2014

AmeriServ Financial Reports Earnings For The Second Quarter And First Six Months Of 2014

JOHNSTOWN, Pa., July 15, 2014 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) reported second quarter 2014 net income available to common shareholders of $927,000, or $0.05 per diluted common share.  This compares to net income available to common shareholders of $1,018,000, or $0.05 per diluted common share, reported for the second quarter of 2013.  For the six month period ended June 30, 2014, the Company reported net income available to common shareholders of $1,804,000, or $0.10 per diluted share.  When compared to the first six months of 2013, net income available to common shareholders was down by $218,000 or 10.8% while diluted earnings per share declined by a lesser amount of $0.01, or 9.1%, as total shares outstanding were lower in 2014 due to the success of the Company's common stock repurchase program which was completed in the second quarter of 2013.  The following table highlights the Company's financial performance for both the three and six month periods ended June 30, 2014 and 2013:           


Second Quarter
2014

Second Quarter
2013


Six Months Ended

June 30, 2014

Six Months Ended

June 30, 2013







Net income

$979,000

$1,070,000


$1,909,000

$2,126,000

Net income available to
common shareholders

 

$927,000

 

$1,018,000


 

$1,804,000

 

$2,022,000

Diluted earnings per share

$ 0.05

$ 0.05


$ 0.10

$0.11

Glenn L. Wilson, President and Chief Executive Officer, commented on the second quarter 2014 financial results: "Our strategic focus on growing our loan portfolio while maintaining strong asset quality continues to show favorable results.  Over the past twelve months, we have increased total loans by $53 million, or 7.10%, to a record level of $805 million.  This has been an important factor contributing to the growth in net interest income that AmeriServ Financial has achieved so far in 2014.  Additionally, our asset quality metrics continue to be outstanding as non-performing assets are only 0.56% of total loans and our allowance for loan losses provided 256% coverage of non-performing loans at June 30, 2014." 

The Company's net interest income in the second quarter of 2014 increased by $363,000, or 4.5%, from the prior year's second quarter and for the first six months of 2014 increased by $846,000, or 5.3%, when compared to the first six months of 2013.  The Company's net interest margin of 3.52% for the first six months of 2014 was two basis points lower than the net interest margin of 3.54% for the first half of 2013.  There was a similar net interest margin decline of three basis points when the second quarter of 2014 is compared to the prior year second quarter.  We believe that this performance demonstrates that the recent pace of net interest margin contraction has slowed from the pace of margin decline experienced over the previous two years.  The Company has been able to mitigate this net interest margin pressure and to increase net interest income by both growing its earning assets and reducing its cost of funds. Specifically, the earning asset growth has occurred in the loan portfolio as total loans averaged $791 million in the first half of 2014 which is $63 million, or 8.7%, higher than the $728 million average for the first half of 2013.  This loan growth reflects the successful results of the Company's more intensive sales calling efforts, with an emphasis on generating commercial loans and owner occupied commercial real estate loans, which qualify as Small Business Lending Fund (SBLF) loans, particularly through its loan production offices.  As a result of this growth in SBLF qualified loans, the Company has locked in the lowest preferred dividend rate available under the program of 1% until the first quarter of 2016.  Interest income in 2014 has also benefitted from reduced premium amortization on mortgage backed securities due to slower mortgage prepayment speeds.  Total interest expense for the first six months of 2014 declined by $97,000 from the first six months of 2013 due to the Company's proactive efforts to reduce deposit costs.  Even with this reduction in deposit costs, the Company still experienced growth in deposits which reflects the loyalty of our core deposit base and ongoing efforts to cross sell new loan customers into deposit products.  Specifically, total deposits averaged a record level of $866 million for the first half of 2014 which is $28 million, or 3.3%, higher than the $839 million average in the first half of 2013.    

The Company did not record a provision for loan losses in the second quarter of 2014 as compared to a $150,000 provision recorded in the second quarter of 2013.  For the six month period in 2014, the Company also did not record a provision for loan losses compared to a $100,000 negative provision in the first six months of 2013.  The Company continued to maintain outstanding asset quality in the first half of 2014.  At June 30, 2014, non-performing assets totaled $4.5 million, or 0.56%, of total loans which is comparable with the level they have averaged for the past six quarters.  The Company experienced net loan recoveries in both the second quarter of 2014 and 2013.  For the six month periods, there were modest net loan recoveries of $46,000, or 0.01%, of total loans in 2014 compared to net loan charge-offs of $1.3 million, or 0.37% of total loans in 2013.  When determining the provision for loan losses, the Company considers a number of factors, some of which include periodic credit reviews, non-performing assets, 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 a strong 256% coverage of non-performing loans, and was 1.26% of total loans at June 30, 2014, compared to 327% of non-performing loans, and 1.29% of total loans, at December 31, 2013.

Total non-interest income in the second quarter of 2014 decreased by $437,000, or 10.7%, from the prior year's second quarter and for the first six months of 2014 decreased by $721,000, or 9.1%, when compared to the first six months of 2013.  The 2014 declines reflect reduced revenue from residential mortgage banking activities due to lower refinance activity as a result of higher mortgage rates and reduced purchase activity particularly in the first quarter of 2014.  This caused gains realized on residential mortgage loan sales into the secondary market and other mortgage related fees to decrease by a total of $138,000 for the second quarter and $507,000 for the first six months of 2014.  Other factors contributing to the non-interest income decline in the second quarter of 2014 included a $203,000 decrease in bank owned life insurance revenue due to the receipt of a death claim in the prior year and a $78,000 loss realized on the sale of an other real estate owned property which contributed to the decline in other income in the second quarter of 2014.  For the six month period, these negative items were partially offset by increased fees from our trust and wealth management businesses and increased gains realized on the sale of investment securities.  Specifically, trust and investment advisory fees increased by $100,000, or 2.6%, for first half of 2014 due to increased assets under management which reflects both successful new business development activities and market appreciation of existing assets.  Gains realized on the sale of investment securities increased by $106,000 for the first six months of 2014 as the Company took advantage of market opportunities to sell certain rapidly prepaying mortgage backed securities.  At June 30, 2014, the Company's available for sale investment securities portfolio still had a market value that exceeded its book value by approximately $3.0 million.

Total non-interest expense in the second quarter of 2014 increased by $178,000, or 1.7%, from the prior year's second quarter and for the first six months of 2014 increased by $294,000, or 1.4%, when compared to the first six months of 2013.  Salaries and employee benefits were down modestly between periods as the benefits of lower pension expense and incentive compensation expense were partially offset by increased health insurance premiums.  Professional fees increased by $314,000 in the second quarter of 2014 and $587,000 for the six month period due to higher legal costs and new recurring costs related to outsourcing our computer operations and statement processing to a third party vendor.  The overall cost savings benefit from outsourcing these services is captured in lower personnel costs in these departments and reduced software expense which is a key factor contributing to the decline in other expenses of $75,000 for the second quarter and $322,000 for the six month period in 2014.  Finally, the Company recorded an income tax expense of $812,000, or an effective tax rate of 29.8%, in the first half of 2014 compared to income tax expense of $864,000, or an effective tax rate of 28.9%, for the first half of 2013.  The effective tax rate was modestly lower in 2013 due to an increased level of tax free earnings from bank owned life insurance.

The Company had total assets of $1.06 billion, shareholders' equity of $116 million, a book value of $5.05 per common share and a tangible book value of $4.38 per common share at June 30, 2014.  The Company has increased its tangible book value per share by 8.7% over the past twelve months.  The Company continued to maintain strong capital ratios that exceed the regulatory defined well capitalized status with a risk based capital ratio of 15.23%, an asset leverage ratio of 11.56% and a tangible common equity to tangible assets ratio of 7.83% at June 30, 2014.

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 

June 30, 2014

(Dollars in thousands, except per share and ratio data)

(Unaudited)








2014





1QTR

2QTR

YEAR





TO DATE

PERFORMANCE DATA FOR THE PERIOD:





Net income 


930

979

1,909

Net income available to common shareholders


877

927

1,804






PERFORMANCE PERCENTAGES (annualized):





Return on average assets


0.36%

0.37%

0.37%

Return on average equity


3.30

3.41

3.35

Net interest margin


3.56

3.47

3.52

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

-

(0.02)

(0.01)

Loan loss provision (credit) as a percentage of average loans

-

-

-

Efficiency ratio


89.02

88.29

88.66






PER COMMON SHARE:





Net income:





Basic


0.05

0.05

0.10

Average number of common shares outstanding


18,786

18,795

18,790

Diluted


0.05

0.05

0.10

Average number of common shares outstanding


18,904

18,936

18,920

Cash dividends declared


0.01

0.01

0.02








2013





1QTR

2QTR

YEAR





TO DATE

PERFORMANCE DATA FOR THE PERIOD:





Net income 


1,056

1,070

2,126

Net income available to common shareholders


1,004

1,018

2,022






PERFORMANCE PERCENTAGES (annualized):





Return on average assets


0.43%

0.43%

0.43%

Return on average equity


3.86

3.86

3.86

Net interest margin


3.59

3.50

3.54

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

0.76

(0.02)

0.37

Loan loss provision (credit) as a percentage of average loans

(0.14)

0.08

(0.03)

Efficiency ratio


89.52

86.28

87.89






PER COMMON SHARE:





Net income:





Basic


0.05

0.05

0.11

Average number of common shares outstanding


19,168

19,039

19,103

Diluted


0.05

0.05

0.11

Average number of common shares outstanding


19,257

19,128

19,192

Cash dividends declared


-

0.01

0.01

                       

 



AMERISERV FINANCIAL, INC.

(Dollars in thousands, except per share, statistical, and ratio data)

(Unaudited)







2014





1QTR

2QTR



FINANCIAL CONDITION DATA AT PERIOD END:





Assets

1,051,108

1,063,717



Short-term investments/overnight funds

9,019

8,013



Investment securities

154,754

153,603



Loans and loans held for sale

789,620

804,675



Allowance for loan losses

10,109

10,150



Goodwill 

12,613

12,613



Deposits

875,333

873,908



FHLB borrowings

40,483

52,677



Shareholders' equity

114,590

115,946



Non-performing assets

3,274

4,469



Asset leverage ratio

11.50%

11.56%



Tangible common equity ratio

7.80

7.83



PER COMMON SHARE:





Book value (A)

4.97

5.05



Tangible book value (A)

4.31

4.38



Market value

3.85

3.48



Trust assets - fair market value (B)

1,693,663

1,873,996








STATISTICAL DATA AT PERIOD END:





Full-time equivalent employees

347

345



Branch locations

18

17



Common shares outstanding

18,793,388

18,794,888














2013





1QTR

2QTR

3QTR

4QTR

FINANCIAL CONDITION DATA AT PERIOD END:





Assets

999,718

1,025,084

1,038,144

1,056,036

Short-term investments/overnight funds

23,995

9,291

8,646

9,778

Investment securities

162,866

168,284

167,110

160,165

Loans and loans held for sale

717,852

751,522

763,681

786,748

Allowance for loan losses

10,960

11,145

11,183

10,104

Goodwill 


12,613

12,613

12,613

12,613

Deposits


847,189

840,272

852,211

854,522

FHLB borrowings


16,000

50,292

52,096

66,555

Shareholders' equity


111,445

109,282

110,370

113,307

Non-performing assets


4,387

5,027

5,037

4,109

Asset leverage ratio


11.58%

11.52%

11.44%

11.45%

Tangible common equity ratio


7.88

7.47

7.48

7.64

PER COMMON SHARE:






Book value (A)


4.72

4.70

4.76

4.91

Tangible book value (A)


4.06

4.03

4.09

4.24

Market value


3.13

2.74

3.15

3.03

Trust assets - fair market value (B)


1,566,236

1,562,366

1,599,402

1,668,654







STATISTICAL DATA AT PERIOD END:






Full-time equivalent employees


357

360

358

352

Branch locations


18

18

18

18

Common shares outstanding


19,168,188

18,784,188

18,784,188

18,784,188







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 consolidated balance sheets.







 

 

AMERISERV FINANCIAL, INC.

CONSOLIDATED STATEMENT OF INCOME

(Dollars in thousands)

(Unaudited)








2014





1QTR

2QTR

YEAR





TO DATE

INTEREST INCOME










Interest and fees on loans


9,032

8,939

17,971

Interest on investments


1,063

1,044

2,107

Total Interest Income


10,095

9,983

20,078






INTEREST EXPENSE





Deposits


1,211

1,240

2,451

All borrowings


359

359

718

Total Interest Expense


1,570

1,599

3,169






NET INTEREST INCOME


8,525

8,384

16,909

Provision (credit) for loan losses


-

-

-






NET INTEREST INCOME AFTER PROVISION (CREDIT)




FOR LOAN LOSSES


8,525

8,384

16,909






NON-INTEREST INCOME





Trust and investment advisory fees


2,032

1,948

3,980

Service charges on deposit accounts


478

501

979

Net realized gains on loans held for sale


101

171

272

Mortgage related fees


117

160

277

Net realized gains on investment securities 


57

120

177

Bank owned life insurance


187

185

372

Other income


560

553

1,113

Total Non-Interest Income


3,532

3,638

7,170






NON-INTEREST EXPENSE





Salaries and employee benefits


6,314

6,107

12,421

Net occupancy expense


839

717

1,556

Equipment expense


470

494

964

Professional fees


1,308

1,464

2,772

FDIC deposit insurance expense


160

154

314

Other expenses


1,647

1,684

3,331

Total Non-Interest Expense


10,738

10,620

21,358






PRETAX INCOME 


1,319

1,402

2,721

Income tax expense 


389

423

812

NET INCOME 


930

979

1,909

Preferred stock dividends 


53

52

105

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

877

927

1,804























2013





1QTR

2QTR

YEAR





TO DATE

INTEREST INCOME










Interest and fees on loans


8,628

8,590

17,218

Interest on investments


1,074

1,037

2,111

Total Interest Income


9,702

9,627

19,329






INTEREST EXPENSE





Deposits


1,350

1,288

2,638

All borrowings


310

318

628

Total Interest Expense


1,660

1,606

3,266






NET INTEREST INCOME


8,042

8,021

16,063

Provision (credit) for loan losses


(250)

150

(100)






NET INTEREST INCOME AFTER PROVISION (CREDIT)




FOR LOAN LOSSES


8,292

7,871

16,163






NON-INTEREST INCOME





Trust and investment advisory fees


1,881

1,999

3,880

Service charges on deposit accounts


511

538

1,049

Net realized gains on loans held for sale


386

241

627

Mortgage related fees


201

228

429

Net realized gains on investment securities


71

-

71

Bank owned life insurance


201

388

589

Other income


565

681

1,246

Total Non-Interest Income


3,816

4,075

7,891






NON-INTEREST EXPENSE





Salaries and employee benefits


6,331

6,176

12,507

Net occupancy expense


773

751

1,524

Equipment expense


455

455

910

Professional fees


1,035

1,150

2,185

FDIC deposit insurance expense


134

151

285

Other expenses


1,894

1,759

3,653

Total Non-Interest Expense


10,622

10,442

21,064






PRETAX INCOME 


1,486

1,504

2,990

Income tax expense 


430

434

864

NET INCOME 


1,056

1,070

2,126

Preferred stock dividends 


52

52

104

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

1,004

1,018

2,022

 

AMERISERV FINANCIAL, INC.

AVERAGE BALANCE SHEET DATA

(Dollars in thousands)

(Unaudited)
























2014



2013





SIX



SIX



2QTR

MONTHS


2QTR

MONTHS








Interest earning assets:







Loans and loans held for sale, net of unearned income

795,233

791,270


728,189

727,846

Deposits with banks


7,512

6,749


9,511

8,324

Short-term investment in money market funds


2,296

3,231


5,702

5,057

Total investment securities


157,348

160,069


169,482

166,559

Total interest earning assets


962,389

961,319


912,884

907,786








Non-interest earning assets:







Cash and due from banks


15,267

15,618


16,470

16,845

Premises and equipment


13,194

13,171


12,799

12,475

Other assets


69,538

69,689


75,924

78,961

Allowance for loan losses


(10,122)

(10,132)


(10,989)

(11,768)








Total assets


1,050,266

1,049,665


1,007,088

1,004,299








Interest bearing liabilities:







Interest bearing deposits:







Interest bearing demand


100,249

91,433


74,721

68,850

Savings


89,871

89,202


88,919

88,058

Money market


229,626

229,170


208,050

210,626

Other time


304,022

303,583


309,318

311,667

Total interest bearing deposits


723,768

713,388


681,008

679,201

Borrowings:







Federal funds purchased and other short-term borrowings

7,249

18,441


12,067

9,966

Advances from Federal Home Loan Bank


30,378

28,544


16,000

15,774

Guaranteed junior subordinated deferrable interest debentures

13,085

13,085


13,085

13,085

Total interest bearing liabilities


774,480

773,458


722,160

718,026








Non-interest bearing liabilities:







Demand deposits


152,976

152,894


160,773

159,512

Other liabilities


7,582

8,519


12,860

15,634

Shareholders' equity


115,228

114,794


111,295

111,127

Total liabilities and shareholders' equity


1,050,266

1,049,665


1,007,088

1,004,299








 

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.