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Section 1: 8-K (FOURTH QUARTER AND FULL YEAR 2019 EARNINGS AND QUARTERLY COMMON STOCK CASH DIVIDEND PRESS RELEASE)

SECURITIES AND EXCHANGE COMMISSION




UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549


Form 8-K


Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported) January 21, 2020


AMERISERV FINANCIAL, Inc.

(exact name of registrant as specified in its charter)


Pennsylvania        0-11204        25-1424278

(State or other     (Commission    (IRS Employer

jurisdiction        File Number)   Identification No.)

of incorporation)


Main and Franklin Streets, Johnstown, PA  15901

(address of principal executive offices)   (Zip Code)


Registrant's telephone number, including area code: 814-533-5300


N/A

(Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


( ) Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


( ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


( ) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


( ) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:


Title Of Each Class

Trading Symbol

Name of Each Exchange On Which Registered

Common Stock

ASRV

The NASDAQ Stock Market LLC

8.45% Beneficial Unsecured Securities, Series A

(AmeriServ Financial Capital Trust I)

ASRVP

The NASDAQ Stock Market LLC


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).

Emerging growth company ( )


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ( )







Form 8-K


Item 2.02 Results of operation and financial condition.


AMERISERV FINANCIAL, Inc. (the "Registrant") announced fourth quarter and full year 2019 results through December 31, 2019.  For a more detailed description of the announcement see the press release attached as Exhibit 99.1.


Item 8.01 Other events.


On January 21, 2020, the Registrant issued a press release announcing that its Board of Directors declared a $0.025 per share quarterly common stock cash dividend.  The cash dividend is payable February 18, 2020 to shareholders of record on February 3, 2020.  The press release, attached hereto as Exhibit 99.1, is incorporated herein.


Item 9.01 Financial Statements and Exhibits.


(d) Exhibits:


99.1  Press release dated January 21, 2020, announcing fourth quarter and full year 2019 earnings through December 31, 2019 and quarterly common stock cash dividend.



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



AMERISERV FINANCIAL, Inc.


By /s/Michael D. Lynch

Michael D. Lynch

SVP & CFO


Date: January 21, 2020







Exhibit 99.1


AMERISERV FINANCIAL REPORTS EARNINGS FOR THE FOURTH QUARTER AND FULL YEAR OF 2019 AND ANNOUNCES QUARTERLY COMMON STOCK CASH DIVIDEND


JOHNSTOWN, PA - AmeriServ Financial, Inc. (NASDAQ: ASRV) reported fourth quarter 2019 net income of $669,000, or $0.04 per diluted common share.  This earnings performance represented a $1,259,000, or 65.3%, decrease from the fourth quarter of 2018 when net income totaled $1,928,000, or $0.11 per diluted common share.  For the year ended December 31, 2019, the Company reported net income of $6,028,000, or $0.35 per diluted common share.  This represents an 18.6% decrease in earnings per share from the full year of 2018 when net income totaled $7,768,000, or $0.43 per diluted common share.  The following table highlights the Company’s financial performance for both the three and twelve month periods ended December 31, 2019 and 2018:  


 

Fourth Quarter

2019

Fourth Quarter 2018

 


Year Ended December 31, 2019


Year Ended December 31, 2018

 

 

 

 

 

 

Net income

$669,000

$1,928,000

 

$6,028,000

$7,768,000

Diluted earnings per share


$ 0.04


$ 0.11

 


$ 0.35


$ 0.43


Jeffrey A. Stopko, President and Chief Executive Officer, commented on the 2019 financial results: "Overall, 2019 was a successful year for AmeriServ Financial, Inc. despite the decline in fourth quarter 2019 earnings which was caused by an increased loan loss provision primarily related to one large commercial loan and an impairment charge recognized on a CRA related investment. Both of these items are discussed later in this release.  I was encouraged that our net interest margin demonstrated improvement in the fourth quarter of 2019 due to increased loan activity and reduced deposit costs.  Additionally, our sizable wealth management company is well positioned for revenue growth in 2020 with the equity markets reaching record highs to close out 2019.  Finally, as a result of our strategic focus on active capital management, we were able to return approximately 70% of our 2019 earnings to our shareholders through accretive common stock buybacks and an increased cash dividend.”  


The Company's net interest income in the fourth quarter of 2019 increased by $181,000, or 2.1%, from the prior year's fourth quarter and, for the full year of 2019, decreased by $52,000, or 0.1%, when compared to the full year of 2018.  The Company’s net interest margin of 3.26% for the fourth quarter of 2019 and 3.29% for the full year was 4 basis points higher than the fourth quarter of 2018 and 2 basis points lower than the full year of 2018.  The improvement in the net interest margin during the fourth quarter of 2019 is attributed to an increase in average total loans as well as a higher level of loan fee revenue.  These favorable items more than offset the unfavorable impact from the lower interest rate environment in the economy as well as a decrease in the balance of total average securities during the quarter.  Overall, our net interest margin performance was challenged throughout 2019 as the U.S. Treasury Yield Curve shifted downward, flattened and became inverted in certain segments, at various times during the year.  The lower interest rate environment along with a lower full year average total loan portfolio balance resulted in the modest year over year unfavorable comparison for net interest income.  Positively impacting net interest income during 2019 was a favorable shift experienced in the mix of total average interest bearing liabilities as the amount of total interest bearing deposits increased and resulted in less reliance on higher cost borrowings to fund interest earning assets.  


Total loans averaged $877 million in the fourth quarter of 2019 which is $3.8 million, or 0.4%, higher than the $873 million average for the fourth quarter of 2018.  Total loans averaged $875 million for the full year of 2019 which is $6.6 million, or 0.7%, lower than the 2018 full year average.  Overall, total loan originations in 2019 exceeded the prior year’s level by $50 million and also exceeded another strong level of loan payoffs in 2019, which resulted in the favorable quarterly average comparison between 2019 and 2018.  However, because of the high level of loan payoffs received late in 2018, the full year average comparison between years is unfavorable.  Loan pipelines remained strong throughout 2019.  Loan interest income increased by $1.9 million, or 4.6%, between the full year of 2019 and the full year of 2018.  The higher loan interest income primarily reflects the Federal Reserve increasing the federal funds interest rate in 2018.  This resulted in new loans originating at higher yields throughout 2018 and during the first half of 2019 and also caused the upward repricing of certain loans tied to LIBOR or the prime rate as both of these indices moved up with the federal funds rate increases in 2018.  Certain floating rate loans, however, did reprice down in the second half of 2019 as the Federal Reserve reduced the federal funds rate by a total of 75 basis points in the second half of 2019.  Also, included in the favorable year over year loan interest income increase was a higher level of loan fee income by $325,000, due primarily to prepayment fees collected on certain early loan pay-offs.

  

Total investment securities averaged $194 million for the full year of 2019 which is $9.5 million, or 5.1%, higher than the $185 million average in 2018.  The growth in the investment securities portfolio occurred primarily during 2018 and is the result of management taking advantage of the rising interest rate environment experienced during 2018 which provided an attractive market for additional security purchases.  Purchases primarily focused on federal agency mortgage backed securities due to the ongoing cash flow that these securities provide.  Also, management continued its portfolio diversification strategy through purchases of high quality corporate and taxable municipal securities.  Investment security purchase activity slowed significantly during 2019 as the interest rate market was less favorable resulting in total average securities decreasing in the fourth quarter of 2019 by $7.7 million, or 4.0%, when compared to the fourth quarter of 2018.  Interest income on investments decreased between the fourth quarter of 2019 and the fourth quarter of 2018 by $26,000, or 1.6%, but increased for the full year of 2019 from 2018 by $768,000, or 12.7%.  Overall, total interest income increased by $2.7 million, or 5.7%, between years.


Total interest expense for the twelve months of 2019 increased by $2.7 million, or 23.5%, when compared to 2018, due to higher levels of deposit interest expense which more than offset a slight decrease to borrowings interest expense.  Deposit interest expense in 2019 was higher by $2.7 million, or 32.5%, for the full the year which reflects the higher level of total average interest bearing deposits and certain indexed money market accounts repricing upward due to the impact of the Federal Reserve increasing interest rates during 2018.  The Company did experience deposit pricing relief during the third and fourth quarters of 2019 because of the Federal Reserve easing interest rates late in July, September and October of 2019.  Specifically, the Company’s cost of interest bearing deposits declined by 10 basis points between the third and fourth quarters of 2019.  However, the Company continues to experience competitive market pressure to retain existing deposit customers and attract new customer deposits.  Customer product preference changed as well in 2019 resulting in movement of funds from non-interest bearing demand deposit accounts and lower yielding money market accounts into higher yielding certificates of deposits.  Overall, total deposits grew during the year and averaged $980 million for the full year of 2019, which was $19.9 million, or 2.1%, higher than the 2018 full year average. The Company's loan to deposit ratio averaged 89.1% in the fourth quarter of 2019, which we believe indicates that the Company has ample capacity to grow its loan portfolio.  

The Company experienced a $21,000, or 0.7%, decrease in the interest cost of borrowings for the full year of 2019.  The decline is a result of the lower total average borrowings balance between years combined with the impact from the Federal Reserve’s action to decrease interest rates three times in 2019 and the impact that these rate decreases had on the cost of overnight borrowed funds and the replacement of matured FHLB term advances.  The total full year average term advance borrowings balance increased by approximately $7.3 million, or 16.3%, when compared to the full year 2018.  This increase is due to the inversion demonstrated by the U.S. Treasury Yield Curve in 2019 and resulted in certain term advances costing less than overnight borrowed funds.  Overall, the 2019 full year average of FHLB borrowed funds was $63.4 million, which represented a decrease of $14.7 million, or 18.8%, due to the increase in total average deposits.  

The Company recorded a $975,000 provision for loan losses in the fourth quarter of 2019 as compared to a $700,000 provision recovery in the fourth quarter of 2018.  For the full year of 2019, the Company recorded an $800,000 provision expense for loan losses compared to a $600,000 provision recovery recorded for the full year of 2018 which resulted in a net unfavorable shift of $1.4 million.    The rating downgrade of a $6.5 million performing commercial loan to substandard as a result of the unexpected death of a borrower caused a $675,000 increase in fourth quarter 2019 provision expense.  While the Company currently believes that repayment should continue as agreed, this rating action was prudent due to the inherent uncertainties associated with a large estate liquidation.  For the full year of 2019, overall asset quality remained good as evidenced by low levels of loan delinquency, net loan charge-offs and non-performing assets.  Specifically, the Company experienced net loan charge-offs of only $192,000, or 0.02% of total loans, in 2019 compared to net loan charge-offs of $943,000, or 0.11% of total loans, in 2018.  Overall, nonperforming assets totaled $2.3 million, or 0.26% of total loans, at December 31, 2019.  In summary, the allowance for loan losses provided 397% coverage of non-performing assets, and 1.05% of total loans, at December 31, 2019, compared to 629% coverage of non-performing assets, and 1.00% of total loans, at December 31, 2018.


Total non-interest income in the fourth quarter of 2019 increased by $94,000, or 2.8%, from the prior year's fourth quarter, and increased for the full year by $549,000, or 3.9%.  In the fourth quarter of 2019, the Company recognized a $500,000 impairment charge on a Community Reinvestment Act (CRA) related investment.  The Small Business Administration (SBA) recently gave formal notice that the managing company of this particular fund was placed into receivership which caused us to write off the full investment and no further action or loss will occur.  It should be noted that the Company only has one other similar CRA related investment that totals $100,000 that has been performing as expected.  Also, for the fourth quarter of 2019, no security sale gains or losses were recognized after a $291,000 net loss was recognized during the fourth quarter of 2018.  The 2018 net loss resulted from the Company selling certain low yielding securities and reinvesting in securities to position the Company for an increased future return from the investment securities portfolio.  Net realized gains on loans held for sale are $195,000, or 203.1%, higher in the fourth quarter of 2019 compared to the fourth quarter of 2018 due to increased residential mortgage loan sales in the secondary market as the lower interest rate environment in the second half of 2019 resulted in a greater level of residential mortgage loan production.  Likewise, the increased residential mortgage loan production resulted in the associated level of mortgage fee income improving by $53,000, or 171.0%.  Wealth management fees increased by $57,000, or 2.3%, in the fourth quarter as the Company benefitted from a continuing increase in market values for assets under management which also contributed to a $71,000, or 0.7%, favorable annual comparison for this important source of fee revenue which hit record levels in 2019.  Also for the full year, similar comparisons for the same line items resulted in the favorable variance when comparing 2019 to 2018.  Net realized gains on loans held for sale increased by $376,000, or 76.9%.  In addition to increased residential mortgage originations, the full year favorable comparison in 2019 was also due to the sale of the guaranteed portion of a SBA loan that resulted in a $197,000 gain.  The higher level of residential mortgage loan production resulted in mortgage related fees increasing by $106,000, or 54.1%.  Additionally, the Company recognized a net investment security sale gain of $118,000 in 2019 compared to a $439,000 net loss in 2018 as the opportunity existed to capture gains on certain securities that demonstrated higher than typical market appreciation in this low interest rate environment.  The 2018 net loss resulted from the Company repositioning a portion of the investment portfolio in 2018 for stronger future returns.  Other income increased by $103,000, or 4.4%, due to higher letter of credit fees and increased revenue from check supply sales due to a favorable vendor contract renegotiation.  These favorable items more than offset a $149,000, or 10.5%, decrease in service charges on deposit accounts due to reduced overdraft fees.


The Company's total non-interest expense in the fourth quarter of 2019 increased by $189,000, or 1.8%, when compared to the fourth quarter of 2018, and increased for the full year by $942,000, or 2.3%, when compared to 2018.  The increase in the fourth quarter of 2019 was due to a higher level of salaries & benefits expense by $224,000, or 3.6%, a greater level of other expense by $76,000, or 4.2%, and higher equipment related costs by $69,000, or 19.2%, due to additional depreciation and maintenance costs.   These increases more than offset a reduction to FDIC deposit insurance expense by $160,000, or 160.0% and professional fees by $42,000, or 3.3%.  Within salaries & benefits, higher salaries expense was due to annual merit increases, the addition of several employees to address management succession planning and four additional employees at our new financial banking center in Hagerstown, Maryland.  Increased pension and health care costs also contributed to the higher employee costs between quarters.  The increase to other expense is due to additional expense for the unfunded commitment reserve as a result of increased loan approvals in 2019 as well as increased investment in technology as evidenced by higher website costs and additional telecommunications expense.  The Company recognized a $60,000 FDIC deposit insurance expense credit in the fourth quarter of 2019.  As part of the application of the Small Bank Assessment Credit regulation, the FDIC awarded community banks under $10 billion an assessment credit because the banking industry reserve ratio exceeded its 1.38% target.  For the full year of 2019 and for similar reasons as the quarterly variance, higher expenses included salaries & benefits by $1,071,000, or 4.4%, other expense by $401,000, or 5.7%, and equipment costs by $46,000, or 3.1%.  Partially offsetting these unfavorable comparisons are lower FDIC deposit insurance expense by $457,000, or 82.0%, and lower professional fees by $154,000, or 3.1%, due to lower legal fees and other professional fees.


The Company recorded an income tax expense of $169,000, or an effective tax rate of 20.2%, in the fourth quarter of 2019.  This compares to an income tax expense of $499,000, or an effective tax rate of 20.6%, for the fourth quarter of 2018.  For the full year of 2019, the Company recorded income tax expense of $1,572,000, or an effective tax rate of 20.7%, compared to income tax expense of $1,677,000 in 2018, or an effective tax rate of 17.8%.  The lower effective tax rate for the full year of 2018 reflected the benefits of corporate tax reform as a result of the enactment of the “Tax Cuts and Jobs Act” which allowed the Company to contribute additional funds to our pension plan in 2018 in order to achieve a greater income tax benefit.  The tax benefit of this additional pension contribution favorably reduced income tax expense by $264,000 in the third quarter of 2018.  


The Company had total assets of $1.17 billion, shareholders' equity of $98.6 million, a book value of $5.78 per common share and a tangible book value(1) of $5.08 per common share at December 31, 2019.  Although demonstrating an increase since the fourth quarter of 2018, both the book value and tangible book value per common share did decline between the third and fourth quarter of 2019 as the annual reevaluation of the Company’s pension obligation negatively impacted capital due to an approximate 1% decline in the discount rate between years.  The Company’s pension plan continues to be well funded.  In accordance with previously announced common stock buyback programs, the Company returned an additional $2.6 million of capital to its shareholders through the accretive repurchase of 602,349 shares of its common stock for the full year of 2019.  When including the increased cash dividend payments on our common stock, total capital returned to our shareholders approximated 70% of net income in 2019.  The Company continued to maintain strong capital ratios that exceed the regulatory defined well capitalized status.

QUARTERLY COMMON STOCK CASH DIVIDEND

The Company’s Board of Directors declared a $0.025 per share quarterly common stock cash dividend.  The cash dividend is payable February 18, 2020 to shareholders of record on February 3, 2020.  This cash dividend represents a 2.40% annualized yield using the January 16, 2020 closing stock price of $4.17.  For the full year 2019, the Company’s dividend payout ratio amounted to 27.1%.







Forward-Looking Statements


This press release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. Such statements are not historical facts and include expressions about management's confidence and strategies and management's current views and expectations about new and existing programs and products, relationships, opportunities, technology, market conditions, dividend program and future payment obligations. These statements may be identified by such forward-looking terminology as "continuing," "expect," "look," "believe," "anticipate," "may," "will," "should," "projects," "strategy," or similar statements. Actual results may differ materially from such forward-looking statements, and no reliance should be placed on any forward-looking statement. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, unanticipated changes in the financial markets and the direction of interest rates; volatility in earnings due to certain financial assets and liabilities held at fair value; competition levels; loan and investment prepayments differing from our assumptions; insufficient allowance for credit losses; a higher level of loan charge-offs and delinquencies than anticipated; material adverse changes in our operations or earnings; a decline in the economy in our market areas; changes in relationships with major customers; changes in effective income tax rates; higher or lower cash flow levels than anticipated; inability to hire or retain qualified employees; a decline in the levels of deposits or loss of alternate funding sources; a decrease in loan origination volume or an inability to close loans currently in the pipeline; changes in laws and regulations; adoption, interpretation and implementation of accounting pronouncements; operational risks, including the risk of fraud by employees, customers or outsiders; unanticipated effects of our new banking platform; and the inability to successfully implement or expand new lines of business or new products and services.  These forward-looking statements involve risks and uncertainties that could cause AmeriServ's results to differ materially from management's current expectations. Such risks and uncertainties are detailed in AmeriServ's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2018. Forward-looking statements are based on the beliefs and assumptions of AmeriServ's management and on currently available information. The statements in this press release are made as of the date of this press release, even if subsequently made available by AmeriServ on its website or otherwise. AmeriServ undertakes no responsibility to publicly update or revise any forward-looking statement.


(1) Non-GAAP Financial Information.  See “Reconciliation of Non-GAAP Financial Measures” at end of release.







AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

SUPPLEMENTAL FINANCIAL PERFORMANCE DATA

December 31, 2019

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

(Unaudited)


2019

 

1QTR

2QTR

3QTR

4QTR

YEAR TO DATE

 

 

 

 

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

 

 

 

 

Net income

  $1,878

  $1,792

  $1,689

  $669

  $6,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

 

 

 

 

Return on average assets

 0.66%

 0.61%

 0.57%

 0.23%

 0.51%

 

 

 

 

Return on average equity

     7.84

     7.24

     6.60

     2.59

     6.02

 

 

 

 

Return on average tangible common equity (B)

     8.94

     8.22

     7.48

     2.93

     6.84

 

 

 

 

Net interest margin

     3.24

     3.30

     3.18

     3.26

     3.29

 

 

 

 

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

     

    0.08

    

    0.00

    

    (0.01)

    

    0.02

     

    0.02

 

 

 

 

Loan loss provision (credit) as a percentage of

    average loans


    (0.19)


    0.00


    0.10


    0.44


    0.09

 

 

 

 

Efficiency ratio

  83.90

  82.18

  81.65

  85.30

  83.23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

Basic

   $0.11

   $0.10

   $0.10

   $0.04

   $0.35

 

 

 

 

Average number of common shares outstanding

17,578

17,476

17,278

17,111

17,359

 

 

 

 

Diluted

    0.11

    0.10

    0.10

    0.04

    0.35

 

 

 

 

Average number of common shares outstanding

17,664

17,560

17,360

17,193

17,440

 

 

 

 

Cash dividends paid per share

$0.020

$0.025

$0.025

$0.025

$0.095

 

 

 

 



2018

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

  $1,767

  $1,744

  $2,329

  $1,928

  $7,768

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

 0.62%

 0.60%

 0.79%

 0.66%

 0.67%

Return on average equity

     7.55

     7.30

     9.54

     7.89

     8.08

Return on average tangible common equity (B)

     8.63

     8.34

   10.88

     9.00

     9.22

Net interest margin

     3.29

     3.28

     3.31

     3.22

     3.31

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

     

     0.15

     

    0.21

     

    0.04

     

    0.03

     

    0.11

Loan loss provision (credit) as a percentage of

    average loans


    0.02


    0.02


    0.00


    (0.32)


    (0.07)

Efficiency ratio

  81.61

  82.04

  79.50

  85.69

  82.17

 

 

 

 

 

 

EARNINGS PER COMMON SHARE:

 

 

 

 

 

Basic

   $0.10

   $0.10

   $0.13

   $0.11

   $0.43

Average number of common shares outstanding

18,079

18,038

17,924

17,697

17,933

Diluted

    0.10

    0.10

    0.13

    0.11

    0.43

Average number of common shares outstanding

18,181

18,140

18,036

17,801

18,037

Cash dividends paid per share

$0.015

$0.020

$0.020

$0.020

$0.075







AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

--CONTINUED--

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

(Unaudited)


2019

 

1QTR

2QTR

3QTR

4QTR

FINANCIAL CONDITION  DATA AT PERIOD END:

 

 

 

 

Assets

$1,167,682

$1,190,583

$1,171,426

$1,171,184

Short-term investments/overnight funds

7,996

6,532

6,039

6,526

Investment securities

194,553

191,168

182,699

181,685

Loans and loans held for sale

863,134

890,081

875,082

887,574

Allowance for loan losses

8,107

8,102

8,345

9,279

Goodwill

11,944

11,944

11,944

11,944

Deposits

957,779

968,480

969,989

960,513

FHLB borrowings

79,483

88,314

66,905

76,080

Subordinated debt, net

7,493

7,499

7,505

7,511

Shareholders’ equity

99,061

101,476

102,460

98,614

Non-performing assets

1,168

1,681

1,957

2,339

Tangible common equity ratio (B)

7.54%

7.60%

7.81%

7.48%

Total capital (to risk weighted assets) ratio

13.37

13.14

13.33

13.49

PER COMMON SHARE:

 

 

 

 

Book value

$5.65

$5.84

$5.98

$5.78

Tangible book value (B)

4.97

5.15

5.28

5.08

Market value (C)

4.02

4.15

4.14

4.20

Wealth management assets – fair market value (A)


$2,229,860


$2,288,576


$2,142,513


$2,237,898

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

309

309

308

309

Branch locations

16

16

16

16

Common shares outstanding

17,540,676

17,384,355

17,146,714

17,057,871







2018

 

1QTR

2QTR

3QTR

4QTR

FINANCIAL CONDITION  DATA AT PERIOD END:

 

 

 

 

Assets

$1,151,160

$1,180,510

$1,168,806

$1,160,680

Short-term investments/overnight funds

7,796

8,050

7,428

6,924

Investment securities

171,053

174,771

177,426

187,491

Loans and loans held for sale

875,716

895,162

884,374

863,129

Allowance for loan losses

9,932

9,521

9,439

8,671

Goodwill

11,944

11,944

11,944

11,944

Deposits

944,206

928,176

944,213

949,171

FHLB borrowings

82,864

126,901

103,799

87,750

Subordinated debt, net

7,470

7,476

7,482

7,488

Shareholders’ equity

95,810

96,883

97,179

97,977

Non-performing assets

2,157

1,160

1,067

1,378

Tangible common equity ratio (B)

7.36%

7.27%

7.37%

7.49%

Total capital (to risk weighted assets) ratio

13.45

13.01

13.13

13.53

PER COMMON SHARE:

 

 

 

 

Book value

$5.31

$5.37

$5.47

$5.56

Tangible book value (B)

4.65

4.71

4.80

4.88

Market value (C)

4.00

4.10

4.30

4.03

Wealth management assets – fair market value (A)


$2,175,538


$2,201,565


$2,258,108


$2,106,172

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

304

295

296

303

Branch locations

15

15

15

16

Common shares outstanding

18,033,401

18,044,692

17,767,313

17,619,303


NOTES:

(A)

Not recognized on the consolidated balance sheets.

(B)

Non-GAAP Financial Information.  See “Reconciliation of Non-GAAP Financial Measures” at end of release.

(C)

Based on closing price reported by the principal market on which the security is traded last business day of the corresponding reporting period.







AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

CONSOLIDATED STATEMENT OF INCOME

(Dollars in thousands)

(Unaudited)


2019

 

1QTR

2QTR

3QTR

4QTR

 YEAR TO DATE

 

 

 

 

INTEREST INCOME

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$10,418

$10,994

$10,737

$10,784

$42,933

 

 

 

 

Interest on investments

1,746

1,771

1,696

1,621

6,834

 

 

 

 

Total Interest Income

12,164

12,765

12,433

12,405

49,767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

Deposits

2,730

2,867

2,895

2,697

11,189

 

 

 

 

All borrowings

777

837

774

748

3,136

 

 

 

 

Total Interest Expense

3,507

3,704

3,669

3,445

14,325

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

8,657

9,061

8,764

8,960

35,442

 

 

 

 

Provision (credit) for loan losses

(400)

0

225

975

800

 

 

 

 

NET INTEREST INCOME AFTER

   PROVISION (CREDIT) FOR LOAN LOSSES


9,057


9,061


8,539


7,985


34,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

Wealth management fees

2,396

2,419

2,431

2,484

9,730

 

 

 

 

Service charges on deposit accounts

310

317

321

323

1,271

 

 

 

 

Net realized gains on loans held for sale

62

107

405

291

865

 

 

 

 

Mortgage related fees

44

77

97

84

302

 

 

 

 

Net realized gains (losses) on investment securities

0

30

88

0

118

 

 

 

 

Impairment charge on other investments

0

0

0

(500)

(500)

 

 

 

 

Bank owned life insurance

128

129

131

133

521

 

 

 

 

Other income

665

578

622

601

2,466

 

 

 

 

Total Non-Interest Income

3,605

3,657

4,095

3,416

14,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

6,301

6,348

6,324

6,456

25,429

 

 

 

 

Net occupancy expense

658

622

599

618

2,497

 

 

 

 

Equipment expense

361

387

333

429

1,510

 

 

 

 

Professional fees

1,120

1,249

1,276

1,240

4,885

 

 

 

 

FDIC deposit insurance expense

80

80

0

(60)

100

 

 

 

 

Other expenses

1,773

1,770

1,971

1,880

7,394

 

 

 

 

Total Non-Interest Expense

10,293

10,456

10,503

10,563

41,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRETAX INCOME

2,369

2,262

2,131

838

7,600

 

 

 

 

Income tax expense

491

470

442

169

1,572

 

 

 

 

NET INCOME

$1,878

$1,792

$1,689

$669

$6,028

 

 

 

 








2018

 

1QTR

2QTR

3QTR

4QTR

 YEAR TO DATE

INTEREST INCOME

 

 

 

 

 

Interest and fees on loans

$9,818

$10,125

$10,607

$10,478

$41,028

Interest on investments

1,399

1,478

1,542

1,647

6,066

Total Interest Income

11,217

11,603

12,149

12,125

47,094

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

Deposits

1,781

1,973

2,164

2,525

8,443

All borrowings

688

772

876

821

3,157

Total Interest Expense

2,469

2,745

3,040

3,346

11,600

 

 

 

 

 

 

NET INTEREST INCOME

8,748

8,858

9,109

8,779

35,494

Provision (credit) for loan losses

50

50

0

(700)

(600)

NET INTEREST INCOME AFTER

   PROVISION (CREDIT) FOR LOAN LOSSES


8,698


8,808


9,109


9,479


36,094

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

Wealth management fees

2,426

2,447

2,359

2,427

9,659

Service charges on deposit accounts

383

357

326

354

1,420

Net realized gains on loans held for sale

98

119

176

96

489

Mortgage related fees

39

72

54

31

196

Net realized gains (losses) on investment securities

(148)

0

0

(291)

(439)

Impairment charge on other investments

0

0

0

0

0

Bank owned life insurance

132

133

135

136

536

Other income

705

553

536

569

2,363

Total Non-Interest Income

3,635

3,681

3,586

3,322

14,224

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

Salaries and employee benefits

6,093

6,218

5,815

6,232

24,358

Net occupancy expense

670

611

585

596

2,462

Equipment expense

391

378

335

360

1,464

Professional fees

1,184

1,252

1,321

1,282

5,039

FDIC deposit insurance expense

162

155

140

100

557

Other expenses

1,611

1,678

1,900

1,804

6,993

Total Non-Interest Expense

10,111

10,292

10,096

10,374

40,873

 

 

 

 

 

 

PRETAX INCOME

2,222

2,197

2,599

2,427

9,445

Income tax expense

455

453

270

499

1,677

NET INCOME

$1,767

$1,744

$2,329

$1,928

$7,768










AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

AVERAGE BALANCE SHEET DATA

(Dollars in thousands)

(Unaudited)


2019

2018

 

 

 

 

 

 

4QTR

TWELVE MONTHS

4QTR

TWELVE MONTHS

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned income

$876,988

$875,198

$873,206

$881,767

Short-term investment in money market funds

17,471

10,552

6,488

6,725

Deposits with banks

1,015

1,018

1,020

1,023

Total investment securities

185,652

194,011

193,315

184,550

Total interest earning assets

1,081,126

1,080,779

1,074,029

1,074,065

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

19,888

20,239

24,476

23,067

Premises and equipment

18,725

17,928

12,667

12,480

Other assets

65,451

64,083

61,514

62,040

Allowance for loan losses

(8,518)

(8,404)

(9,540)

(9,866)

 

 

 

 

 

Total assets

$1,176,672

$1,174,625

$1,163,146

$1,161,786

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$173,933

$170,326

$161,101

$138,572

Savings

94,117

96,783

96,806

98,035

Money market

229,740

234,387

244,827

249,618

Other time

338,117

326,867

307,414

299,391

Total interest bearing deposits

835,907

828,363

810,148

785,616

Borrowings:

 

 

 

 

Federal funds purchased and other short-term borrowings

2,521

11,088

29,615

33,126

Advances from Federal Home Loan Bank

55,901

52,309

45,241

44,974

Guaranteed junior subordinated deferrable interest debentures

13,085

13,085

13,085

13,085

Subordinated debt

7,650

7,650

7,650

7,650

Lease liabilities

     4,059

     3,444

           0

           0

Total interest bearing liabilities

919,123

915,939

905,739

884,451

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

  Demand deposits

148,576

151,292

156,262

174,108

  Other liabilities

6,582

7,271

4,209

7,077

Shareholders’ equity

102,391

100,123

96,936

96,150


Total liabilities and shareholders’ equity


$1,176,672


$1,174,625


$1,163,146


$1,161,786








AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

RETURN ON AVERAGE TANGIBLE COMMON EQUITY, TANGIBLE COMMON EQUITY RATIO AND TANGIBLE BOOK VALUE PER SHARE

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

(Unaudited)


The press release contains certain financial information determined by methods other than in accordance with generally accepted accounting policies in the United States (GAAP).  These non-GAAP financial measures are “return on average tangible common equity”, "tangible common equity ratio" and "tangible book value per share."  This non-GAAP disclosure has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.  Our management uses these non-GAAP measures in its analysis of our performance because it believes these measures are material and will be used as a measure of our performance by investors.



2019

 


1QTR


2QTR


3QTR


4QTR

YEAR TO DATE

 

 

 

 

 

 

Net income

$1,878

$1,792

$1,689

$669

$6,028

 

 

 

 

 

 

Average shareholders’ equity

97,166

99,371

101,566

102,391

100,123

Less:  Goodwill

11,944

11,944

11,944

11,944

11,944

Average tangible common equity

85,222

87,427

89,622

90,447

88,179

 

 

 

 

 

 

Return on average tangible common equity (annualized)


8.94%


8.22%


7.48%


2.93%


6.84%

 

 

 

 

 

 

 

 

 

 

 

1QTR

2QTR

3QTR

4QTR

TANGIBLE COMMON EQUITY

 

 

 

 

Total shareholders’ equity

$99,061

$101,476

$102,460

$98,614

Less:  Goodwill

11,944

11,944

11,944

11,944

Tangible common equity

87,117

89,532

90,516

86,670

 

 

 

 

 

TANGIBLE ASSETS

 

 

 

 

Total assets

1,167,682

1,190,583

1,171,426

1,171,184

Less:  Goodwill

11,944

11,944

11,944

11,944

Tangible assets

1,155,738

1,178,639

1,159,482

1,159,240

 

 

 

 

 

Tangible common equity ratio

7.54%

7.60%

7.81%

7.48%

 

 

 

 

 

Total shares outstanding

17,540,676

17,384,355

17,146,714

17,057,871

 

 

 

 

 

Tangible book value per share

$4.97

$5.15

$5.28

$5.08

 

 

 

 










2018

 


1QTR


2QTR


3QTR


4QTR

YEAR TO DATE

 

 

 

 

 

 

Net income

$1,767

$1,744

$2,329

$1,928

$7,768

 

 

 

 

 

 

Average shareholders’ equity

94,956

95,840

96,868

96,936

96,150

Less:  Goodwill

11,944

11,944

11,944

11,944

11,944

Average tangible common equity

83,012

83,896

84,924

84,992

84,206

 

 

 

 

 

 

Return on average tangible common equity (annualized)


8.63%


8.34%


10.88%


9.00%


9.22%

 

 

 

 

 

 

 

 

 

 

 

1QTR

2QTR

3QTR

4QTR

TANGIBLE COMMON EQUITY

 

 

 

 

Total shareholders’ equity

$95,810

$96,883

$97,179

$97,977

Less:  Goodwill

11,944

11,944

11,944

11,944

Tangible common equity

83,866

84,939

85,235

86,033

 

 

 

 

 

TANGIBLE ASSETS

 

 

 

 

Total assets

1,151,160

1,180,510

1,168,806

1,160,680

Less:  Goodwill

11,944

11,944

11,944

11,944

Tangible assets

1,139,216

1,168,566

1,156,862

1,148,736

 

 

 

 

 

Tangible common equity ratio

7.36%

7.27%

7.37%

7.49%

 

 

 

 

 

Total shares outstanding

18,033,401

18,044,692

17,767,313

17,619,303

 

 

 

 

 

Tangible book value per share

$4.65

$4.71

$4.80

$4.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 







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