JOHNSTOWN, Pa., Oct. 21 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) completed its second consecutive quarter of profitability
by reporting net income for the third quarter of 2003 of $249,000 or $0.02 per
diluted share. This represents significant improvement and a dramatic
turnaround from the net loss of $4.2 million or $0.31 per share reported in
the third quarter of 2002. As a result of the positive second and third
quarter 2003 performance, the Company is also profitable for the nine month
period ended September 30, 2003 with net income of $369,000 or $0.03 per
diluted share compared to a net loss of $3.2 million or $0.23 per share for
the same period in 2002. The following table highlights the Company's
financial performance for both the three and nine month periods ended
September 30, 2003 and 2002:
Third Third Nine Months Nine Months
Quarter Quarter Ended Ended
2003 2002 September 30, September 30,
2003 2002
Net income (loss) $249,000 ($4,224,000) $369,000 ($3,190,000)
Diluted earnings (loss)
per share 0.02 (0.31) 0.03 (0.23)
At September 30, 2003, ASRV had total assets of $1.16 billion and
shareholders' equity of $73 million or $5.21 per share. The Company is well
capitalized for regulatory purposes with an asset leverage ratio at September
30, 2003 of 7.19%, compared to a regulatory minimum of 5.0%.
The Company's provision for loan losses totaled $384,000 or 0.30% of total
loans in the third quarter of 2003. This represented a decrease of $3 million
from the third quarter 2002 provision of $3.4 million or 2.24% of total loans.
Net charge-offs also experienced a similar decline dropping from $3.1 million
or 2.08% of total loans in the third quarter of 2002 to $428,000 or 0.33% of
total loans in the third quarter of 2003. The Company's allowance for loan
losses totaled $11.9 million at September 30, 2003 providing 106% coverage of
non-performing assets. Non-performing assets totaled $11.2 million at
September 30, 2003. This represented an increase of $1.1 million from the
June 30, 2003 level primarily due to the transfer of a commercial lease into
non-accrual status. The Company's largest non-performing asset continues to
be 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.
If the government guaranteed portion of this commercial mortgage were excluded
from the non-performing asset totals, the loan loss reserve coverage of
non-performing assets would amount to 162% at September 30, 2003. Overall,
the allowance for loan losses as a percentage of total loans increased to
2.39% at September 30, 2003 compared to 1.75% at December 31, 2002 and 0.97%
at September 30, 2002.
The Company's net interest income in the third quarter of 2003 decreased
by $1.1 million from the prior year third quarter due to a reduced level of
earning assets and a 34 basis point decline in the net interest margin to
2.14%. Loan portfolio shrinkage experienced during 2003 was a predominant
factor contributing to both the lower level of earning assets and the
quarterly 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 third quarter of 2003 and is now better positioned to generate
increased new loan production in the fourth quarter of 2003. The record rate
of mortgage re-financings also contributed to accelerated prepayments on the
Company's mortgage backed securities portfolio. This caused an approximate
$500,000 increase in amortization expense on premiums associated with the
mortgage-backed securities thus reducing the yield earned on the investment
securities portfolio. The Company believes that the after-effect of the
significant May-June refinancing wave is now largely completed and the
negative earnings impact related to these accelerated prepayments should
decline in the fourth quarter.
The Company's total non-interest income in the third quarter of 2003
declined by $947,000 from the prior year third quarter due primarily to fewer
gains realized on investment security sales. Investment security gains
decreased by $954,000 and were at their lowest quarterly level in seven
quarters as the increasing interest rate environment limited the Company's
ability to capture profits on prepaying securities. The Company's decision to
exit the merchant card business in the fourth quarter of 2002 was the item
responsible for the decline in other income. Items that favorably impacted
third quarter 2003 non-interest income were increased trust fees and deposit
service charges. The trust division is focused on continuing to increase the
fee revenue generated from union business activities, particularly the ERECT
and Build Funds, which are collective investment funds for trade union pension
funds.
The Company's total non-interest expense in the third quarter of 2003
favorably decreased by $5.9 million when compared to the prior year third
quarter due to the Company's continued focus on reducing and containing
expenses. The Company recorded a $3.0 million impairment charge on its
mortgage servicing rights in the third quarter of 2002 compared to a modest
impairment reversal of $230,000 in the third quarter of 2003. The dramatic
downsizing of the mortgage servicing asset in the first quarter of 2003 has
significantly reduced the volatility of this business line on the Company's
financial performance. The value of the Company's mortgage servicing rights
has declined from $6.9 million at December 31, 2002 to $1.9 million at
September 30, 2003. The Company also recorded in the third quarter of 2002 a
$920,000 restructuring charge associated with implementing its earnings
improvement program. There was no such charge in the third quarter of 2003.
The Company is realizing the benefits of its ongoing focus on reducing
expenses as evidenced by salaries and employee benefits dropping by $613,000.
There were 42 fewer full-time equivalent employees when compared to the
beginning of the third quarter of 2002. Other expenses also declined by
$988,000 due to cost cutting in numerous expense categories, some of the
larger of which included advertising expense, merchant card expense, business
development expense and education expenses.
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 21, 2003
(In thousands, except per share and ratio data)
2003
1QTR 2QTR 3QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE
PERIOD:
Net income (loss) $(795) $915 $249 $369
PERFORMANCE PERCENTAGES
(annualized):
Return on average equity (4.17)% 4.84% 1.35% 0.65%
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
2002
1QTR 2QTR 3QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE
PERIOD:
Net income (loss) $626 $408 $(4,224) $(3,190)
PERFORMANCE PERCENTAGES
(annualized):
Return on average equity 3.16% 2.04% (20.19)% (5.25)%
Net interest margin 2.35 2.63 2.48 2.49
Net charge-offs as a
percentage of average
loans 0.06 1.09 2.08 1.08
Loan loss provision as a
percentage of average
loans 0.37 0.56 2.24 1.07
Efficiency ratio 88.34 89.52 127.78 101.86
PER COMMON SHARE:
Net income (loss):
Basic $0.05 $0.03 $(0.31) $(0.23)
Average number of common
shares outstanding 13,689,478 13,748,179 13,799,547 13,746,138
Diluted 0.05 0.03 (0.31) (0.23)
Average number of common
shares outstanding 13,712,382 13,778,716 13,800,897 13,765,998
Cash dividends declared 0.09 0.09 0.09 0.27
NOTES:
(A) All quarterly data unaudited.
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
2003
1QTR 2QTR 3QTR
PERFORMANCE DATA AT PERIOD
END
Assets $1,190,360 $1,167,610 $1,160,915
Investment securities 546,427 544,967 577,374
Loans 555,335 525,591 496,951
Allowance for loan losses 11,415 11,916 11,872
Goodwill and core deposit
intangibles 15,337 14,979 14,621
Mortgage servicing rights 2,214 1,784 1,859
Deposits 669,103 661,932 648,844
Stockholders' equity 75,364 76,384 72,688
Trust assets 1,091,391 1,146,695 1,009,520
Non-performing assets 11,687 10,163 11,227
Asset leverage ratio 6.94% 7.10% 7.19%
PER COMMON SHARE:
Book value (A) $5.41 $5.48 $5.21
Market value 3.50 3.80 4.17
Market price to book value 64.69% 69.35% 80.03%
STATISTICAL DATA AT PERIOD
END:
Full-time equivalent
employees 416 427 422
Branch locations 23 23 23
Common shares outstanding 13,929,324 13,940,999 13,949,383
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 $0.01 on book
value per share at September 30, 2003.
AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Quarterly data unaudited)
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
2002
YEAR
INTEREST INCOME 1QTR 2QTR 3QTR TO DATE
Interest and fees on
loans $10,562 $10,434 $10,191 $31,187
Total investment
portfolio 6,698 6,637 6,011 19,346
Total Interest Income 17,260 17,071 16,202 50,533
INTEREST EXPENSE
Deposits 4,288 4,215 4,015 12,518
All other funding
sources 6,389 5,549 5,393 17,331
Total Interest Expense 10,677 9,764 9,408 29,849
NET INTEREST INCOME 6,583 7,307 6,794 20,684
Provision for loan
losses 540 815 3,380 4,735
NET INTEREST INCOME
AFTER PROVISION
FOR LOAN LOSSES 6,043 6,492 3,414 15,949
NON-INTEREST INCOME
Trust fees 1,279 1,235 1,077 3,591
Net realized gains on
investment securities
available for sale 637 1,314 1,356 3,307
Net realized gains on
loans and loans held
for sale 124 141 160 425
Service charges on
deposit accounts 674 694 732 2,100
Net mortgage servicing
fees 92 123 97 312
Bank owned life
insurance 554 317 309 1,180
Other income 1,288 1,200 1,198 3,686
Total Non-interest
Income 4,648 5,024 4,929 14,601
NON-INTEREST EXPENSE
Salaries and employee
benefits 5,145 5,128 5,342 15,615
Net occupancy expense 739 750 682 2,171
Equipment expense 783 768 741 2,292
Professional fees 750 847 1,057 2,654
FDIC deposit insurance
expense 29 29 28 86
Amortization of core
deposit intangibles 358 358 358 1,074
Impairment charge
(credit) for mortgage
servicing rights (123) 787 3,034 3,698
Wholesale mortgage
production exit costs (26) (14) - (40)
Restructuring costs - - 920 920
Other expenses 2,280 2,403 2,843 7,526
Total Non-interest
Expense 9,935 11,056 15,005 35,996
INCOME (LOSS) BEFORE
INCOME TAXES 756 460 (6,662) (5,446)
Provision (benefit)
for income taxes 130 52 (2,438) (2,256)
NET INCOME (LOSS) $626 $408 $(4,224) $(3,190)
AMERISERV FINANCIAL, INC.
Nasdaq NMS: ASRV
Average Balance Sheet Data (In thousands)
(Quarterly Data Unaudited)
Note: 2002 data appears before 2003.
2002 2003
NINE NINE
3QTR MONTHS 3QTR MONTHS
Interest earning
assets:
Loans and loans held
for sale, net of
unearned income $591,743 $586,753 $497,647 $526,902
Deposits with banks 15,379 16,800 5,183 5,475
Federal funds sold 124 702 80 38
Total investment
securities 483,688 494,591 565,477 531,716
Total interest
earning assets 1,090,934 1,098,846 1,068,387 1,064,131
Non-interest
earning assets:
Cash and due from
banks 21,957 22,218 22,008 22,366
Premises and
equipment 13,060 13,249 11,827 12,142
Other assets 67,308 67,798 62,114 67,674
Allowance for loan
losses (5,529) (5,959) (11,881) (11,286)
Total assets $1,187,730 $1,196,152 $1,152,455 $1,155,027
Interest bearing
liabilities:
Interest bearing
deposits:
Interest bearing
demand $49,633 $49,290 $52,565 $51,868
Savings 103,435 100,213 105,055 103,470
Money market 125,893 130,710 122,536 125,199
Other time 301,037 302,521 278,641 284,244
Total interest
bearing deposits 579,998 582,734 558,797 564,781
Borrowings:
Federal funds
purchased,
securities sold
under agreements
to repurchase, and
other short-term
borrowings 70,244 46,697 100,602 98,839
Advanced from
Federal Home Loan
Bank 304,645 335,700 277,313 270,110
Guaranteed junior
subordinated
deferrable interest
debentures 34,500 34,500 34,500 34,500
Total interest
bearing liabilities 989,387 999,631 971,212 968,230
Non-interest bearing
liabilities:
Demand deposits 106,752 105,604 102,378 104,761
Other liabilities 8,602 9,634 6,048 6,738
Stockholders' equity 82,989 81,283 72,817 75,298
Total liabilities
and stockholders'
equity $1,187,730 $1,196,152 $1,152,455 $1,155,027
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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