity 1.21% 1.41% 4.21% 2.25%
Net interest margin 2.39 2.25 2.15 2.26
Net charge-offs as a percentage
of average loans 0.48 0.48 0.92 0.63
Loan loss provision as a
percentage of average loans 0.31 0.21 - 0.17
Efficiency ratio 93.83 94.80 96.89 95.16
PER COMMON SHARE:
Net income:
Basic $0.02 $0.02 $0.05 $0.09
Average number of common
shares outstanding 13,962,010 13,969,211 13,975,838 13,969,045
Diluted 0.02 0.02 0.05 0.09
Average number of common
shares outstanding 14,025,836 14,023,577 14,009,952 14,019,351
Cash dividends declared 0.00 0.00 0.00 0.00
2003
YEAR
1QTR 2QTR 3QTR TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income (loss) $(795) $915 $249 $369
PERFORMANCE PERCENTAGES
(annualized):
Return on average equity (4.17)% 4.68% 1.31% 0.63%
Net interest margin 2.48 2.41 2.14 2.34
Net charge-offs as a percentage
of average loans 0.20 0.02 0.33 0.18
Loan loss provision as a
percentage of average loans 1.19 0.40 0.30 0.64
Efficiency ratio 94.98 84.81 94.05 91.02
PER COMMON SHARE:
Net income (loss):
Basic $(0.06) $0.07 $0.02 $0.03
Average number of common
shares outstanding 13,923,010 13,935,086 13,945,889 13,934,746
Diluted (0.06) 0.07 0.02 0.03
Average number of common
shares outstanding 13,923,010 13,940,460 13,954,648 13,940,926
Cash dividends declared 0.00 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 3QTR
PERFORMANCE DATA AT PERIOD END
Assets $1,099,564 $1,178,406 $1,088,849
Investment securities 504,980 581,553 488,617
Loans 503,404 500,522 506,551
Allowance for loan losses 11,379 10,932 9,827
Goodwill and core deposit intangibles 13,905 13,547 13,329
Mortgage servicing rights 1,493 1,642 1,395
Deposits 656,348 670,941 659,176
Stockholders' equity 77,721 67,213 73,471
Trust assets - fair market value 1,256,064 1,246,458 1,228,126
Non-performing assets 13,482 10,155 5,047
Asset leverage ratio 7.75% 7.71% 7.85%
PER COMMON SHARE:
Book value (A) $5.57 $4.81 $5.26
Market value 6.10 5.55 5.00
Market price to book value 109.52% 115.50% 95.13%
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 415 412 409
Branch locations 23 23 23
Common shares outstanding 13,965,737 13,972,424 13,978,726
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 $0.22 on book
value per share at September 30, 2004.
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Quarterly data unaudited)
2004
YEAR
INTEREST INCOME 1QTR 2QTR 3QTR TO DATE
Interest and fees on loans $7,691 $7,679 $7,346 $22,716
Total investment portfolio 5,228 4,943 5,352 15,523
Total Interest Income 12,919 12,622 12,698 38,239
INTEREST EXPENSE
Deposits 2,543 2,529 2,628 7,700
All other funding sources 4,164 4,180 4,418 12,762
Total Interest Expense 6,707 6,709 7,046 20,462
NET INTEREST INCOME 6,212 5,913 5,652 17,777
Provision for loan losses 384 259 - 643
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,828 5,654 5,652 17,134
NON-INTEREST INCOME
Trust fees 1,267 1,347 1,377 3,991
Net realized gains on investment
securities available for sale 937 111 228 1,276
Net realized gains on loans
and loans held for sale 40 115 108 263
Service charges on deposit
accounts 730 716 692 2,138
Net mortgage servicing fees 52 47 40 139
Bank owned life insurance 275 276 279 830
Other income 764 893 1,452 3,109
Total Non-interest Income 4,065 3,505 4,176 11,746
NON-INTEREST EXPENSE
Salaries and employee benefits 4,915 4,803 4,893 14,611
Net occupancy expense 757 699 665 2,121
Equipment expense 704 687 672 2,063
Professional fees 804 833 1,099 2,736
FDIC deposit insurance expense 72 71 72 215
Amortization of core deposit
intangibles 358 358 218 934
Impairment charge (credit) for
mortgage servicing rights 100 (264) 138 (26)
Other expenses 1,961 1,769 1,794 5,524
Total Non-interest Expense 9,671 8,956 9,551 28,178
INCOME BEFORE INCOME TAXES 222 203 277 702
Provision (benefit) for income taxes (4) (51) (465) (520)
NET INCOME $226 $254 $742 $1,222
2003
YEAR
INTEREST INCOME 1QTR 2QTR 3QTR TO DATE
Interest and fees on loans $9,083 $8,595 $8,044 $25,722
Total investment portfolio 5,660 5,631 5,035 16,326
Total Interest Income 14,743 14,226 13,079 42,048
INTEREST EXPENSE
Deposits 3,140 2,965 2,765 8,870
All other funding sources 4,956 4,827 4,618 14,401
Total Interest Expense 8,096 7,792 7,383 23,271
NET INTEREST INCOME 6,647 6,434 5,696 18,777
Provision for loan losses 1,659 534 384 2,577
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,988 5,900 5,312 16,200
NON-INTEREST INCOME
Trust fees 1,253 1,253 1,254 3,760
Net realized gains on investment
securities available for sale 1,278 1,420 402 3,100
Net realized gains on loans
and loans held for sale 173 221 165 559
Service charges on deposit accounts 767 800 812 2,379
Net mortgage servicing fees 71 77 55 203
Gain (loss) on sale of mortgage
servicing (758) - - (758)
Bank owned life insurance 298 307 305 910
Other income 913 1,017 989 2,919
Total Non-interest Income 3,995 5,095 3,982 13,072
NON-INTEREST EXPENSE
Salaries and employee benefits 4,789 4,717 4,729 14,235
Net occupancy expense 752 701 682 2,135
Equipment expense 817 750 692 2,259
Professional fees 903 1,058 951 2,912
FDIC deposit insurance expense 28 26 75 129
Amortization of core deposit
intangibles 358 358 358 1,074
Impairment charge (credit) for
mortgage servicing rights 366 254 (230) 390
Goodwill impairment loss 199 - - 199
Other expenses 1,908 1,922 1,855 5,685
Total Non-interest Expense 10,120 9,786 9,112 29,018
INCOME (LOSS) BEFORE
INCOME TAXES (1,137) 1,209 182 254
Provision (benefit) for
income taxes (342) 294 (67) (115)
NET INCOME (LOSS) $(795) $915 $249 $369
AMERISERV FINANCIAL, INC.
Nasdaq NMS: ASRV
Average Balance Sheet Data (In thousands)
(Quarterly Data Unaudited)
Note: 2003 data appears before 2004.
2003 2004
NINE NINE
3QTR MONTHS 3QTR MONTHS
Interest earning assets:
Loans and loans held for
sale, net of unearned
income $497,647 $526,902 $490,468 $493,905
Deposits with banks 5,183 5,475 3,806 4,499
Federal funds sold 80 38 - 91
Total investment securities 565,477 531,716 562,415 552,867
Total interest earning
assets 1,068,387 1,064,131 1,056,689 1,051,362
Non-interest earning assets:
Cash and due from banks 22,008 22,366 22,021 21,785
Premises and equipment 11,827 12,142 10,359 10,640
Other assets 62,114 67,674 62,160 66,173
Allowance for loan losses (11,881) (11,286) (10,538) (11,084)
Total assets $1,152,455 $1,155,027 $1,140,691 $1,138,876
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand $52,565 $51,868 $54,133 $53,079
Savings 105,055 103,470 104,840 105,565
Money market 122,536 125,199 121,990 120,374
Other time 278,641 284,244 288,747 280,706
Total interest bearing
deposits 558,797 564,781 569,710 559,724
Borrowings:
Federal funds purchased,
securities sold under
agreements to repurchase,
and other short-term
borrowings 100,602 98,839 125,286 129,557
Advanced from Federal Home
Loan Bank 277,313 270,110 226,041 226,301
Guaranteed junior
subordinated deferrable
interest debentures * 34,500 34,500 35,567 35,567
Total interest bearing
liabilities 971,212 968,230 956,604 951,149
Non-interest bearing
liabilities:
Demand deposits 102,378 104,761 105,819 106,486
Other liabilities 3,548 4,238 8,248 8,633
Stockholders' equity 75,317 77,798 70,020 72,608
Total liabilities and
stockholders' equity $1,152,455 $1,155,027 $1,140,691 $1,138,876
* - 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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