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| ASRV > SEC Filings for ASRV > Form 8-K on 17-Apr-2012 | All Recent SEC Filings |
17-Apr-2012
Results of Operations and Financial Condition
AMERISERV FINANCIAL Inc. (the "Registrant") announced first quarter results through March 31, 2012. For a more detailed description of the announcement see the press release attached as Exhibit #99.1.
Exhibits
Exhibit 99.1
Press release dated April 17, 2012, announcing the first quarter results through March 31, 2012.
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/Jeffrey A. Stopko
Jeffrey A. Stopko
Executive Vice President
& CFO
Date: April 17, 2012
Exhibit 99.1
AMERISERV FINANCIAL REPORTS EARNINGS FOR THE FIRST QUARTER OF 2012
JOHNSTOWN, PA - AmeriServ Financial, Inc. (NASDAQ: ASRV) continued its positive earnings momentum in the first quarter of 2012 by reporting net income of $1,565,000 or $0.06 per diluted common share. This represents an increase of $302,000, or 23.9%, from the first quarter 2011 net income of $1,263,000 or $0.05 per diluted common share. There was a greater percentage increase in earnings per share due to the success of the Company's common stock repurchase program as the Company's increased 2012 earnings are being spread over a smaller number of shares outstanding. The following table highlights the Company's financial performance for the quarters ended March 31, 2012 and 2011:
First First Quarter 2011 Dollar Change Percentage Change
Quarter 2012
Net income $1,565,000 $1,263,000 $302,000 23.9%
Diluted earnings per share $ 0.06 $ 0.05 $ 0.01 37.0%
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Glenn L. Wilson, President and Chief Executive Officer, commented on the first quarter 2012 financial results: "I was pleased that our growth in earnings was driven by increased non-interest revenue and stable net interest margin performance. Our non-interest revenue benefitted from good fee growth in our trust and wealth management business along with another strong quarter of residential mortgage loan production. This improved revenue growth combined with our continued excellent asset quality, and strong capital and loan loss reserve, positions us well to execute our growth oriented strategic plan."
The Company's net interest income in the first quarter of 2012 increased by
$92,000, or 1.2%, when compared to the first quarter of 2011. The first quarter
2012 net interest margin of 3.70% was consistent with last year's first quarter.
The increased net interest income and overall stable net interest margin
performance reflects the benefits of a lower cost of funds and moderate loan
growth. Specifically, total loans outstanding have increased for four
consecutive quarters and now are $26.5 million or 4.1% higher than they were at
March 31, 2011. This loan growth reflects the successful results of the
Company's more intensive sales calling efforts with a particular emphasis on
generating commercial loans and owner occupied commercial real estate loans
which qualify as Small Business Lending Fund loans. Despite this growth in
loans, total interest revenue dropped by $472,000 between years and reflects the
lower interest rate environment and flatter yield curve. However, careful
management of funding costs allowed the Company to mitigate this drop in
interest revenue during the past year. Specifically, interest expense in the
first quarter of 2012 declined by $564,000 from the same prior year quarter due
to the Company's proactive efforts to reduce deposit and borrowing costs. This
reduction in deposit costs has not negatively impacted deposit balances which
have increased by $3.6 million over the past 12 months.
Sustained improvements in asset quality evidenced by lower levels of non-performing assets and criticized loans allowed the Company to reverse a portion of the allowance for loan losses into earnings in the first quarter of 2012 while still maintaining especially strong coverage ratios. During the first quarter of 2012, total non-performing assets again declined to $4.8 million or 0.72% of total loans as a result of successful ongoing resolution efforts. Criticized loans also dropped by $10 million or 20.4% during this same period. As a result of this improvement, the Company again recorded a negative provision for loan losses of $625,000 in the first quarter of 2012 compared to a similar credit provision of $600,000 in the first quarter of 2011. Actual credit losses realized through net charge-offs also declined sharply in the first quarter of 2012. Net charge-offs in the first quarter of 2012 totaled only $220,000, or 0.13% of total loans, compared to net charge-offs of $1.1 million, or 0.70% of total loans, in the first quarter of 2011. When determining the provision for loan losses, the Company considers a number of factors some of which include periodic credit reviews, non-performing asset, loan delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends. In summary, the allowance for loan losses provided 296% coverage of non-performing loans, and was 2.05% of total loans, at March 31, 2012, compared to 288% of non-performing loans, and 2.18% of total loans, at December 31, 2011.
The Company's non-interest income in the first quarter of 2012 increased by $569,000 or 18.3% from the prior year's first quarter. In the first quarter of 2011, the Company realized a $358,000 investment security loss on a portfolio repositioning strategy where we sold $17 million of lower yielding, longer duration securities in the portfolio and replaced them with higher yielding securities with a shorter duration. There were no investment security gains or losses in the first quarter of 2012. Trust and investment advisory fees increased by $136,000 or 7.8% over the prior year first quarter as our wealth management businesses benefited from the implementation of new fee schedules and improved asset values in the first quarter of 2012.
Total non-interest expense in the first quarter of 2012 increased by $195,000 or 2.0% from the prior year's first quarter. Salaries and employee benefits increased by $486,000 or 8.8% due to higher salaries expense, incentive compensation, and pension expense in the first quarter of 2012. The 2012 personnel expenses also reflect the staffing costs associated with new loan production offices in Altoona and Harrisburg for the full quarter and Hagerstown, Maryland for part of the quarter. Other expenses also increased by $105,000 due to an increase in the reserve for unfunded loan commitments as result of increased commercial loan origination activity in the first quarter of 2012. These negative items were partially offset by a $333,000 reduction in FDIC deposit insurance expense in the first quarter of 2012. This reduction resulted from a change in the calculation methodology which took effect in the second half of 2011 and the Company's improved risk profile which is evidenced by better asset quality and increased profitability. Finally, the Company recorded an income tax expense of $678,000 or an effective tax rate of 30.2% for the first quarter of 2012 compared to an income tax expense of $489,000 or an effective tax rate of 27.9% for the first quarter of 2011. The higher income tax expense and effective rate in 2012 reflects the Company's increased pre-tax earnings combined with a relatively consistent level of tax free earnings from bank owned life insurance.
ASRV had total assets of $967 million and shareholders' equity of $112 million or a book value of $4.46 per common share at March 31, 2012. During the first quarter of 2012, the Company repurchased 456,000 shares of its common stock at an average price of $2.38 in conjunction with the terms of the Company's stock buyback program that was announced on November 9, 2011. The Company continued to maintain strong capital ratios that considerably exceed the regulatory defined well capitalized status with a risk based capital ratio of 17.22%, an asset leverage ratio of 11.83% and a tangible common equity to tangible assets ratio of 8.24% at March 31, 2012.
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
2012
1QTR
PERFORMANCE DATA FOR THE PERIOD:
Net income $1,565
Net income available to common 1,302
shareholders
PERFORMANCE PERCENTAGES (annualized):
Return on average assets 0.65%
Return on average equity 5.60
Net interest margin 3.70
Net charge-offs (recoveries) as a percentage 0.13
of average loans
Loan loss provision as a percentage of (0.38)
average loans
Efficiency ratio 86.17
PER COMMON SHARE:
Net income:
Basic $0.06
Average number of common shares 20,679
outstanding
Diluted 0.06
Average number of common shares 20,722
outstanding
2011
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $1,263 $1,938 $1,566 $1,770 $6,537
Net income available to common 973 1,648 1,027 1,505 5,153
shareholders
PERFORMANCE PERCENTAGES (annualized):
Return on average assets 0.54% 0.81% 0.64% 0.72% 0.68%
Return on average equity 4.77 7.11 5.52 6.19 5.90
Net interest margin 3.70 3.71 3.68 3.64 3.72
Net charge-offs as a percentage of 0.70 (0.07) 0.20 0.12 0.24
average loans
Loan loss provision as a percentage of (0.37) (0.72) (0.33) (0.73) (0.54)
average loans
Efficiency ratio 89.53 85.53 84.83 89.26 87.26
PER COMMON SHARE:
Net income:
Basic $0.05 $0.08 $0.05 $0.07 $0.24
Average number of common shares 21,208 21,208 21,208 21,114 21,184
outstanding
Diluted 0.05 0.08 0.05 0.07 0.24
Average number of common shares 21,230 21,236 21,227 21,128 21,205
outstanding
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2012
1QTR
PERFORMANCE DATA AT PERIOD END
Assets $967,401
Short-term investments 4,689
Investment securities 190,089
Loans and loans held for sale 671,328
Allowance for loan losses 13,778
Goodwill 12,613
Deposits 820,105
FHLB borrowings 6,390
Shareholders' equity 112,270
Non-performing assets 4,801
Asset leverage ratio 11.83%
Tangible common equity ratio 8.24
PER COMMON SHARE:
Book value (A) $4.46
Tangible book value 3.84
Market value 2.74
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STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees 353
Branch locations 18
Common shares outstanding 20,465,521
2011
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT PERIOD END
Assets $961,067 $954,893 $973,439 $979,076
Short-term investments 4,094 4,338 17,941 6,129
Investment securities 195,272 198,770 195,784 195,203
Loans and loans held for sale 644,836 656,838 667,409 670,847
Allowance for loan losses 18,025 16,958 16,069 14,623
Goodwill 12,613 12,613 12,613 12,613
Deposits 816,528 810,082 827,358 816,420
FHLB borrowings 9,736 9,722 9,707 21,765
Shareholders' equity 108,170 111,410 114,164 112,352
Non-performing assets 9,328 7,433 5,344 5,199
Asset leverage ratio 11.40% 11.60% 11.70% 11.66%
Tangible common equity ratio 7.89 8.29 8.38 8.15
PER COMMON SHARE:
Book value (A) $4.12 $4.28 $4.39 $4.37
Tangible book value 3.53 3.68 3.80 3.76
Market value 2.37 1.95 1.90 1.95
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STATISTICAL DATA AT PERIOD END: Full-time equivalent employees 351 352 342 347 Branch locations 18 18 18 18 Common shares outstanding 21,207,670 21,208,421 21,208,421 20,921,021 |
NOTES:
(A)
Preferred stockof $21 million received through the Small Business Lending Fund is excluded from the book value per
common share calculation.
(B)
Not recognized on the balance sheet.
2012
1QTR
INTEREST INCOME
Interest and fees on loans $8,729
Total investment portfolio 1,395
Total Interest Income 10,124
INTEREST EXPENSE
Deposits 1,762
All borrowings 304
Total Interest Expense 2,066
NET INTEREST INCOME 8,058
Provision (credit) for loan losses (625)
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES 8,683
NON-INTEREST INCOME
Trust fees 1,697
Investment advisory fees 193
Net realized gains (losses) on investment -
securities
Net realized gains on loans held for sale 276
Service charges on deposit accounts 535
Bank owned life insurance 215
Other income 758
Total Non-interest Income 3,674
NON-INTEREST EXPENSE
Salaries and employee benefits 5,986
Net occupancy expense 729
Equipment expense 451
Professional fees 923
FDIC deposit insurance expense 129
FHLB prepayment penalty -
Other expenses 1,896
Total Non-interest Expense 10,114
PRETAX INCOME 2,243
Income tax expense 678
NET INCOME 1,565
Preferred stock dividends 263
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $1,302
2011
1QTR 2QTR 3QTR 4QTR YEAR
INTEREST INCOME TO DATE
Interest and fees on loans $9,083 $8,804 $8,888 $8,924 $35,699
Total investment portfolio 1,513 1,726 1,604 1,422 6,265
Total Interest Income 10,596 10,530 10,492 10,346 41,964
INTEREST EXPENSE
Deposits 2,294 2,106 2,038 1,897 8,335
All borrowings 336 338 336 336 1,346
Total Interest Expense 2,630 2,444 2,374 2,233 9,681
NET INTEREST INCOME 7,966 8,086 8,118 8,113 32,283
Provision (credit) for loan (600) (1,175) (550) (1,250) (3,575)
losses
NET INTEREST INCOME AFTER 8,566 9,261 8,668 9,363 35,858
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PROVISION (CREDIT) FOR LOAN LOSSES NON-INTEREST INCOME Trust fees 1,556 1,617 1,570 1,430 6,173 Investment advisory fees 198 198 172 186 754 Net realized gains (losses) (358) - - - (358) on investment securities Net realized gains on loans 262 155 186 209 812 held for sale Service charges on deposit 472 549 640 580 2,241 accounts Bank owned life insurance 216 218 227 224 885 Other income 759 717 729 857 3,062 Total Non-interest Income 3,105 3,454 3,524 3,486 13,569 NON-INTEREST EXPENSE Salaries and employee 5,500 5,574 5,702 5,840 22,616 benefits Net occupancy expense 757 742 680 721 2,900 Equipment expense 429 411 435 411 1,686 Professional fees 980 911 983 1,001 3,875 FDIC deposit insurance 462 460 262 154 1,338 expense FHLB prepayment penalty - - - 240 240 Other expenses 1,791 1,779 1,820 1,992 7,382 Total Non-interest Expense 9,919 9,877 9,882 10,359 40,037 PRETAX INCOME 1,752 2,838 2,310 2,490 9,390 Income tax expense 489 900 744 720 2,853 NET INCOME 1,263 1,938 1,566 1,770 6,537 Preferred stock dividends and 290 290 539 265 1,384 accretion of preferred stock discount NET INCOME AVAILABLE TO $973 $1,648 $1,027 $1,505 $5,153 COMMON SHAREHOLDERS |
2012
2011
1QTR 1QTR
Interest earning assets:
Loans and loans held for sale, net of unearned Income $666,575 $661,061
Deposits with banks 4,027 1,786
Short-term investment in money market funds 5,168 3,855
Federal funds sold - 14,178
Total investment securities 194,576 188,537
Total interest earning assets 870,346 869,417
Non-interest earning assets:
Cash and due from banks 17,163 15,555
Premises and equipment 10,826 10,483
Other assets 82,302 79,615
Allowance for loan losses (14,486) (19,834)
Total assets $966,151 $955,236
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand $56,346 $55,092
Savings 83,678 78,545
Money market 202,156 185,933
Other time 327,680 360,137
Total interest bearing deposits 669,860 679,707
Borrowings:
Federal funds purchased, securities sold under 4,233 424
agreements to repurchase, and other short-
term borrowings
Advanced from Federal Home Loan Bank 8,493 9,743
Guaranteed junior subordinated deferrable interest 13,085 13,085
debentures
Total interest bearing liabilities 695,671 702,959
Non-interest bearing liabilities:
Demand deposits 142,106 133,049
Other liabilities 16,067 11,859
Shareholders' equity 112,307 107,369
Total liabilities and shareholders' equity $966,151 $955,236
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