JOHNSTOWN, Pa., Oct. 20, 2020 /PRNewswire/ -- AmeriServ
Financial, Inc. (NASDAQ: ASRV) reported third quarter 2020 net
income of $1,078,000, or $0.06 per diluted common share. This
earnings performance was a $611,000,
or 36.2%, decrease from the third quarter of 2019 when net income
totaled $1,689,000, or $0.10 per diluted common share. For the
nine-month period ended September 30,
2020, the Company reported net income of $3,906,000, or $0.23 per diluted common share. This
represents a 25.8% decrease in earnings per share from the
nine-month period of 2019 when net income totaled $5,359,000, or $0.31 per diluted common share. The
following table highlights the Company's financial performance for
both the three and nine month periods ended September 30, 2020 and 2019:
|
Third
Quarter 2020
|
Third
Quarter
2019
|
|
Nine Months Ended
September 30, 2020
|
Nine Months Ended
September 30, 2019
|
|
|
|
|
|
|
Net income
|
$1,078,000
|
$1,689,000
|
|
$3,906,000
|
$5,359,000
|
Diluted earnings
per
share
|
$ 0.06
|
$ 0.10
|
|
$0.23
|
$ 0.31
|
Jeffrey A. Stopko, President and
Chief Executive Officer, commented on the 2020 third quarter
financial results: "Our community bank customer-focused business
model and conservative risk management posture has served us well
so far in 2020 as our Company has experienced record levels of both
loans and deposits while dealing with the challenges presented by
the COVID-19 pandemic. The decline in earnings between years
is due to our decision to further strengthen our allowance for loan
losses given the economic uncertainty resulting from the
pandemic. Additionally, over 32% of our total revenue in the
third quarter of 2020 came from non-interest income sources which
included record contributions from our strong wealth management
business and active residential mortgage operation. Overall,
I am pleased with how the AmeriServ team has served our communities
with consistent, safe and uninterrupted access to banking services
and personalized financial guidance and advice during this
pandemic."
The Company's net interest income in the third quarter of 2020
increased slightly by $27,000, or
0.3%, from the prior year's third quarter and, for the first nine
months of 2020, increased by $533,000, or 2.0%, when compared to the first
nine months of 2019. The Company's net interest margin of
2.97% for the third quarter of 2020 and 3.16% for the nine-month
timeframe was 21 basis points lower than last year's third quarter
results and was 8 basis points lower when compared to the first
nine months of 2019. Third quarter 2020 results were
indicative of the slow economic recovery currently being
experienced due to the uncertainty that exists from the pandemic
and the upcoming Presidential election. Although
demonstrating increasing strength late in the third quarter, the
economic uncertainty resulted in slow commercial loan demand, which
has an unfavorable impact on our business model since commercial
loans comprise approximately 73% of our total loan portfolio.
The slow loan demand combined with the low Federal Reserve managed
interest rates continues to pressure earning asset margins and,
along with an increased loan loss provision, more than offset a
higher level of non-interest income and resulted in a lower
earnings performance for both time periods in 2020. The
Company's balance sheet experienced robust growth during the second
quarter of 2020 as a result of AmeriServ's participation in the
Small Business Administration's 100% guaranteed Paycheck Protection
Program (PPP) and the impact of other government sponsored
initiatives established to stimulate the economy. The higher
level of loans and deposits that resulted from these government
sponsored programs remained on the balance sheet throughout the
third quarter. As a result, the average balance of total
interest earning assets for both the third quarter of 2020 and the
nine-month year to date time periods is higher compared to the same
time periods in 2019. Growth in total loans and short-term
investments more than offset total investment securities
decreasing. The higher level of average earning assets was
primarily attributable to approximately $68
million of PPP loans that have an interest rate of 1.0% and
approximately $40 million of
short-term investments which earned 0.5% during the third
quarter. These low earning assets further contributed to the
pressure being experienced on earning asset margins, which are
already unfavorably impacted by the low interest rate
environment. Excluding the low yielding PPP loans from the
net interest margin calculation for the 2020 third quarter would
result in the net interest margin percentage being 9 basis points
higher and averaging 3.06%(1). Both non-interest
and interest bearing deposits also increased since last year
resulting in less reliance on short term borrowed funds.
Effective management of our funding costs along with the downward
repricing of certain interest bearing liabilities tied to market
indexes resulted in total interest expense decreasing nicely
between years. This decrease to total interest expense more
than offset the decrease in total interest income resulting in the
increase to net interest income for both the third quarter and
first nine months of 2020.
Total loans continued to reach a new record level and averaged
$933 million in the third quarter of
2020 which is $52.8 million, or 6.0%,
higher than the $880 million average
for the third quarter of 2019, while total average loans for the
first nine months of 2020 were $33.0
million, or 3.8%, higher than the 2019 nine-month
average. The growth in total average loans was due primarily
to the Company's participation in the PPP program. As of
September 30, 2020, the Company
processed 474 PPP loans totaling approximately $68 million to assist small businesses and our
community in this difficult economy. Also, the Company
recorded a total of $1.4 million of
processing fee income and interest income from PPP lending
activity. Note that PPP processing fee income decreased
significantly by approximately $700,000 between the second and third quarters of
2020 as most of the allowable up-front fees from the PPP loans were
already recognized as income in the second quarter. The
remaining portion of PPP processing fees totals approximately
$1.1 million and are being amortized
into income over the time period that the loans remain on our
balance sheet or until the PPP loan is forgiven at which time the
remaining fee will be recognized immediately as income.
Normal commercial lending activity has been slow because of the
economic uncertainty but did improve as the third quarter
progressed. Commercial loan pipelines are currently at levels
that are similar to where they were prior to the pandemic.
Overall on an end of period basis, excluding total PPP loans, the
total loan portfolio grew by approximately $20 million since June
30, 2020. Residential mortgage loan activity continued
to be exceptionally strong given the lower interest rate
environment. Through the first nine months of 2020,
residential mortgage loan production is 65.0% higher than the
production level achieved for the full year of 2019. Even
though total average loans increased compared to the same time
periods last year and loan interest income was enhanced by the PPP
revenue, loan interest and fee income decreased by $1.0 million, or 9.4%, for the quarter and also
declined by $1.6 million, or 5.1%,
for the nine months. The lower loan interest income reflects
the challenges that this record low interest rate environment has
created. New loans are being originated at lower yields and
certain loans tied to LIBOR or the prime rate reprice downward as
both of these indices have moved down with the Federal Reserve's
decision to decrease the target federal funds interest rate by a
total of 225 basis points since June of 2019. Finally, the
Company is working prudently with our borrowers that have been
negatively impacted from the effects of this difficult economy by
granting them loan payment modifications. Requested
modifications primarily consist of the deferral of principal and/or
interest payments for a period of three to six months and maturity
date extensions. Initially, the balance of loan modifications
related to COVID-19 that were granted to our customers totaled
$200 million. At September 30, 2020, total loan modifications
demonstrated an improving trend, decreasing by $55.6 million, or 27.8%, and totaled $144 million, or 15.2% of total loans.
Management is carefully monitoring asset quality with a particular
focus on customers that have requested these payment deferrals and
does expect a significant number of the remaining loans with
payment modifications to return to normal payment status during the
fourth quarter of 2020. As we reach the end of the deferral
time periods, deferral extension requests will be considered based
upon the customer's needs and their impacted industry, borrower and
guarantor capacity to service debt and current as well as any
additional regulatory guidance.
Total investment securities averaged $187
million in the first nine months of 2020 which is
$9.9 million, or 5.0%, lower than the
$197 million average for the first
nine months of 2019. The Company continues to be selective
this year when purchasing the more typical types of securities that
have been purchased historically as the market is less favorable
given the differences in the position and shape of the U.S.
Treasury yield curve from the prior year. The Company has
been active since March purchasing corporate securities,
particularly subordinated debt issued by other financial
institutions. Subordinated debt offers higher yields than the
typical types of securities in which we invest and is particularly
attractive given the current low interest rate environment and flat
shape of the yield curve. Management believes it to be
acceptable to increase our investments in bank subordinated debt in
a gradual and diversified manner, given the heavily regulated
nature of the industry combined with our intensive due diligence
process.
Our liquidity position continues to be exceptionally strong due
to the significant influx of deposits that resulted from the
government stimulus programs and as customers continue to be
cautious and are demonstrating reduced spending activity due to the
economic uncertainty. As a result, average short-term
investments increased by $28.7
million in the third quarter of 2020 and by $23.3 million for the first nine months when
compared to 2019. The challenge of profitably deploying this
excess liquidity resulted in management investing in high quality
commercial paper given their short maturities and higher rates of
return. However, as the third quarter progressed, the yields
on commercial paper demonstrated a steady decline, making it even
more challenging to find a suitable return for our excess
liquidity. Overall, interest income on total investments
decreased between the first nine months of 2020 and first nine
months of 2019 by $475,000, or
9.1%. Overall, through nine months in 2020, total interest
income decreased by $2.1 million, or
5.7%, between years.
Total interest expense for the first nine months of 2020
decreased by $2.7 million, or 24.4%,
when compared to 2019, due to lower levels of both deposit and
borrowing interest expense. Through nine months, deposit
interest expense in 2020 is lower by $2.4
million, or 28.7%. Total deposits grew significantly
during the second quarter of 2020 because of the government
stimulus programs and consumers being more cautious with their
spending. The higher level of total deposits remained on the
Company's balance sheet throughout the third quarter. Similar
to total loans, total average deposits, again, reached a record
level, averaging $1.054 billion for
the quarter, which is $69.1 million,
or 7.0%, higher than the 2019 third quarter average. In
addition, the Company's loyal core deposit base continues to be a
source of strength for the Company during periods of market
volatility. Management continued to effectively execute
several deposit product pricing decreases given the low interest
rate environment and the downward pressure that the low interest
rates are having on the net interest margin. As a result, the
Company experienced deposit cost relief. Specifically, the
Company's average cost of interest bearing deposits declined by 59
basis points since the third quarter of 2019 and averaged 0.79% in
the third quarter of 2020. Also offsetting a portion of the
net interest margin pressure from the lower national interest rates
is a significant portion of the deposit growth occurring in
non-interest bearing demand deposits. Overall, total deposit
cost, including demand deposits, averaged 0.65% in the third
quarter of 2020 compared to 1.17% in the third quarter of
2019. The Company's loan to deposit ratio averaged 88.6% in
the third quarter of 2020 which we believe indicates that the
Company has ample capacity to grow its loan portfolio and is well
positioned to continue assisting our customers and the community
given the impact that the COVID-19 pandemic is having on the
economy.
The Company experienced a $215,000, or 9.0%, decrease in the interest cost
of borrowings in the first nine months of 2020 when compared to the
first nine months of 2019. The decline is a result of the
Federal Reserve's actions to decrease interest rates and the impact
that these rate decreases have on the cost of overnight borrowed
funds and the replacement of matured FHLB term advances. The
total 2020 third quarter average term advance borrowings balance
increased by approximately $18.1
million, or 32.4%, when compared to the third quarter of
2019 as the Company took advantage of the lower yield curve to
prudently extend borrowings. The rate on certain FHLB term
advances is lower than the rate on overnight borrowings. As a
result, the combined growth of average FHLB term advances and total
average deposits resulted in less reliance on overnight borrowed
funds, which decreased between years by $4.6
million, or 76.4%, for the quarter. Overall, the 2020
third quarter average of total short-term and FHLB borrowed funds
was $75.3 million, which represents
an increase of $13.5 million, or
21.8%, from the 2019 third quarter.
The Company recorded a $675,000
provision expense for loan losses in the third quarter of 2020 as
compared to a $225,000 provision
expense recorded in the third quarter of 2019. For the first
nine months of 2020, the Company recorded a $1.3 million provision expense for loan losses
compared to a $175,000 provision
recovery recorded in the first nine months of 2019, which
represents a net unfavorable shift of $1,475,000. The Company continues to build
the allowance for loan losses given the overall economic climate
and the uncertainty that exists because of the COVID-19
pandemic. The 2020 provision reflects management
strengthening certain qualitative factors within the allowance for
loan losses calculation as well as the third quarter rating
downgrade of several loans totaling approximately $29 million from the hotel industry. The
hotel industry has been especially negatively impacted from the
pandemic and is demonstrating a slow pace of recovery from the
economic lockdown. While we anticipate that our hotel
borrowers will need additional time to recover, we remain
encouraged by their signs of increasing occupancy rates.
Additionally, during the third quarter, two substantial commercial
loans previously classified as substandard were upgraded, while
another troubled commercial loan paid off. The rating
improvements on these loans helped limit the increase in the loan
loss provision during the third quarter of 2020. The Company
experienced low net loan charge-offs of $296,000, or 0.04% of total loans, in the first
nine months of 2020 compared to net loan charge-offs of
$152,000, or 0.02% of total loans,
for the same time period of 2019. Non-performing assets
totaled $2.6 million, or 0.27% of
total loans, at September 30, 2020
and are below industry levels. As mentioned previously,
management is carefully monitoring asset quality with a particular
focus on customers that have requested payment deferrals during
this difficult economic time. The Asset Quality Task Force is
meeting monthly to review these particular relationships, receiving
input from the business lenders regarding their ongoing discussions
with the borrowers. In summary, the allowance for loan losses
provided 395% coverage of non-performing assets, and 1.08% of total
loans, at September 30, 2020,
compared to 397% coverage of non-performing assets, and 1.05% of
total loans, at December 31,
2019. Note that the reserve coverage of total loans,
excluding PPP loans, is 1.17%(1) at September 30, 2020. The Small Business
Administration guarantees 100% of the PPP loans made to eligible
borrowers which minimizes the level of credit risk associated with
these loans.
Total non-interest income in the third quarter of 2020 increased
by $209,000, or 5.1%, from the prior
year's third quarter, and increased by $546,000, or 4.8%, in the first nine months of
2020 when compared to the first nine months of 2019. Income
from residential mortgage loan sales into the secondary market
increased by $102,000, or 25.2%, for
the quarter and increased by $505,000, or 88.0%, for the first nine months due
to the strong level of residential mortgage loan production.
The higher level of residential mortgage loan production also
resulted in mortgage related fees increasing by $64,000, or 66.0%, for the quarter and by
$214,000, or 98.2%, for the nine
months. Wealth management fees increased by $173,000, or 7.1%, in the third quarter of 2020
and by $383,000, or 5.3%, for the
nine months of 2020 compared to the same time periods in
2019. In addition to an improved level of fee income from the
Financial Services business unit, the entire Wealth Management
Division has been resilient and performed well in spite of the
volatility of the markets and a major market value decline that
occurred in late March has been fully recovered by the end of the
third quarter of 2020. Other income compares favorably for
the quarter by $43,000, or 6.9%,
while other income compares unfavorably for the nine-month time
period by 208,000, or 11.2%, after the Company recognized a gain in
2019 on the sale of equity shares from a previous
acquisition. Slightly offsetting these favorable items was
service charges on deposit accounts decreasing by $115,000, or 35.8%, for the quarter and by
$280,000, or, 29.5%, for the first
nine months. Consumer spending activity based fees such as
deposit service charges, which include overdraft fees, decreased
significantly with the shutdown of the economy and has been slow to
improve given the pace of the economic recovery. Finally, the
Company has not recognized a gain or loss on security sales this
year. In 2019, an $88,000 gain
was recognized during the third quarter of 2019 which contributed
to a $118,000 gain recognized during
the first nine months of last
year.
The Company's total non-interest expense in the third quarter of
2020 increased by $604,000, or 5.8%,
when compared to the third quarter of 2019 and increased in the
first nine months of 2020 by $1,494,000, or 4.8%, when compared to 2019.
The increase in both time periods was due to higher salaries &
benefits expense of $514,000, or
8.1%, for the quarter and $1,188,000,
or 6.3%, for the nine months of 2020. Within salaries &
benefits, pension expense increased by $71,000, or 15.5%, for the quarter between years
and increased by $447,000, or 37.8%,
for the nine months. This significant increase results from
the unfavorable impact that the lower interest rate environment has
on the discount rates that are used to revalue the defined benefit
pension obligation each year. In addition, the higher
salaries & benefits expense for both time periods is also due
to increased health care costs ($90,000, or 11.9%, for the quarter and
$330,000, or 14.5%, for the nine
months) and greater incentive compensation ($160,000, or 52.5%, for the quarter and
$327,000, or 39.0%, for the nine
months) primarily due to commissions earned as a result of
increased residential mortgage loan production. Total salaries are
higher by $92,000, or 2.1%, for the
third quarter and by $285,000, or
2.2%, for the nine months. Total professional fees increased
by $97,000, or 7.6%, in the third
quarter of 2020 and by $213,000, or
5.8%, for the first nine months of the year. The increase
results from higher appraisal fees due to the significantly higher
level of residential mortgage loan production, higher legal fees
related to PPP loan processing and a higher level of outside
professional services related costs. FDIC deposit insurance
expense is $140,000 higher for the
quarter and $136,000, or 85.0% higher
for the nine months as this line returned to a more normal level
after the benefit from the application of the Small Bank Assessment
Credit regulation expired earlier this year. Finally, and
slightly offsetting these higher expenses was other expense
comparing favorably to last year's third quarter by $197,000, or 10.0%, and by $126,000, or 2.3% for the nine months. The
favorable comparison for both time periods between years is due to
a lower level of meals & travel related costs that is related
to travel restrictions from the pandemic as well as reduced outside
processing fees and telephone costs. The nine-month favorable
comparison for other expense also resulted from a credit recognized
earlier in the year for the unfunded commitment reserve.
The Company recorded an income tax expense of $235,000, or an effective tax rate of 17.9%, in
the third quarter of 2020. This compares to an income tax
expense of $442,000, or an effective
tax rate of 20.7%, for the third quarter of 2019. The lower
effective tax rate and income tax expense in the third quarter of
2020 reflected a modest income tax credit recognized to correct an
over accrual of income tax expense that occurred earlier this
year. Similarly, for the first nine months of 2020, the
Company recorded income tax expense of $966,000, or an effective tax rate of 19.8%,
compared to income tax expense of $1,403,000 in 2019, or an effective tax rate of
20.7%.
The Company had total assets of $1.26
billion, shareholders' equity of $103.4 million, a book value of $6.06 per common share and a tangible book
value(1) of $5.36 per
common share at September 30,
2020. 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 November 16, 2020 to shareholders of record on
November 2, 2020. This cash
dividend represents a 3.3% annualized yield using the October 16, 2020 closing stock price of
$3.02. For the first nine
months of 2020, the Company's dividend payout ratio amounted to
32.6%.
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 banking platform; risks and uncertainties relating to the
duration of the COVID-19 pandemic, and actions that may be taken by
governmental authorities to contain the pandemic or to treat its
impact; 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, 2019.
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
September 30, 2020
(Dollars in thousands, except per share and ratio data)
(Unaudited)
|
|
2020
|
|
1QTR
|
2QTR
|
3QTR
|
YEAR
TO DATE
|
PERFORMANCE DATA FOR
THE PERIOD:
|
|
|
|
|
Net income
|
$1,409
|
$1,419
|
$1,078
|
$3,906
|
|
|
|
|
|
PERFORMANCE
PERCENTAGES (annualized):
|
|
|
|
|
Return on average
assets
|
0.48%
|
0.46%
|
0.34%
|
0.43%
|
Return on average
equity
|
5.69
|
5.63
|
4.17
|
5.15
|
Return on average
tangible common equity (B)
|
6.46
|
6.38
|
4.72
|
5.84
|
Net interest
margin
|
3.21
|
3.30
|
2.97
|
3.16
|
Net charge-offs
(recoveries) as a percentage of
average loans
|
0.06
|
0.04
|
0.04
|
0.04
|
Loan loss provision
(credit) as a percentage of
average loans
|
0.08
|
0.20
|
0.29
|
0.19
|
Efficiency
ratio
|
84.46
|
83.09
|
84.79
|
84.10
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE:
|
|
|
|
|
Basic
|
$0.08
|
$0.08
|
$0.06
|
$0.23
|
Average number of
common shares outstanding
|
17,043
|
17,052
|
17,059
|
17,051
|
Diluted
|
0.08
|
0.08
|
0.06
|
0.23
|
Average number of
common shares outstanding
|
17,099
|
17,056
|
17,062
|
17,063
|
Cash dividends paid
per share
|
$0.025
|
$0.025
|
$0.025
|
$0.075
|
2019
|
|
1QTR
|
2QTR
|
3QTR
|
YEAR
TO DATE
|
PERFORMANCE DATA FOR
THE PERIOD:
|
|
|
|
|
Net income
|
$1,878
|
$1,792
|
$1,689
|
$5,359
|
|
|
|
|
|
PERFORMANCE
PERCENTAGES (annualized):
|
|
|
|
|
Return on average
assets
|
0.66%
|
0.61%
|
0.57%
|
0.61%
|
Return on average
equity
|
7.84
|
7.24
|
6.60
|
7.21
|
Return on average
tangible common equity (B)
|
8.94
|
8.22
|
7.48
|
8.20
|
Net interest
margin
|
3.24
|
3.30
|
3.18
|
3.24
|
Net charge-offs
(recoveries) as a percentage of
average loans
|
0.08
|
0.00
|
(0.01)
|
0.02
|
Loan loss provision
(credit) as a percentage of
average loans
|
(0.19)
|
0.00
|
0.10
|
(0.03)
|
Efficiency
ratio
|
83.90
|
82.18
|
81.65
|
82.55
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE:
|
|
|
|
|
Basic
|
$0.11
|
$0.10
|
$0.10
|
$0.31
|
Average number of
common shares outstanding
|
17,578
|
17,476
|
17,278
|
17,443
|
Diluted
|
0.11
|
0.10
|
0.10
|
0.31
|
Average number of
common shares outstanding
|
17,664
|
17,560
|
17,360
|
17,524
|
Cash dividends paid
per share
|
$0.020
|
$0.025
|
$0.025
|
$0.070
|
AMERISERV FINANCIAL,
INC.
NASDAQ: ASRV
--CONTINUED--
(Dollars in thousands, except per share, statistical, and ratio
data)
(Unaudited)
|
|
2020
|
|
1QTR
|
2QTR
|
3QTR
|
FINANCIAL CONDITION
DATA AT
PERIOD END:
|
|
|
|
Assets
|
$1,168,355
|
$1,242,074
|
$1,258,131
|
Short-term
investments/overnight funds
|
6,431
|
30,219
|
23,222
|
Investment
securities
|
184,784
|
184,908
|
184,352
|
Total loans and loans
held for sale
|
877,399
|
928,350
|
949,367
|
Paycheck Protection
Program (PPP) loans
|
0
|
66,956
|
68,460
|
Allowance for loan
losses
|
9,334
|
9,699
|
10,284
|
Goodwill
|
11,944
|
11,944
|
11,944
|
Deposits
|
957,593
|
1,033,033
|
1,042,235
|
Short-term and FHLB
borrowings
|
74,572
|
69,894
|
80,230
|
Subordinated debt,
net
|
7,517
|
7,522
|
7,528
|
Shareholders'
equity
|
100,840
|
102,604
|
103,369
|
Non-performing
assets
|
2,244
|
3,122
|
2,603
|
Tangible common
equity ratio (B)
|
7.69%
|
7.37%
|
7.34%
|
Total capital (to
risk weighted assets) ratio
|
13.41
|
13.18
|
13.02
|
PER COMMON
SHARE:
|
|
|
|
Book value
|
$5.92
|
$6.01
|
$6.06
|
Tangible book value
(B)
|
5.22
|
5.31
|
5.36
|
Market value
(C)
|
2.62
|
3.08
|
2.81
|
Wealth management
assets – fair market
value (A)
|
$1,983,952
|
$2,193,504
|
$2,289,948
|
|
|
|
|
STATISTICAL DATA AT
PERIOD END:
|
|
|
|
Full-time equivalent
employees
|
306
|
305
|
306
|
Branch
locations
|
16
|
16
|
16
|
Common shares
outstanding
|
17,043,644
|
17,058,644
|
17,058,644
|
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
|
Total loans and loans
held for sale
|
863,134
|
890,081
|
875,082
|
887,574
|
Paycheck Protection
Program (PPP) loans
|
0
|
0
|
0
|
0
|
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
|
Short-term and 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
|
|
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)
|
|
2020
|
|
1QTR
|
2QTR
|
3QTR
|
YEAR
TO DATE
|
INTEREST
INCOME
|
|
|
|
|
Interest and fees on
loans
|
$10,332
|
$10,448
|
$9,724
|
$30,504
|
Interest on
investments
|
1,612
|
1,613
|
1,513
|
4,738
|
Total Interest
Income
|
11,944
|
12,061
|
11,237
|
35,242
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
Deposits
|
2,458
|
1,869
|
1,727
|
6,054
|
All
borrowings
|
735
|
719
|
719
|
2,173
|
Total Interest
Expense
|
3,193
|
2,588
|
2,446
|
8,227
|
|
|
|
|
|
NET INTEREST
INCOME
|
8,751
|
9,473
|
8,791
|
27,015
|
Provision (credit)
for loan losses
|
175
|
450
|
675
|
1,300
|
NET INTEREST INCOME
AFTER
PROVISION (CREDIT) FOR LOAN LOSSES
|
8,576
|
9,023
|
8,116
|
25,715
|
|
|
|
|
|
NON-INTEREST
INCOME
|
|
|
|
|
Wealth management
fees
|
2,554
|
2,471
|
2,604
|
7,629
|
Service charges on
deposit accounts
|
286
|
176
|
206
|
668
|
Net realized gains on
loans held for sale
|
237
|
335
|
507
|
1,079
|
Mortgage related
fees
|
126
|
145
|
161
|
432
|
Net realized gains on
investment securities
|
0
|
0
|
0
|
0
|
Bank owned life
insurance
|
125
|
152
|
161
|
438
|
Other
income
|
504
|
488
|
665
|
1,657
|
Total Non-Interest
Income
|
3,832
|
3,767
|
4,304
|
11,903
|
|
|
|
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
Salaries and employee
benefits
|
6,704
|
6,619
|
6,838
|
20,161
|
Net occupancy
expense
|
671
|
606
|
608
|
1,885
|
Equipment
expense
|
395
|
389
|
374
|
1,158
|
Professional
fees
|
1,154
|
1,331
|
1,373
|
3,858
|
FDIC deposit
insurance expense
|
26
|
130
|
140
|
296
|
Other
expenses
|
1,683
|
1,931
|
1,774
|
5,388
|
Total Non-Interest
Expense
|
10,633
|
11,006
|
11,107
|
32,746
|
|
|
|
|
|
PRETAX
INCOME
|
1,775
|
1,784
|
1,313
|
4,872
|
Income tax
expense
|
366
|
365
|
235
|
966
|
NET INCOME
|
$1,409
|
$1,419
|
$1,078
|
$3,906
|
2019
|
|
|
1QTR
|
2QTR
|
3QTR
|
YEAR
TO DATE
|
INTEREST
INCOME
|
|
|
|
|
|
Interest and fees on
loans
|
|
$10,418
|
$10,994
|
$10,737
|
$32,149
|
Interest on
investments
|
|
1,746
|
1,771
|
1,696
|
5,213
|
Total Interest
Income
|
|
12,164
|
12,765
|
12,433
|
37,362
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
|
|
Deposits
|
|
2,730
|
2,867
|
2,895
|
8,492
|
All
borrowings
|
|
777
|
837
|
774
|
2,388
|
Total Interest
Expense
|
|
3,507
|
3,704
|
3,669
|
10,880
|
|
|
|
|
|
|
NET INTEREST
INCOME
|
|
8,657
|
9,061
|
8,764
|
26,482
|
Provision (credit)
for loan losses
|
|
(400)
|
0
|
225
|
(175)
|
NET INTEREST INCOME
AFTER
PROVISION (CREDIT) FOR LOAN LOSSES
|
|
9,057
|
9,061
|
8,539
|
26,657
|
|
|
|
|
|
|
NON-INTEREST
INCOME
|
|
|
|
|
|
Wealth management
fees
|
|
2,396
|
2,419
|
2,431
|
7,246
|
Service charges on
deposit accounts
|
|
310
|
317
|
321
|
948
|
Net realized gains on
loans held for sale
|
|
62
|
107
|
405
|
574
|
Mortgage related
fees
|
|
44
|
77
|
97
|
218
|
Net realized gains on
investment securities
|
|
0
|
30
|
88
|
118
|
Bank owned life
insurance
|
|
128
|
129
|
131
|
388
|
Other
income
|
|
665
|
578
|
622
|
1,865
|
Total Non-Interest
Income
|
|
3,605
|
3,657
|
4,095
|
11,357
|
|
|
|
|
|
|
NON-INTEREST
EXPENSE
|
|
|
|
|
|
Salaries and employee
benefits
|
|
6,301
|
6,348
|
6,324
|
18,973
|
Net occupancy
expense
|
|
658
|
622
|
599
|
1,879
|
Equipment
expense
|
|
361
|
387
|
333
|
1,081
|
Professional
fees
|
|
1,120
|
1,249
|
1,276
|
3,645
|
FDIC deposit
insurance expense
|
|
80
|
80
|
0
|
160
|
Other
expenses
|
|
1,773
|
1,770
|
1,971
|
5,514
|
Total Non-Interest
Expense
|
|
10,293
|
10,456
|
10,503
|
31,252
|
|
|
|
|
|
|
PRETAX
INCOME
|
|
2,369
|
2,262
|
2,131
|
6,762
|
Income tax
expense
|
|
491
|
470
|
442
|
1,403
|
NET INCOME
|
|
$1,878
|
$1,792
|
$1,689
|
$5,359
|
AMERISERV FINANCIAL,
INC.
NASDAQ: ASRV
Average Balance Sheet Data
(Dollars in thousands)
(Unaudited)
|
|
2020
|
2019
|
|
|
NINE
|
|
NINE
|
|
3QTR
|
MONTHS
|
3QTR
|
MONTHS
|
Interest earning
assets:
|
|
|
|
|
Loans and loans held
for sale, net of unearned income
|
$933,139
|
$907,593
|
$880,320
|
$874,601
|
Short-term
investments
|
39,848
|
31,513
|
11,150
|
8,245
|
Deposits with
banks
|
5,705
|
3,329
|
1,018
|
1,019
|
Total investment
securities
|
187,759
|
186,945
|
192,467
|
196,797
|
Total interest
earning assets
|
1,166,451
|
1,129,380
|
1,084,955
|
1,080,662
|
|
|
|
|
|
Non-interest earning
assets:
|
|
|
|
|
Cash and due from
banks
|
18,512
|
18,395
|
19,803
|
20,356
|
Premises and
equipment
|
18,352
|
18,497
|
18,881
|
17,663
|
Other
assets
|
72,247
|
70,380
|
65,545
|
63,628
|
Allowance for loan
losses
|
(9,792)
|
(9,494)
|
(8,247)
|
(8,366)
|
|
|
|
|
|
Total
assets
|
$1,265,770
|
$1,227,158
|
$1,180,937
|
$1,173,943
|
|
|
|
|
|
Interest bearing
liabilities:
|
|
|
|
|
Interest bearing
deposits:
|
|
|
|
|
Interest bearing
demand
|
$177,242
|
$172,365
|
$174,452
|
$169,125
|
Savings
|
107,824
|
102,498
|
97,281
|
97,672
|
Money market
|
237,758
|
232,819
|
231,024
|
235,936
|
Other time
|
345,923
|
344,729
|
330,878
|
323,116
|
Total interest
bearing deposits
|
868,747
|
852,411
|
833,635
|
825,849
|
Borrowings:
|
|
|
|
|
Federal funds purchased
and other short-term borrowings
|
1,429
|
2,860
|
6,053
|
13,944
|
Advances from Federal
Home Loan Bank
|
73,857
|
62,979
|
55,781
|
51,112
|
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
|
3,911
|
3,960
|
4,122
|
3,238
|
Total interest
bearing liabilities
|
968,679
|
942,945
|
920,326
|
914,878
|
|
|
|
|
|
Non-interest bearing
liabilities:
|
|
|
|
|
Demand
deposits
|
185,108
|
171,767
|
151,096
|
152,197
|
Other
liabilities
|
9,170
|
11,192
|
7,949
|
7,501
|
Shareholders'
equity
|
102,813
|
101,254
|
101,566
|
99,367
|
Total liabilities and
shareholders' equity
|
$1,265,770
|
$1,227,158
|
$1,180,937
|
$1,173,943
|
AMERISERV FINANCIAL,
INC.
NASDAQ: ASRV
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
RETURN ON AVERAGE TANGIBLE COMMON EQUITY, TANGIBLE COMMON EQUITY
RATIO, TANGIBLE BOOK VALUE PER SHARE, NET INTEREST
MARGIN EXCLUDING PPP LOANS, AND LOAN LOSS RESERVE COVERAGE TO TOTAL
LOANS EXCLUDING PPP LOANS
(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", "tangible book value per share", "net interest
margin excluding PPP loans", and "loan loss reserve coverage to
total loans excluding PPP loans." 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.
|
|
2020
|
|
1QTR
|
2QTR
|
3QTR
|
YEAR
TO DATE
|
|
|
|
|
|
Net income
|
$1,409
|
$1,419
|
$1,078
|
$3,906
|
|
|
|
|
|
Average shareholders'
equity
|
99,612
|
101,336
|
102,813
|
101,254
|
Less:
Goodwill
|
11,944
|
11,944
|
11,944
|
11,944
|
Average tangible
common equity
|
87,668
|
89,392
|
90,869
|
89,310
|
|
|
|
|
|
Return on average
tangible common
equity (annualized)
|
6.46%
|
6.38%
|
4.72%
|
5.84%
|
|
|
|
|
|
|
|
|
|
|
|
1QTR
|
2QTR
|
3QTR
|
|
TANGIBLE COMMON
EQUITY
|
|
|
|
|
Total shareholders'
equity
|
$100,840
|
$102,604
|
$103,369
|
|
Less:
Goodwill
|
11,944
|
11,944
|
11,944
|
|
Tangible common
equity
|
88,896
|
90,660
|
91,425
|
|
|
|
|
|
|
TANGIBLE
ASSETS
|
|
|
|
|
Total
assets
|
1,168,355
|
1,242,074
|
1,258,131
|
|
Less:
Goodwill
|
11,944
|
11,944
|
11,944
|
|
Tangible
assets
|
1,156,411
|
1,230,130
|
1,246,187
|
|
|
|
|
|
|
Tangible common
equity ratio
|
7.69%
|
7.37%
|
7.34%
|
|
|
|
|
|
|
Total shares
outstanding
|
17,043,644
|
17,058,644
|
17,058,644
|
|
|
|
|
|
|
Tangible book value
per share
|
$5.22
|
$5.31
|
$5.36
|
|
|
|
|
|
|
2019
|
|
1QTR
|
2QTR
|
3QTR
|
YEAR
TO DATE
|
|
|
|
|
|
Net income
|
$1,878
|
$1,792
|
$1,689
|
$5,359
|
|
|
|
|
|
Average shareholders'
equity
|
97,166
|
99,371
|
101,566
|
99,367
|
Less:
Goodwill
|
11,944
|
11,944
|
11,944
|
11,944
|
Average tangible
common equity
|
85,222
|
87,427
|
89,622
|
87,423
|
|
|
|
|
|
Return on average
tangible common
equity (annualized)
|
8.94%
|
8.22%
|
7.48%
|
8.20%
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
AMERISERV FINANCIAL,
INC.
NASDAQ: ASRV
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
RETURN ON AVERAGE TANGIBLE COMMON EQUITY, TANGIBLE COMMON EQUITY
RATIO, TANGIBLE BOOK VALUE PER SHARE, NET INTEREST
MARGIN EXCLUDING PPP LOANS, AND LOAN LOSS RESERVE COVERAGE TO TOTAL
LOANS EXCLUDING PPP LOANS
--CONTINUED--
(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", "tangible book value per share", "net interest
margin excluding PPP loans", and "loan loss reserve coverage to
total loans excluding PPP loans." 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.
|
|
|
September 30,
2020
|
|
|
Tax-equivalent net
interest income (annualized)
|
$34,599
|
|
|
Average earning
assets
|
1,166,451
|
|
|
Net interest
margin
|
2.97%
|
|
|
Net interest
margin, excluding PPP lending activity and
corresponding increase in total deposits from
government related assistance programs:
|
|
Tax-equivalent net
interest income (annualized)
|
$34,599
|
PPP loan income
(annualized)
|
(1,515)
|
Borrowings expense to
fund PPP loans (annualized)
|
564
|
Non-GAAP
tax-equivalent net interest income
|
33,648
|
|
|
Average earning
assets
|
1,166,451
|
Average PPP
loans
|
(67,970)
|
Non-GAAP average
earning assets
|
1,098,481
|
|
|
Non-GAAP net interest
margin
|
3.06%
|
|
|
|
September 30,
2020
|
|
|
Allowance for loan
losses
|
$10,284
|
|
|
Total loans and loans
held for sale, net of unearned income
|
949,367
|
|
|
Reserve
coverage
|
1.08%
|
|
|
Reserve coverage
to total loans, excluding PPP loans:
|
|
Allowance for loan
losses
|
$10,284
|
|
|
Total loans and loans
held for sale, net of unearned income
|
949,367
|
PPP loans
|
(68,460)
|
|
880,907
|
|
|
Non-GAAP reserve
coverage
|
1.17%
|
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SOURCE AmeriServ Financial, Inc.