JOHNSTOWN, Pa., July 14 /PRNewswire-FirstCall/ -- AmeriServ
Financial, Inc. (NASDAQ:ASRV) reported a second quarter 2009 net
loss of $939,000 or $0.06 per diluted share. This represents a
decrease of $2,455,000 from the second quarter 2008 net income of
$1,516,000 or $0.07 per diluted share. For the six month period
ended June 30, 2009, the Company reported a net loss of $406,000 or
$0.04 per diluted share. This also represents a decrease of
$3,151,000 when compared to net income of $2,745,000 or $0.13 per
diluted share for the first six months of 2008. The following table
highlights the Company's financial performance for both the three
and six month periods ended June 30, 2009 and 2008: Second Second
Six Months Six Months Quarter Quarter Ended Ended 2009 2008 June
30, 2009 June 30, 2008 --------- ---------- --------- ----------
Net income (loss) ($939,000) $1,516,000 ($406,000) $2,745,000
----------------- --------- ---------- --------- ---------- Diluted
earnings per share ($0.06) $0.07 ($0.04) $0.13 ----------------
------ ----- ------ ----- Allan R. Dennison, President and Chief
Executive Officer, commented on the second quarter 2009 financial
results, "AmeriServ Financial reported a loss for the second
quarter of 2009 due to an increased provision for loan losses and
higher FDIC insurance expense. We prudently increased our allowance
for loan losses to respond to higher non-performing loans as the
continued recessionary economic environment is negatively impacting
our commercial borrowers. This higher provision unfortunately more
than offset increased net interest income that resulted from strong
loan and deposit growth within our retail bank. Overall at June 30,
2009, our allowance for loan losses provided 100% coverage of
non-performing loans and represented 1.84% of total loans
outstanding. With a tangible common equity ratio of 8.17% and an
asset leverage ratio of 11.61%, AmeriServ Financial has good
capital strength to work through this challenging economic period."
The Company's net interest income in the second quarter of 2009
increased by $1.2 million from the prior year's second quarter and
for the first six months of 2009 increased by $2.6 million or 19.1%
when compared to the first six months of 2008. The Company's net
interest margin is also up by 8 and 24 basis points, respectively
for the quarter and six-month periods ended June 30, 2009. 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 $723 million in the first six
months of 2009, an increase of $94 million or 15.0% over the first
half of 2008. This loan growth caused overall interest income to
increase for both 2009 periods. The loan growth was driven by
increased commercial and commercial real-estate loan production as
the majority of increased residential mortgage loan production has
been sold into the secondary market. Total deposits averaged $742
million in the first six months of 2009, an increase of $43 million
or 6.2% over the same 2008 period. 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 appropriately strengthened its
allowance for loan losses in the second quarter of 2009 in response
to an increase in non-performing loans. Specifically,
non-performing assets increased by $9.6 million from $5.1 million
or 0.70% of total loans at March 31, 2009 to $14.7 million or 1.98%
of total loans at June 30, 2009. The following two credits, both
negatively impacted by weakening economic conditions, were
primarily responsible for the increased level of non-performing
assets: 1) a $5.9 million commercial loan to an information
technology consulting company that is experiencing cash flow
difficulties. A $3.4 million specific reserve has been established
against this credit. 2) a $3.9 million commercial relationship with
a paper manufacturer that has ceased operations. This relationship
consists of both an asset based line of credit and a commercial
mortgage with an 80% government guarantee. A $370,000 specific
reserve has been established against this relationship. Overall,
the Company recorded a $3.3 million provision for loan losses in
the second quarter of 2009 compared to a $1.4 million provision in
the second quarter of 2008, or an increase of $1.9 million. For the
six month period ended June 30, 2009, the Company recorded a $5.1
million provision for loan losses compared to a $1.5 million
provision for the first half of 2008, or an increase of $3.6
million. 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 addition to the higher level
of non-performing loans, the increased loan loss provision in 2009
was also caused by the Company's decision to strengthen its
allowance for loan losses due to the downgrade of the rating
classification of several performing commercial loans and
uncertainties in the local and national economies. For the six
month period ended June 30, 2009, net charge-offs have amounted to
$404,000 or 0.11% of total loans compared to net charge-offs of
$814,000 or 0.26% of total loans for the same six month period in
2008. In summary, the allowance for loan losses provided 100%
coverage of non-performing loans and was 1.84% of total loans at
June 30, 2009 compared to 264% of non-performing loans and 1.26% of
total loans at December 31, 2008. The Company's non-interest income
in the second quarter of 2009 decreased by $1.9 million from the
prior year's second quarter and for the first six months of 2009
decreased by $2.1 million when compared to the first six months of
2008. The largest item causing the decline was related to bank
owned life insurance. Bank owned life insurance revenue returned to
a more typical level in 2009 as the 2008 revenue was impacted by
the payment of $1.6 million in death claims. Trust and investment
advisory fees also declined by $365,000 for the second quarter and
$685,000 for the six month period due to reductions in the market
value of assets managed due to lower equity and real estate values
in 2009. These negative items were partially offset by increased
gains on asset sales. Specifically, gains realized on residential
mortgage sales into the secondary market in 2009 increased by
$42,000 for the second quarter and $71,000 for the six month period
due to increased mortgage purchase and refinance activity in the
Company's primary market. The Company also took advantage of market
opportunities and generated $164,000 of gains on the sale of
investment securities in 2009 compared to a $137,000 loss on a
portfolio repositioning strategy executed in 2008. Total
non-interest expense in the second quarter of 2009 increased by
$611,000 from the prior year's second quarter and for the first six
months of 2009 increased by $994,000 or 5.6% when compared to the
first six months of 2008. Higher FDIC deposit insurance expense is
the largest factor responsible for the non-interest expense
increase in 2009. Specifically, FDIC deposit insurance expense has
increased by $681,000 due to the recognition of a $435,000 expense
for a special five basis point assessment, mandated for all banks,
that was accrued in the second quarter of 2009 and an increase in
the recurring insurance premiums due to the need to strengthen the
deposit insurance fund. Total salaries and benefits expense in 2009
increased by $171,000 in the second quarter and $433,000 for the
six month period due to greater salary costs as a result of merit
increases and higher pension expense. Other expenses have increased
by $120,000 in the first six months of 2009 due primarily to
increased other real estate owned expense. These negative items
were partially offset by a reduction in core deposit amortization
expense of $216,000 for the second quarter and $324,000 for the six
month period as a branch core deposit intangible was fully
amortized in the first quarter of 2009. ASRV had total assets of
$979 million and shareholders' equity of $113 million or a book
value of $4.37 per common share at June 30, 2009. The Company's
asset leverage ratio remained strong at 11.61% and the Company had
a tangible common equity to tangible assets ratio of 8.17% at June
30, 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
July 14, 2009 (In thousands, except per share and ratio data) (All
quarterly and 2009 data unaudited) 2009 1QTR 2QTR YEAR TO DATE
PERFORMANCE DATA FOR THE PERIOD: Net income (loss) $533 $(939)
$(406) Net income (loss) available to common shareholders 274
(1,202) (928) PERFORMANCE PERCENTAGES (annualized): Return on
average assets 0.22% (0.39)% (0.08)% Return on average equity 1.90
(3.29) (0.72) Net interest margin 3.72 3.66 3.69 Net charge-offs as
a percentage of average loans 0.03 0.19 0.11 Loan loss provision as
a percentage of average loans 1.02 2.79 1.42 Efficiency ratio 78.22
82.56 79.93 PER COMMON SHARE: Net income (loss): Basic $0.01
$(0.06) $(0.04) Average number of common shares outstanding 21,137
21,151 21,144 Diluted 0.01 (0.06) (0.04) Average number of common
shares outstanding 21,137 21,152 21,144 2008 1QTR 2QTR YEAR TO DATE
PERFORMANCE DATA FOR THE PERIOD: Net income $1,229 $1,516 $2,745
Net income available to common shareholders 1,229 1,516 2,745
PERFORMANCE PERCENTAGES (annualized): Return on average assets
0.55% 0.71% 0.63% Return on average equity 5.43 6.64 6.04 Net
interest margin 3.32 3.58 3.45 Net charge-offs as a percentage of
average loans 0.06 0.46 0.26 Loan loss provision as a percentage of
average loans 0.10 0.89 0.49 Efficiency ratio 82.87 73.20 77.67 PER
COMMON SHARE: Net income: Basic $0.06 $0.07 $0.13 Average number of
common shares outstanding 22,060 21,847 21,954 Diluted 0.06 0.07
0.13 Average number of common shares outstanding 22,062 21,848
21,955 AMERISERV FINANCIAL, INC. (In thousands, except per share,
statistical, and ratio data) (All quarterly and 2009 data
unaudited) 2009 1QTR 2QTR PERFORMANCE DATA AT PERIOD END: Assets
$975,062 $978,899 Short-term investment in money market funds
10,817 7,516 Investment securities 138,853 136,119 Loans 726,961
739,649 Allowance for loan losses 10,661 13,606 Goodwill and core
deposit intangibles 13,498 13,498 Deposits 746,813 783,807 FHLB
borrowings 90,346 57,702 Shareholders' equity 114,254 112,880
Non-performing assets 5,099 14,670 Asset leverage ratio 11.82%
11.61% Tangible common equity ratio 8.35 8.17 PER COMMON SHARE:
Book value (A) $4.44 $4.37 Market value 1.67 1.85 Trust assets -
fair market value (B) $1,432,375 $1,376,272 STATISTICAL DATA AT
PERIOD END: Full-time equivalent employees 355 352 Branch locations
18 18 Common shares outstanding 21,144,700 21,156,801 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% Tangible common equity ratio 8.70 9.06
8.90 8.31 PER COMMON SHARE: Book value (A) $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 $1,678,398 $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 2QTR YEAR TO DATE INTEREST INCOME Interest and fees on loans
$10,349 $10,544 $20,893 Total investment portfolio 1,586 1,511
3,097 ----- ----- ----- Total Interest Income 11,935 12,055 23,990
INTEREST EXPENSE Deposits 3,255 3,405 6,660 All borrowings 539 479
1,018 --- --- ----- Total Interest Expense 3,794 3,884 7,678 -----
----- ----- NET INTEREST INCOME 8,141 8,171 16,312 Provision for
loan losses 1,800 3,300 5,100 ----- ----- ----- NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 6,341 4,871 11,212 NON-INTEREST
INCOME Trust fees 1,559 1,438 2,997 Net realized gains on
investment securities available for sale 101 63 164 Net realized
gains on loans held for sale 118 163 281 Service charges on deposit
accounts 673 710 1,383 Investment advisory fees 137 152 289 Bank
owned life insurance 250 254 504 Other income 723 711 1,434 --- ---
----- Total Non-Interest Income 3,561 3,491 7,052 NON-INTEREST
EXPENSE Salaries and employee benefits 5,092 4,983 10,075 Net
occupancy expense 722 641 1,363 Equipment expense 415 442 857
Professional fees 920 873 1,793 FDIC deposit insurance expense 32
691 723 Amortization of core deposit intangibles 108 - 108 Other
expenses 1,873 2,006 3,879 ----- ----- ----- Total Non-Interest
Expense 9,162 9,636 18,798 ----- ----- ------ PRETAX INCOME (LOSS)
740 (1,274) (534) Income tax expense (benefit) 207 (335) (128) ---
---- ---- NET INCOME (LOSS) 533 (939) (406) Preferred stock
dividends 259 263 522 --- --- --- NET INCOME (LOSS) AVAILABLE TO
COMMON SHAREHOLDERS $274 $(1,202) $(928) ---- ------- ----- 2008
1QTR 2QTR YEAR TO DATE INTEREST INCOME Interest and fees on loans
$10,462 $9,862 $20,324 Total investment portfolio 1,820 1,588 3,408
----- ----- ----- Total Interest Income 12,282 11,450 23,732
INTEREST EXPENSE Deposits 4,499 3,861 8,360 All borrowings 1,048
623 1,671 ----- --- ----- Total Interest Expense 5,547 4,484 10,031
----- ----- ------ NET INTEREST INCOME 6,735 6,966 13,701 Provision
for loan losses 150 1,375 1,525 --- ----- ----- NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 6,585 5,591 12,176 NON-INTEREST
INCOME Trust fees 1,790 1,737 3,527 Net realized losses on
investment securities available for sale - (137) (137) Net realized
gains on loans held for sale 89 121 210 Service charges on deposit
accounts 734 807 1,541 Investment advisory fees 226 218 444 Bank
owned life insurance 249 1,923 2,172 Other income 750 674 1,424 ---
--- ----- Total Non-Interest Income 3,838 5,343 9,181 NON-INTEREST
EXPENSE Salaries and employee benefits 4,830 4,812 9,642 Net
occupancy expense 661 653 1,314 Equipment expense 431 414 845
Professional fees 769 910 1,679 FHLB prepayment penalty - 91 91
FDIC deposit insurance expense 22 20 42 Amortization of core
deposit intangibles 216 216 432 Other expenses 1,850 1,909 3,759
----- ----- ----- Total Non-Interest Expense 8,779 9,025 17,804
----- ----- ------ PRETAX INCOME 1,644 1,909 3,553 Income tax
expense 415 393 808 --- --- --- NET INCOME 1,229 1,516 2,745
Preferred stock dividends - - - -- -- -- NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS $1,229 $1,516 $2,745 AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA (In thousands) (All quarterly and 2009
data unaudited) 2009 2008 SIX SIX 2QTR MONTHS 2QTR MONTHS Interest
earning assets: Loans and loans held for sale, net of unearned
income $732,568 $723,410 $624,193 $629,003 Deposits with banks
1,715 1,731 446 395 Short-term investment in money market funds
10,579 11,051 6,399 6,402 Federal funds - 28 - 212 Total investment
securities 144,863 146,664 143,490 155,274 ------- ------- -------
------- Total interest earning assets 889,725 882,884 774,528
791,286 Non-interest earning assets: Cash and due from banks 14,005
14,747 17,056 17,495 Premises and equipment 9,122 9,284 9,101 8,993
Other assets 72,074 71,539 69,798 69,766 Allowance for loan losses
(11,101) (10,123) (7,350) (7,329) ------- ------- ------ ------
Total assets 973,825 968,331 863,133 880,211 ======= =======
======= ======= Interest bearing liabilities: Interest bearing
deposits: Interest bearing demand 61,316 61,836 65,495 64,902
Savings 72,988 72,373 70,976 69,822 Money market 171,019 156,231
105,308 104,744 Other time 347,422 336,821 350,229 348,681 -------
------- ------- ------- Total interest bearing deposits 652,745
627,261 592,008 588,149 Borrowings: Federal funds purchased,
securities sold under agreements to repurchase, and other
short-term borrowings 52,358 73,629 35,822 56,409 Advanced from
Federal Home Loan Bank 13,840 13,847 11,822 11,770 Guaranteed
junior subordinated deferrable interest debentures 13,085 13,085
13,085 13,085 ------ ------ ------ ------ Total interest bearing
liabilities 732,028 727,822 652,737 669,413 Non-interest bearing
liabilities: Demand deposits 115,248 114,273 109,316 109,980 Other
liabilities 11,914 12,090 9,220 9,374 Shareholders' equity 114,635
114,146 91,860 91,444 ------- ------- ------ ------ Total
liabilities and shareholders' equity $973,825 $968,331 $863,133
$880,211 ======== ======== ======== ======== DATASOURCE: AmeriServ
Financial, Inc. CONTACT: Jeffrey A. Stopko, Executive Vice
President & Chief Financial Officer of AmeriServ Financial,
Inc., +1-814-533-5310 Web Site: http://www.ameriservfinancial.com/
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