AMERISERV FINANCIAL, INC. 
By JOHNSTOWN, Pa., Jan. 24, 2012 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) continued its positive earnings momentum in the fourth quarter of 2011 by reporting net income of $1,770,000 or $0.07 per diluted common share. This represents an increase of $656,000 or 58.9% from the fourth quarter 2010 net income of $1,114,000 or $0.04 per diluted common share. For the year ended December 31, 2011, the Company reported net income of $6,537,000 or $0.24 per diluted share, a $5.3 million improvement over the net income of $1,282,000 or $0.01 per diluted share reported for the full year of 2010. The following table highlights the Company's financial performance for both the quarters and years ended December 31, 2011 and 2010:
Fourth Quarter Fourth Quarter Year Ended Year Ended
2011 2010 December 31, 2011 December 31, 2010
---- ---- ----------------- -----------------
Net
income $1,770,000 $1,114,000 $6,537,000 $1,282,000
------- ---------- ---------- ---------- ----------
Diluted
earnings
per
share $0.07 $0.04 $0.24 $0.01
--------- ----- ----- ----- -----
Glenn L. Wilson, President and Chief Executive Officer, commented on the 2011 financial results: "I was pleased with the strong growth in earnings that AmeriServ Financial achieved in 2011. A significant and sustained improvement in asset quality was an important factor contributing to our financial success in 2011. Specifically, non-performing assets again declined as a result of our successful problem credit resolution efforts and now total $5.2 million, or only 0.77% of total loans, while net charge-offs dropped to 0.24% of total loans for all of 2011. I was also pleased with the growth in revenue within our trust and wealth management business, and our overall non-interest expense control. AmeriServ Financial enters 2012 with good momentum and an updated strategic plan that focuses on growing revenue by leveraging our strong balance sheet and capital position."
The Company's net interest income performance has been relatively stable throughout 2011. It increased in the fourth quarter of 2011 by $123,000, or 1.5%, from the prior year's fourth quarter and for the full year of 2011 it decreased by only $59,000, or 0.2%, when compared to the entire year of 2010. The Company's 2011 fourth quarter net interest margin of 3.64 % was down four basis points from the most recent third quarter 2011 performance and for the full year 2011 averaged 3.72%, which was seven basis points lower than the 2010 net interest margin of 3.79%. Reduced loan balances were the primary factor causing the drop in both net interest income and net interest margin in 2011. Specifically, total loans averaged $663 million for the full year 2011, a decrease of $39 million or 5.5% from the 2010 year. The lower balances reflect the results of the Company's focus on reducing its commercial real estate exposure and problem loans, particularly during the first half of 2011. However, total loan balances appear to have bottomed in the first quarter of 2011. Loans have increased by $26 million over the past three quarters reflecting the successful results of the Company's more intensive sales calling efforts for commercial loans and growth in home equity loans. The Company has strengthened its excellent liquidity position by reinvesting excess cash in high quality investment securities and short-term investments whose average balance increased by $42 million in 2011. Careful management of funding costs allowed the Company to mitigate a significant portion of the drop in interest revenue during the past twelve months. Specifically, interest expense in the fourth quarter of 2011 declined by $633,000 from the same prior year quarter and for the full year 2011 decreased by $2.8 million both due to reduced deposit costs. This reduction in deposit costs has not negatively impacted deposit balances which have increased by $15 million or 1.9% since December 31, 2010. The Company is particularly pleased with the growth achieved in non-interest bearing demand deposits in 2011 whose balances on average increased by $12 million or 10.0%.
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 2011 while still increasing the non-performing assets coverage ratio. During the full year of 2011, total non-performing assets decreased by $9.2 million or 63.8% to $5.2 million or 0.77% of total loans as a result of successful resolution efforts. Classified loans rated substandard or doubtful also dropped by $21.1 million or 53.2% during this same period. As a result of this improvement, the Company recorded a negative provision for loan losses of $1,250,000 in the fourth quarter of 2011 compared to no provision in the fourth quarter of 2010. For the full year 2011 the negative provision amounted to $3,575,000 compared to a $5,250,000 provision for all of 2010. Actual credit losses realized through net charge-offs also declined sharply for both the fourth quarter and full year 2011. Net charge-offs in the fourth quarter of 2011 totaled only $196,000 or 0.12% of total loans compared to net charge-offs of $988,000 or 0.57% of total loans in the fourth quarter of 2010. For the full year 2011, net charge-offs totaled $1.6 million or 0.24% of total loans which represents a decrease from the entire year of 2010 when net charge-offs totaled $5.2 million or 0.74% of total loans. 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 288% coverage of non-performing loans and was 2.18% of total loans at December 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 fourth quarter of 2011 decreased by $280,000 from the prior year's fourth quarter and for the full year 2011 decreased by $398,000 or 2.8% when compared to the entire year of 2010. The largest factor contributing to the decline was reduced revenue from bank owned life insurance as the quarterly revenue dropped by $231,000 and the annual revenue decreased by $342,000. Note that the 2010 revenue was enhanced by the receipt of a death benefit. When compared to the prior year, gains realized on residential mortgage loan sales into the secondary market were down by $181,000 for the fourth quarter and $146,000 for the full year due to less refinance activity in 2011. Another item causing the full year 2011 decline in non-interest income 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 Company recognized $157,000 of investment security gains in 2010. The largest positive item in 2011 was increased trust and investment advisory fees. Specifically, trust and investment advisory fees increased by $41,000 for the fourth quarter and $643,000 or 10.2% for the full year as our wealth management businesses benefited from the implementation of new fee schedules in 2011.
Total non-interest expense in the fourth quarter of 2011 decreased modestly by $14,000 from the prior year's fourth quarter and for the full year 2011 increased by $340,000 or 0.9% when compared to all of 2010. The Company's 2011 fourth quarter performance was impacted by a $240,000 prepayment penalty realized on the early retirement of $5.7 million of FHLB term advances. The Company elected to utilize its strong liquidity to prepay all of its FHLB term advances with maturities greater than two years in order to reduce future interest expense. Salaries and employee benefits increased by $88,000 for the fourth quarter and $1.0 million or 4.7% for the full year 2011 due to higher medical insurance costs, increased pension expense, and greater incentive compensation expense. These negative items were partially offset by lower professional fees which dropped by $112,000 in the fourth quarter and $488,000, or 11.2%, for the full year 2011 due to reduced legal fees, recruitment fees, and lower consulting expenses in the Trust Company. FDIC deposit insurance expense also declined by $319,000 in the fourth quarter and $237,000 for the full year due to a change in the calculation methodology in 2011. Other expenses were up modestly in the fourth quarter of 2011 but decreased by $404,000 for the full year 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. Finally, the Company recorded an income tax expense of $2.9 million for the full year 2011 compared to a modest income tax expense of $80,000 for 2010 due to the sharply higher pre-tax earnings in 2011 and reduced tax free earnings from bank owned life insurance.
ASRV had total assets of $979 million and shareholders' equity of $112 million or a book value of $4.37 per common share at December 31, 2011. During the fourth quarter of 2011, the Company repurchased 287,000 shares of its common stock at an average price of $2.03 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 17.60%, an asset leverage ratio of 11.66% and a tangible common equity to tangible assets ratio of 8.15% at December 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
December 31, 2011
(In thousands, except per share and ratio data)
(Unaudited)
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% 72.00% 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
(recoveries) 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
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 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 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
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
2010
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT PERIOD END:
Assets $960,817 $962,282 $963,169 $948,974
Short-term investments 3,816 5,929 5,326 5,177
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 of $21 million received through the Small Business Lending Fund 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 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
---- ------ ------ ------ ------
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
Investment advisory fees 187 167 171 188 713
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
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
TWELVE TWELVE
4QTR MONTHS 4QTR MONTHS
Interest
earning
assets:
Loans and
loans held
for sale,
net of
unearned
income $675,657 $662,746 $689,041 $701,502
Deposits
with banks 9,961 6,853 1,790 1,795
Short-term
investment
in money
market
funds 2,355 2,224 4,631 4,375
Federal
funds sold - 5,838 4,073 3,834
Total
investment
securities 195,925 197,916 171,379 161,265
------- ------- ------- -------
Total
interest
earning
assets 883,898 875,577 870,914 872,771
Non-
interest
earning
assets:
Cash and due
from banks 16,779 15,893 16,331 15,297
Premises and
equipment 10,539 10,513 10,813 10,212
Other assets 79,201 79,293 80,402 80,206
Allowance
for loan
losses (16,155) (17,771) (20,828) (21,218)
------- ------- ------- -------
Total assets 974,262 963,505 957,632 957,268
======= ======= ======= =======
Interest
bearing
liabilities:
Interest
bearing
deposits:
Interest
bearing
demand 59,707 57,784 57,732 58,118
Savings 82,238 81,490 76,419 77,381
Money market 202,220 193,536 187,550 186,560
Other time 337,730 348,915 362,396 358,472
------- ------- ------- -------
Total
interest
bearing
deposits 681,895 681,725 684,097 680,531
Borrowings:
Federal
funds
purchased,
securities
sold under
agreements
to
repurchase,
and other
short-term
borrowings 3,343 1,216 3,586 3,119
Advanced
from
Federal
Home Loan
Bank 9,888 9,769 10,521 18,694
Guaranteed
junior
subordinated
deferrable
interest
debentures 13,085 13,085 13,085 13,085
------ ------ ------ ------
Total
interest
bearing
liabilities 708,211 705,795 711,289 715,429
Non-
interest
bearing
liabilities:
Demand
deposits 140,797 135,298 126,718 122,963
Other
liabilities 11,721 11,699 10,882 11,188
Shareholders'
equity 113,533 110,713 108,743 107,688
------- ------- ------- -------
Total
liabilities
and
shareholders'
equity $974,262 $963,505 $957,632 $957,268
======== ======== ======== ========
SOURCE AmeriServ Financial, Inc.
