2014

AmeriServ Financial Reports Earnings for the First Quarter of 2009

JOHNSTOWN, Pa., April 14 /PRNewswire-FirstCall/ -- AmeriServ Financial, Inc. (Nasdaq: ASRV) reported first quarter 2009 net income of $533,000 or $0.01 per diluted common share. This represents a decrease of $696,000 from the first quarter 2008 net income of $1,229,000 or $0.06 per diluted common share. The following table highlights the Company's financial performance for the quarters ended March 31, 2009 and 2008:

                            First Quarter   First Quarter
                                  2009           2008      $Change   % Change

    Net income                  $533,000     $1,229,000  ($696,000)   (56.6 %)
    Diluted earnings per share     $0.01          $0.06     ($0.05)    (83.3%)

Allan R. Dennison, President and Chief Executive Officer, commented on the first quarter 2009 financial results, "AmeriServ Financial generated strong loan and deposit growth during the first quarter of 2009 which led to increased net interest income and margin performance. However, this difficult economic environment has led us to further strengthen our allowance for loan losses which was the primary factor causing the decline in earnings between periods. Overall our asset quality continues to be good by industry standards with non-performing assets amounting to $5.1 million or 0.70% of total loans and net charge-offs for the first quarter of 2009 totaling $49,000 or 0.03% of total loans."

The Company's net interest income in the first quarter of 2009 increased by $1.4 million or 20.9% from the prior year's first quarter and the net interest margin was up by 40 basis points to 3.72% over the same comparative period. The increased net interest income and margin resulted from a combination of good balance sheet growth and the pricing benefits achieved from a steeper positively sloped yield curve. Specifically, total loans averaged $714 million in the first quarter of 2009, an increase of $80 million or 12.7% over the first quarter of 2008. The loan growth was driven by increased commercial and commercial real-estate loan production. Total deposits averaged $715 million in the first quarter of 2009, an increase of $20 million or 2.9% over the same 2008 quarter. The Company believes that uncertainties in the financial markets and the economy have contributed to growth in both money market and demand deposits as consumers have looked for safety in well capitalized community banks like AmeriServ Financial. Additionally, the Company also benefited from a favorable decline in interest expense caused by the more rapid downward repricing of both deposits and Federal Home Loan Bank borrowings due to the market decline in short-term interest rates.

The Company recorded a $1.8 million provision for loan losses in the first quarter of 2009 compared to a $150,000 provision in the first quarter of 2008, or an increase of $1.65 million. When determining the provision for loan losses, the Company considers a number of factors some of which include periodic credit reviews, delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends. The higher loan provision in the first quarter of 2009 was caused by the Company's decision to strengthen its allowance for loan losses due to the downgrade of the rating classification of one large performing commercial loan and uncertainties in the local and national economies. The Company's net charge-offs in the first quarter of 2009 amounted to only $49,000 or 0.03% of total loans. This amount was comparable with the net charge-offs of $93,000 or 0.06% of total loans experienced in the first quarter of 2008. Non-performing assets increased moderately to $5.1 million or 0.70% of total loans at March 31, 2009 compared to $4.6 million or 0.65% of total loans at December 31, 2008. Overall, the allowance for loan losses provided 209% coverage of non-performing assets and was 1.47% of total loans at March 31, 2009 compared to 195% of non-performing assets and 1.26% of total loans at December 31, 2008. Note also that the Company has no direct exposure to sub-prime mortgage loans in either the loan or investment portfolios.

The Company's non-interest income in the first quarter of 2009 decreased by $277,000 or 7.2% from the first quarter of 2008. The quarterly decrease was primarily due to a $320,000 decline in trust and investment advisory fees due to reductions in the market value of assets managed due to lower equity and real estate values in the first quarter of 2009. These negative items were partially offset by increased gains on asset sales. Specifically, gains realized on residential mortgage sales into the secondary market increased by $29,000 or 32.6% due to increased mortgage purchase and refinance activity in the Company's primary market. The Company also took advantage of market opportunities and generated $101,000 of gains on the sale of investment securities in order to provide additional liquidity to fund the strong loan growth.

Total non-interest expense in the first quarter of 2009 increased by $383,000 or 4.4% from the prior year's first quarter. Total salaries and benefits expense increased by $262,000 or 5.4% due greater incentive compensation and health care costs. The other main factor causing the increase in non-interest expense was a $151,000 increase in professional fees. The increased professional fees resulted primarily from higher legal, consulting and other professional fees in the first quarter of 2009.

ASRV had total assets of $975 million and shareholders' equity of $114 million or a book value of $4.44 per common share at March 31, 2009. The Company's asset leverage ratio remained strong at 11.82% and the Company had a tangible common equity to tangible assets ratio of 8.35% at March 31, 2009.

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
                              April 14, 2009
             (In thousands, except per share and ratio data)
                   (All quarterly and 2009 data unaudited)

                                                           2009
                                                           1QTR

    PERFORMANCE DATA FOR THE PERIOD:
    Net income                                             $533
    Net income available to common shareholders             274

    PERFORMANCE PERCENTAGES (annualized):
    Return on average assets                               0.22%
    Return on average equity                               1.90
    Net interest margin                                    3.72
    Net charge-offs as a percentage of average loans       0.03
    Loan loss provision as a percentage of average loans   1.02
    Efficiency ratio                                      78.22

    PER COMMON SHARE:
    Net income:
    Basic                                                 $0.01
    Average number of common shares outstanding          21,137
    Diluted                                                0.01
    Average number of common shares outstanding          21,137


                                              2008

                                         1QTR    2QTR    3QTR    4QTR   YEAR
                                                                      TO DATE
    PERFORMANCE DATA FOR THE PERIOD:
    Net income                        $1,229  $1,516  $1,149  $1,615   $5,509
    Net income available to common
     shareholders                      1,229   1,516   1,149   1,580    5,474

    PERFORMANCE PERCENTAGES (annualized):
    Return on average assets            0.55%   0.71%   0.52%   0.69%    0.62%
    Return on average equity            5.43    6.64    4.93    6.68     5.93
    Net interest margin                 3.32    3.58    3.59    3.84     3.64
    Net charge-offs as a percentage
     of average loans                   0.06    0.46    0.04    0.23     0.20
    Loan loss provision as a
     percentage of average loans        0.10    0.89    0.48    0.36     0.45
    Efficiency ratio                   82.87   73.20   79.72   77.46    78.11

    PER COMMON SHARE:
    Net income:
    Basic                              $0.06   $0.07   $0.05   $0.07    $0.25
    Average number of common shares
     outstanding                      22,060  21,847  21,855  21,571   21,833
    Diluted                             0.06    0.07    0.05    0.07     0.25
    Average number of common shares
     outstanding                      22,062  21,848  21,856  21,571   21,975



                                   AMERISERV FINANCIAL, INC.
                 (In thousands, except per share, statistical, and ratio data)
                          (All quarterly and 2009 data unaudited)

                                               2009
                                               1QTR
    PERFORMANCE DATA AT PERIOD END:
    Assets                                 $975,062
    Short-term investment in
     money market funds                      10,817
    Investment securities                   138,853
    Loans                                   726,961
    Allowance for loan losses                10,661
    Goodwill and core deposit intangibles    13,498
    Deposits                                746,813
    FHLB borrowings                          90,346
    Shareholders' equity                    114,254
    Non-performing assets                     5,099
    Asset leverage ratio                      11.82%
    PER COMMON SHARE:
    Book value (A)                            $4.44
    Market value                               1.67
    Trust assets - fair market value (B) $1,432,375

    STATISTICAL DATA AT PERIOD END:
    Full-time equivalent employees              355
    Branch locations                             18
    Common shares outstanding            21,144,700


                                         2008

                                     1QTR        2QTR        3QTR        4QTR
    PERFORMANCE DATA AT PERIOD END:
    Assets                       $902,349    $877,230    $911,306    $966,929
    Short-term investment in
     money market funds             5,682       6,952       7,147      15,578
    Investment securities         146,285     141,867     141,630     142,675
    Loans                         632,934     623,798     663,996     707,108
    Allowance for loan losses       7,309       7,963       8,677       8,910
    Goodwill and core deposit
     intangibles                   14,254      14,038      13,821      13,605
    Deposits                      682,459     722,913     688,998     694,956
    FHLB borrowings               106,579      40,214     106,897     133,778
    Shareholders' equity           91,558      92,248      93,671     113,252
    Non-performing assets           3,050       3,717       4,390       4,572
    Asset leverage ratio             9.78%      10.47%      10.37%      12.15%
    PER COMMON SHARE:
    Book value                      $4.19       $4.22       $4.29       $4.39
    Market value                     2.79        2.98        2.51        1.99
    Trust assets - fair
     market value (B)          $1,838,029  $1,813,231  $1,678,698  $1,554,351

    STATISTICAL DATA AT PERIOD END:
    Full-time equivalent
     employees                        350         353         352         353
    Branch locations                   19          18          18          18
    Common shares outstanding  21,842,691  21,850,773  21,859,409  21,128,831

    Note:
    (A)  Preferred stock received through the Capital Purchase Program is
          excluded from the book value per common share calculation.
    (B)  Not recognized on the balance sheet



                              AMERISERV FINANCIAL, INC.
                           CONSOLIDATED STATEMENT OF INCOME
                                    (In thousands)
                           (All quarterly and 2009 data unaudited)

                                                  2009
                                                  1QTR

    INTEREST INCOME

    Interest and fees on loans                  $10,349
    Total investment portfolio                    1,586
                                                 ------
    Total Interest Income                        11,935

    INTEREST EXPENSE
    Deposits                                      3,255
    All borrowings                                  539
                                                  -----
    Total Interest Expense                        3,794
                                                  -----

    NET INTEREST INCOME                           8,141
    Provision for loan losses                     1,800
                                                  -----

    NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                               6,341

    NON-INTEREST INCOME
    Trust fees                                    1,559
    Net realized gains on investment
     securities available for sale                  101
    Net realized gains on loans held for sale       118
    Service charges on deposit accounts             673
    Investment advisory fees                        137
    Bank owned life insurance                       250
    Other income                                    723
                                                  -----
    Total Non-Interest Income                     3,561

    NON-INTEREST EXPENSE
    Salaries and employee benefits                5,092
    Net occupancy expense                           722
    Equipment expense                               415
    Professional fees                               920
    FDIC deposit insurance expense                   32
    Amortization of core deposit intangibles        108
    Other expenses                                1,873
                                                  -----
    Total Non-Interest Expense                    9,162
                                                  -----

    PRETAX INCOME                                   740
    Income tax expense                              207
                                                    ---
    NET INCOME                                      533
    Preferred stock dividends                       259
                                                   ----
    NET INCOME AVAILABLE TO COMMON SHAREHOLDERS    $274
                                                   ----




                                                   2008
                                          1QTR    2QTR    3QTR    4QTR   YEAR
                                                                       TO DATE
    INTEREST INCOME

    Interest and fees on loans         $10,462 $9,862  $10,015 $10,680 $41,019
    Total investment portfolio           1,820  1,588    1,717   1,675   6,800
                                         -----  -----    -----   -----   -----
    Total Interest Income               12,282 11,450   11,732  12,355  47,819

    INTEREST EXPENSE
    Deposits                             4,499  3,861    3,774   3,546  15,680
    All borrowings                       1,048    623      727     624   3,022
                                         -----    ---      ---     ---   -----
    Total Interest Expense               5,547  4,484    4,501   4,170  18,702
                                         -----  -----    -----   -----  ------

    NET INTEREST INCOME                  6,735  6,966    7,231   8,185  29,117
    Provision for loan losses              150  1,375      775     625   2,925
                                           ---  -----      ---     ---   -----

    NET INTEREST INCOME AFTER PROVISION
    FOR LOAN LOSSES                      6,585  5,591    6,456   7,560  26,192

    NON-INTEREST INCOME
    Trust fees                           1,790  1,737    1,691   1,513   6,731
    Net realized (losses) gains on
     investment securities available
     for sale                               -   (137)      20      22     (95)
    Net realized gains on loans held for
     sale                                   89    121      138     129     477
    Service charges on deposit accounts    734    807      771     757   3,069
    Investment advisory fees               226    218      185     150     779
    Bank owned life insurance              249  1,923      260     263   2,695
    Other income                           750    674      702     642   2,768
                                           ---    ---      ---     ---   -----
    Total Non-Interest Income            3,838  5,343    3,767   3,476  16,424

    NON-INTEREST EXPENSE
    Salaries and employee benefits       4,830  4,812    4,758   4,817  19,217
    Net occupancy expense                  661    653      586     661   2,561
    Equipment expense                      431    414      402     430   1,677
    Professional fees                      769    910      922     981   3,582
    FHLB prepayment penalty                  -     91        -       -      91
    FDIC deposit insurance expense          22     20       30      41     113
    Amortization of core deposit
     intangibles                           216    216      217     216     865
    Other expenses                       1,850  1,909    1,869   1,903   7,531
                                         -----  -----    -----   -----   -----
    Total Non-Interest Expense           8,779  9,025    8,784   9,049  35,637
                                         -----  -----    -----   -----  ------

    PRETAX INCOME                        1,644  1,909    1,439   1,987   6,979
    Income tax expense                     415    393      290     372   1,470
                                           ---    ---      ---     ---   -----
    NET INCOME                           1,229  1,516    1,149   1,615   5,509
    Preferred stock dividends                -      -        -      35      35
                                         -----  -----    -----   -----   -----
    NET INCOME AVAILABLE TO
    COMMON SHAREHOLDERS                 $1,229 $1,516   $1,149  $1,580  $5,474



                                 AMERISERV FINANCIAL, INC.
                               AVERAGE BALANCE SHEET DATA
                                    (In thousands)
                         (All quarterly and 2009 data unaudited)

                                                     2009             2008
                                                     1QTR             1QTR
    Interest earning assets:
    Loans and loans held for
     sale, net of unearned income                $714,253         $633,809
    Deposits with banks                             3,158              498
    Short-term investment in money market funds    10,112            6,252
    Federal funds                                      55              424
    Total investment securities                   148,465          167,059
                                                  -------          -------
    Total interest earning assets                 876,043          808,042

    Non-interest earning assets:
    Cash and due from banks                        15,488           17,935
    Premises and equipment                          9,446            8,886
    Other assets                                   71,004           69,735
    Allowance for loan losses                      (9,144)          (7,309)
                                                   ------           ------

    Total assets                                  962,837          897,289
                                                  =======          =======

    Interest bearing liabilities:
    Interest bearing deposits:
    Interest bearing demand                        62,355           64,310
    Savings                                        71,759           68,666
    Money market                                  141,442          104,180
    Other time                                    326,221          347,134
                                                  -------          -------
    Total interest bearing deposits               601,777          584,290
    Borrowings:
    Federal funds purchased, securities sold under
     agreements to repurchase, and other
     short-term borrowings                         94,901           76,997
    Advanced from Federal Home Loan Bank           13,853           11,718
    Guaranteed junior subordinated deferrable
     interest debentures                           13,085           13,085
                                                   ------           ------
    Total interest bearing liabilities            723,616          686,090

    Non-interest bearing liabilities:
    Demand deposits                               113,298          110,645
    Other liabilities                              12,265            9,526
    Shareholders' equity                          113,658           91,028
                                                  -------           ------
    Total liabilities and shareholders' equity   $962,837         $897,289
                                                 ========         ========

SOURCE AmeriServ Financial, Inc.



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http://www.ameriservfinancial.com

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