8-K
AMERISERV FINANCIAL INC /PA/ (ASRV)
8-K
2023-06-01
For: 2023-06-01
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April 06, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 1, 2023
AMERISERV FINANCIAL, Inc.
(exact name of registrant as specified in its charter)
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|---|---|---|---|---|
| Pennsylvania | | 0-11204 | | 25-1424278 |
| (State or other jurisdiction | | (Commission | | (IRS Employer |
| of incorporation) | | File Number) | | Identification No.) |
| | |
|---|---|
| Main and Franklin Streets, Johnstown, PA | 15901 |
| (address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: 814-533-5300
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title Of Each Class | Trading Symbol | Name of Each Exchange On Which Registered | ||
|---|---|---|---|---|
| Common Stock | | ASRV | | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Form 8-K
Item 7.01 Regulation FD Disclosure.
On June 1, 2023, AmeriServ Financial, Inc. (the “Company”) posted presentation materials under Events & Presentations on the Investor Relations section of the Company’s website at https://investors.ameriserv.com/events-and-presentations, which is also attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure. Members of the Company’s management may use all or portions of these materials from time to time in meetings with or when making presentations to the investment community, current or potential stakeholders, and others.
Each of the information in the preceding paragraph and Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liabilities of that section. Each may only be incorporated by reference into another filing under the Exchange Act or the Securities Act of 1933 if such subsequent filing specifically references this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits:
99.1
Investor slide presentation.
104Cover Page Interactive Data File (embedded within the Inline XBRL document).
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.
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| | AMERISERV FINANCIAL, Inc. | |
| | | |
| Date: June 1, 2023 | By | /s/Michael D. Lynch |
| | | Michael D. Lynch |
| | | EVP & CFO |
Exhibit 99.1
| 2<br>Michael D. Lynch<br>Executive Vice President<br>Chief Financial Officer<br>Chief Investment Officer<br>Chief Risk Officer |
|---|
| 3<br>Forward-Looking Statements<br>This presentation contains various forward-looking statements and includes assumptions concerning the Company’s beliefs, plans, objectives, goals,<br>expectations, anticipations, estimates, intentions, operations, future results, and prospects, including statements that include the words “may,” “could,”<br>“should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,” “plan” or similar expressions. These forward-looking statements are<br>based upon current expectations, are subject to risk and uncertainties and are applicable only as of the dates of such statements. Forward-looking<br>statements involve risks, uncertainties and assumptions. Although we do not make forward-looking statements unless we believe we have a reasonable<br>basis for doing so, we cannot guarantee their accuracy. You should not put undue reliance on any forward-looking statements. These statements speak<br>only as of the date of this presentation, even if subsequently made available on our website or otherwise, and we undertake no obligation to update or<br>revise these statements to reflect events or circumstances occurring after the date of this presentation. In connection with the “safe harbor” provisions of<br>the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary statement identifying important factors (some of which<br>are beyond the Company’s control) which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.<br>Such factors include the following: (i) the effect of changing regional and national economic conditions; (ii) the effects of trade, monetary and fiscal<br>policies and laws, including interest rate policies of the Federal Reserve; (iii) significant changes in interest rates and prepayment speeds; (iv) inflation, stock<br>and bond market, and monetary fluctuations; (v) credit risks of commercial, real estate, consumer, and other lending activities; (vi) changes in federal and<br>state banking and financial services laws and regulations; (vii) the presence in the Company’s market area of competitors with greater financial resources<br>than the Company; (viii) the timely development of competitive new products and services by the Company and the acceptance of those products and<br>services by customers and regulators (when required); (ix) the willingness of customers to substitute competitors’ products and services for those of the<br>Company and vice versa; (x) changes in consumer spending and savings habits; (xi) unanticipated regulatory or judicial proceedings; and (xii) other<br>external developments which could materially impact the Company’s operational and financial performance.<br>The foregoing list of important factors is not exclusive, and neither such list nor any forward-looking statement takes into account the impact that any future<br>acquisition may have on the Company and on any such forward-looking statement. |
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| 4<br>Annual Financial Results<br>Through 2022 |
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| 5<br>Net Income<br>(thousands)<br>$0<br>$2,000<br>$4,000<br>$6,000<br>$8,000<br>2018 2019 2020 2021 2022<br>$7,768<br>$6,028<br>$4,598<br>$7,072 $7,448 |
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| Earnings Per Common Share<br>$0.00<br>$0.10<br>$0.20<br>$0.30<br>$0.40<br>$0.50<br>2018 2019 2020 2021 2022<br>$0.43<br>$0.35<br>$0.27<br>$0.41 $0.43<br>6 |
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| Net-Interest Income<br>(thousands)<br>$25,000<br>$35,000<br>$45,000<br>2018 2019 2020 2021 2022<br>$35,494 $35,442<br>$36,367<br>$39,083<br>$40,563<br>7 |
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| Net Interest Margin %<br>1.50%<br>2.00%<br>2.50%<br>3.00%<br>3.50%<br>4.00%<br>2018 2019 2020 2021 2022<br>3.31% 3.29%<br>3.19% 3.15%<br>3.27%<br>8 |
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| Total Average Securities<br>(Millions)<br>0<br>5 0<br>100<br>150<br>200<br>250<br>2018 2019 2020 2021 2022<br>185 194 188<br>210<br>245<br>9 |
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| Total Average Loans<br>(Millions)<br>600<br>700<br>800<br>900<br>1,000<br>2018 2019 2020 2021 2022<br>882 875<br>923<br>989 978<br>10 |
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| Total Average Loans Excluding PPP Loans<br>(Millions)<br>600<br>700<br>800<br>900<br>1,000<br>2018 2019 2020 2021 2022<br>882 875 878<br>943 973<br>11 |
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| Total Average Deposits<br>(Millions)<br>700<br>800<br>900<br>1,000<br>1,100<br>1,200<br>2018 2019 2020 2021 2022<br>960 980<br>1,035<br>1,154 1,156<br>12 |
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| Average Deposits Vs. Total Deposit Cost %<br>969<br>980 985 984 983<br>1,036<br>1,054<br>1,067<br>1,103<br>1,165<br>1,189<br>1,161 1,159 1,163 1,159<br>1,145<br>1.14% 1.17% 1.17%<br>1.09%<br>1.01%<br>0.73%<br>0.65%<br>0.59%<br>0.52%<br>0.45%<br>0.40%<br>0.31% 0.28%<br>0.33%<br>0.59%<br>1.02%<br>0.00%<br>0.25%<br>0.50%<br>0.75%<br>1.00%<br>1.25%<br>1.50%<br> 800<br> 900<br> 1,000<br> 1,100<br> 1,200<br>1Q '19 2Q 3Q 4Q 1Q '20 2Q 3Q 4Q 1Q '21 2Q 3Q 4Q 1Q '22 2Q 3Q 4Q<br>Average Deposits Total Deposit Cost<br>13 |
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| ($1,000)<br>$0<br>$1,000<br>$2,000<br>$3,000<br>2018 2019 2020 2021 2022<br>-$600<br>$800<br>$2,375<br>$1,100<br>$50<br>$943<br>$192 $309<br>$47<br>$1,705<br>Loan Loss Provision Net Charge Offs<br>Loan Loss Provision vs. Net Charge Offs<br>(Thousands)<br>14 |
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| Non-Performing Assets<br>(Thousands)<br>$0<br>$2,000<br>$4,000<br>$6,000<br>2018 2019 2020 2021 2022<br>$1,378<br>$2,339<br>$3,331 $3,323<br>$5,200<br>15 |
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| Non-Interest Revenue<br>(excluding security sale gains/losses)<br>(thousands)<br>$12,000<br>$14,000<br>$16,000<br>$18,000<br>2018 2019 2020 2021 2022<br>$14,507<br>$15,155<br>$16,275<br>$17,677<br>$16,692<br>16 |
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| Total Wealth Management Fee Income<br>(thousands)<br>$6,500<br>$8,500<br>$10,500<br>$12,500<br>2018 2019 2020 2021 2022<br>$9,659 $9,730<br>$10,212<br>$11,986<br>$11,619<br>17 |
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| Non-Interest Expense<br>(thousands)<br>$30,000<br>$35,000<br>$40,000<br>$45,000<br>$50,000<br>2018 2019 2020 2021 2022<br>$40,936<br>$41,815<br>$44,455<br>$46,970<br>$48,004<br>18 |
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| Tangible Book Value<br>$3.75<br>$4.25<br>$4.75<br>$5.25<br>$5.75<br>$6.25<br>2018 2019 2020 2021 2022<br>$4.88<br>$5.08<br>$5.42<br>$6.02<br>$5.28<br>19 |
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| Securities Valuation Allowance<br>(thousands)<br>3,341<br>4,302 4,445 4,481<br>2,972<br>3,625 3,035<br>1,755<br>(5,663)<br>(11,096)<br>-20,000 (19,159) (18,909)<br>-15,000<br>-10,000<br>-5,000<br>0<br>5,000<br>Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22<br>With 2022 dramatic increases in interest rates,<br>the market value of the AFS securities portfolio<br>declined significantly.<br>20 |
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| 2020 2021 2022<br>Normal Pension Expense 2,169 1,015 18<br>Settlement Charge - 1,736 2,498<br>Total Pension Expense 2,169 2,751 2,516<br>AmeriServ Financial, Inc.<br>Pension Expense<br>21 |
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| Non-Interest Expense<br>Excluding Pension Settlement Charge<br>(thousands)<br>$30,000<br>$35,000<br>$40,000<br>$45,000<br>$50,000<br>2018 2019 2020 2021 2022<br>$40,936<br>$41,815<br>$44,455<br>$45,234 $45,506<br>22 |
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| Earnings Per Common Share<br>Excluding Pension Settlement Charge (1)(2)<br>$0.00<br>$0.15<br>$0.30<br>$0.45<br>$0.60<br>2018 2019 2020 2021 2022<br>$0.43<br>$0.35<br>$0.27<br>$0.50<br>$0.55<br>(1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.<br>(2) Adjusted for pension settlement charge.<br>23 |
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| 2022 Summary<br>• The higher national interest rates resulted in an improved net<br>interest margin performance as total interest income<br>increased to a higher degree than the increase in total<br>interest expense.<br>• Effective asset quality management resulted in a significant<br>reduction to the loan loss provision, as the Company<br>continued to demonstrate strong asset quality with low levels<br>of non-performing assets and net charge-offs.<br>• Non-interest income was challenged by unfavorable market<br>impact on Wealth Management fees and the significantly<br>reduced level of residential mortgage production because<br>of the rapidly escalating national interest rates.<br>24 |
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| 2022 Summary<br>• Non-interest expense was well-controlled despite the<br>recognition of pension settlement charges throughout the<br>year.<br>• Overall, our improved earnings performance in 2022 reflects<br>the full year benefit of several important strategic actions<br>that management executed in 2021 to reduce our cost of<br>funding, the successful management of our asset quality,<br>and effective balance sheet management.<br>25 |
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| 26<br>Jeffrey A. Stopko<br>President / CEO |
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| ASRV Branches<br>Loan Production Offices<br>Overview of AmeriServ Financial Inc.<br>Branch Map Overview<br>▪ $1.3 Billion Community Bank<br>Headquartered in Johnstown, PA<br>▪ 17 Retail Branches<br>▪ 2 Loan Production Offices<br>▪ Sizable Wealth Management<br>Company with $2.4 Billion Assets<br>Under Administration<br>▪ Stable deposit base in core markets with 20%<br>deposit market share in Cambria County<br>▪ Commercial Loan Portfolio well diversified in<br>nearby faster growing markets<br>Financial Highlights as of 03/31/2023<br>($ Millions except per share data)<br>Total Assets $1346.2<br>Total Loans $ 980.9<br>Total Deposits $1131.7<br>Shareholders Equity $ 105.9<br>2022 Net Income $ 7.4<br>2022 Earnings Per Share $ 0.43<br>Tangible Book Value/Share $ 5.38<br>NASDAQ Ticker Symbol ASRV<br>Market Cap $ 52.3 |
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| 28<br>$0<br>$500<br>$1,000<br>$1,500<br>$2,000<br>$2,500<br>1Q '21 2Q 3Q 4Q 1Q '22 2Q 3Q 4Q 1Q '23<br>2,081<br>1,708<br>1,431<br>1,851<br>2,418<br>1,981<br>2,102<br>947<br>1,515<br>Net Income<br>(Thousands) |
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| 29<br>$0.00<br>$0.05<br>$0.10<br>$0.15<br>1Q '21 2Q 3Q 4Q 1Q '22 2Q 3Q 4Q 1Q '23<br>$0.12<br>$0.10<br>$0.08<br>$0.11<br>$0.14<br>$0.12<br>$0.12<br>$0.06<br>$0.09<br>Earnings per Share |
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| 30<br>Key Constituents We Manage For<br>• Shareholders<br>• Customers<br>• Employees<br>• Community<br>AmeriServ Strategic Plan |
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| 31<br>Create long-term value for our shareholders by:<br>• Maintaining financially strong balance sheet<br>• Appropriately managing risk<br>• Consistently improving shareholder returns<br>AmeriServ Strategic Plan |
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| 32<br>Financially Strong Balance Sheet<br>Demand Deposits<br>$194.8<br>Savings, NOW &<br>Money Market,<br>$638.9<br>Certificates of<br>Deposit<br>$279.2<br>Jumbo Certificates<br>of Deposit $18.9<br>$1.132 Billion<br>17%<br>2%<br>25%<br>56%<br>Deposit Composition ($mm)<br>As of March 31, 2023 |
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| 33<br>Financially Strong Balance Sheet<br>Insured<br>Deposits<br>Under<br>$250,000<br>Public Funds<br>that are<br>Collateralized<br>Uninsured<br>Deposits<br>19%<br>11%<br>70%<br>Analysis of Insured Deposits<br>As of March 31, 2023 |
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| 34<br>Financially Strong Balance Sheet<br>Loan Portfolio Composition ($mm)<br>As of March 31, 2023<br>Residential<br>Mortgage<br>$175.9<br>Home Equity<br>& Consumer<br>$99.8<br>Commercial<br>& Industrial<br>$151.3<br>Commercial<br>Real Estate<br>$553.9<br>$980.9 Million<br>72% Commercial / 28% Retail<br>Non-Owner Occupied CRE / Total Capital Ratio: 340% |
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| 35<br>Financially Strong Balance Sheet<br>Commercial Loan Portfolio Diversification ($mm)<br>As of March 31, 2023<br>$234.1<br>33%<br>$268.6<br>38%<br>$103.4<br>15%<br>$99.1<br>14%<br>Johnstown Pittsburgh Hagerstown State College/Altoona<br>Loan Total = $705.2 Million |
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| 36<br>Interest Rate Risk<br>• Proactive steps taken to address net interest margin<br>compression.<br>• Executed $60 million of interest rate hedges in 2023 to bring the<br>Company’s interest rate risk position to neutral.<br>• Prudently extending FHLB borrowings to take advantage of the<br>inverted yield curve.<br>• Limiting new security purchases to replacing maturing securities<br>cash flow for pledging purposes.<br>Diligent Focus on Risk Management |
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| 37<br>Liquidity Risk<br>• Stable diverse core deposit base generated in our local<br>communities.<br>• Do not use brokered deposits as a funding source.<br>• Bank has experienced deposit growth in 2023.<br>• Available unused borrowing capacity in excess of $300 million<br>at the FHLB which sharply exceeds our level of uninsured<br>deposits.<br>Diligent Focus on Risk Management |
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| 38<br>Credit Risk<br>• Long term history of disciplined underwriting and low net loan<br>charge-offs.<br>• Adopted CECL in the first quarter of 2023.<br>• Non-performing assets well controlled and amounted to $4.6 million<br>or 0.47% of total loans on March 31, 2023.<br>• Have historically maintained solid loan loss reserves which provided<br>264% coverage of non-performing assets and 1.24% of total loans on<br>March 31, 2023.<br>Diligent Focus on Risk Management |
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| 39<br>• Generate positive operating leverage by growing<br>revenues at a faster pace than expenses.<br>• Continue our diligent focus on capital allocation.<br>• Further leverage union related revenue streams.<br>Strategic Outlook for 2023 |
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| 40<br>Revenue Diversification Promotes<br>Positive Operating Leverage<br>Non-Interest<br>Income<br>28%<br>Net Interest<br>Income 72%<br>ASRV generates more revenue from non-interest income than our<br>peers due to our strong wealth management company. |
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| 41<br>• Profitable Company with good financial contribution to ASRV.<br>• Good Diversification of business lines within Wealth<br>Management:<br>• Retirement Services, Personal Trust, Investment<br>Management, ERECT Fund & Diversified Services.<br>• Scalable business model well positioned for further growth.<br>Revenue Diversification Promotes<br>Positive Operating Leverage<br>Wealth Management |
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| 42<br>Wealth Management Revenue<br>$2,872<br>$3,023<br>$3,136<br>$2,955<br>$3,165<br>$2,976<br>$2,813<br>$2,665 $2,736<br>$1,000<br>$1,500<br>$2,000<br>$2,500<br>$3,000<br>$3,500<br>1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023 |
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| 43<br>• Wealth Management Company is trustee for the $250 million ERECT FUND.<br>• ASRV Bank is a preferred mortgage and consumer loan provider for the<br>Pennsylvania State Education Association.<br>• Expands our reach on these products to customers throughout<br>Pennsylvania.<br>• Since inception we have originated $151 million of mortgage loans and<br>$61 million of consumer loans.<br>• Commercial banking has financed several training centers for the building<br>trades.<br>• ASRV Bank has meaningful deposit relationships with several unions.<br>Leverage Union Relationships to<br>Generate Revenue |
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| 44<br>• Return capital to shareholders through dividends, share<br>repurchases, or both if feasible.<br>• Focus on growing EPS, book value and tangible book value per<br>share.<br>• Capital return strategies are always subject to maintaining<br>sufficient capital to support balance sheet growth.<br>• We conservatively built our regulatory capital ratios since the<br>pandemic.<br>Capital Allocation Strategies |
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| 45<br>10.52% 10.52%<br>14.17%<br>8.46%<br>11.52% 11.52%<br>12.73%<br>9.33%<br>0.00%<br>3.00%<br>6.00%<br>9.00%<br>12.00%<br>15.00%<br>Common Equity Tier 1<br>Capital Ratio<br>Tier 1 Capital Ratio Total Capital Ratio Tier 1 Leverage Ratio<br>Consolidated Bank<br>Regulatory Well Capitalized Requirement<br>Regulatory Capital Ratios<br>As of March 31, 2023 |
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| 46<br>Capital Returns to Shareholders |
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| 47<br>• As a result of the Company’s improved earnings power, common stock<br>dividend payments to shareholders increased by 15% in 2022.<br>• These dividends provide shareholders with an ongoing cash return and a<br>competitive dividend yield of 4.2% based upon the current stock price.<br>• Our common dividend payment was a reasonable 26.7% of 2022 net<br>income.<br>• This continues our longer-term pattern of responsible dividend increases<br>which correlate well with the Company’s improved earnings.<br>Capital Allocation – Common Stock<br>Dividends |
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| 48<br>$0.01<br>$0.015<br>$0.020<br>$0.025<br>$0.030<br>$0.00<br>$0.01<br>$0.02<br>$0.03<br>1Q '14 1Q '15 1Q '16 1Q '17 1Q '18 1Q '19 1Q '20 1Q '21 1Q '22 1Q '23<br>Common Dividend per Share |
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| 49<br>• The Board of Directors understands the value of returning capital to<br>shareholders through common stock buybacks.<br>• Our longer-term capital allocation decisions reflect the consistent use of<br>common stock buybacks to improve tangible book value and earnings per share.<br>• There is currently no common stock buyback program in place due to economic<br>uncertainty, market volatility, and a decline in our tangible common equity ratio<br>to 6.92% as a result of the decline in value of our AFS securities portfolio.<br>• The Board of Directors plan to revisit this capital allocation strategy later in<br>2023.<br>Capital Allocation –<br>Common Stock Buybacks |
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| 50<br>• We generated positive total shareholder returns of 5% for the 2022 year<br>which compared favorably to most bank stock indexes which produced<br>negative total shareholder returns for 2022.<br>• So far in 2023 our common stock price has declined by 27% which is<br>comparable with the bank indexes we are in as the banking sector has<br>experienced extreme pressure this year.<br>• At the current price of $2.85, ASRV stock trades at attractive multiples of<br>7.3 times trailing 12-month earnings and 53% of tangible book value.<br>Capital Allocation – ASRV Stock Price |
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