Ameriserv Financial Inc. · NASDAQ:ASRV
Ameriserv Financial — Shareholder Meeting (April 2018)
83 slides from Ameriserv Financial's shareholder meeting presentation, Apr 30, 2018
Slide 1: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. AMERISERV FINANCIAL,ING.
Slide 2: 2018 Annual Shareholders' Meeting
2 2018 Annual Shareholders' Meeting
Slide 3: Kerri Mueller, Senior Vice President – Retail Banking
Kerri Mueller Senior Vice President – Retail Banking 3
Slide 4: Meeting webcast notice
4 This meeting is being transmitted in its entirety beyond this room via webcast to all interested shareholders and prospective investors.
Slide 5: Craig G. Ford, Chairman
Craig G. Ford Chairman AmeriServ Financial, Inc. 5
Slide 6: Welcome to our Annual Shareholder Meeting
Welcome to our Annual Shareholder Meeting. We appreciate your ongoing loyalty and support. Welcome! 6
Slide 7: Agenda
Agenda • Proxy Items • Comments by Chairman of the Board • Chief Financial Officer Presentation • President & CEO Comments • Final Report on Proxy Items • Question & Answer Period 7
Slide 8: Election of Class II Directors
Election of Class II Directors J. Michael Adams, Jr. Margaret A. O’Malley Mark E. Pasquerilla 8
Slide 9: Honored Guests
Honored Guests • Elected Officials • Labor Officials • Distinguished Guests 9 • Past Directors • Present Directors • AmeriServ Employees • Our Shareholders
Slide 10: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. AMERISERV FINANCIAL,ING.
Slide 11: A Community Financial Institution: A Different Kind of Community Bank
11 A Community Financial Institution A Different Kind of Community Bank AmeriServ Financial, Inc.
Slide 12: How is AmeriServ different?
12 How is AmeriServ different?
Slide 13: Provider of loans to small and medium-sized businesses
• Provider of loans to small - and - medium - sized businesses • Five consecutive years lending 90% of deposits to regional businesses and consumers • 10% more than other financial institutions of similar size 13
Slide 14: High-tech business services
• Provides high - tech business services • Business owners have flexibility to create business opportunities rather than be tied to their office 14
Slide 15: AmeriServ Financial Banking Center
• AmeriServ Financial Banking Center – One - stop shop for banking – N ew center staffed by trained professionals able to handle routine banking transactions, along with all types of lending, home mortgages, wealth management and financial problem solving 15
Slide 16: Customer-defined convenience
• AmeriServ allows the customer to define convenience • If a Financial Banking Center is not their idea of convenience, they may use mobile tools to access their financial institution – day or night 16
Slide 17: AmeriServ Lender of Choice
AmeriServ Lender of Choice • Designated mortgage lender of choice for Pennsylvania State Education Association (PSEA) • AmeriServ is placing families in homes both locally and across the state • AmeriServ is Banking for Life 17
Slide 18: AmeriServ Trust & Wealth Management
AmeriServ Trust & Wealth Management • W holly - owned subsidiary of AmeriServ Financial, Inc. • Grown from $294 million in 1994 to $2.1 billion today • Operates six business lines • Prominent in retirement services and financial planning • Manages wealth and provides investment counseling • Diversif
Slide 19: Trust Specialty Real Estate
Trust Specialty Real Estate • Builds and rehabilitates properties using union labor • Provides profits for union pension plan sponsors • Over $100 million in projects in progress 19
Slide 20: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. AMERISERV FINANCIAL,ING.
Slide 21: A New Message
A New Message • Redefined processes to meet convenience of our customers • A leading lender, a leader in business services, investment counseling and advice, and a leader in leveraging the returns of pension funds for hardworking Americans 21
Slide 22: Building an enterprise of value, headquartered in Johnstown
22 Building an enterprise of value, headquartered in Johnstown, Pennsylvania, and operating significantly and visibly throughout the region. AmeriServ is -
Slide 23: The heart and soul of Banking for Life
23 The heart and soul of Banking for Life. AmeriServ is -
Slide 24: Michael D. Lynch, CFO, CIO, CRO
Michael D. Lynch Senior Vice President Chief Financial Officer Chief Investment Officer Chief Risk Officer 24
Slide 25: Annual Financial Results Through 2017
Annual Financial Results Through 2017 25
Slide 26: Net Income
Net Income (Thousands) $8,000 5,997 $6,000 $4,000 - - - 3,023 2,310 $2,000 O so 2012 2013 2014 2015 2016 2017 BANKING FOR LIFE.
Slide 27: Net Income (excluding one time additional tax expense)
Net Income (excluding one time additional tax expense) (Thousands) 27
Slide 28: Net Interest Income
Net Interest Income (Thousands) 28
Slide 29: Net Interest Margin
Net Interest Margin 3.65% 3.56% 3.52% 3.49% HET 2012 2013 2014 2015 2016 2017 BANKING FOR LIFE.
Slide 30: Total Average Securities
Total Average Securities (Millions) 30
Slide 31: Total Average Loans
Total Average Loans (Millions) 31
Slide 32: Total Average Deposits
Total Average Deposits (Millions) 32
Slide 33: Non-Interest Revenue
Non - Interest Revenue (Thousands) 33
Slide 34: Non-Interest Expense
Non - Interest Expense (Thousands) 34
Slide 35: Loan Loss Provision
Loan Loss Provision (Thousands) 35
Slide 36: Non-Performing Assets
Non - Performing Assets (Thousands) 36
Slide 37: Tangible Book Value Per Common Share
Tangible Book Value Per Common Share 37
Slide 38: Earnings Per Share
Earnings Per Share $0.35 $0.30 $0.25 $0.20 - $0.15 $0.10 $0.05 $0.00 2012 2013 2014 2015 2016 2017 BANKING FOR LIFE.
Slide 39: Earnings Per Share (excluding one time additional income tax expense)
Earnings Per Share (excluding one time additional income tax expense) 39
Slide 40: Financial Results Through 1st Quarter 2018
Financial Results Through 1 st Quarter 2018 40
Slide 41: Net Income
Net Income (Thousands) $2,000 4,767 $1,500 $1,000 $500 $0 ($500) ($1,000) (996) ($1,500) 2.267) 1016 2016 3Q16 4Q16 1017 2017 3Q17 4Q17 1018 BANKING FOR LIFE.
Slide 42: Earnings Per Share
Earnings Per Share $0.10 £0.10 $0.07 $0.07 $0.06 $0.06 $0.05 $0.00 ($0.05) 0.07, ($0.10) banal 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1018 BANKING FOR LIFE.
Slide 43: Net Interest Income
Net Interest Income (Thousands) 43
Slide 44: Net Interest Margin %
Net Interest Margin % 3.27% 3.27% 3.28% 331% 3.29% 2.50% 2.00% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1018 BANKING FOR LIFE.
Slide 45: Average Loans
Average Loans (Millions) $500 1Q16 2016 3Q16 4Q16 1017 2017 3Q17 4Q17 1Q18 BANKING FOR LIFE.
Slide 46: Average Deposits
Average Deposits (Millions) 46
Slide 47: Loans to Deposits %
Loans to Deposits % 100% 95.45% 96-10% 92.66% 91.26% oe 90% — | 89.70% | 91.21% 92.58% 91.30% 91.63% 91.05% Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Deci7 Maris BANKING FOR LIFE.
Slide 48: Non-Interest Income
Non - Interest Income (Thousands) 48
Slide 49: Non-Interest Expense
Non - Interest Expense (Thousands) 49
Slide 50: Loan Loss Provision
Loan Loss Provision (Thousands) 50
Slide 51: Loan Loss Provision vs. Net Charge Offs
Loan Loss Provision vs. Net Charge Offs (Thousands) 51
Slide 52: Allowance for Loan Loss vs. Non-Performing Assets
Allowance for Loan Loss vs. Non - Performing Assets (Thousands) 52
Slide 53: Regulatory Capital Ratios As of March 31, 2018
Regulatory Capital Ratios As of March 31, 2018 53
Slide 54: 2018 First Quarter Summary
2018 First Quarter Summary 54 • In 2017 our goal was to re - establish the financial performance level that we reported to you in 2015. We met this goal and established positive performance momentum that carried forward into the first quarter of 2018 . • We did indeed recognize improved earnings in
Slide 55: Jeffrey A. Stopko, President & Chief Executive Officer
Jeffrey A. Stopko President & Chief Executive Officer AmeriServ Financial, Inc. 55
Slide 56: Strategic Plan 2017-2019
AmeriServ Financial, Inc. Strategic Plan 2017 - 2019 • Built around Banking for Life philosophy • Focuses on four key constituencies – Shareholders – Customers – Staff – Communities 56
Slide 57: Strategic Plan: Create long-term value for shareholders
AmeriServ Strategic Plan 57 Create long - term value for our shareholders by: – Maintaining financially strong balance sheet – Appropriately managing risk – Consistently improving shareholder returns
Slide 58: Strategic Plan: Shareholder value creation
AmeriServ Strategic Plan Shareholder value creation focuses on: – Increasing Earnings Per Share (EPS) – Providing Strong Capital Returns to Shareholders 58
Slide 59: Strategic Plan: Increasing Earnings Per Share
AmeriServ Strategic Plan 59 Increasing Earnings Per Share (EPS) – Striving to grow EPS by at least 10% annually – Improve profitability metrics – Narrow financial performance gap – Careful balance sheet and income statement management
Slide 60: 2017 Key Strategic Financial Accomplishments
AmeriServ Financial 2017 60 Key Strategic Financial Accomplishments – Achieved 10% EPS annual growth goal with reported EPS increasing 50% and adjusted EPS excluding tax charge increasing 167% – Achieved positive operating leverage as total revenue grew while total non - interest expense declined –
Slide 61: Strategic Plan: Strong Capital Returns to Shareholders
AmeriServ Strategic Plan Strong Capital Returns to Shareholders – Strategic plan goal – Return 75% of earnings to shareholders through a combination of dividends and share repurchases – Subject to maintaining sufficient capital to support balance sheet growth 61
Slide 62: 2017 Capital Returns
2017 Capital Returns 62 2017 Net Income (excluding tax charge) $5,917,000 Common Stock Repurchase Program $3,405,000 Common Stock Dividend Payments $1,113,000 Total Capital Returned to Shareholders $4,518,000 % of Earnings Returned to Shareholders 76.4%
Slide 63: 2017 Key Strategic Customer Accomplishments
AmeriServ Financial 2017 63 Key Strategic Customer Accomplishments – Introduced AmeriServ Financial Banking Center concept at University Heights and North Atherton Locations – Provides customers with a comprehensive offering of financial solutions including retail and business banking, home mortgage
Slide 64: 2017 Key Strategic Technology Accomplishments
AmeriServ Financial 2017 64 Key Strategic Technology Accomplishments – C ost effectively leverage technology with core systems vendor contract extension – New contract enables us to install several platform enhancements including: Consumer eBanking (with mobile), Business eBanking (with new mobile f
Slide 65: 2017 Key Strategic Technology Accomplishments (continued)
AmeriServ Financial 2017 65 Key Strategic Technology Accomplishments – T echnology platform conversions are ongoing and will continue over next two years – Cost effective contract extension will save Company approximately $600,000 in vendor - related costs over contract term – Developed and launched
Slide 66: 2017 Key Strategic Employee Accomplishments
AmeriServ Financial 2017 66 Key Strategic Employee Accomplishments – N ew 4 - year labor contract with United Steelworkers of America – Key financial terms – • A nnual wage increases of 3 % • T ransition of union employees to new exclusive health care provider plan insures better control of future h
Slide 67: 2017 Key Strategic Wealth Management Accomplishments
AmeriServ Financial 2017 67 Key Strategic Wealth Management Accomplishments – Developed new strategic plan – Focuses on revenue expansion of business lines – Continue to invest in talent within wealth management business – Important strategically for AmeriServ Financial since non - interest income r
Slide 68: 2018 Outlook: Key Strategic Initiatives
AmeriServ Financial 2018 68 Outlook 2018 – Key Strategic Initiatives – Continue to execute strategic plan and further improve earnings – Bring as much income tax savings from corporate tax reform to bottom line so we can accrete capital faster and further close financial performance gap to peer – Ma
Slide 69: 2018 Outlook: Grow Maryland presence
AmeriServ Financial 2018 69 Outlook 2018 – Key Strategic Initiatives – Further grow Maryland presence by consolidating successful Hagerstown Loan Production Office into new full - service AmeriServ Financial Banking Center in Hagerstown, Maryland.
Slide 70: Hagerstown, Maryland Loan Production Office Commercial Loans Outstanding
Hagerstown, Maryland Loan Production Office Commercial Loans Outstanding (Thousands) 70
Slide 71: 2018 Outlook: Leverage union-related revenue streams
AmeriServ Financial 2018 71 Outlook 2018 – Key Strategic Initiatives – Further leverage union - related revenue streams through expansion of affinity group mortgage and consumer loan programs
Slide 72: PSEA Mortgage & Consumer Loan Production Since Inception
Pennsylvania State Education Association (PSEA) Mortgage & Consumer Loan Production Since Inception (Thousands) 72
Slide 73: 2018 Outlook: Increase deposits
AmeriServ Financial 2018 73 Outlook 2018 – Key Strategic Initiatives – Increase deposits by taking advantage of larger competitor branch dislocations in rural markets – Good opportunity with closure of $26 million competitor branch in New Florence, PA which is near ASRV Seward, PA office
Slide 74: 2018 Outlook: Increase common stock price
AmeriServ Financial 2018 74 Outlook 2018 – Key Strategic Initiatives – Increase common stock price through improved earnings and active capital returns to shareholders while ensuring we maintain sufficient capital to support balance sheet growth
Slide 75: 2018 Outlook: Strong Capital Returns to Shareholders
AmeriServ Strategic Plan 75 Outlook 2018 – Strong Capital Returns to Shareholders – April 2018: Increased quarterly common stock cash dividend by ½ cent or 33% to $0.02 per share – 1 st Quarter 2018: Completed most recently authorized common stock buyback program by repurchasing 106,000 shares at a
Slide 76: 2018 Outlook: Completed buyback program
AmeriServ Strategic Plan 76 Outlook 2018 – Strong Capital Returns to Shareholders – Completed buyback program in 14 months; repurchased 945,000 shares at a total cost of $3.8 million or average price of $4.07 per share – A ccretive use of capital given all shares were repurchased at a price below ta
Slide 77: 2018 Outlook: Commitment to capital returns
AmeriServ Strategic Plan 77 Outlook 2018 – Strong Capital Returns to Shareholders – P erformance in 2017 and to date in 2018 demonstrates commitment to providing strong capital returns to shareholders – With the completion of the buyback program and announced increase in the cash dividend, ASRV Boar
Slide 78: 2018 Outlook: Current stock price and multiples
AmeriServ Strategic Plan 78 Outlook 2018 – Strong Capital Returns to Shareholders – Current stock price $ 4.10; representing $0.15 or 4% increase from the 2017 Annual Meeting – Stock continues to trade at attractive multiples 10.3 times annualized 1Q earnings and 88% of tangible book value
Slide 79: James Huerth, President, AmeriServ Trust & Financial Services
James Huerth President AmeriServ Trust & Financial Services Company 79
Slide 80: Mike Baylor, EVP, Chief Commercial Banking Officer
Mike Baylor Executive Vice President Chief Commercial Banking Officer 80
Slide 81: Report On Election
Report On Election En FOR_LIEE
Slide 82: Question & Answer Period
Question & Answer Period ar FOD Li>
Slide 83: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. AMERISERV FINANCIAL,ING.
Ameriserv Financial — Shareholder Meeting (April 2018) on 6ix