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AmeriServ Financial Reports Earnings for the Second Quarter and First Six Months of 2020 and Announces Quarterly Common Stock Cash Dividend

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JOHNSTOWN, Pa., July 21, 2020 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) reported second quarter 2020 net income of $1,419,000, or $0.08 per diluted common share. This earnings performance was a $373,000, or 20.8%, decrease from the second quarter of 2019 when net income totaled $1,792,000, or $0.10 per diluted common share. For the six-month period ended June 30, 2020, the Company reported net income of $2,828,000, or $0.17 per diluted common share. This represents a 19.1% decrease in earnings per share from the six-month period of 2019 when net income totaled $3,670,000, or $0.21 per diluted common share. The following table highlights the Company's financial performance for both the three and six month periods ended June 30, 2020 and 2019:


Second
Quarter
2020

Second
Quarter
2019


Six Months Ended
June 30, 2020

Six Months Ended
June 30, 2019







Net income

$1,419,000

$1,792,000


$2,828,000

$3,670,000

Diluted earnings per
share

$ 0.08

$ 0.10


$0.17

$ 0.21

Jeffrey A. Stopko, President and Chief Executive Officer, commented on the 2020 second quarter financial results: "AmeriServ Financial Inc. again reported sound earnings in the second quarter of 2020 while navigating through the challenges presented by the COVID-19 pandemic and the resultant economic shutdown. Our community bank customer-focused business model and conservative risk management posture has served us well so far in 2020 as our Company has experienced record levels of both loans and deposits. The decline in earnings between years is due to our decision to further strengthen our allowance for loan losses given the economic uncertainty resulting from the pandemic. Additionally, the diversification of our revenue, with almost 30% coming from non-interest income sources including a strong wealth management business and active residential mortgage operation, is beneficial to our company. Overall, I am most proud of how the AmeriServ team has stepped up and worked tirelessly with customers to provide them with resources to address the financial challenges that they are experiencing in 2020 as a result of the pandemic."

The Company's net interest income in the second quarter of 2020 increased by $412,000, or 4.5%, from the prior year's second quarter and, for the first six months of 2020, increased by $506,000, or 2.9%, when compared to the first six months of 2019. The Company's net interest margin of 3.30% for the second quarter of 2020 and 3.26% for the six-month timeframe matched 2019 results for the quarter and was one basis point lower for the six -month period. The second quarter of 2020 represented the first full quarter's impact of the COVID-19 pandemic in the financial industry. An economic shutdown experienced for the majority of the second quarter along with a record low interest rate environment continued to pressure earning asset margins and caused an increased loan loss provision resulting in a lower earnings performance for both time periods. The continued pressure on earning asset margins is offset by a sharply higher level of loan fees and interest income due to the Company's participation in the Paycheck Protection Program (PPP), which was created under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. The PPP initiative along with other government sponsored programs established to stimulate the economy resulted in the Company experiencing robust growth on both sides of the balance sheet as total loans and total deposits are at record levels. Total interest earning assets increased due to growth in total loans and short-term investments which more than offset total investment securities decreasing. Both, non-interest and interest bearing deposits increased resulting in less reliance on higher cost borrowed funds. Effective management of our funding costs along with the downward repricing of certain interest bearing liabilities tied to market indexes resulted in total interest expense decreasing between years. The decrease to total interest expense more than offset the decrease in total interest income resulting in the increase to net interest income for both the second quarter and first six months of 2020.

Total loans reached a record level and averaged $913 million in the second quarter of 2020 which is $29.2 million, or 3.3%, higher than the $883 million average for the second quarter of 2019, while total average loans for the first six months of 2020 were $23.1 million, or 2.6%, higher than the 2019 six-month level. The growth in total loans was due primarily to the Company's participation in the PPP as normal commercial lending activity decreased significantly due to the economic shutdown. Overall, the Company has processed 448 PPP loans totaling $67 million to assist small businesses and our community in this difficult economy. As of June 30, 2020, the Company has recorded a total of $1.0 million of processing fee income and interest income from PPP lending activity. The Small Business Administration guarantees 100% of the PPP loans made to eligible borrowers which minimizes the level of credit risk associated with the loans. As a result, such loans are assigned a 0% risk weight for purposes of calculating the Bank's risk-based capital ratios. In addition to the PPP lending activity, residential mortgage loan activity is exceptionally strong given the lower interest rate environment. Through the first six months of 2020, residential mortgage loan production is more than double the production level achieved through the first six months of 2019 and very near the level of production that was achieved in the full year of 2019. The Company is also encouraged that commercial loan pipelines have recently rebounded and are currently approaching levels that are similar to where they were prior to the pandemic. Even though total average loans increased compared to the same periods last year and loan interest income was enhanced by the PPP revenue, loan interest revenue decreased by $546,000, or 5.0%, for the quarter and also declined by $632,000, or 3.0%, for the six months. The lower loan interest income reflects the challenges that this record low interest rate environment has created. New loans are being originated at lower yields and certain loans tied to LIBOR or the prime rate reprice downward as both of these indices have moved down with the Federal Reserve's decision to decrease the target federal funds interest rate by a total of 225 basis points since June of 2019.

Total investment securities averaged $187 million in the first six months of 2020 which is $12.4 million, or 6.2%, lower than the $199 million average for the first six months of 2019. The Company continues to be selective this year when purchasing the more typical types of securities that have been purchased historically as the market is less favorable given the differences in the position and shape of the U.S. Treasury yield curve from the prior year. The Company has been active since March purchasing corporate securities, particularly subordinated debt issued by other financial institutions. Subordinated debt offers higher yields than the typical types of securities in which we invest and is particularly attractive given the current low interest rate environment and flat shape of the yield curve. Management believes it to be prudent to increase our investments in bank subordinated debt in a gradual and diversified manner, given our familiarity with the banking industry and the heavily regulated nature of the industry combined with our intensive due diligence process.

Our liquidity position is exceptionally strong due to the significant influx of deposits that resulted from the government stimulus programs and reduced customer spending activity due to the shutdown of the economy. As a result, average short-term investments increased by $31.4 million in the second quarter of 2020 and by $20.6 million for the first six months when compared to 2019. Therefore, the challenge exists to profitably deploy this excess in short term assets, which management has responded by utilizing the commercial paper market. Overall, interest income on investments decreased between the first six months of 2020 and first six months of 2019 by $292,000, or 8.3%. Overall in the first half of 2020, total interest income decreased by $924,000, or 3.7%, between years.

Total interest expense for the first six months of 2020 decreased by $1.4 million, or 19.8%, when compared to 2019, due to lower levels of both deposit and borrowing interest expense. Through six months, deposit interest expense in 2020 is lower by $1.3 million, or 22.7%. Total deposits grew significantly during the second quarter of 2020 to reach a record level, averaging $1.036 billion for the quarter, which is $55.5 million, or 5.7%, higher than the 2019 second quarter average. This robust growth between years is the result of consumers' behavior to: 1.) deposit their PPP funds into deposit accounts, 2.) deposit government stimulus checks into the bank and 3.) keep higher balances in their accounts since they are not able to spend as much as they otherwise would because of the COVID-19 pandemic's impact to the economy and our community. In addition, the Company's loyal core deposit base continues to be a source of strength for the Company during periods of market volatility. Management prudently and effectively executed several deposit product pricing decreases given the declining interest rate environment and the downward pressure that the falling interest rates have on the net interest margin. As a result, the Company experienced deposit cost relief. Specifically, the Company's average cost of interest bearing deposits declined by 51 basis points since the second quarter of 2019 and averaged 0.88% in the second quarter of 2020. Also offsetting a portion of the net interest margin pressure from the lower national interest rates is a significant portion of the deposit growth occurring in non-interest bearing demand deposits. Overall, total deposit cost, including demand deposits, averaged 0.73% in the second quarter of 2020 compared to 1.17% in the second quarter of 2019. The Company's loan to deposit ratio averaged 88.1% in the second quarter of 2020 which we believe indicates that the Company has ample capacity to grow its loan portfolio and is well positioned to continue assisting our customers given the impact that the COVID-19 pandemic is having on the economy.

The Company experienced a $160,000, or 9.9%, decrease in the interest cost of borrowings in the first six months of 2020 when compared to the first six months of 2019. The decline is a result of lower total average borrowings between years combined with the impact from the Federal Reserve's actions to decrease interest rates and the impact that these rate decreases have on the cost of overnight borrowed funds and the replacement of matured FHLB term advances. The total 2020 second quarter average term advance borrowings balance increased by approximately $9.2 million, or 18.2%, when compared to the second quarter of 2019 as the Company took advantage of the lower yield curve and its flat shape to prudently extend borrowings. As a result, the combined growth of average FHLB term advances and total average deposits resulted in total average overnight borrowed funds decreasing between years by $16.1 million, or 79.2%, for the quarter. Overall, the 2020 second quarter average of total FHLB borrowed funds was $64.0 million, which represents a decrease of $6.9 million, or 9.7%, from the 2019 second quarter.

The Company recorded a $450,000 provision expense for loan losses in the second quarter of 2020 as compared to a zero provision recorded in the second quarter of 2019. For the first six months of 2020, the Company recorded a $625,000 provision expense for loan losses compared to a $400,000 provision recovery recorded in the first six months of 2019, which represents a net unfavorable shift of $1,025,000. The 2020 provision reflects management's decision to strengthen certain qualitative factors within our allowance for loan losses calculation due to the economic uncertainty caused by the COVID-19 pandemic. The Company's asset quality remains strong as evidenced by low levels of loan delinquency, net loan charge-offs and non-performing assets. The Company experienced net loan charge-offs of $205,000, or 0.05% of total loans, in the first half of 2020 compared to net loan charge-offs of $169,000, or 0.04% of total loans, in the first half of 2019. Non-performing assets totaled $3.1 million, or 0.34% of total loans, at June 30, 2020 and are below industry levels. Management is carefully monitoring asset quality with a particular focus on customers that have requested payment deferrals during this difficult economic time. The Asset Quality Task Force is meeting monthly to review these particular relationships, receiving input from the business lenders regarding their ongoing discussions with the borrowers. In summary, the allowance for loan losses provided 311% coverage of non-performing assets, and 1.04% of total loans, at June 30, 2020, compared to 397% coverage of non-performing assets, and 1.05% of total loans, at December 31, 2019. Note that the reserve coverage of total loans, excluding PPP loans, is 1.13% at June 30, 2020.

Total non-interest income in the second quarter of 2020 increased by $110,000, or 3.0%, from the prior year's second quarter, and increased by $337,000, or 4.6%, in the first half of 2020 when compared to the first half of 2019. Income from residential mortgage loan sales into the secondary market increased by $228,000, or 213.1%, for the quarter and increased by $403,000, or 238.5%, for the first six months due to the strong level of residential mortgage loan production. The higher level of residential mortgage loan production also resulted in mortgage related fees increasing by $68,000, or 88.3%, for the quarter and by $150,000, or 124.0%, for the six months. Wealth management fees increased by $52,000, or 2.1%, in the second quarter of 2020 and by $210,000, or 4.4%, for the first half of 2020 compared to the same time period in 2019. In addition to an improved level of fee income from the Financial Services business unit, the entire Wealth Management Division has been resilient and performed well in spite of the volatility of the markets and a major market value decline that occurred in late March. Slightly offsetting these favorable items was service charges on deposit accounts decreasing by $141,000, or 44.5%, for the quarter and by $165,000, or, 26.3%, for the first six months. Consumer spending activity based fees such as deposit service charges, which include overdraft fees, decreased significantly with the shutdown of the economy. Finally, the economic shutdown also resulted in other income comparing unfavorably for the quarter by $90,000, or 15.6%, and, also, declined by $251,000, or 20.2%, for the six months of 2020. The six- month unfavorable comparison also results from the Company recognizing a gain in 2019 on the sale of equity shares from a previous acquisition.

The Company's total non-interest expense in the second quarter of 2020 increased by $550,000, or 5.3%, when compared to the second quarter of 2019 and increased in the first half of 2020 by $890,000, or 4.3%, when compared to 2019. The increase in both time periods was due to higher salaries & benefits expense of $271,000, or 4.3%, for the quarter and $674,000, or 5.3%, for the first six months of 2020. Within salaries & benefits, pension expense increased by $188,000, or 50.8%, for the quarter between years and increased by $376,000, or 51.9%, for the six months. This significant increase results from the unfavorable impact that the lower interest rate environment has on the discount rates that are used to revalue the defined benefit pension obligation each year. In addition, the higher salaries & benefits expense for both time periods is also due to increased health care costs and greater commissions earned as a result of increased residential mortgage loan production while total salaries are higher for the six-month time period only in 2020 by $193,000, or 2.2%. Total professional fees increased by $82,000, or 6.6%, in the second quarter of 2020 and by $116,000, or 4.9%, for the first half of the year. The increase results from higher appraisal fees due to the significantly higher level of residential mortgage loan production, higher legal fees related to PPP loan processing and a higher level of outside professional services related costs. Other expenses are higher in both time periods as the Company incurred approximately $80,000 of expense for personal protective equipment (PPE) and related supplies so far in 2020 to keep our employees and customers safe during the pandemic. Finally, FDIC deposit insurance expense is $50,000, or 62.5%, higher for the quarterly comparison only as this line returned to a more normal level after the credit from the application of the Small Bank Assessment Credit regulation expired.

The Company recorded an income tax expense of $365,000, or an effective tax rate of 20.5%, in the second quarter of 2020. This compares to an income tax expense of $470,000, or an effective tax rate of 20.8%, for the second quarter of 2019. Similarly, for the first six months of 2020, the Company recorded income tax expense of $731,000, or an effective tax rate of 20.5%, compared to income tax expense of $961,000 in 2019, or an effective tax rate of 20.8%.

The Company had total assets of $1.24 billion, shareholders' equity of $102.6 million, a book value of $6.01 per common share and a tangible book value(1) of $5.31 per common share at June 30, 2020. 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 $0.025 per share quarterly common stock cash dividend. The cash dividend is payable August 17, 2020 to shareholders of record on August 3, 2020. This cash dividend represents a 3.5% annualized yield using the July 17, 2020 closing stock price of $2.87. For the first six months of 2020, the Company's dividend payout ratio amounted to 29.4%.

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; 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, 2019. 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
June 30, 2020
(Dollars in thousands, except per share and ratio data)
(Unaudited)


2020


1QTR

2QTR

YEAR
TO DATE

PERFORMANCE DATA FOR THE PERIOD:




Net income

$1,409

$1,419

$2,828





PERFORMANCE PERCENTAGES (annualized):




Return on average assets

0.48%

0.46%

0.47%

Return on average equity

5.69

5.63

5.66

Return on average tangible common equity (B)

6.46

6.38

6.42

Net interest margin

3.21

3.30

3.26

Net charge-offs as a percentage of average loans

0.06

0.04

0.05

Loan loss provision (credit) as a percentage of

average loans

0.08

0.20

0.14

Efficiency ratio

84.46

83.09

83.76





EARNINGS PER COMMON SHARE:




Basic

$0.08

$0.08

$0.17

Average number of common shares outstanding

17,043

17,052

17,047

Diluted

0.08

0.08

0.17

Average number of common shares outstanding

17,099

17,056

17,070

Cash dividends paid per share

$0.025

$0.025

$0.050

2019


1QTR

2QTR

YEAR
TO DATE

PERFORMANCE DATA FOR THE PERIOD:




Net income

$1,878

$1,792

$3,670





PERFORMANCE PERCENTAGES (annualized):




Return on average assets

0.66%

0.61%

0.63%

Return on average equity

7.84

7.24

7.53

Return on average tangible common equity (B)

8.94

8.22

8.57

Net interest margin

3.24

3.30

3.27

Net charge-offs as a percentage of average loans

0.08

0.00

0.04

Loan loss provision (credit) as a percentage of

average loans

(0.19)

0.00

(0.09)

Efficiency ratio

83.90

82.18

83.02





EARNINGS PER COMMON SHARE:




Basic

$0.11

$0.10

$0.21

Average number of common shares outstanding

17,578

17,476

17,527

Diluted

0.11

0.10

0.21

Average number of common shares outstanding

17,664

17,560

17,611

Cash dividends paid per share

$0.020

$0.025

$0.045

AMERISERV FINANCIAL, INC.
NASDAQ: ASRV
--CONTINUED--
(Dollars in thousands, except per share, statistical, and ratio data)
(Unaudited)


2020


1QTR

2QTR

FINANCIAL CONDITION DATA AT
PERIOD END:



Assets

$1,168,355

$1,242,074

Short-term investments/overnight funds

6,431

30,219

Investment securities

184,784

184,908

Total loans and loans held for sale

877,399

928,350

Paycheck Protection Program (PPP) loans

0

66,956

Allowance for loan losses

9,334

9,699

Goodwill

11,944

11,944

Deposits

957,593

1,033,033

FHLB borrowings

74,572

69,894

Subordinated debt, net

7,517

7,522

Shareholders' equity

100,840

102,604

Non-performing assets

2,244

3,122

Tangible common equity ratio (B)

7.69%

7.37%

Total capital (to risk weighted assets) ratio

13.41

13.18

PER COMMON SHARE:



Book value

$5.92

$6.01

Tangible book value (B)

5.22

5.31

Market value (C)

2.62

3.08

Wealth management assets – fair market
value (A)

$1,983,952

$2,193,504




STATISTICAL DATA AT PERIOD
END:



Full-time equivalent employees

306

305

Branch locations

16

16

Common shares outstanding

17,043,644

17,058,644

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 investments/overnight funds

7,996

6,532

6,039

6,526

Investment securities

194,553

191,168

182,699

181,685

Total loans and loans held for sale

863,134

890,081

875,082

887,574

Paycheck Protection Program (PPP) loans

0

0

0

0

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 ratio (B)

7.54%

7.60%

7.81%

7.48%

Total capital (to risk weighted assets) ratio

13.37

13.14

13.33

13.49

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 – fair market
value (A)

$2,229,860

$2,288,576

$2,142,513

$2,237,898






STATISTICAL DATA AT PERIOD
END:





Full-time equivalent employees

309

309

308

309

Branch locations

16

16

16

16

Common shares outstanding

17,540,676

17,384,355

17,146,714

17,057,871





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.

AMERISERV FINANCIAL, INC.
NASDAQ: ASRV
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands)
(Unaudited)


2020


1QTR

2QTR

YEAR
TO DATE

INTEREST INCOME




Interest and fees on loans

$10,332

$10,448

$20,780

Interest on investments

1,612

1,613

3,225

Total Interest Income

11,944

12,061

24,005





INTEREST EXPENSE




Deposits

2,458

1,869

4,327

All borrowings

735

719

1,454

Total Interest Expense

3,193

2,588

5,781





NET INTEREST INCOME

8,751

9,473

18,224

Provision (credit) for loan losses

175

450

625

NET INTEREST INCOME AFTER

PROVISION (CREDIT) FOR LOAN LOSSES

8,576

9,023

17,599





NON-INTEREST INCOME




Wealth management fees

2,554

2,471

5,025

Service charges on deposit accounts

286

176

462

Net realized gains on loans held for sale

237

335

572

Mortgage related fees

126

145

271

Net realized gains on investment securities

0

0

0

Bank owned life insurance

125

152

277

Other income

504

488

992

Total Non-Interest Income

3,832

3,767

7,599





NON-INTEREST EXPENSE




Salaries and employee benefits

6,704

6,619

13,323

Net occupancy expense

671

606

1,277

Equipment expense

395

389

784

Professional fees

1,154

1,331

2,485

FDIC deposit insurance expense

26

130

156

Other expenses

1,683

1,931

3,614

Total Non-Interest Expense

10,633

11,006

21,639





PRETAX INCOME

1,775

1,784

3,559

Income tax expense

366

365

731

NET INCOME

$1,409

$1,419

$2,828

2019



1QTR

2QTR

YEAR
TO DATE

INTEREST INCOME





Interest and fees on loans


$10,418

$10,994

$21,412

Interest on investments


1,746

1,771

3,517

Total Interest Income


12,164

12,765

24,929






INTEREST EXPENSE





Deposits


2,730

2,867

5,597

All borrowings


777

837

1,614

Total Interest Expense


3,507

3,704

7,211






NET INTEREST INCOME


8,657

9,061

17,718

Provision (credit) for loan losses


(400)

0

(400)

NET INTEREST INCOME AFTER

PROVISION (CREDIT) FOR LOAN LOSSES


9,057

9,061

18,118






NON-INTEREST INCOME





Wealth management fees


2,396

2,419

4,815

Service charges on deposit accounts


310

317

627

Net realized gains on loans held for sale


62

107

169

Mortgage related fees


44

77

121

Net realized gains on investment securities


0

30

30

Bank owned life insurance


128

129

257

Other income


665

578

1,243

Total Non-Interest Income


3,605

3,657

7,262






NON-INTEREST EXPENSE





Salaries and employee benefits


6,301

6,348

12,649

Net occupancy expense


658

622

1,280

Equipment expense


361

387

748

Professional fees


1,120

1,249

2,369

FDIC deposit insurance expense


80

80

160

Other expenses


1,773

1,770

3,543

Total Non-Interest Expense


10,293

10,456

20,749






PRETAX INCOME


2,369

2,262

4,631

Income tax expense


491

470

961

NET INCOME


$1,878

$1,792

$3,670

AMERISERV FINANCIAL, INC.
NASDAQ: ASRV
AVERAGE BALANCE SHEET DATA
(Dollars in thousands)
(Unaudited)





2020

2019



SIX


SIX


2QTR

MONTHS

2QTR

MONTHS

Interest earning assets:





Loans and loans held for sale, net of unearned income

$912,541

$894,819

$883,315

$871,742

Short-term investments

37,180

27,346

5,813

6,793

Deposits with banks

3,266

2,140

1,020

1,020

Total investment securities

187,288

186,538

199,561

198,962

Total interest earning assets

1,140,275

1,110,843

1,089,709

1,078,517






Non-interest earning assets:





Cash and due from banks

17,586

18,337

19,367

20,633

Premises and equipment

18,545

18,569

18,795

17,053

Other assets

70,657

69,447

63,251

62,667

Allowance for loan losses

(9,373)

(9,345)

(8,184)

(8,425)






Total assets

$1,237,690

$1,207,851

$1,182,938

$1,170,445






Interest bearing liabilities:





Interest bearing deposits:





Interest bearing demand

$172,786

$169,926

$169,029

$166,461

Savings

102,505

99,836

97,884

97,867

Money market

230,863

230,350

235,058

238,393

Other time

346,314

344,131

323,080

319,235

Total interest bearing deposits

852,468

844,243

825,051

821,956

Borrowings:





Federal funds purchased and other short-term borrowings

4,245

3,576

20,363

17,888

Advances from Federal Home Loan Bank

59,786

57,539

50,571

48,777

Guaranteed junior subordinated deferrable interest debentures

13,085

13,085

13,085

13,085

Subordinated debt

7,650

7,650

7,650

7,650

Lease liabilities

3,977

3,985

4,188

2,797

Total interest bearing liabilities

941,211

930,078

920,908

912,153






Non-interest bearing liabilities:





Demand deposits

183,352

165,096

155,250

152,748

Other liabilities

11,791

12,203

7,409

7,276

Shareholders' equity

101,336

100,474

99,371

98,268

Total liabilities and shareholders' equity

$1,237,690

$1,207,851

$1,182,938

$1,170,445

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. Our management uses these non-GAAP measures in its analysis of our performance because it believes these
measures are material and will be used as a measure of our performance by investors.


2020


1QTR

2QTR

YEAR

TO DATE





Net income

$1,409

$1,419

$2,828





Average shareholders' equity

99,612

101,336

100,474

Less: Goodwill

11,944

11,944

11,944

Average tangible common equity

87,668

89,392

88,530





Return on average tangible common equity (annualized)

6.46%

6.38%

6.42%










1QTR

2QTR


TANGIBLE COMMON EQUITY




Total shareholders' equity

$100,840

$102,604


Less: Goodwill

11,944

11,944


Tangible common equity

88,896

90,660






TANGIBLE ASSETS




Total assets

1,168,355

1,242,074


Less: Goodwill

11,944

11,944


Tangible assets

1,156,411

1,230,130






Tangible common equity ratio

7.69%

7.37%






Total shares outstanding

17,043,644

17,058,644






Tangible book value per share

$5.22

$5.31






2019


1QTR

2QTR

YEAR

TO DATE







Net income

$1,878

$1,792

$3,670







Average shareholders' equity

97,166

99,371

98,268


Less: Goodwill

11,944

11,944

11,944


Average tangible common equity

85,222

87,427

86,324







Return on average tangible common equity (annualized)

8.94%

8.22%

8.57%













1QTR

2QTR

3QTR

4QTR

TANGIBLE COMMON EQUITY





Total shareholders' equity

$99,061

$101,476

$102,460

$98,614

Less: Goodwill

11,944

11,944

11,944

11,944

Tangible common equity

87,117

89,532

90,516

86,670






TANGIBLE ASSETS





Total assets

1,167,682

1,190,583

1,171,426

1,171,184

Less: Goodwill

11,944

11,944

11,944

11,944

Tangible assets

1,155,738

1,178,639

1,159,482

1,159,240






Tangible common equity ratio

7.54%

7.60%

7.81%

7.48%






Total shares outstanding

17,540,676

17,384,355

17,146,714

17,057,871






Tangible book value per share

$4.97

$5.15

$5.28

$5.08











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SOURCE AmeriServ Financial, Inc.