AmeriServ Financial Reports Earnings For The Fourth Quarter And Full Year Of 2012

 AmeriServ Financial Reports Earnings For The Fourth Quarter And Full Year Of
                                     2012

PR Newswire

JOHNSTOWN, Pa., Jan. 22, 2013

JOHNSTOWN, Pa., Jan. 22, 2013 /PRNewswire/ --AmeriServ Financial, Inc.
(NASDAQ: ASRV) reported fourth quarter 2012 net income available to common
shareholders of $683,000 or $0.04 per diluted common share. This represented
a 42.9% decrease in earnings per share from the fourth quarter of 2011 where
net income available to common shareholders totaled $1,505,000 or $0.07 per
diluted common share. For the year ended December 31, 2012, the Company
reported net income available to common shareholders of $4,211,000 or $0.21
per diluted share. This represented a 12.5% decline in earnings per share
from the full year 2011 where net income available to common shareholders
totaled $5,153,000 or $0.24 per diluted share. The largest factor causing the
reduction in net income for both the fourth quarter and full year of 2012 was
the provision for loan losses. The Company recorded a $550,000 loan loss
provision in the fourth quarter of 2012 compared to a negative loan loss
provision of $1,250,000 in the fourth quarter of 2011. For the full year
2012, the Company recorded a negative provision of $775,000 but this was at a
lesser level than the $3,575,000 negative provision for the 2011 year. The
following table highlights the Company's financial performance for both the
quarters and years ended December 31, 2012 and 2011:

                    Fourth   Fourth        Year Ended        Year Ended
                    Quarter  Quarter 2011
                    2012                   December31,2012 December31,2011
Net income          $735,000 $1,770,000    $5,039,000        $6,537,000
Net income                                                
available to
 common            $683,000 $1,505,000    $4,211,000        $5,153,000
shareholders
Diluted earnings    $ 0.04   $ 0.07        $ 0.21            $0.24
per share

Glenn L. Wilson, President and Chief Executive Officer, commented on the 2012
financial results: "AmeriServ Financial was able to accomplish several
important strategic initiatives during 2012. We have now reported seven
consecutive quarters of loan growth which has caused our total loan portfolio
to increase by $61 million or 9.1% for the full year 2012. Our new loan
production offices contributed to this growth in loan categories that qualify
for the Small Business Lending Fund (SBLF) and as a result we will continue to
pay the lowest preferred share dividend rate available under the program. I
was also pleased with our strong growth in non-interest revenue in 2012 which
reflected a record year in residential mortgage related revenues and a second
consecutive year of double digit growth in the net income contribution from
our wealth management businesses. Finally, we are well positioned for further
growth in 2013 which will be supported by our strong and conservative balance
sheet. We ended 2012 with our allowance for loan losses providing 210%
coverage of non-performing loans and a tier one capital to average assets
ratio of 11.44%." 

The Company's net interest income has been relatively stable this year as it
decreased by $31,000 or 0.4% in the fourth quarter of 2012 from the prior
year's fourth quarter and for the full year 2012 decreased by only $80,000 or
0.2% when compared to the full year 2011. The Company's full year 2012 net
interest margin of 3.65% was seven basis points lower than the net interest
margin of 3.72% for the 2011 year. The decreased net interest margin reflects
the challenges of a flatter yield curve which has pressured interest revenue
in 2012 and demonstrates the impact of Federal Reserve low interest rate
policies. The Company has been able to overcome this net interest margin
pressure and keep net interest income relatively constant by reducing its cost
of funds and growing its earning assets, particularly loans. Specifically,
total loans outstanding have increased for seven consecutive quarters and now
are $61 million or 9.1% higher than they were at December 31, 2011. This loan
growth reflects the successful results of the Company's more intensive sales
calling efforts with an emphasis on generating commercial loans and owner
occupied commercial real estate loans which qualify as Small Business Lending
Fund loans, particularly through its new loan production offices. Despite
this growth in loans, total interest revenue dropped by $2,047,000 between
years and reflects the lower interest rate environment and flatter yield
curve. Interest revenue has also been negatively impacted by increased
premium amortization on mortgage backed securities due to faster mortgage
prepayment speeds. However, careful management of funding costs has allowed
the Company to mitigate a significant portion of this drop in interest revenue
during the past year. Specifically, total interest expense for the full year
of 2012 declined by $1,967,000 from the 2011 year due to the Company's
proactive efforts to reduce deposit and borrowing costs. Even with this
reduction in deposit costs, the Company still experienced solid growth in
deposits which increased by $19 million or 2.4% over the past year. The
Company continues to maintain strong liquidity as evidenced by a loan to
deposit ratio of 87.6% at December 31, 2012. 

The Company recorded a $550,000 provision for loan losses in the fourth
quarter of 2012 compared to a $1,250,000 negative provision recorded in the
fourth quarter of 2011. The $550,000 provision was needed to address a $1.9
million increase in non-performing assets that occurred during the fourth
quarter of 2012. This increase largely relates to one problem commercial real
estate loan which had been on our watch list and reflects the Company's
consistent practice of quickly identifying and managing problem credits in
order to minimize losses during the workout process. Even with this uptick,
non-performing assets are still at a very manageable level at December 31,
2012, as they now total $7.2 million or 0.99% of total loans. For the full
year 2012, the Company was able to reverse a portion of the allowance for loan
losses into earnings while still maintaining strong coverage ratios. For the
2012 year, the negative loan loss provision amounted to $775,000 compared to a
$3,575,000 negative provision for the 2011 year. Consequently, there has been
$2.8 million less earnings benefit from negative loan loss provisions in
2012. The Company continued to realize overall low levels of net charge-offs
during 2012, despite an increase in the fourth quarter. Specifically, net
charge-offs for the 2012 year totaled $1.3 million or 0.19% of total loans
which represents a decrease from the 2011 year when net charge-offs totaled
$1.6 million or 0.24% of total loans. Criticized and classified loans also
dropped by $4.2 million or 8.5% during the past 12 months. 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 210% coverage of non-performing loans, and
was 1.72% of total loans, at December 31, 2012, compared to 288% of
non-performing loans, and 2.18% of total loans, at December 31, 2011.

The Company's strong growth in non-interest income has also been a financial
performance highlight in 2012. Total non-interest income in the fourth
quarter of 2012 increased by $401,000 or 11.5% from the prior year's fourth
quarter and for the full year 2012 increased by $1.4 million or 10.1% when
compared to the 2011 year. The 2012 non-interest income increase was driven
by increased revenue from residential mortgage banking activities and our
Trust Company's wealth management businesses. Specifically, gains realized on
residential mortgage loan sales into the secondary market increased by
$134,000 for the fourth quarter and by $320,000 or 39.4% for the full year due
to increased mortgage loan production in 2012. The higher residential
mortgage loan production reflected both increased purchase and refinance
activity. Trust fees also increased by $239,000 for the fourth quarter and by
$354,000 for the full year as our wealth management businesses benefited from
the implementation of new fee schedules and improved asset values under
management in 2012. Higher fees related to residential mortgage banking
activities along with increased revenue from financial services (annuity and
mutual funds sales) were the key factors responsible for the $34,000 quarterly
increase and $411,000 full year increase in other income in 2012. Finally,
the Company realized a modest $12,000 investment security gain in 2012
compared to a $358,000 investment security loss in the first quarter of 2011
that resulted from a portfolio repositioning strategy. 

Total non-interest expense in the fourth quarter of 2012 increased by only
$14,000 from the prior year's fourth quarter and for the full year 2012
increased by $604,000 or 1.5% when compared to the 2011 year. Salaries and
employee benefits increased by $490,000 for the fourth quarter and $1.8
million or 8.0% for the 2012 year due to higher salaries expense, incentive
compensation, and pension expense. The 2012 personnel expenses also reflect
the staffing costs associated with new loan production offices in Altoona,
Harrisburg and Hagerstown, Maryland. These negative items were partially
offset by a $60,000 reduction in FDIC deposit insurance expense for the fourth
quarter of 2012 and an $897,000 reduction for the full year. 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. Additionally,
the Company incurred a $240,000 prepayment penalty on the early retirement of
$5.7 million of FHLB term advances in the fourth quarter of 2011. There was
no such prepayment charge in 2012. Finally, the Company recorded an income
tax expense for the full year of 2012 of $2.2 million which was lower than the
2011 full year tax expense of $2.9 million due to reduced pre-tax earnings in
2012. The 2012 effective tax rate of 30.8% was comparable with the 2011
effective tax rate of 30.4%.

ASRV had total assets of $1.0 billion and shareholders' equity of $110 million
or a book value of $4.67 per common share and a tangible book value of $4.01
per common share at December 31, 2012. During the full year 2012, the Company
repurchased 1,758,000 shares or 8.4% of its outstanding common stock at an
average price of $2.51 in conjunction with the terms of its recently completed
common stock repurchase program. This was a key factor contributing to a 6.6%
growth in tangible book value per share since the end of 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
15.92%, an asset leverage ratio of 11.44% and a tangible common equity to
tangible assets ratio of 7.74% at December 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
December 31, 2012
(In thousands, except per share and ratio data)
(Unaudited)
                             2012
                             1QTR      2QTR      3QTR      4QTR      YEAR
                                                                     TO DATE
PERFORMANCE DATA FOR THE
PERIOD:
Net income                  $     $     $     $     $    
                              1,565    1,432   1,307     735  5,039
Net income available to      1,302     1,170     1,056     683       4,211
common shareholders
PERFORMANCE PERCENTAGES
(annualized):
Return on average assets     0.65%     0.59%     0.52%     0.29%     0.51%
Return on average equity     5.60      5.19      4.66      2.60      4.51
Net interest margin          3.70      3.59      3.59      3.55      3.65
Net charge-offs (recoveries)
as a percentage of average   0.13      (0.02)    0.16      0.45      0.19
loans
Loan loss provision (credit)
as a percentage of average   (0.38)    (0.30)    (0.11)    0.30      (0.11)
loans
Efficiency ratio             86.17     86.34     85.50     86.61     86.16
PER COMMON SHARE:
Net income:
Basic                        $     $     $     $     $    
                               0.06    0.06   0.05   0.04   0.21
Average number of common     20,679    19,584    19,275    19,209    19,685
shares outstanding
Diluted                      0.06      0.06      0.05      0.04      0.21
Average number of common     20,722    19,652    19,351    19,289    19,747
shares 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      973       1,648     1,027     1,505     5,153
common 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         0.70      (0.07)    0.20      0.12      0.24
percentage of average loans
Loan loss provision (credit)
as a percentage of average   (0.37)    (0.72)    (0.33)    (0.73)    (0.54)
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     21,208    21,208    21,208    21,114    21,184
shares outstanding
Diluted                      0.05      0.08      0.05      0.07      0.24
Average number of common     21,230    21,236    21,227    21,128    21,205
shares outstanding



AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
(Unaudited)
                               2012
                               1QTR        2QTR        3QTR        4QTR
FINANCIAL CONDITION DATA AT
PERIOD END:
Assets                         $        $        $         $  
                               967,401    997,102    1,002,281  1,005,828
Short-term                     7,398       14,158      14,210      9,012
investments/overnight funds
Investment securities          190,089     191,791     181,319     165,261
Loans and loans held for sale  671,328     690,815     706,624     731,741
Allowance for loan losses      13,778      13,317      12,829      12,571
Goodwill                      12,613      12,613      12,613      12,613
Deposits                       820,105     854,017     850,125     835,734
FHLB borrowings                6,390       3,000       12,000      28,660
Shareholders' equity           112,270     110,810     112,311     110,468
Non-performing assets          4,801       5,077       5,372       7,224
Asset leverage ratio           11.83%      11.60%      11.45%      11.44%
Tangible common equity ratio   8.24        7.84        7.95        7.74
PER COMMON SHARE:
Book value (A)                 $      $      $      $     
                                4.46      4.66      4.74      4.67
Tangible book value            3.84        4.00        4.09        4.01
Market value                   2.74        2.82        2.97        3.01
Trust assets - fair market     $         $         $         $  
value (B)                      1,469,789  1,447,877  1,511,012  1,512,387
STATISTICAL DATA AT PERIOD
END:
Full-time equivalent employees 353         353         355         350
Branch locations               18          18          18          18
Common shares outstanding      20,465,521  19,284,521  19,255,221  19,164,721
                               2011
                               1QTR        2QTR        3QTR        4QTR
FINANCIAL CONDITION DATA AT
PERIOD END:
Assets                         $        $        $        $   
                               961,067    954,893    973,439    979,076
Short-term                     26,769      4,338       17,941      7,845
investments/overnight funds
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
Trust assets - fair market     $         $         $         $  
value (B)                      1,410,755  1,390,534  1,313,440  1,382,745
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
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 consolidated balance sheets.

AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(Unaudited)
                             2012
                             1QTR      2QTR      3QTR      4QTR      YEAR
                                                                     TO DATE
INTEREST INCOME
Interest and fees on loans   $     $     $     $     $    
                              8,729    8,552   8,807     8,727   34,815
Total investment portfolio   1,395     1,333     1,223     1,151     5,102
Total Interest Income        10,124    9,885     10,030    9,878     39,917
INTEREST EXPENSE
Deposits                     1,762     1,668     1,587     1,485     6,502
All borrowings               304       296       301       311       1,212
Total Interest Expense       2,066     1,964     1,888     1,796     7,714
NET INTEREST INCOME          8,058     7,921     8,142     8,082     32,203
Provision (credit) for loan  (625)     (500)     (200)     550       (775)
losses
NET INTEREST INCOME AFTER
PROVISION (CREDIT)
FOR LOAN LOSSES              8,683     8,421     8,342     7,532     32,978
NON-INTEREST INCOME
Trust fees                   1,697     1,628     1,533     1,669     6,527
Investment advisory fees     193       177       182       189       741
Net realized gains on
investment securities        -         12        -         -         12
available for sale
Net realized gains on loans  276       251       262       343       1,132
held for sale
Service charges on deposit   535       517       567       576       2,195
accounts
Bank owned life insurance    215       212       217       219       863
Other income                 758       936       888       891       3,473
Total Non-Interest Income    3,674     3,733     3,649     3,887     14,943
NON-INTEREST EXPENSE
Salaries and employee        5,986     5,976     6,132     6,330     24,424
benefits
Net occupancy expense        729       702       698       671       2,800
Equipment expense            451       473       395       445       1,764
Professional fees            923       937       977       1,033     3,870
FDIC deposit insurance       129       114       104       94        441
expense
Other expenses               1,896     1,865     1,781     1,800     7,342
Total Non-Interest Expense   10,114    10,067    10,087    10,373    40,641
PRETAX INCOME               2,243     2,087     1,904     1,046     7,280
Income tax expense          678       655       597       311       2,241
NET INCOME                  1,565     1,432     1,307     735       5,039
Preferred stock dividends   263       262       251       52        828
NET INCOME AVAILABLE TO      $     $     $     $     $    
COMMON SHAREHOLDERS           1,302    1,170   1,056      683    4,211
                             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  (600)     (1,175)   (550)     (1,250)   (3,575)
losses
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 losses on
investment securities        (358)     -         -         -         (358)
available for sale
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 accretion of preferred   290       290       539       265       1,384
stock discount
NET INCOME AVAILABLE TO      $     $     $     $     $    
COMMON SHAREHOLDERS            973    1,648   1,027     1,505    5,153

AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(Unaudited)
                                    2012                     2011
                                                   TWELVE             TWELVE
                                    4QTR           MONTHS    4QTR     MONTHS
Interest earning assets:
Loans and loans held for sale, net  $           $      $     $   
of unearned income                  717,959        688,736   675,657  662,746
Deposits with banks                 5,064          10,634    9,961    6,853
Short-term investment in money      4,716          1,889     2,355    2,224
market funds
Federal funds sold                  -              -         -        5,838
Total investment securities         175,114        186,775   195,925  197,916
Total interest earning assets       902,853        888,034   883,898  875,577
Non-interest earning assets:
Cash and due from banks             18,219         17,136    16,779   15,893
Premises and equipment              11,446         11,055    10,539   10,513
Other assets                       81,804         81,796    79,201   79,293
Allowance for loan losses           (12,511)       (13,500)  (16,155) (17,771)
Total assets                        1,001,811      984,521   974,262  963,505
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand             64,131         60,810    59,707   57,784
Savings                             84,995         85,112    82,238   81,490
Money market                        221,732        211,744   202,220  193,536
Other time                          320,007        327,557   337,730  348,915
Total interest bearing deposits     690,865        685,223   681,895  681,725
Borrowings:
Federal funds purchased and other   7,005          5,342     3,343    1,216
short-term borrowings
Advances from Federal Home Loan     11,478         5,661     9,888    9,769
Bank
Guaranteed junior subordinated      13,085         13,085    13,085   13,085
deferrable interest debentures
Total interest bearing liabilities  722,433        709,311   708,211  705,795
Non-interest bearing liabilities:
 Demand deposits                   152,861        147,887   140,797  135,298
 Other liabilities                14,156         15,517    11,721   11,699
Shareholders' equity                112,361        111,806   113,533  110,713
Total liabilities and shareholders' $  1,001,811 $      $     $   
equity                                             984,521   974,262  963,505



SOURCE AmeriServ Financial, Inc.

Website: http://www.ameriservfinancial.com
Contact: Jeffrey A. Stopko, Executive Vice President & Chief Financial
Officer, +1-814-533-5310
 
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