AmeriServ Financial Reports Earnings for the First Quarter of 2011

JOHNSTOWN, Pa., April 19, 2011 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) continued its positive earnings momentum in the first quarter of 2011 by reporting net income of $1,263,000 or $0.05 per diluted common share.  This represents a significant improvement of $2.2 million from the first quarter 2010 net loss of $918,000 or ($0.06) per diluted common share.  The following table highlights the Company's financial performance for the quarters ended March 31, 2011 and 2010:    



First Quarter 2011

First Quarter 2010


Change






Net income (loss)

$1,263,000

($918,000)


$2,181,000

Diluted earnings per share

$ 0.05

($ 0.06)


$ 0.11




Glenn L. Wilson, President and Chief Executive Officer, commented on the first quarter 2011 financial results: "Continued improvements in asset quality were a key factor causing our increased earnings in the first quarter of 2011.  Non-performing assets declined by $5 million during the first quarter of 2011 as a result of our successful ongoing problem credit resolution efforts and they now represent 1.45% of total loans.  With excellent liquidity, a tier one capital to assets ratio of 11.40% and loan loss reserve coverage of non-performing loans of 206%, I believe that AmeriServ Financial is conservatively positioned to take advantage of an improving economy in 2011.  We are keenly focused on providing superior client service and expanding relationships in our major business lines:  Retail, Commercial, Trust and Wealth Management."          

The Company's net interest income in the first quarter of 2011 decreased by $155,000 or 1.9% from the prior year's first quarter.  The Company's first quarter 2011 net interest margin of 3.70% was eight basis points lower than the 2010 first quarter margin of 3.78% but was unchanged from the more recent fourth quarter 2010 net interest margin which also totaled 3.70%.  Reduced loan balances were the primary factor causing the drop in both net interest income and net interest margin between first quarter periods.  Specifically, total loans averaged $661 million in the first quarter of 2011 a decrease of $56 million or 7.8% from the first quarter of 2010.  The lower balances reflect the results of the Company's focus on reducing its commercial real estate exposure and non-performing assets during this period along with weak commercial loan demand.  The Company has strengthened its excellent liquidity position by electing to reinvest these net loan paydowns in high quality investment securities and fed funds sold whose average balance has increased by $52 million over this same period.  Careful management of funding costs has allowed the Company to mitigate a significant portion of the drop in interest revenue during the past twelve months.  Specifically, quarterly interest expense has declined by $714,000 since the first quarter of 2010 due to reduced deposit costs and a lower borrowed funds position.  This reduction in deposit costs has not impacted average deposit balances which have increased by $26 million or 3.3% during this same period.  The Company is pleased that $16 million of this deposit growth has occurred in non-interest bearing demand deposit accounts whose balances have grown by 13.8% since the first quarter of 2010.  The Company believes that uncertainties in the economy have contributed to growth in deposits as consumers and businesses have looked for safety and liquidity in well capitalized community banks like AmeriServ Financial.  

The improvements in asset quality evidenced by lower levels of non-performing assets and classified loans allowed the Company to reverse a portion of the allowance for loan losses into earnings in the first quarter of 2011 while still increasing coverage ratios.  During the first quarter, total non-performing assets decreased by $5.0 million to $9.3 million or 1.45% of total loans as a result of successful resolution efforts.  Classified loans rated substandard or doubtful also dropped by $8.6 million or 21.8% during this same period.  As a result of this improvement, the Company recorded a negative provision for loan losses of $600,000 in the first quarter of 2011 compared to a $3.1 million provision in the first quarter of 2010.  Actual credit losses realized through net charge-offs in the first quarter of 2011 totaled $1.1 million or 0.70% of total loans which was comparable with the net charge-offs realized in the first quarter of 2010.  When determining the provision for loan losses, the Company considers a number of factors some of which include periodic credit reviews, non-performing, delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends.  In summary, the allowance for loan losses provided 206% coverage of non-performing loans and was 2.80% of total loans at March 31, 2011, compared to 145% of non-performing loans and 2.91% of total loans at December 31, 2010.

The Company's non-interest income in the first quarter of 2011 decreased by $195,000 or 5.9% from the prior year's first quarter.  The largest factor causing the decline between periods was a $358,000 loss realized on the sale of $17 million of investment securities in the first quarter of 2011.  The Company took advantage of a steeper yield curve to position the investment portfolio for better future earnings by selling some of the lower yielding, longer duration securities in the portfolio and replacing them with higher yielding securities with a shorter duration.  The other item contributing to the decrease in non-interest income was a reduced level of deposit service charges which were down by $100,000 in the first quarter of 2011.  Deposit service charges were negatively impacted by regulatory changes which took effect in mid-2010 and were designed to limit customer overdraft fees on debit card transactions.  Also, customers have maintained higher balances in their checking accounts which have contributed to fewer overdraft fees in 2011.  These negative items were partially offset by increased revenue generated on residential mortgage loan sales into the secondary market, greater wealth management revenue, and higher other income.  As a result of increased mortgage loan production, the realized gain on loan sales was $131,000 higher in the first quarter of 2011.  Trust and investment advisory fees increased by $113,000 as these wealth management businesses benefitted from increased equity values in the first quarter of 2011.  The improvement in other income resulted primarily from an $80,000 gain realized on the sale of an other real estate owned property.  

Total non-interest expense in the first quarter of 2011 increased by $155,000 or 1.6% from the prior year's first quarter.  Salaries and employee benefits costs increased by $301,000 due to higher medical insurance costs, increased pension expense, and greater incentive compensation expense reflecting greater commission payments related to the residential mortgage activity.  Other expenses declined by $187,000 due to a reduction in costs associated with the reserve for unfunded loan commitments and lower telephone expense resulting from the implementation of technology enhancements.  Professional fees also dropped by $122,000 in the first quarter of 2011 due to reduced legal fees and lower consulting expenses in the Trust Company.  Finally, the Company recorded an income tax expense of $489,000 in the first quarter of 2011 compared to an income tax benefit of $475,000 recorded in the first quarter of 2010 due to the pretax loss in last year's first quarter.

ASRV had total assets of $961 million and shareholders' equity of $108 million or a book value of $4.12 per common share at March 31, 2011.  The Company continued to maintain strong capital ratios that considerably exceed the regulatory defined well capitalized status with a risk based capital ratio of 16.90%, an asset leverage ratio of 11.40% and a tangible common equity to tangible assets ratio of 7.89% at March 31, 2011.    

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

March 31, 2011

(In thousands, except per share and ratio data)

(Unaudited)








2011






1QTR











PERFORMANCE DATA FOR THE PERIOD:






Net income

$ 1,263





Net income available to common shareholders

973











PERFORMANCE PERCENTAGES (annualized):






Return on average assets

0.54%





Return on average equity

4.77





Net interest margin

3.70





Net charge-offs as a percentage of average loans

0.70





Loan loss provision as a percentage of average loans

(0.37)





Efficiency ratio

89.53











PER COMMON SHARE:






Net income:






Basic

$   0.05





Average number of common shares outstanding

21,208





Diluted

0.05





Average number of common shares outstanding

21,230


















2010






1QTR

2QTR

3QTR

4QTR

YEAR






TO DATE

PERFORMANCE DATA FOR THE PERIOD:






Net income (loss)

$  (918)

$    477

$    609

$ 1,114

$  1,282

Net income (loss) available to common shareholders

(1,209)

187

318

825

121







PERFORMANCE PERCENTAGES (annualized):






Return on average assets

(0.39)%

0.20%

0.25%

0.46%

0.13.%

Return on average equity

(3.47)

1.79

2.24

4.06

1.19

Net interest margin

3.78

3.83

3.70

3.70

3.79

Net charge-offs as a percentage of average loans

0.69

1.13

0.56

0.57

0.74

Loan loss provision as a percentage of average loans

1.72

0.68

0.57

-

0.75

Efficiency ratio

85.42

84.33

84.67

88.18

85.66







PER COMMON SHARE:






Net income (loss):






Basic

$ (0.06)

$   0.01

$   0.02

$   0.04

$    0.01

Average number of common shares outstanding

21,224

21,224

21,224

21,224

21,224

Diluted

(0.06)

0.01

0.02

0.04

0.01

Average number of common shares outstanding

21,224

21,245

21,225

21,224

21,226



AMERISERV FINANCIAL, INC.

(In thousands, except per share, statistical, and ratio data)

(Unaudited)







2011





1QTR




PERFORMANCE DATA AT PERIOD END:





Assets

$    961,067




Short-term investment in money market funds

2,379




Investment securities

195,272




Loans

644,836




Allowance for loan losses

18,025




Goodwill

12,613




Deposits

816,528




FHLB borrowings

9,736




Shareholders' equity

108,170




Non-performing assets

9,328




Asset leverage ratio

11.40%




Tangible common equity ratio

7.89




PER COMMON SHARE:





Book value (A)

$          4.12




Market value

2.37




Trust assets - fair market value (B)

$ 1,410,755









STATISTICAL DATA AT PERIOD END:





Full-time equivalent employees

351




Branch locations

18




Common shares outstanding

21,207,670















2010





1QTR

2QTR

3QTR

4QTR

PERFORMANCE DATA AT PERIOD END:





Assets

$    960,817

$    962,282

$    963,169

$    948,974

Short-term investment in money market funds

2,105

4,216

3,611

3,461

Investment securities

150,073

157,057

165,291

172,635

Loans

712,929

693,988

699,394

678,181

Allowance for loan losses

21,516

20,737

20,753

19,765

Goodwill and core deposit intangibles

12,950

12,950

12,950

12,950

Deposits

802,201

809,177

818,150

801,216

FHLB borrowings

25,296

17,777

13,119

14,300

Shareholders' equity

106,393

108,023

108,391

107,058

Non-performing assets

20,322

19,815

25,267

14,364

Asset leverage ratio

11.01%

11.08%

11.07%

11.20%

Tangible common equity ratio

7.70

7.83

7.86

7.85

PER COMMON SHARE:





Book value (A)

$          4.04

$          4.11

$          4.13

$          4.07

Market value

1.67

1.61

1.81

1.58

Trust assets - fair market value (B)

$ 1,398,215

$ 1,329,495

$ 1,341,699

$ 1,366,929






STATISTICAL DATA AT PERIOD END:





Full-time equivalent employees

353

355

355

348

Branch locations

18

18

19

18

Common shares outstanding

21,223,942

21,223,942

21,223,942

21,207,670






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)

(Unaudited)




2011


1QTR



INTEREST INCOME




Interest and fees on loans

$   9,083

Total investment portfolio

1,513

Total Interest Income

10,596



INTEREST EXPENSE


Deposits

2,294

All borrowings

336

Total Interest Expense

2,630



NET INTEREST INCOME

7,966

Provision (credit) for loan losses

(600)



NET INTEREST INCOME AFTER PROVISION (CREDIT)


FOR LOAN LOSSES

8,566



NON-INTEREST INCOME


Trust fees

1,556

Net realized gains (losses) on investment securities available for sale

(358)

Net realized gains on loans held for sale

262

Service charges on deposit accounts

472

Investment advisory fees

198

Bank owned life insurance

216

Other income

759

Total Non-Interest Income

3,105



NON-INTEREST EXPENSE


Salaries and employee benefits

5,500

Net occupancy expense

757

Equipment expense

429

Professional fees

980

FDIC deposit insurance expense

462

Other expenses

1,791

Total Non-Interest Expense

9,919



PRETAX INCOME

1,752

Income tax expense

489

NET INCOME

1,263

Preferred stock dividends and accretion of preferred stock discount

290

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

$      973
















2010






1QTR

2QTR

3QTR

4QTR

YEAR






TO DATE

INTEREST INCOME












Interest and fees on loans

$ 10,020

$ 9,984

$ 9,592

$ 9,500

$ 39,096

Total investment portfolio

1,445

1,466

1,468

1,356

5,735

Total Interest Income

11,465

11,450

11,060

10,856

44,831







INTEREST EXPENSE






Deposits

2,927

2,833

2,668

2,517

10,945

All borrowings

417

409

369

349

1,544

Total Interest Expense

3,344

3,242

3,037

2,866

12,489







NET INTEREST INCOME

8,121

8,208

8,023

7,990

32,342

Provision for loan losses

3,050

1,200

1,000

-

5,250







NET INTEREST INCOME AFTER PROVISION






FOR LOAN LOSSES

5,071

7,008

7,023

7,990

27,092







NON-INTEREST INCOME






Trust fees

1,454

1,373

1,357

1,387

5,571

Net realized gains on investment securities available for sale

65

42

50

-

157

Net realized gains on loans held for sale

131

159

278

390

958

Service charges on deposit accounts

572

611

565

536

2,284

Investment advisory fees

187

167

171

188

713

Bank owned life insurance

254

258

260

455

1,227

Other income

637

778

832

810

3,057

Total Non-Interest Income

3,300

3,388

3,513

3,766

13,967







NON-INTEREST EXPENSE






Salaries and employee benefits

5,199

5,236

5,415

5,752

21,602

Net occupancy expense

736

639

620

696

2,691

Equipment expense

418

427

401

434

1,680

Professional fees

1,102

1,114

1,034

1,113

4,363

FDIC deposit insurance expense

331

341

430

473

1,575

Other expenses

1,978

2,029

1,874

1,905

7,786

Total Non-Interest Expense

9,764

9,786

9,774

10,373

39,697







PRETAX INCOME (LOSS)

(1,393)

610

762

1,383

1,362

Income tax expense (benefit)

(475)

133

153

269

80

NET INCOME (LOSS)

(918)

477

609

1,114

1,282

Preferred stock dividends and accretion of preferred stock discount

291

290

291

289

1,161

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS

$ (1,209)

$    187

$    318

$    825

$      121



AMERISERV FINANCIAL, INC.

AVERAGE BALANCE SHEET DATA

(In thousands)

(Unaudited)














2011


2010






1QTR


1QTR





Interest earning assets:




Loans and loans held for sale, net of unearned income

$ 661,061


$ 717,247

Deposits with banks

1,786


1,711

Short-term investment in money market funds

3,855


4,545

Federal funds sold

14,178


2,394

Total investment securities

188,537


148,399

Total interest earning assets

869,417


874,296





Non-interest earning assets:




Cash and due from banks

15,555


15,433

Premises and equipment

10,483


9,449

Other assets

79,615


79,643

Allowance for loan losses

(19,834)


(20,793)





Total assets

955,236


958,028





Interest bearing liabilities:




Interest bearing deposits:




Interest bearing demand

55,092


57,365

Savings

78,545


75,287

Money market

185,933


187,276

Other time

360,137


350,229

Total interest bearing deposits

679,707


670,157

Borrowings:




Federal funds purchased, securities sold under




  agreements to repurchase, and other short-term




  borrowings

424


5,490

Advanced from Federal Home Loan Bank

9,743


32,494

Guaranteed junior subordinated deferrable interest debentures

13,085


13,085

Total interest bearing liabilities

702,959


721,226





Non-interest bearing liabilities:




 Demand deposits

133,049


116,954

 Other liabilities

11,859


12,620

Shareholders' equity

107,369


107,228

Total liabilities and shareholders' equity

$ 955,236


$ 958,028



SOURCE AmeriServ Financial, Inc.



RELATED LINKS
http://www.ameriservfinancial.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.