JOHNSTOWN, Pa., Oct. 18, 2022 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) reported third quarter 2022 net income of $2,102,000, or $0.12 per diluted common share.  This earnings performance was a $671,000, or 46.9%, increase from the third quarter of 2021 when net income totaled $1,431,000, or $0.08 per diluted common share.  For the nine-month period ended September 30, 2022, the Company reported net income of $6,501,000, or $0.38 per diluted common share.  This represents a 22.6% increase in earnings per share from the nine-month period of 2021 when net income totaled $5,220,000, 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, 2022 and 2021:
















Third
Quarter 
2022


Third
Quarter 
2021


Nine Months Ended
September 30, 2022


Nine Months Ended
September 30, 2021












Net income


$

2,102,000


$

1,431,000


$

6,501,000

$

5,220,000


Diluted earnings per share


$

0.12


$

0.08


$

0.38

$

0.31


 

Jeffrey A. Stopko, President and Chief Executive Officer, commented on the 2022 financial results: "AmeriServ Financial continued its positive earnings momentum in the third quarter of 2022 as we again posted increased earnings when compared to the 2021 results. The improved earnings performance in 2022 reflects the full benefit of several important strategic actions that our company executed in 2021, the successful management of our asset quality throughout the pandemic, and effective balance sheet management.  Our net interest income has increased in each quarter of 2022 as we have been able to more rapidly capture the benefit of higher interest rates on our earning assets while limiting the negative impact that higher rates have on the cost of funding our balance sheet. Additionally, this increase in net interest income occurred in 2022 despite a $1.5 million reduction in PPP loan related fee income in the first nine months of this year."

The Company's net interest income in the third quarter of 2022 increased by $1.3 million, or 14.1%, from the prior year's third quarter and, for the first nine months of 2022, increased by $1.6 million, or 5.7%, when compared to the first nine months of 2021.  The Company's net interest margin of 3.35% for the third quarter of 2022 and 3.24% for the nine-month timeframe represents a 50 basis point improvement for the quarter and a 17 basis point improvement for the nine-month period.  The size of the Company's balance sheet continues to remain at a high level by historical standards prior to the impact of the COVID-19 government stimulus programs.  Both total loans and total deposits have demonstrated stabilization since the second half of last year.  The Company's 2022 financial performance has been favorably impacted by the strategic actions taken by management in 2021 to lower funding costs.  The Company has also benefitted from the higher U.S. Treasury yield curve as interest rates have increased due to the Federal Reserve's action to tighten monetary policy in their effort to tame decades high inflation.  The higher national interest rates have favorably impacted the Company's financial performance, particularly net interest income, which has demonstrated an increasing trend as the year progresses.  Specifically, in 2022, the higher interest rates are causing total interest income to increase to a higher level than the corresponding increase in total interest expense.  In comparison to 2021, interest income increased for both the third quarter and the nine-month period.  Interest expense in the 2022 third quarter remained relatively consistent with the 2021 third quarter level, increasing slightly, but demonstrating a significant decline when comparing the first nine-month time period between years.  The higher interest rate environment along with increased investment in the securities portfolio more than offset a reduced level of Paycheck Protection Program (PPP) loan fee income and caused total interest income to increase for both the third quarter and first nine months of 2022 when compared to the same time periods from last year.  The increased national interest rates resulted in total deposit costs increasing in the third quarter of 2022 when compared to the third quarter of 2021.  But this increase in deposit interest expense was nearly offset by a decline in total borrowings interest expense resulting in only a slight increase to total interest expense.  For the nine months in 2022, both deposit and borrowing interest expense declined and resulted in a significant decrease to total interest expense between years.  Financial results also reflect the impact of continued diligent management of our asset quality, as the Company's loan loss provision expense increased by $150,000 for the 2022 third quarter but is $1,075,000 lower when compared to the first nine months of 2021.  Overall, the increase to net interest income, along with a reduced loan loss provision, more than offset a lower level of non-interest income and higher non-interest expense resulting in an improved earnings performance in 2022.

Total average loans in the third quarter of 2022 are lower than the 2021 third quarter average by $13.5 million, or 1.4%, while total average loans for the nine months of 2022 were $10.1 million, or 1.0%, lower than the 2021 nine-month level.  Strong loan pipelines have resulted in increased production during the second and third quarters of 2022 and more than offset a higher than typical level of payoff activity in the first half of 2022.  Excluding PPP loans, total average loans in the third quarter of 2022 exceed the 2021 third quarter average by $20.9 million, or 2.2%, as growth of commercial real estate (CRE) and home equity loans along with a higher volume of residential mortgage loans more than offset a decrease in the level of commercial & industrial loans.    Total PPP loans averaged $1.3 million in the third quarter of 2022, representing a decrease of $34.5 million, or 96.3%, from the third quarter of last year.  Additionally, of the $100 million of PPP loans originated from both government programs, only one very small PPP loan remains on the balance sheet that totals approximately $24,000, reflecting the Company's successful efforts working with our customers through the SBA to complete the forgiveness process.  Overall, the higher interest rate environment along with the higher average volumes of CRE, residential mortgages and home equity loans, resulted in total loan interest income improving by $861,000, or 8.8%, for the third quarter of 2022 when compared to the third quarter of last year.  On a year-to-date basis, however, loan interest and fee income is $528,000, or 1.7%, lower through nine months of 2022 compared to the same period in 2021, as the favorable impact of the higher volume of traditional loans and the higher interest rate environment was more than offset by the reduction in PPP loan fee income.  This decrease is primarily due to the Company recording a total of $433,000 of processing fees and interest income from PPP loans in the nine months of 2022, which is $1.5 million, or 77.6%, lower than PPP income in the nine months of 2021. Finally, on an end of period basis at September 30, 2022, excluding total PPP loans, the total loan portfolio is approximately $14.0 million, or 1.5%, higher from the September 30, 2021 level. 

Total investment securities averaged $238.5 million for the nine months of 2022 which is $31.6 million, or 15.3%, higher than the $206.9 million average for the nine months of last year.  The increase in the U.S. Treasury yield curve resulted in a more favorable market for securities purchasing activity so far in 2022.  The 2-year to 10-year portion of the yield curve increased by approximately 220 to 344 basis points since the beginning of the year, with shorter yields in that range increasing to a higher degree than the longer yields.  Overall, the higher rates resulted in yields for new federal agency mortgage-backed securities and federal agency bonds improving and exceeding the overall average yield of the existing securities portfolio.  Management purchased more of these investments by redeploying the cash flow from the excess payoff activity from the loan portfolio and profitably utilizing a portion of the increased short-term liquidity on our balance sheet.  This redeployment of funds contributed to total securities growing between years.  Management also continued to purchase taxable municipals and corporate securities to maintain a well-diversified portfolio.  Overall, through nine months of 2022, the average balance of total interest earning assets was consistent with the nine-month average of 2021 while total interest income increased by $276,000, or 0.8%, between years.

Although reduced from its high levels when government stimulus initially impacted the economy, our liquidity position continues to be solid as total short-term investments averaged $29.4 million for the nine-month period of 2022, which is $21.4 million, or 42.2%, lower than the 2021 nine-month average.  Short-term investments averaged $13.0 million in the third quarter of 2022, which is lower than it has been trending over the past several quarters due to the additional investment in the securities portfolio.  Uncertainty remains regarding the duration that the increased funds from government stimulus will remain on the balance sheet.  Diligent monitoring and management of our short-term investment position remains a priority.  Continued loan growth and prudent investment in securities are critical to achieve the best return on the Company's liquid funds with management expecting to continue to be active with new security purchases during the remainder of 2022 given the increase in interest rates.

On the liability side of the balance sheet, through nine months, total average deposits are $7.9 million, or 0.7%, higher compared to the nine months of 2021.  Total deposits continue to demonstrate stability over the past year despite a $29.7 million, or 2.5%, decrease in total average deposits when comparing the 2022 third quarter to last year's third quarter.  This decrease reflects management electing to allow one high cost, large institutional deposit to mature late in September 2021.  Deposit volumes continue to reflect the favorable impact of government stimulus which provided support to many Americans and financial assistance to municipalities and school districts during the pandemic.  Deposit volumes were also favorably impacted by the Company's successful business development efforts and the Somerset County branch acquisition, which occurred in late May 2021.  Overall, the loan to deposit ratio averaged 84.2% in the third quarter of 2022, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is strongly positioned to support our customers and our community during times of economic volatility.  

Total interest expense for the nine months of 2022 decreased by $1.4 million, or 21.9%, when compared to the nine months of 2021, due to lower levels of both deposit and borrowing interest expense.  Deposit interest expense was lower by $425,000, or 10.9%, despite the higher year to date average volume of total deposits reflecting new deposit inflows as well as the loyalty of the bank's core deposit base.  Also, management's decision to allow the previously mentioned large, high cost institutional deposit to mature has proven to be beneficial since the interest rate on this particular deposit was indexed to the market and would have become more expensive with the rising national interest rates experienced so far in 2022.  This large institutional deposit was replaced by the additional low cost, fixed rate deposits from the Somerset County branch acquisition and resulted in significant interest expense savings.  The rising national interest rates this year resulted in total deposit interest expense increasing as certain deposit products that are tied to a market index reprice upward with the move in national interest rates.  Specifically, total deposit cost averaged 0.59% in the third quarter of 2022, which is 19 basis points higher than total deposit cost of 0.40% in the third quarter of 2021.  However, through nine months in 2022, total deposits costs of 40 basis points remain favorable to total deposit costs of 45 basis points through nine months of 2021.  Overall, management believes that total deposit cost will continue to rise given the expectation of additional short-term interest rate increases by the Federal Reserve throughout 2022. 

Total borrowings interest expense decreased by $506,000, or 52.9%, between the third quarter of 2022 and the same quarter of 2021 and by $934,000, or 40.7%, when comparing the nine months of 2022 to the nine months of 2021.  The decrease between years results from the favorable impact of the August 2021 subordinated debt offering which was used to replace higher cost debt.  This transaction effectively lowered debt cost on these long-term funds by nearly 4.0%.  This savings is recognized even though the size of the new subordinated debt is $7.0 million higher than the debt instruments it replaced.  Note that included in 2021 borrowings interest expense is $202,000 of additional interest expense that the Company had to recognize from the write-off of the unamortized issuance costs from the original debt instruments that the new sub debt replaced.  The remaining portion of the favorable variance in borrowings interest expense between the nine months of 2022 and the nine months of 2021 is due to reduced interest expense from Federal Home Loan Bank (FHLB) borrowings.  The average balance of total short-term and FHLB borrowings is lower in the first nine months of 2022 by $13.8 million, or 26.4%, as strength of the Company's liquidity position allowed management to let higher cost FHLB term advances mature and not be replaced. 

The Company recorded a $500,000 loan loss provision in the third quarter of 2022 as compared to a $350,000 provision expense recorded in the third quarter of 2021.  For the nine months of 2022, the Company recorded a $225,000 provision recovery compared to an $850,000 provision expense recorded in the nine months of 2021 resulting in a net favorable change of $1.1 million.  The increased third quarter 2022 provision expense reflects the transfer of one commercial real estate loan relationship into non-accrual status while the borrower pursues the sale of the property.  However, the provision recovery for the nine-month time period in 2022 reflects improved credit quality for the overall portfolio due to several loan upgrades and increased payoff and paydown activity including two substandard credits. As a result, the Company also experienced lower levels of classified assets.  As demonstrated historically, the Company continues its strategic conviction that a strong allowance for loan losses is needed, which has proven to be essential given the support provided to certain borrowers as they fully recover from the COVID-19 pandemic.  Even with the third quarter increase, overall non-performing assets remain well controlled totaling $6.0 million, or 0.61% of total loans, on September 30, 2022.  The Company continues to experience low net loan charge-offs, which were $111,000, or 0.02% of total average loans, in the nine months of 2022 and is only slightly higher than net loan charge-offs of $71,000, or 0.01% of total average loans, for the nine months of 2021. In summary, the allowance for loan losses provided 202% coverage of non-performing assets, and 1.23% of total loans, on September 30, 2022, compared to 373% coverage of non-performing assets, and 1.26% of total loans, on December 31, 2021.   

Total non-interest income in the third quarter of 2022 decreased by $90,000, or 2.0%, from the prior year's third quarter and for the nine months of 2022 decreased by $630,000, or 4.7%, from the nine months of 2021.  Net realized gains on loans held for sale decreased by $449,000, or 71.0%, for the nine months, due to the lower level of residential mortgage loan production which reflects a reduced level of mortgage loan refinance activity due to the rapid escalation of interest rates since the beginning of 2022.  Residential mortgage loan production through nine months in 2022 totals $19.9 million representing a $56.2 million, or 73.8%, reduction from the 2021 production level. The reduced level of mortgage loan production also caused mortgage related fees to decline by $218,000, or 70.3%, for the nine months.  Wealth management fees decreased by $324,000, or 10.3%, for the third quarter of 2022 and also declined by $77,000, or 0.9%, for the nine-month period between years.  The decrease in both time periods reflects the unfavorable impact of the declining equity markets on wealth management fee income as well as the unfavorable impact that the move in the bond market is having on wealth management asset values.  Both unfavorable items are being partially offset by new customer business growth.  The fair market value of wealth management assets declined since the fourth quarter of 2021 by $422.0 million, or 15.6%, and totaled $2.3 billion at September 30, 2022.  Service charges on deposit accounts increased by $139,000, or 20.3%, in the nine months of 2022 compared to the nine months of 2021, as consumers are more active this year, increasing their spending habits.  Revenue from bank owned life insurance (BOLI) increased by $108,000, or 48.9%, for the third quarter of 2022 due to the receipt of a death claim.  BOLI income for the nine months in 2022 is consistent with the 2021 level.  Finally, other income is $113,000, or 16.1%, higher for the quarter and $61,000, or 3.2%, higher for the nine-month period due to the recognition of a positive credit valuation adjustment to the market value of the interest rate swap contracts that the Company executed to accommodate the needs of certain borrowers while managing our interest rate risk position.

The Company has demonstrated good expense control in this inflationary environment as total non-interest expense in the third quarter of 2022 increased by $207,000, or 1.8%, when compared to the third quarter of 2021 and increased in the nine months of 2022 by $453,000, or 1.3%, when compared to 2021.  Salaries & employee benefits increased by $161,000, or 2.3%, for the quarter and are $721,000, or 3.5%, higher for the nine-month time period in 2022.  Within total salaries & benefits expense, salaries costs are higher by $1.1 million, or 8.5%, through nine months due to merit increases and a higher level of full-time equivalent employees (FTEs).  Total FTEs of 306 in the third quarter of 2022 are nine higher than they were in the third quarter of 2021 as the Company has been able to fill certain open positions this year.  Also, contributing to the higher salaries & employee benefits costs were additional increases to health care and other employee benefits.  Partially offsetting these higher costs within salaries & benefits through nine months was lower incentive compensation by $354,000, or 25.1%, due to the reduced level of loan production.  Similar to what occurred in 2021, the Company was required to recognize a settlement charge in connection with its defined benefit pension plan in the second and third quarters of 2022. The amount of the charge in the third quarter was $230,000, bringing the total settlement charge recognized for the nine months to $1.2 million.  A settlement charge must be recognized when the total dollar amount of lump sum distributions paid from the pension plan to retired employees exceeds a threshold of expected annual service and interest costs in the current year.  The value of the lump sums continued to be elevated this year due to the low level where interest rates were late in 2021 when these lump sums were calculated.  It is anticipated that the Company will be required to recognize additional settlement charges through year end as more people retire.  However, since the retired employees have chosen to take the lump sum payments, these individuals are no longer included in the pension plan.  Therefore, the Company's normal annual pension expense is expected to be lower in the future.  This has been evident so far in 2022 as the normal amount of pension expense required to be recognized is lower than the 2021 level.  Specifically, pension expense in the third quarter of 2022 was $349,000, or 63.1%, lower than the 2021 third quarter level and was $687,000, or 34.9%, lower for the nine-month time period compared to last year.  Professional fees were $401,000, or 9.8%, higher for the nine months of 2022 primarily due to higher legal costs in 2022.  Net occupancy expenses were $156,000, or 7.9%, higher through nine months of 2022 due to increased utilities cost along with maintenance and repair expense which was primarily related to the new branch office.  Partially offsetting these higher costs were other expenses decreasing by $767,000, or 12.0%, for the first nine months of 2022 when compared to the same time period from last year.  Contributing to the lower level of other expense was no additional costs related to a branch acquisition in 2022 after $390,000 of expense was recognized for this purpose in 2021.  Other expenses were also favorably impacted by a $215,000 credit for the unfunded commitment reserve after $92,000 of expense was recognized in the nine months of last year, resulting in a $307,000 favorable shift.

The Company recorded an income tax expense of $526,000, or an effective tax rate of 20.0%, in the third quarter of 2022.  This compares to an income tax expense of $341,000, or an effective tax rate of 19.2%, for the third quarter of 2021.  Similarly, for the first nine months of 2022, the Company recorded income tax expense of $1.6 million, or an effective tax rate of 20.0%, compared to income tax expense of $1.3 million in 2021, or an effective tax rate of 19.7%.   

The Company had total assets of $1.4 billion, shareholders' equity of $101.6 million, a book value of $5.94 per common share and a tangible book value(1) of $5.13 per common share on September 30, 2022.  The decline in the Company's book value and tangible book value per share in 2022 reflects a decrease in the value of the Company's available for sale investment securities due to higher interest rates and the negative impact of a revaluation of the net pension liability resulting from a drop in the value of the pension plan assets. The Company continued to maintain strong capital ratios that exceed the regulatory defined well capitalized status.

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, the level of inflation, 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, 2021. 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, 2022

(Dollars in thousands, except per share and ratio data)

(Unaudited)


2022















1QTR


2QTR



3QTR



YEAR TO
DATE


PERFORMANCE DATA FOR THE PERIOD:















Net income


$

2,418


$

1,981


$

2,102



$

6,501

















PERFORMANCE PERCENTAGES (annualized):















Return on average assets



0.73

%


0.59

%


0.62

%



0.65

%

Return on average equity



8.48



7.10



7.81




7.80


Return on average tangible common equity (B)



9.62



8.10



8.97




8.90


Net interest margin



3.14



3.23



3.35




3.24


Net charge-offs (recoveries) as a percentage of average loans



0.03



0.01



0.00




0.02


Loan loss provision (credit) as a percentage of average loans



(0.17)



(0.13)



0.20




(0.03)


Efficiency ratio (D)



81.38



84.89



78.93




81.70

















EARNINGS PER COMMON SHARE:















Basic


$

0.14


$

0.12


$

0.12



$

0.38


Average number of common shares outstanding



17,094



17,109



17,111




17,105


Diluted



0.14



0.12



0.12




0.38


Average number of common shares outstanding



17,146



17,149



17,145




17,146


Cash dividends paid per share


$

0.025


$

0.030


$

0.030



$

0.085


 

 

2021

 














1QTR


2QTR



3QTR


YEAR TO
DATE


PERFORMANCE DATA FOR THE PERIOD:














Net income


$

2,081


$

1,708


$

1,431


$

5,220
















PERFORMANCE PERCENTAGES (annualized):














Return on average assets



0.65

%


0.51

%


0.41

%


0.52

%

Return on average equity



8.04



6.46



5.07



6.48


Return on average tangible common equity (B)



9.08



7.30



5.78



7.35


Net interest margin



3.23



3.13



2.85



3.07


Net charge-offs (recoveries) as a percentage of average loans



0.05



(0.01)



(0.01)



0.01


Loan loss provision (credit) as a percentage of average loans



0.17



0.04



0.14



0.12


Efficiency ratio (D)



79.00



84.35



84.42



82.56
















EARNINGS PER COMMON SHARE:














Basic


$

0.12


$

0.10


$

0.08


$

0.31


Average number of common shares outstanding



17,064



17,073



17,075



17,071


Diluted



0.12



0.10



0.08



0.31


Average number of common shares outstanding



17,101



17,131



17,114



17,114


Cash dividends paid per share


$

0.025


$

0.025


$

0.025


$

0.075


 

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

--CONTINUED--

(Dollars in thousands, except per share, statistical, and ratio data)

(Unaudited)


2022




1QTR



2QTR



3QTR


FINANCIAL CONDITION DATA AT PERIOD END:











Assets


$

1,331,265


$

1,321,402


$

1,350,048


Short-term investments/overnight funds



13,588



10,714



4,133


Investment securities



223,286



231,255



236,867


Total loans and loans held for sale, net of unearned income



978,692



965,587



980,840


Paycheck Protection Program (PPP) loans (E)



7,835



2,242



24


Allowance for loan losses



11,922



11,568



12,062


Intangible assets



13,761



13,753



13,746


Deposits



1,140,889



1,142,756



1,152,813


Short-term and FHLB borrowings



37,863



34,028



54,796


Guaranteed junior subordinated deferrable interest debentures



0



0



0


Subordinated debt, net



26,613



26,624



26,634


Shareholders' equity



113,692



106,392



101,587


Non-performing assets



3,401



3,240



5,986


Tangible common equity ratio (B)



7.58

%


7.08

%


6.57

%

Total capital (to risk weighted assets) ratio



14.01



14.33



14.02


PER COMMON SHARE:











Book value


$

6.65


$

6.22


$

5.94


Tangible book value (B)



5.84



5.41



5.13


Market value (C)



4.04



3.94



3.80


Wealth management assets – fair market value (A)


$

2,633,096


$

2,372,772


$

2,290,678













STATISTICAL DATA AT PERIOD END:











Full-time equivalent employees



301



310



306


Branch locations



17



17



17


Common shares outstanding



17,109,084



17,109,097



17,112,617


 















2021




1QTR


2QTR


3QTR


4QTR


FINANCIAL CONDITION DATA AT PERIOD END:














Assets


$

1,311,412


$

1,360,583


$

1,338,886


$

1,335,560


Short-term investments/overnight funds



18,025



45,459



10,080



16,353


Investment securities



204,193



219,395



214,295



216,922


Total loans and loans held for sale, net of unearned income



986,557



992,865



996,029



986,037


Paycheck Protection Program (PPP) loans (E)



67,253



48,098



29,260



17,311


Allowance for loan losses



11,631



11,752



12,124



12,398


Intangible assets



11,944



13,785



13,777



13,769


Deposits



1,117,091



1,168,742



1,144,391



1,139,378


Short-term and FHLB borrowings



55,149



48,149



43,653



42,653


Guaranteed junior subordinated deferrable interest debentures



12,974



12,978



0



0


Subordinated debt, net



7,540



7,546



26,600



26,603


Shareholders' equity



105,331



111,272



113,736



116,549


Non-performing assets



4,245



3,727



3,119



3,323


Tangible common equity ratio (B)



7.19

%


7.24

%


7.54

%


7.78

%

Total capital (to risk weighted assets) ratio



13.03



12.79



13.61



14.04


PER COMMON SHARE:














Book value


$

6.17


$

6.52


$

6.66


$

6.82


Tangible book value (B)



5.47



5.71



5.85



6.02


Market value (C)



4.06



3.93



3.88



3.86


Wealth management assets – fair market value (A)


$

2,517,810


$

2,614,898


$

2,596,672


$

2,712,695
















STATISTICAL DATA AT PERIOD END:














Full-time equivalent employees



301



300



297



304


Branch locations



16



17



17



17


Common shares outstanding



17,069,000



17,075,000



17,075,000



17,081,500



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.

(D)

Ratio calculated by dividing total non-interest expense by tax equivalent net interest income plus total non-interest income.

(E)

Paycheck Protection Program (PPP) loans are included in total loans and loans held for sale, net of unearned income.

 

 

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

CONSOLIDATED STATEMENT OF INCOME

(Dollars in thousands)

(Unaudited)


2022




1QTR


2QTR





3QTR


YEAR TO

DATE

INTEREST INCOME















Interest and fees on loans


$

9,496


$

9,725



$


10,691


$

29,912

Interest on investments



1,532



1,802





2,009



5,343

Total Interest Income



11,028



11,527





12,700



35,255
















INTEREST EXPENSE















Deposits



796



956





1,720



3,472

All borrowings



465



447





451



1,363

Total Interest Expense



1,261



1,403





2,171



4,835
















NET INTEREST INCOME



9,767



10,124





10,529



30,420

Provision (credit) for loan losses



(400)



(325)





500



(225)

NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES



10,167



10,449





10,029



30,645
















NON-INTEREST INCOME















Wealth management fees



3,165



2,976





2,813



8,954

Service charges on deposit accounts



272



263





289



824

Net realized gains on loans held for sale



95



35





53



183

Mortgage related fees



33



32





27



92

Net realized gains on investment securities



0



0





0



0

Bank owned life insurance



209



231





329



769

Other income



561



601





815



1,977

Total Non-Interest Income



4,335



4,138





4,326



12,799
















NON-INTEREST EXPENSE















Salaries and employee benefits



7,405



6,963





7,071



21,439

Net occupancy expense



741



697





698



2,136

Equipment expense



397



415





393



1,205

Professional fees



1,324



1,510





1,656



4,490

FDIC deposit insurance expense



145



130





125



400

Other expenses



1,467



2,395





1,784



5,646

Total Non-Interest Expense



11,479



12,110





11,727



35,316
















PRETAX INCOME



3,023



2,477





2,628



8,128

Income tax expense



605



496





526



1,627

NET INCOME


$

2,418


$

1,981



$


2,102


$

6,501

 

2021




1QTR


2QTR





 

3QTR


YEAR TO

DATE

INTEREST INCOME















Interest and fees on loans


$

10,327


$

10,283




$

9,830


$

30,440

Interest on investments



1,442



1,555





1,542



4,539

Total Interest Income



11,769



11,838





11,372



34,979
















INTEREST EXPENSE















Deposits



1,402



1,306





1,189



3,897

All borrowings



675



665





957



2,297

Total Interest Expense



2,077



1,971





2,146



6,194
















NET INTEREST INCOME



9,692



9,867





9,226



28,785

Provision (credit) for loan losses



400



100





350



850

NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES



9,292



9,767





8,876



27,935
















NON-INTEREST INCOME















Wealth management fees



2,872



3,022





3,137



9,031

Service charges on deposit accounts



201



224





260



685

Net realized gains on loans held for sale



495



122





15



632

Mortgage related fees



130



99





81



310

Net realized gains on investment securities



0



84





0



84

Bank owned life insurance



332



218





221



771

Other income



584



630





702



1,916

Total Non-Interest Income



4,614



4,399





4,416



13,429
















NON-INTEREST EXPENSE















Salaries and employee benefits



6,941



6,867





6,910



20,718

Net occupancy expense



680



649





651



1,980

Equipment expense



390



403





390



1,183

Professional fees



1,314



1,396





1,379



4,089

FDIC deposit insurance expense



155



155





170



480

Other expenses



1,825



2,568





2,020



6,413

Total Non-Interest Expense



11,305



12,038





11,520



34,863
















PRETAX INCOME



2,601



2,128





1,772



6,501

Income tax expense



520



420





341



1,281

NET INCOME


$

2,081


$

1,708




$

1,431


$

5,220


















 

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

AVERAGE BALANCE SHEET DATA

(Dollars in thousands)

(Unaudited)




 

2022


2021



3QTR



NINE

MONTHS


3QTR



NINE

MONTHS

Interest earning assets:













Loans and loans held for sale, net of unearned income


$

975,615


$

977,386


$

989,164


$

987,523

Short-term investments and bank deposits



13,009



29,409



71,361



50,857

Total investment securities



253,398



238,491



217,935



206,905

Total interest earning assets



1,242,022



1,245,286



1,278,460



1,245,285














Non-interest earning assets:













Cash and due from banks



17,814



17,820



20,806



18,882

Premises and equipment



17,575



17,449



17,678



17,822

Other assets



74,758



79,016



82,919



76,147

Allowance for loan losses



(11,757)



(12,113)



(11,907)



(11,788)














Total assets


$

1,340,412


$

1,347,458


$

1,387,956


$

1,346,348














Interest bearing liabilities:













Interest bearing deposits:













Interest bearing demand


$

226,606


$

228,425


$

220,594


$

210,179

Savings



139,724



138,524



131,184



124,120

Money market



289,701



290,946



281,427



269,509

Other time



283,504



286,061



334,635



337,726

Total interest bearing deposits



939,535



943,956



967,840



941,534

Borrowings:













Federal funds purchased and other short-term borrowings



5,142



2,214



0



437

Advances from Federal Home Loan Bank



31,109



36,164



45,867



51,717

Guaranteed junior subordinated deferrable interest debentures



0



0



12,794



12,988

Subordinated debt



27,000



27,000



18,017



11,106

Lease liabilities



3,424



3,477



3,695



3,767

Total interest bearing liabilities



1,006,210



1,012,811



1,048,213



1,021,549














Non-interest bearing liabilities:













Demand deposits



219,307



216,266



220,745



210,758

Other liabilities



8,146



6,946



6,970



6,385

Shareholders' equity



106,749



111,435



112,028



107,656

Total liabilities and shareholders' equity


$

1,340,412


$

1,347,458


$

1,387,956


$

1,346,348

 

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

RETURN ON AVERAGE TANGIBLE COMMON EQUITY, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER SHARE

(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", and "tangible book value per share."  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.  These non-GAAP measures are used by management in their analysis of the Company's performance or, management believes, facilitate an understanding of the Company's performance.

 

2022













YEAR TO




1QTR


2QTR



3QTR




DATE


RETURN ON AVERAGE TANGIBLE COMMON EQUITY
















Net income


$

2,418


$

1,981


$

2,102




$

6,501


















Average shareholders' equity



115,658



111,898



106,749





111,435


Less: Average intangible assets



13,766



13,757



13,749





13,757


Average tangible common equity



101,892



98,141



93,000





97,678


















Return on average tangible common equity (annualized)



9.62

%


8.10

 

%


8.97

 

%




8.90

%



































1QTR


2QTR



3QTR







TANGIBLE COMMON EQUITY
















Total shareholders' equity


$

113,692


$

106,392


$

101,587







Less: Intangible assets



13,761



13,753



13,746







Tangible common equity



99,931



92,639



87,841























TANGIBLE ASSETS
















Total assets



1,331,265



1,321,402



1,350,048







Less: Intangible assets



13,761



13,753



13,746







Tangible assets



1,317,504



1,307,649



1,336,302























Tangible common equity ratio



7.58

%


7.08

%


6.57

%






















Total shares outstanding



17,109,084



17,109,097



17,112,617























Tangible book value per share


$

5.84


$

5.41


$

5.13












































 

2021




1QTR


2QTR



 

3QTR



YEAR TO

DATE


RETURN ON AVERAGE TANGIBLE COMMON EQUITY















Net income


$

2,081


$

1,708


$

1,431



$

5,220

















Average shareholders' equity



104,931



106,009



112,028




107,656


Less: Average intangible assets



11,944



12,194



13,780




12,640


Average tangible common equity



92,987



93,815



98,248




95,016

















Return on average tangible common equity (annualized)



9.08

%


7.30

%


5.78

 

%



7.35

%
















 


















1QTR


2QTR


3QTR




4QTR


TANGIBLE COMMON EQUITY















Total shareholders' equity


$

105,331


$

111,272


$

113,736



$

116,549


Less: Intangible assets



11,944



13,785



13,777




13,769


Tangible common equity



93,387



97,487



99,959




102,780

















TANGIBLE ASSETS















Total assets



1,311,412



1,360,583



1,338,886




1,335,560


Less: Intangible assets



11,944



13,785



13,777




13,769


Tangible assets



1,299,468



1,346,798



1,325,109




1,321,791

















Tangible common equity ratio



7.19

%


7.24

%


7.54

%



7.78

%
















Total shares outstanding



17,069,000



17,075,000



17,075,000




17,081,500

















Tangible book value per share


$

5.47


$

5.71


$

5.85



$

6.02

















 

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SOURCE AmeriServ Financial, Inc.

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