ASRV AmeriServ Financial Inc

JOHNSTOWN, Pa., Jan. 22 /PRNewswire-FirstCall/ -- AmeriServ Financial, Inc. (NASDAQ:ASRV) reported fourth quarter 2007 net income of $924,000 or $0.04 per diluted share. This represents an increase of $343,000 or 59.0% over the fourth quarter 2006 net income of $581,000 or $0.03 per diluted share. For the year ended December 31, 2007, the Company reported net income of $3.0 million or $0.14 per diluted share. This represents an increase of $702,000 or 30.1% when compared to net income of $2.3 million or $0.11 per diluted share for the full year 2006. The following table highlights the Company's financial performance for both the quarters and years ended December 31, 2007 and 2006: Year Ended Year Ended Fourth Fourth December 31, December 31, Quarter 2007 Quarter 2006 2007 2006 Net income $924,000 $581,000 $3,034,000 $2,332,000 Diluted earnings per share $0.04 $0.03 $0.14 $0.11 Additionally, the Company also announced that its Board of Directors approved a stock repurchase program which calls for AmeriServ Financial, Inc. to buyback up to 5% or approximately 1.1 million of its outstanding common shares. The shares may be purchased in open market, negotiated, or block transactions. This stock repurchase program does not obligate the Company to acquire any specific number of shares and may be suspended or discontinued at any time. As of December 31, 2007, the Company had approximately 22.2 million shares of its common stock outstanding. ASRV had total assets of $905 million and shareholders' equity of $90.3 million or a book value of $4.07 per share at December 31, 2007. The Company's asset leverage ratio remained strong at 10.47%. Allan R. Dennison, President and Chief Executive Officer, commented on the 2007 results and stock repurchase program, "Our focus on executing our strategic plan has caused AmeriServ Financial to report improved financial performance in 2007. We enter 2008 with positive earnings momentum, a high quality balance sheet, and a strong capital position. The announcement of this stock repurchase program reflects our belief that the ASRV stock price has been unfairly impacted by the recent credit concerns in the banking sector and the return of capital to our shareholders through a stock buyback program is an appropriate capital management strategy at this time." The Company's net interest income in the fourth quarter of 2007 increased by $337,000 from the prior year's fourth quarter and the net interest margin is up by 15 basis points over the same comparative period. The increased net interest income and margin in the fourth quarter of 2007 reflects the benefits of solid loan growth experienced throughout 2007. Since year-end 2006, total loans have grown by $46.7 million or 7.9% to $636.2 million at December 31, 2007. The loan growth was most evident in the commercial loan portfolio with particularly strong performance during the second half of 2007. The Federal Reserve reductions in short-term interest rates that began late in the third quarter of 2007 also contributed to the increased net interest income in the fourth quarter of 2007. On a quarterly basis the Company's net interest margin has shown improvement throughout 2007 increasing from 2.97% in the first quarter to 3.08% in the fourth quarter. This helped to reverse a trend of four consecutive quarters of net interest income and margin contraction experienced in 2006 where the margin declined from 3.20% to a low of 2.93% in the fourth quarter. When the full year 2007 is compared to the full year 2006, the Company's net interest income decreased by $255,000 or 1.0% while the net interest margin declined by six basis points. The full year decline in both net interest income and net interest margin resulted from the Company's cost of funds increasing at a faster pace than the earning asset yield particularly during the first six months of 2007. This resulted from deposit customer preference for higher yielding certificates of deposit and money market accounts due to the inverted/flat yield curve with short-term interest rates exceeding intermediate to longer term rates during that period. As mentioned earlier, that trend changed during the second half of 2007 and the Company believes it is well positioned for net interest income and margin expansion in 2008. The Company recorded a $150,000 provision for loan losses in the fourth quarter of 2007 compared to a negative loan loss provision of $75,000 realized in the fourth quarter of 2006. For the full year 2007, the provision for loan losses amounted to $300,000 compared to a negative loan loss provision of $125,000 for the full year 2006. The Company did experience higher net charge-offs in 2007. For the full year 2007, net charge-offs have amounted to $1.1 million or 0.19% of total loans compared to net charge-offs of $926,000 or 0.16% of total loans for the full year 2006. Note that the Company's 2007 net charge-offs were materially impacted by a third quarter $875,000 complete charge-off of a commercial loan that resulted from fraud committed by the borrower. Net charge-offs decreased to only $16,000 or 0.01% of total loans in the fourth quarter of 2007; the Company's best quarterly performance of 2007. Non-performing assets totaled $5.3 million or 0.83% of total loans at December 31, 2007 which represented an increase from the approximate $2.4 million non-performing asset total at both September 30, 2007 and December 31, 2006. The increase during the fourth quarter of 2007 resulted primarily from the transfer of a $2.4 million commercial real-estate loan into non-accrual status. The Company is pleased to report that this non-performing loan was subsequently paid-off in January 2008 with no loss to the bank. The allowance for loan losses provided 137% coverage of non-performing assets and was 1.14% of total loans at December 31, 2007. Note also that the Company has no exposure to sub-prime mortgage loans in either the loan or investment portfolios. The Company's non-interest income in the fourth quarter of 2007 increased by $776,000 from the prior year's fourth quarter and for the full year 2007 increased by $1.9 million or 14.5% when compared to 2006. The increase for both periods was due in part to the West Chester Capital Advisors acquisition, which closed in early March of 2007. This accretive acquisition provided $268,000 of investment advisory fees in the fourth quarter of 2007 and $974,000 of fees for the full year 2007. Trust fees also increased by $79,000 for the fourth quarter 2007 and by $234,000 or 3.6% for the full year 2007 due to continued successful new business development efforts and an increased value for trust assets. The fair market value of trust assets totaled $1.9 billion at December 31, 2007. The Company also realized an increase on gains realized on residential mortgage loan sales into the secondary market that amounted to $51,000 for the fourth quarter of 2007 and $202,000 for the full year 2007. These increases reflect improved residential mortgage production from the Company's primary market as this has been an area of emphasis in the strategic plan. Finally, other income increased by $326,000 in the fourth quarter and $377,000 for the full year 2007 due in part to a $200,000 gain realized on the sale of a bank owned operations facility that was no longer being fully utilized. The Company also benefited from a $69,000 gain realized on the sale of a closed branch facility in the third quarter of 2007. Total non-interest expense in the fourth quarter of 2007 increased by $211,000 from the prior year's fourth quarter but for the full year 2007 declined by $20,000 when compared to the full year 2006. The largest factor responsible for the quarterly increase was the inclusion of $253,000 of non- interest expenses from West Chester Capital Advisors; the largest component of which was reflected in salaries and employee benefits. West Chester Capital Advisors has contributed $820,000 in non-interest expenses for full year 2007. The overall reduction in expenses for the full year 2007 reflects the Company's continuing focus on containing and reducing non-interest expenses. The largest expense reductions were experienced in equipment expense $304,000, other expenses $355,000 and FDIC deposit insurance expense $104,000. The Company recorded an income tax expense of $315,000 in the fourth quarter of 2007 compared to an income tax benefit of $19,000 in the fourth quarter of 2006. The tax benefit in the fourth quarter of 2006 resulted from the elimination of a $100,000 income tax valuation allowance related to the deductibility of charitable contributions that management determined was no longer needed given the level of taxable income generated by the Company in 2006. For the full year 2007, the Company recorded an income tax expense of $924,000, which reflects an estimated effective tax rate of 23.3%. This compares to $420,000 of income tax expense or an effective tax rate of approximately 15.3% in 2006. The higher effective tax rate in 2007 resulted from the Company's improved profitability. 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 22, 2008 (In thousands, except per share and ratio data) (All quarterly and 2007 data unaudited) 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 2006 1QTR 2QTR 3QTR 4QTR YEAR TO DATE PERFORMANCE DATA FOR THE PERIOD: Net income $540 $568 $643 $581 $2,332 PERFORMANCE PERCENTAGES (annualized): Return on average assets 0.25% 0.26% 0.29% 0.26% 0.27% Return on average equity 2.59 2.71 3.00 2.66 2.74 Net interest margin 3.20 3.16 3.06 2.93 3.12 Net charge-offs as a percentage of average loans 0.09 0.07 0.39 0.09 0.16 Loan loss provision as a percentage of average loans - (0.04) - (0.05) (0.02) Efficiency ratio 92.68 92.08 91.38 94.34 92.60 PER COMMON SHARE: Net income: Basic $0.02 $0.03 $0.03 $0.03 $0.11 Average number of common shares outstanding 22,119 22,143 22,148 22,154 22,141 Diluted 0.02 0.03 0.03 0.03 0.11 Average number of common shares outstanding 22,127 22,153 22,156 22,161 22,149 AMERISERV FINANCIAL, INC. (In thousands, except per share, statistical, and ratio data) (All quarterly and 2007 data unaudited) 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 Trust assets - fair market value (B) 1,828,475 1,872,366 1,846,240 1,883,307 Non-performing assets 2,706 2,825 2,463 5,280 Asset leverage ratio 10.23% 10.36% 10.44% 10.47% PER COMMON SHARE: Book value (A) $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% STATISTICAL DATA AT PERIOD END: Full-time equivalent employees 375 376 358 351 Branch locations 21 21 20 20 Common shares outstanding 22,161,445 22,167,235 22,180,650 22,188,997 2006 1QTR 2QTR 3QTR 4QTR PERFORMANCE DATA AT PERIOD END: Assets $876,393 $887,608 $882,837 $895,992 Investment securities 223,658 210,230 209,046 196,200 Loans 548,466 573,884 580,560 589,435 Allowance for loan losses 9,026 8,874 8,302 8,092 Goodwill and core deposit intangibles 12,031 11,815 11,599 11,382 Deposits 727,987 740,979 743,687 741,755 FHLB borrowings 45,223 43,031 31,949 50,037 Stockholders' equity 84,336 84,231 86,788 84,684 Trust assets - fair market value (B) 1,669,525 1,679,634 1,702,210 1,778,652 Non-performing assets 4,193 4,625 2,978 2,292 Asset leverage ratio 10.36% 10.54% 10.52% 10.54% PER COMMON SHARE: Book value $3.81 $3.80 $3.92 $3.82 Market value 5.00 4.91 4.43 4.93 Market price to book value 131.26% 129.09% 113.07% 128.98% STATISTICAL DATA AT PERIOD END: Full-time equivalent employees 375 367 364 369 Branch locations 22 22 21 21 Common shares outstanding 22,140,172 22,145,639 22,150,767 22,156,094 Note: (A) Other comprehensive income had a negative impact of $0.18 on book value per share at December 31, 2007. (B) Not recognized on the balance sheet AMERISERV FINANCIAL, INC. CONSOLIDATED STATEMENT OF INCOME (In thousands) (All quarterly and 2007 data unaudited) 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. CONSOLIDATED STATEMENT OF INCOME (In thousands) (All quarterly and 2007 data unaudited) 2006 1QTR 2QTR 3QTR 4QTR YEAR TO DATE INTEREST INCOME Interest and fees on loans $8,900 $9,155 $9,677 $9,865 $37,597 Total investment portfolio 2,279 2,259 2,218 2,212 8,968 Total Interest Income 11,179 11,414 11,895 12,077 46,565 INTEREST EXPENSE Deposits 4,026 4,563 5,143 5,500 19,232 All borrowings 861 660 653 681 2,855 Total Interest Expense 4,887 5,223 5,796 6,181 22,087 NET INTEREST INCOME 6,292 6,191 6,099 5,896 24,478 Provision for loan losses - (50) - (75) (125) NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 6,292 6,241 6,099 5,971 24,603 NON-INTEREST INCOME Trust fees 1,641 1,671 1,603 1,604 6,519 Net realized gains on loans held for sale 23 20 26 36 105 Service charges on deposit accounts 627 651 645 638 2,561 Bank owned life insurance 256 260 428 263 1,207 Other income 695 666 545 543 2,449 Total Non-Interest Income 3,242 3,268 3,247 3,084 12,841 NON-INTEREST EXPENSE Salaries and employee benefits 4,815 4,612 4,600 4,642 18,669 Net occupancy expense 655 591 573 591 2,410 Equipment expense 639 631 529 550 2,349 Professional fees 795 859 791 763 3,208 FDIC deposit insurance expense 73 74 22 23 192 Amortization of core deposit intangibles 216 216 216 217 865 Other expenses 1,665 1,794 1,833 1,707 6,999 Total Non-Interest Expense 8,858 8,777 8,564 8,493 34,692 PRETAX INCOME 676 732 782 562 2,752 Income tax expense (benefit) 136 164 139 (19) 420 NET INCOME $540 $568 $643 $581 $2,332 AMERISERV FINANCIAL, INC. AVERAGE BALANCE SHEET DATA (In thousands) (All quarterly and 2007 data unaudited) Note: 2006 data appears before 2007. 2006 2007 TWELVE TWELVE 4QTR MONTHS 4QTR MONTHS Interest earning assets: Loans and loans held for sale, net of unearned income $582,165 $564,173 $625,255 $607,507 Deposits with banks 688 706 603 500 Federal funds 248 62 85 2,278 Total investment securities 211,747 221,704 174,094 184,117 Total interest earning assets 794,848 786,645 800,037 794,402 Non-interest earning assets: Cash and due from banks 18,439 18,841 17,797 17,750 Premises and equipment 8,285 8,324 8,328 8,623 Other assets 68,003 68,920 72,823 70,369 Allowance for loan losses (8,237) (8,750) (7,181) (7,755) Total assets 881,338 873,980 891,804 883,389 Interest bearing liabilities: Interest bearing deposits: Interest bearing demand 59,280 57,817 55,853 56,383 Savings 75,150 81,964 68,354 71,922 Money market 173,538 172,029 132,141 169,696 Other time 336,089 319,220 352,074 346,134 Total interest bearing deposits 644,057 631,030 608,422 644,135 Borrowings: Federal funds purchased, securities sold under agreements to repurchase, and other short-term borrowings 27,910 32,821 54,051 19,844 Advanced from Federal Home Loan Bank 951 967 8,585 4,852 Guaranteed junior subordinated deferrable interest debentures 13,085 13,085 13,085 13,085 Total interest bearing liabilities 686,003 677,903 684,143 681,916 Non-interest bearing liabilities: Demand deposits 101,188 104,266 108,214 105,306 Other liabilities 7,310 6,765 10,385 9,703 Stockholders' equity 86,837 85,046 89,062 86,464 Total liabilities and stockholders' equity $881,338 $873,980 $891,804 $883,389 DATASOURCE: AmeriServ Financial, Inc. CONTACT: Jeffrey A. Stopko, Senior Vice President & Chief Financial Officer of AmeriServ Financial, Inc., +1-814-533-5310 Web site: http://www.ameriservfinancial.com/

Copyright