AMERISERV FINANCIAL, INC. Item 2.02 Results of operation and financial condition.
Item 8.01 Other events.
On
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
99.1 Press release dated
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/Michael D. Lynch Michael D. Lynch SVP & CFO Date:January 21, 2020 Exhibit 99.1
AMERISERV FINANCIAL REPORTS EARNINGS FOR THE FOURTH QUARTER AND FULL YEAR OF 2019 AND ANNOUNCES QUARTERLY COMMON STOCK CASH DIVIDEND
For the year ended
Year Ended Year Ended
Fourth Quarter December 31, December 31,
2019 Fourth Quarter 2018 2019 2018
Net income $669,000 $1,928,000 $6,028,000 $7,768,000
Diluted earnings per $ 0.04 $ 0.11 $ 0.35 $ 0.43
share
The Company's net interest income in the fourth quarter of 2019 increased by
The Company's net interest margin of 3.26% for the fourth quarter of 2019 and 3.29% for the full year was 4 basis points higher than the fourth quarter of 2018 and 2 basis points lower than the full year of 2018. The improvement in the net interest margin during the fourth quarter of 2019 is attributed to an increase in average total loans as well as a higher level of loan fee revenue.
These favorable items more than offset the unfavorable impact from the lower
interest rate environment in the economy as well as a decrease in the balance of
total average securities during the quarter. Overall, our net interest margin
performance was challenged throughout 2019 as the
Total loans averaged
Total investment securities averaged
The growth in the investment securities portfolio occurred primarily during 2018 and is the result of management taking advantage of the rising interest rate environment experienced during 2018 which provided an attractive market for additional security purchases. Purchases primarily focused on federal agency mortgage backed securities due to the ongoing cash flow that these securities provide. Also, management continued its portfolio diversification strategy through purchases of high quality corporate and taxable municipal securities.
Investment security purchase activity slowed significantly during 2019 as the
interest rate market was less favorable resulting in total average securities
decreasing in the fourth quarter of 2019 by
Overall, total interest income increased by
Total interest expense for the twelve months of 2019 increased by
Deposit interest expense in 2019 was higher by
The Company experienced a
The Company recorded a
The rating downgrade of a
Total non-interest income in the fourth quarter of 2019 increased by
Also, for the fourth quarter of 2019, no security sale gains or losses were
recognized after a
The Company's total non-interest expense in the fourth quarter of 2019 increased
by
Increased pension and health care costs also contributed to the higher employee
costs between quarters. The increase to other expense is due to additional
expense for the unfunded commitment reserve as a result of increased loan
approvals in 2019 as well as increased investment in technology as evidenced by
higher website costs and additional telecommunications expense. The Company
recognized a
For the full year of 2019 and for similar reasons as the quarterly variance,
higher expenses included salaries & benefits by
Partially offsetting these unfavorable comparisons are lower
The Company recorded an income tax expense of
For the full year of 2019, the Company recorded income tax expense of
The Company had total assets of
The Company's pension plan continues to be well funded. In accordance with
previously announced common stock buyback programs, the Company returned an
additional
When including the increased cash dividend payments on our common stock, total capital returned to our shareholders approximated 70% of net income in 2019.
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
For the full year 2019, the Company's dividend payout ratio amounted to 27.1%.
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
new banking platform; 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
(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
December 31, 2019
(Dollars in thousands, except per share and ratio data)
(Unaudited)
2019
1QTR 2QTR 3QTR 4QTR YEAR TO DATE
PERFORMANCE DATA FOR THE
PERIOD:
Net income $1,878 $1,792 $1,689 $669 $6,028
PERFORMANCE PERCENTAGES
(annualized):
Return on average assets 0.66% 0.61% 0.57% 0.23% 0.51%
Return on average equity 7.84 7.24 6.60 2.59 6.02
Return on average 8.94 8.22 7.48 2.93 6.84
tangible common equity
(B)
Net interest margin 3.24 3.30 3.18 3.26 3.29
Net charge-offs
(recoveries) as a 0.08 0.00 (0.01) 0.02 0.02
percentage of average
loans
Loan loss provision (0.19) 0.00 0.10 0.44 0.09
(credit) as a percentage
of
average loans
Efficiency ratio 83.90 82.18 81.65 85.30 83.23
EARNINGS PER COMMON
SHARE:
Basic $0.11 $0.10 $0.10 $0.04 $0.35
Average number of common 17,578 17,476 17,278 17,111 17,359
shares outstanding
Diluted 0.11 0.10 0.10 0.04 0.35
Average number of common 17,664 17,560 17,360 17,193 17,440
shares outstanding
Cash dividends paid per $0.020 $0.025 $0.025 $0.025 $0.095
share
2018
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $1,767 $1,744 $2,329 $1,928 $7,768
PERFORMANCE PERCENTAGES
(annualized):
Return on average assets 0.62% 0.60% 0.79% 0.66% 0.67%
Return on average equity 7.55 7.30 9.54 7.89 8.08Return on average tangible common 8.63 8.34 10.88 9.00 9.22 equity (B) Net interest margin
3.29 3.28 3.31 3.22 3.31
Net charge-offs (recoveries) as a
percentage of average loans 0.15 0.21 0.04 0.03 0.11
Loan loss provision (credit) as a 0.02 0.02 0.00 (0.32) (0.07)
percentage of
average loans
Efficiency ratio 81.61 82.04 79.50 85.69 82.17
EARNINGS PER COMMON SHARE:
Basic $0.10 $0.10 $0.13 $0.11 $0.43 Average number of common shares 18,079 18,038 17,924 17,697 17,933 outstanding Diluted
0.10 0.10 0.13 0.11 0.43
Average number of common shares 18,181 18,140 18,036 17,801 18,037
outstanding
Cash dividends paid per share
AMERISERV FINANCIAL, INC.
NASDAQ: ASRV
--CONTINUED--
(Dollars in thousands, except per share, statistical, and ratio data)
(Unaudited)
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 7,996 6,532 6,039 6,526
investments/overnight funds
Investment securities 194,553 191,168 182,699 181,685
Loans and loans held for 863,134 890,081 875,082 887,574
sale
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
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 7.54% 7.60% 7.81% 7.48%
ratio (B)
Total capital (to risk 13.37 13.14 13.33 13.49
weighted assets) ratio
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 - $2,229,860 $2,288,576 $2,142,513 $2,237,898
fair market value (A)
STATISTICAL DATA AT PERIOD
END:
Full-time equivalent 309 309 308 309
employees
Branch locations 16 16 16 16Common shares outstanding 17,540,676 17,384,355 17,146,714 17,057,871
2018
1QTR 2QTR 3QTR 4QTR
FINANCIAL CONDITION DATA
AT PERIOD END:
Assets $1,151,160 $1,180,510 $1,168,806 $1,160,680
Short-term 7,796 8,050 7,428 6,924
investments/overnight funds
Investment securities 171,053 174,771 177,426 187,491
Loans and loans held for 875,716 895,162 884,374 863,129
sale
Allowance for loan losses 9,932 9,521 9,439 8,671
Goodwill 11,944 11,944 11,944 11,944
Deposits 944,206 928,176 944,213 949,171
FHLB borrowings 82,864 126,901 103,799 87,750
Subordinated debt, net 7,470 7,476 7,482 7,488
Shareholders' equity 95,810 96,883 97,179 97,977
Non-performing assets 2,157 1,160 1,067 1,378
Tangible common equity 7.36% 7.27% 7.37% 7.49%
ratio (B)
Total capital (to risk 13.45 13.01 13.13 13.53
weighted assets) ratio
PER COMMON SHARE:
Book value $5.31 $5.37 $5.47 $5.56
Tangible book value (B) 4.65 4.71 4.80 4.88
Market value (C) 4.00 4.10 4.30 4.03
Wealth management assets -
STATISTICAL DATA AT PERIOD END: . . .
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