JOHNSTOWN, Pa., Jan. 20 /PRNewswire-FirstCall/ -- AmeriServ Financial, Inc. (Nasdaq: ASRV) reported fourth quarter 2008 net income of $1,615,000 or $0.07 per diluted share. This represents an increase of $691,000 or 74.8% over the fourth quarter 2007 net income of $924,000 or $0.04 per diluted share. For the year ended December 31, 2008, the Company earned $5,509,000 or $0.25 per diluted share. This also represents an increase of $2,475,000 or 81.6% when compared to net income of $3,034,000 or $0.14 per diluted share for the full year 2007. The following table highlights the Company's financial performance for both the quarters and years ended December 31, 2008 and 2007:
Fourth Fourth Year Ended Year Ended
Quarter 2008 Quarter 2007 December 31, December 31,
2008 2007
Net income $1,615,000 $924,000 $5,509,000 $3,034,000
Diluted earnings
per share $0.07 $0.04 $0.25 $0.14
Allan R. Dennison, President and Chief Executive Officer, commented on the 2008 financial results, "AmeriServ Financial's strong growth in earnings in 2008 resulted from our disciplined focus on maintaining a high quality conservatively positioned balance sheet during a historic period of economic turmoil and crisis within the financial markets. I was particularly pleased that we were able to have a record year in growing our loan portfolio by $71 million or 11.1% by extending credit to quality borrowers within the communities in which we operate. The current recessionary environment makes the future more difficult to forecast, but we enter 2009 with an improved net interest margin, sound asset quality, and strong capital levels which should provide us with greater financial flexibility."
The Company's net interest income in the fourth quarter of 2008 increased by $2.0 million from the prior year's fourth quarter and for the full year of 2008 increased by $4.9 million or 20.2% when compared to 2007. The Company's net interest margin when compared to the same prior year periods was up sharply by 76 basis points to 3.84% for the fourth quarter of 2008 and was up by 58 basis points to 3.64% for the full year 2008. This improved net interest margin resulted from a combination of strong loan growth and balance sheet positioning which allowed the Company to benefit from the significant Federal Reserve reductions in short-term interest rates and the return to a more traditional positively sloped yield curve. As a result of these changes, the Company's interest expense on deposits and borrowings declined at a faster rate than the interest income on loans and investment securities. Additionally, the improved earning asset mix with fewer investment securities and more loans outstanding also contributed to the increased net interest income and margin in 2008. For the full year 2008, total loans increased by $71 million or 11.1% with $43 million of this growth occurring during the fourth quarter. The 2008 loan growth was driven by increased commercial and commercial real-estate loan production particularly in the suburban Pittsburgh market. Overall, net interest income has now increased for eight consecutive quarters.
The Company recorded a $625,000 provision for loan losses in the fourth quarter of 2008 compared to a $150,000 provision in the fourth quarter of 2007. For the full year 2008, the Company recorded a $2.9 million loan loss provision which represented an increase of $2.6 million over the 2007 full year loan loss provision of $300,000. When determining the provision for loan losses, the Company considers a number of factors some of which include periodic credit reviews, delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends. The higher loan provision in 2008 was caused by the Company's decision to strengthen its allowance for loan losses due to the downgrade of the rating classification of several specific performing commercial loans and uncertainties in the local and national economies. Overall, net charge-offs were up moderately in 2008 when compared to 2007. Specifically, for the full year 2008, net charge-offs amounted to $1.3 million or 0.20% of total loans compared to net charge-offs of $1.1 million or 0.19% of total loans for the full year 2007. Non-performing assets increased by $182,000 since the third quarter of 2008 but are still lower than the year-end 2007 level. Non-performing assets totaled $4.6 million or 0.65% of total loans at December 31, 2008 compared to $5.3 million or 0.83% of total loans at December 31, 2007. Overall, the allowance for loan losses provided 195% coverage of non-performing assets and was 1.26% of total loans at December 31, 2008 compared to 137% of non-performing assets and 1.14% of total loans at December 31, 2007. Note also that the Company has no direct exposure to sub-prime mortgage loans in either the loan or investment portfolios.
The Company's non-interest income in the fourth quarter of 2008 decreased by $384,000 from the prior year's fourth quarter but for the full year of 2008 increased by $1.7 million when compared to the full year 2007. The quarterly decrease was primarily due to a $288,000 decline in trust and investment advisory fees due to reductions in the market value of assets managed due to lower equity values in the fourth quarter of 2008. Other income also declined as there was a non-recurring $200,000 gain realized in the fourth quarter of 2007 on the sale of a bank owned operations facility that was no longer being fully utilized. For the full year 2008, the increase in non-interest income was primarily due to a $1.4 million increase in revenue from bank owned life insurance due to the payment of death claims in 2008. The remainder of the increase in non-interest income was driven by increases in several other non-interest revenue categories. Deposit service charges increased by $490,000 or 19.0% due to increased overdraft fees and greater service charge revenue that resulted from a realignment of the bank's checking accounts to include more fee based products. The Company also recorded an increase on gains realized on residential mortgage loan sales into the secondary market that amounted to $170,000 for the full year 2008. This increase reflects improved residential mortgage production from the Company's primary market as this has been an area of emphasis in the Company's strategic plan. Finally, the Company took advantage of the positively sloped yield curve to position the investment portfolio for better future earnings by selling some of the lower yielding securities in the portfolio and replacing them with higher yielding securities with a modestly longer duration. Overall, the Company realized a net security loss of $95,000 in 2008.
Total non-interest expense in the fourth quarter of 2008 increased by $345,000 from the prior year's fourth quarter and for the full year of 2008 increased by $965,000 or 2.8% when compared to 2007. The higher annual 2008 expenses were due to an $887,000 increase in other expenses, a $385,000 increase in professional fees, and a $91,000 charge on the prepayment of $6 million of Federal Home Loan Bank Advances. Note that the increase in other expenses was due to higher advertising and business development expenses, increased other real-estate owned expenses, and the non-recurrence of a $400,000 expense recovery related to a previous mortgage servicing operation that was realized in 2007. The increased professional fees resulted primarily from higher legal, consulting and other professional fees in 2008. The $91,000 FHLB debt prepayment charge resulted from the Company's decision to retire some higher cost advances and replace them with lower cost current market rate advances in order to reduce ongoing interest expense. While salaries and employee benefits expenses were higher in the fourth quarter of 2008, they were down by $122,000 for the full year due primarily to reduced medical insurance premiums. The $368,000 annual reduction in equipment expense resulted from the benefits achieved from the migration to a new core data processing operating system and mainframe processor.
ASRV had total assets of $967 million, total shareholders' equity of $113 million and a book value of $4.39 per share at December 31, 2008. With the receipt of $21 million of preferred stock from the U.S. Treasury's Capital Purchase Program on December 19, 2008, the Company's asset leverage ratio increased to 12.15% at December 31, 2008 compared to 9.74% as December 31, 2007. The Company also completed its previously announced stock repurchase program during the fourth quarter of 2008 by repurchasing 743,200 shares at an average price of $2.33. For the full year 2008, the Company repurchased 1,097,700 shares of its common stock at an average price of $2.58.
As a result of the decision by the Company to accept a preferred stock investment under the U.S. Treasury's Capital Purchase Program for a period of three years the Company is no longer permitted to repurchase stock or declare and pay common dividends without the consent of the U.S. Treasury.
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
January 20, 2009
(In thousands, except per share and ratio data)
(All quarterly and 2008 data unaudited)
2008
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA FOR
THE PERIOD:
Net income $1,229 $1,516 $1,149 $1,615 $5,509
PERFORMANCE PERCENTAGES
(annualized):
Return on average assets 0.55% 0.71% 0.52% 0.69% 0.62%
Return on average equity 5.43 6.64 4.93 6.68 5.93
Net interest margin 3.32 3.58 3.59 3.84 3.64
Net charge-offs as a
percentage of average
loans 0.06 0.46 0.04 0.23 0.20
Loan loss provision as a
percentage of average loans 0.10 0.89 0.48 0.36 0.45
Efficiency ratio 82.87 73.20 79.72 77.46 78.11
PER COMMON SHARE:
Net income:
Basic $0.06 $0.07 $0.05 $0.07 $0.25
Average number of
common shares
outstanding 22,060 21,847 21,855 21,571 21,833
Diluted 0.06 0.07 0.05 0.07 0.25
Average number of
common shares
outstanding 22,062 21,848 21,856 21,571 21,975
2007
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA FOR
THE PERIOD:
Net income $428 $808 $874 $924 $3,034
PERFORMANCE PERCENTAGES
(annualized):
Return on average assets 0.20% 0.37% 0.39% 0.41% 0.34%
Return on average equity 2.05 3.79 4.00 4.12 3.51
Net interest margin 2.97 3.01 3.00 3.08 3.06
Net charge-offs as a
percentage of average
loans 0.06 0.07 0.61 0.01 0.19
Loan loss provision as a
percentage of average loans - - 0.10 0.09 0.05
Efficiency ratio 94.16 88.52 87.15 86.04 88.85
PER COMMON SHARE:
Net income:
Basic $0.02 $0.04 $0.04 $0.04 $0.14
Average number of
common shares
outstanding 22,159 22,164 22,175 22,184 22,171
Diluted 0.02 0.04 0.04 0.04 0.14
Average number of
common shares
outstanding 22,166 22,171 22,177 22,186 22,173
AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
(All quarterly and 2008 data unaudited)
2008
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT
PERIOD END:
Assets $902,349 $877,230 $911,306 $966,929
Investment securities 151,967 148,819 148,777 158,253
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
Stockholders' 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%
PER COMMON SHARE:
Book value (A) $4.19 $4.22 $4.29 $4.39
Market value 2.79 2.98 2.51 1.99
Market price to book value 66.62% 70.59% 58.57% 45.31%
Trust assets - fair
market value (B) $1,838,029 $1,813,231 $1,678,698 $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
2007
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT
PERIOD END:
Assets $891,559 $876,160 $897,940 $904,878
Investment securities 185,338 174,508 170,765 163,474
Loans 603,834 604,639 629,564 636,155
Allowance for loan losses 8,010 7,911 7,119 7,252
Goodwill and core deposit
intangibles 15,119 14,903 14,687 14,470
Deposits 768,947 762,902 763,771 710,439
FHLB borrowings 15,170 4,258 23,482 82,115
Stockholders' equity 85,693 86,226 88,517 90,294
Non-performing assets 2,706 2,825 2,463 5,280
Asset leverage ratio 10.23% 10.36% 10.44% 9.74%
PER COMMON SHARE:
Book value $3.87 $3.89 $3.99 $4.07
Market value 4.79 4.40 3.33 2.77
Market price to
book value 123.88% 113.12% 83.44% 68.07%
Trust assets - fair
market value (B) $1,828,475 $1,872,366 $1,846,240 $1,883,307
STATISTICAL DATA AT
PERIOD END:
Full-time equivalent
employees 375 376 358 351
Branch locations 21 21 20 19
Common shares outstanding 22,161,445 22,167,235 22,180,650 22,188,997
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 2008 data unaudited)
2008
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $10,462 $9,862 $10,015 $10,680 $41,019
Total investment portfolio 1,820 1,588 1,717 1,675 6,800
----- ----- ----- ----- -----
Total Interest Income 12,282 11,450 11,732 12,355 47,819
INTEREST EXPENSE
Deposits 4,499 3,861 3,774 3,546 15,680
All borrowings 1,048 623 727 624 3,022
----- --- --- --- -----
Total Interest Expense 5,547 4,484 4,501 4,170 18,702
----- ----- ----- ----- ------
NET INTEREST INCOME 6,735 6,966 7,231 8,185 29,117
Provision for loan losses 150 1,375 775 625 2,925
--- ----- --- --- -----
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,585 5,591 6,456 7,560 26,192
NON-INTEREST INCOME
Trust fees 1,790 1,737 1,691 1,513 6,731
Net realized (losses) gains on
investment securities
available for sale - (137) 20 22 (95)
Net realized gains on loans
held for sale 89 121 138 129 477
Service charges on deposit
accounts 734 807 771 757 3,069
Investment advisory fees 226 218 185 150 779
Bank owned life insurance 249 1,923 260 263 2,695
Other income 750 674 702 642 2,768
--- --- --- --- -----
Total Non-Interest Income 3,838 5,343 3,767 3,476 16,424
NON-INTEREST EXPENSE
Salaries and employee benefits 4,830 4,812 4,758 4,817 19,217
Net occupancy expense 661 653 586 661 2,561
Equipment expense 431 414 402 430 1,677
Professional fees 769 910 922 981 3,582
FHLB prepayment penalty - 91 - - 91
FDIC deposit insurance expense 22 20 30 41 113
Amortization of core deposit
intangibles 216 216 217 216 865
Other expenses 1,850 1,909 1,869 1,903 7,531
----- ----- ----- ----- -----
Total Non-Interest Expense 8,779 9,025 8,784 9,049 35,637
----- ----- ----- ----- ------
PRETAX INCOME 1,644 1,909 1,439 1,987 6,979
Income tax expense 415 393 290 372 1,470
--- --- --- --- -----
NET INCOME $1,229 $1,516 $1,149 $1,615 $5,509
------ ------ ------ ------ ------
2007
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
INTEREST INCOME
Interest and fees on loans $10,061 $10,303 $10,591 $10,608 $41,563
Total investment portfolio 2,114 2,005 1,863 1,834 7,816
----- ----- ----- ----- -----
Total Interest Income 12,175 12,308 12,454 12,442 49,379
INTEREST EXPENSE
Deposits 5,699 5,931 5,994 5,187 22,811
All borrowings 521 364 438 1,022 2,345
--- --- --- ----- -----
Total Interest Expense 6,220 6,295 6,432 6,209 25,156
----- ----- ----- ----- ------
NET INTEREST INCOME 5,955 6,013 6,022 6,233 24,223
Provision for loan losses - - 150 150 300
- - --- --- ---
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,955 6,013 5,872 6,083 23,923
NON-INTEREST INCOME
Trust fees 1,704 1,689 1,677 1,683 6,753
Net realized gains on loans
held for sale 25 79 116 87 307
Service charges on deposit
accounts 585 636 671 687 2,579
Investment advisory fees 102 329 275 268 974
Bank owned life insurance 258 265 479 266 1,268
Other income 559 594 804 869 2,826
--- --- --- --- -----
Total Non-Interest Income 3,233 3,592 4,022 3,860 14,707
NON-INTEREST EXPENSE
Salaries and employee benefits 4,885 4,930 4,813 4,711 19,339
Net occupancy expense 664 615 618 597 2,494
Equipment expense 546 564 466 469 2,045
Professional fees 695 818 814 870 3,197
FDIC deposit insurance expense 22 22 22 22 88
Amortization of core deposit
intangibles 216 216 216 217 865
Other expenses 1,645 1,357 1,824 1,818 6,644
----- ----- ----- ----- -----
Total Non-Interest Expense 8,673 8,522 8,773 8,704 34,672
----- ----- ----- ----- ------
PRETAX INCOME 515 1,083 1,121 1,239 3,958
Income tax expense 87 275 247 315 924
-- --- --- --- ---
NET INCOME $428 $808 $874 $924 $3,034
==== ==== ==== ==== ======
AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2008 data unaudited)
Note: 2007 data appears before 2008.
2007 2008
TWELVE TWELVE
4QTR MONTHS 4QTR MONTHS
Interest earning assets:
Loans and loans held for
sale, net of unearned income $625,255 $607,507 $680,278 $641,766
Deposits with banks 603 500 493 583
Federal funds 85 2,278 - 114
Total investment securities 174,094 184,117 159,926 160,772
------- ------- ------- -------
Total interest earning assets 800,037 794,402 840,697 803,235
Non-interest earning assets:
Cash and due from banks 17,797 17,750 15,581 16,786
Premises and equipment 8,328 8,623 9,751 9,333
Other assets 72,823 70,369 71,786 72,249
Allowance for loan losses (7,181) (7,755) (8,602) (7,837)
------ ------ ------ ------
Total assets 891,804 883,389 929,213 893,766
======= ======= ======= =======
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 55,853 56,383 63,225 64,683
Savings 68,354 71,922 69,856 70,255
Money market 132,141 169,696 113,703 107,843
Other time 352,074 346,134 325,920 341,185
------- ------- ------- -------
Total interest bearing deposits 608,422 644,135 572,704 583,966
Borrowings:
Federal funds purchased,
securities sold under
agreements to repurchase, and
other short-term borrowings 54,051 19,844 113,093 71,636
Advanced from Federal Home Loan
Bank 8,585 4,852 13,101 11,725
Guaranteed junior subordinated
deferrable interest debentures 13,085 13,085 13,085 13,085
------ ------ ------ ------
Total interest bearing liabilities 684,143 681,916 711,983 680,412
Non-interest bearing liabilities:
Demand deposits 108,214 105,306 111,306 110,601
Other liabilities 10,385 9,703 9,751 9,816
Stockholders' equity 89,062 86,464 96,173 92,937
------ ------ ------ ------
Total liabilities and
stockholders' equity $891,804 $883,389 $929,213 $893,766
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