2014

AmeriServ Financial Reports Earnings for the First Quarter of 2012

JOHNSTOWN, Pa., April 17, 2012 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) continued its positive earnings momentum in the first quarter of 2012 by reporting net income of $1,565,000 or $0.06 per diluted common share.  This represents an increase of $302,000, or 23.9%, from the first quarter 2011 net income of $1,263,000 or $0.05 per diluted common share.  There was a greater percentage increase in earnings per share due to the success of the Company's common stock repurchase program as the Company's increased 2012 earnings are being spread over a smaller number of shares outstanding.  The following table highlights the Company's financial performance for the quarters ended March 31, 2012 and 2011:    


First Quarter
2012

First Quarter
2011


Dollar

Change

Percentage

Change







Net income

$1,565,000

$1,263,000


$302,000

23.9%

Diluted earnings per share

$ 0.06

$ 0.05


$ 0.01

37.0%

Glenn L. Wilson, President and Chief Executive Officer, commented on the first quarter 2012 financial results: "I was pleased that our growth in earnings was driven by increased non-interest revenue and stable net interest margin performance.  Our non-interest revenue benefitted from good fee growth in our trust and wealth management business along with another strong quarter of residential mortgage loan production.  This improved revenue growth combined with our continued excellent asset quality,  and strong capital and loan loss reserve, positions us well to execute our growth oriented strategic plan."            

The Company's net interest income in the first quarter of 2012 increased by $92,000, or 1.2%, when compared to the first quarter of 2011.  The first quarter 2012 net interest margin of 3.70% was consistent with last year's first quarter.  The increased net interest income and overall stable net interest margin performance reflects the benefits of a lower cost of funds and moderate loan growth.  Specifically, total loans outstanding have increased for four consecutive quarters and now are $26.5 million or 4.1% higher than they were at March 31, 2011.   This loan growth reflects the successful results of the Company's more intensive sales calling efforts with a particular emphasis on generating commercial loans and owner occupied commercial real estate loans which qualify as Small Business Lending Fund loans.  Despite this growth in loans, total interest revenue dropped by $472,000 between years and reflects the lower interest rate environment and flatter yield curve.  However, careful management of funding costs allowed the Company to mitigate this drop in interest revenue during the past year.  Specifically, interest expense in the first quarter of 2012 declined by $564,000 from the same prior year quarter due to the Company's proactive efforts to reduce deposit and borrowing costs.  This reduction in deposit costs has not negatively impacted deposit balances which have increased by $3.6 million over the past 12 months.     

Sustained improvements in asset quality evidenced by lower levels of non-performing assets and criticized loans allowed the Company to reverse a portion of the allowance for loan losses into earnings in the first quarter of 2012 while still maintaining especially strong coverage ratios.  During the first quarter of 2012, total non-performing assets again declined to $4.8 million or 0.72% of total loans as a result of successful ongoing resolution efforts.  Criticized loans also dropped by $10 million or 20.4% during this same period.  As a result of this improvement, the Company again recorded a negative provision for loan losses of $625,000 in the first quarter of 2012 compared to a similar credit provision of $600,000 in the first quarter of 2011.  Actual credit losses realized through net charge-offs also declined sharply in the first quarter of 2012.  Net charge-offs in the first quarter of 2012 totaled only $220,000, or 0.13% of total loans, compared to net charge-offs of $1.1 million, or 0.70% of total loans, in the first quarter of 2011.  When determining the provision for loan losses, the Company considers a number of factors some of which include periodic credit reviews, non-performing asset, loan 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 296% coverage of non-performing loans, and was 2.05% of total loans, at March 31, 2012, compared to 288% of non-performing loans, and 2.18% of total loans, at December 31, 2011.

The Company's non-interest income in the first quarter of 2012 increased by $569,000 or 18.3% from the prior year's first quarter.  In the first quarter of 2011, the Company realized a $358,000 investment security loss on a portfolio repositioning strategy where we sold $17 million of lower yielding, longer duration securities in the portfolio and replaced them with higher yielding securities with a shorter duration.  There were no investment security gains or losses in the first quarter of 2012.    Trust and investment advisory fees increased by $136,000 or 7.8% over the prior year first quarter as our wealth management businesses benefited from the implementation of new fee schedules and improved asset values in the first quarter of 2012.        

Total non-interest expense in the first quarter of 2012 increased by $195,000 or 2.0% from the prior year's first quarter.  Salaries and employee benefits increased by $486,000 or 8.8% due to higher salaries expense, incentive compensation, and pension expense in the first quarter of 2012.  The 2012 personnel expenses also reflect the staffing costs associated with new loan production offices in Altoona and Harrisburg for the full quarter and Hagerstown, Maryland for part of the quarter.  Other expenses also increased by $105,000 due to an increase in the reserve for unfunded loan commitments as result of increased commercial loan origination activity in the first quarter of 2012.  These negative items were partially offset by a $333,000 reduction in FDIC deposit insurance expense in the first quarter of 2012. This reduction resulted from a change in the calculation methodology which took effect in the second half of 2011 and the Company's improved risk profile which is evidenced by better asset quality and increased profitability.  Finally, the Company recorded an income tax expense of $678,000 or an effective tax rate of 30.2% for the first quarter of 2012 compared to an income tax expense of $489,000 or an effective tax rate of 27.9% for the first quarter of 2011.  The higher income tax expense and effective rate in 2012 reflects the Company's increased pre-tax earnings combined with a relatively consistent level of tax free earnings from bank owned life insurance.

ASRV had total assets of $967 million and shareholders' equity of $112 million or a book value of $4.46 per common share at March 31, 2012.  During the first quarter of 2012, the Company repurchased 456,000 shares of its common stock at an average price of $2.38 in conjunction with the terms of the Company's stock buyback program that was announced on November 9, 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 17.22%, an asset leverage ratio of 11.83% and a tangible common equity to tangible assets ratio of 8.24% at March 31, 2012. 

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, 2012

(In thousands, except per share and ratio data)

(Unaudited)












2012









1QTR
















PERFORMANCE DATA FOR THE PERIOD:









Net income 


$     1,565







Net income available to common shareholders


1,302
















PERFORMANCE PERCENTAGES (annualized):









Return on average assets


0.65%







Return on average equity


5.60







Net interest margin


3.70







Net charge-offs (recoveries) as a percentage of average loans


0.13







Loan loss provision as a percentage of average loans


(0.38)







Efficiency ratio


86.17
















PER COMMON SHARE:









Net income:









Basic


$     0.06







Average number of common shares outstanding


20,679







Diluted


0.06







Average number of common shares outstanding


20,722



























2011









1QTR

2QTR

3QTR

4QTR

YEAR









TO DATE



PERFORMANCE DATA FOR THE PERIOD:









Net income 


$     1,263

$     1,938

$     1,566

$     1,770

$     6,537



Net income available to common shareholders


973

1,648

1,027

1,505

5,153












PERFORMANCE PERCENTAGES (annualized):









Return on average assets


0.54%

0.81%

0.64%

0.72%

0.68%



Return on average equity


4.77

7.11

5.52

6.19

5.90



Net interest margin


3.70

3.71

3.68

3.64

3.72



Net charge-offs as a percentage of average loans


0.70

(0.07)

0.20

0.12

0.24



Loan loss provision as a percentage of average loans


(0.37)

(0.72)

(0.33)

(0.73)

(0.54)



Efficiency ratio


89.53

85.53

84.83

89.26

87.26












PER COMMON SHARE:









Net income:









Basic


$     0.05

$     0.08

$     0.05

$     0.07

$     0.24



Average number of common shares outstanding


21,208

21,208

21,208

21,114

21,184



Diluted


0.05

0.08

0.05

0.07

0.24



Average number of common shares outstanding


21,230

21,236

21,227

21,128

21,205



  













AMERISERV FINANCIAL, INC.

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


(Unaudited)









2012






1QTR




PERFORMANCE DATA AT PERIOD END:






Assets


$     967,401




Short-term investments


4,689




Investment securities


190,089




Loans and loans held for sale


671,328




Allowance for loan losses


13,778




Goodwill 


12,613




Deposits


820,105




FHLB borrowings


6,390




Shareholders' equity


112,270




Non-performing assets


4,801




Asset leverage ratio


11.83%




Tangible common equity ratio


8.24




PER COMMON SHARE:






Book value (A)


$     4.46




Tangible book value


3.84




Market value


2.74




Trust assets - fair market value (B)


$     1,469,789










STATISTICAL DATA AT PERIOD END:






Full-time equivalent employees


353




Branch locations


18




Common shares outstanding


20,465,521


















2011






1QTR

2QTR

3QTR

4QTR

PERFORMANCE DATA AT PERIOD END:






Assets


$     961,067

$     954,893

$     973,439

$     979,076

Short-term investments


4,094

4,338

17,941

6,129

Investment securities


195,272

198,770

195,784

195,203

Loans and loans held for sale


644,836

656,838

667,409

670,847

Allowance for loan losses


18,025

16,958

16,069

14,623

Goodwill


12,613

12,613

12,613

12,613

Deposits


816,528

810,082

827,358

816,420

FHLB borrowings


9,736

9,722

9,707

21,765

Shareholders' equity


108,170

111,410

114,164

112,352

Non-performing assets


9,328

7,433

5,344

5,199

Asset leverage ratio


11.40%

11.60%

11.70%

11.66%

Tangible common equity ratio


7.89

8.29

8.38

8.15

PER COMMON SHARE:






Book value (A)


$     4.12

$     4.28

$     4.39

$     4.37

Tangible book value


3.53

3.68

3.80

3.76

Market value


2.37

1.95

1.90

1.95

Trust assets - fair market value (B)


$     1,410,755

$     1,390,534

$1,313,440

$1,382,745







STATISTICAL DATA AT PERIOD END:






Full-time equivalent employees


351

352

342

347

Branch locations


18

18

18

18

Common shares outstanding


21,207,670

21,208,421

21,208,421

20,921,021







Note:






(A)  Preferred stock of $21 million received through the Small Business Lending Fund is excluded from the book value per common share and

  tangible book value per common share calculations.

(B)  Not recognized on the balance sheet

  










AMERISERV FINANCIAL, INC.

CONSOLIDATED STATEMENT OF INCOME

(In thousands)

(Unaudited)












2012









1QTR
















INTEREST INCOME


















Interest and fees on loans


$     8,729







Total investment portfolio


1,395







Total Interest Income


10,124
















INTEREST EXPENSE









Deposits


1,762







All borrowings


304







Total Interest Expense


2,066
















NET INTEREST INCOME


8,058







Provision (credit) for loan losses


(625)
















NET INTEREST INCOME AFTER PROVISION (CREDIT)









FOR LOAN LOSSES


8,683
















NON-INTEREST INCOME









Trust fees


1,697







Investment advisory fees


193







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


-







Net realized gains on loans held for sale


276







Service charges on deposit accounts


535







Bank owned life insurance


215







Other income


758







Total Non-Interest Income


3,674
















NON-INTEREST EXPENSE









Salaries and employee benefits


5,986







Net occupancy expense


729







Equipment expense


451







Professional fees


923







FDIC deposit insurance expense


129







Other expenses


1,896







Total Non-Interest Expense


10,114
















PRETAX INCOME 


2,243







Income tax expense 


678







NET INCOME 


1,565







Preferred stock dividends


263







NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$     1,302













































2011









1QTR

2QTR

3QTR

4QTR

YEAR









TO DATE



INTEREST INCOME


















Interest and fees on loans


$     9,083

$     8,804

$     8,888

$     8,924

$     35,699



Total investment portfolio


1,513

1,726

1,604

1,422

6,265



Total Interest Income


10,596

10,530

10,492

10,346

41,964












INTEREST EXPENSE









Deposits


2,294

2,106

2,038

1,897

8,335



All borrowings


336

338

336

336

1,346



Total Interest Expense


2,630

2,444

2,374

2,233

9,681












NET INTEREST INCOME


7,966

8,086

8,118

8,113

32,283



Provision (credit) for loan losses


(600)

(1,175)

(550)

(1,250)

(3,575)












NET INTEREST INCOME AFTER PROVISION (CREDIT)









FOR LOAN LOSSES


8,566

9,261

8,668

9,363

35,858












NON-INTEREST INCOME









Trust fees


1,556

1,617

1,570

1,430

6,173



Investment advisory fees


198

198

172

186

754



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


(358)

-

-

-

(358)



Net realized gains on loans held for sale


262

155

186

209

812



Service charges on deposit accounts


472

549

640

580

2,241



Bank owned life insurance


216

218

227

224

885



Other income


759

717

729

857

3,062



Total Non-Interest Income


3,105

3,454

3,524

3,486

13,569












NON-INTEREST EXPENSE









Salaries and employee benefits


5,500

5,574

5,702

5,840

22,616



Net occupancy expense


757

742

680

721

2,900



Equipment expense


429

411

435

411

1,686



Professional fees


980

911

983

1,001

3,875



FDIC deposit insurance expense


462

460

262

154

1,338



FHLB prepayment penalty


-

-

-

240

240



Other expenses


1,791

1,779

1,820

1,992

7,382



Total Non-Interest Expense


9,919

9,877

9,882

10,359

40,037












PRETAX INCOME 


1,752

2,838

2,310

2,490

9,390



Income tax expense 


489

900

744

720

2,853



NET INCOME 


1,263

1,938

1,566

1,770

6,537



Preferred stock dividends and accretion of preferred stock discount


290

290

539

265

1,384



NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$     973

$     1,648

$     1,027

$     1,505

$     5,153



  






AMERISERV FINANCIAL, INC.

AVERAGE BALANCE SHEET DATA

(In thousands)

(Unaudited)


















2012


2011








1QTR


1QTR






Interest earning assets:





Loans and loans held for sale, net of unearned income


$     666,575


$     661,061

Deposits with banks


4,027


1,786

Short-term investment in money market funds


5,168


3,855

Federal funds sold


-


14,178

Total investment securities


194,576


188,537

Total interest earning assets


870,346


869,417






Non-interest earning assets:





Cash and due from banks


17,163


15,555

Premises and equipment


10,826


10,483

Other assets 


82,302


79,615

Allowance for loan losses


(14,486)


(19,834)






Total assets


966,151


955,236






Interest bearing liabilities:





Interest bearing deposits:





Interest bearing demand


56,346


55,092

Savings


83,678


78,545

Money market


202,156


185,933

Other time


327,680


360,137

Total interest bearing deposits


669,860


679,707

Borrowings:





Federal funds purchased, securities sold under 





   agreements to repurchase, and other short-term





   borrowings


4,233


424

Advanced from Federal Home Loan Bank


8,493


9,743

Guaranteed junior subordinated deferrable interest debentures


13,085


13,085

Total interest bearing liabilities


695,671


702,959






Non-interest bearing liabilities:





  Demand deposits


142,106


133,049

  Other liabilities 


16,067


11,859

Shareholders' equity


112,307


107,369

Total liabilities and shareholders' equity


$     966,151


$     955,236

SOURCE AmeriServ Financial, Inc.



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