AmeriServ Financial Reports Earnings for the First Quarter of 2012

      AmeriServ Financial Reports Earnings for the First Quarter of 2012

PR Newswire

JOHNSTOWN, Pa., April 17, 2012

JOHNSTOWN, Pa., April 17, 2012 /PRNewswire/ --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 Quarter First Quarter  Dollar   Percentage
                           2012          2011
                                                        Change   Change
Net income                 $1,565,000    $1,263,000     $302,000 23.9%
Diluted earnings per share $ 0.06        $ 0.05         $ 0.01   37.0%

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
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA
March 31, 2012
(In thousands, except per share and ratio data)
(Unaudited)
                                 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  0.13
a percentage of average loans
Loan loss provision as a         (0.38)
percentage of 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  0.70       (0.07)     0.20   0.12   0.24
of average loans
Loan loss provision as a         (0.37)     (0.72)     (0.33) (0.73) (0.54)
percentage of 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



AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
(Unaudited)
                             2012
                             1QTR
PERFORMANCE DATA AT PERIOD
END:
Assets                       $   967,401
Short-term investments       4,689
Investment securities        190,089
Loans and loans held for     671,328
sale
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       8.24
ratio
PER COMMON SHARE:
Book value (A)               $   4.46
Tangible book value          3.84
Market value                 2.74
Trust assets - fair market   $  
value (B)                    1,469,789
STATISTICAL DATA AT PERIOD
END:
Full-time equivalent         353
employees
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     644,836       656,838       667,409    670,847
sale
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       7.89          8.29          8.38       8.15
ratio
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
Trust assets - fair market   $           $           $1,313,440 $1,382,745
value (B)                    1,410,755     1,390,534
STATISTICAL DATA AT PERIOD
END:
Full-time equivalent         351           352           342        347
employees
Branch locations             18            18            18         18
Common shares outstanding    21,207,670    21,208,421    21,208,421 20,921,021
Note:
(A) Preferred stock of $21 million received through the Small Business
Lending Fund is excluded from the book value per common share and
 tangible book value per common share calculations.
(B) Not recognized on the balance sheet



AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Unaudited)
                                    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 available     -
for sale
Net realized gains on loans held    276
for sale
Service charges on deposit          535
accounts
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
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
                                                                     TO DATE
INTEREST INCOME
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 losses  (600)     (1,175) (550)  (1,250) (3,575)
NET INTEREST INCOME AFTER
PROVISION (CREDIT)
FOR LOAN LOSSES                     8,566     9,261   8,668  9,363   35,858
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)on
investment securities available     (358)     -       -      -       (358)
for sale
Net realized gains on loans held    262       155     186    209     812
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 benefits      5,500     5,574   5,702  5,840   22,616
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 expense      462       460     262    154     1,338
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
accretion of preferred stock        290       290     539    265     1,384
discount
NET INCOME AVAILABLE TO COMMON      $   973 $     $    $     $  
SHAREHOLDERS                                  1,648   1,027  1,505   5,153



AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(Unaudited)
                                                2012           2011
                                                1QTR           1QTR
Interest earning assets:
Loans and loans held for sale, net of unearned  $   666,575  $   661,061
income
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
 agreements to repurchase, and other
short-term
 borrowings                                   4,233          424
Advanced from Federal Home Loan Bank            8,493          9,743
Guaranteed junior subordinated deferrable       13,085         13,085
interest 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

SOURCE AmeriServ Financial, Inc.