Ameriserv Financial Inc. · NASDAQ:ASRV
Ameriserv Financial — Shareholder Meeting (April 2020)
65 slides from Ameriserv Financial's shareholder meeting presentation, Apr 29, 2020
Slide 1: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. AMERISERV FINANCIAL,INGC.
Slide 2: 2020 Annual Shareholders' Meeting
2020 Annual Shareholders' Meeting 2
Slide 3: Allan R. Dennison, Chairman
Allan R. Dennison Chairman AmeriServ Financial, Inc. 3
Slide 4: Meeting transmitted via webcast
4 This meeting is being transmitted in its entirety via webcast to all interested shareholders and prospective investors.
Slide 5: Welcome to our Annual Shareholder Meeting
Welcome to our Annual Shareholder Meeting. We appreciate your ongoing loyalty and support. Welcome! 5
Slide 6: Agenda
Agenda • Proxy Items • Chief Financial Officer Presentation • President & CEO Comments • Final Report on Proxy Items • Question & Answer Period 6
Slide 7: Voting Procedures
Voting Procedures VOTE BY EMAIL - bgilchrist@wesselcpa.com You have the option to vote or change your vote during the meeting. Use the email address shown here to transmit your voting instructions and for electronic delivery of information. Have your proxy card in hand when you access the email addr
Slide 8: Election of Class I Directors
Election of Class I Directors Allan R. Dennison Sara A. Sargent 8
Slide 9: Ratification of Appointment of S.R. Snodgrass
Ratification of Appointment of S.R. Snodgrass - Audit financial records for fiscal year ending 12 - 31 - 20 9
Slide 10: Advisory Vote on Compensation of Named Executive Officers
Advisory (Non - Binding) Vote – Compensation of Named Executive Officers of AmeriServ Financial, Inc. 10
Slide 11: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. AMERISERV FINANCIAL,INGC.
Slide 12: Michael D. Lynch, Chief Financial Officer
Michael D. Lynch Senior Vice President Chief Financial Officer Chief Investment Officer Chief Risk Officer 12
Slide 13: Forward-Looking Statements
Forward - Looking Statements 13 This presentation contains various forward - looking statements and includes assumptions concerning the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates, intentions, operations, future results, and prospects, including statements tha
Slide 14: Annual Financial Results Through 2019
Annual Financial Results Through 2019 14
Slide 15: Net Income
Net Income (thousands) $0 $2,000 $4,000 $6,000 $8,000 2015 2016 2017 2018 2019 $5,997 $2,310 $3,293 $7,768 $6,028 15 15
Slide 16: Earnings Per Common Share
$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 2015 2016 2017 2018 2019 $0.31 $0.12 $0.18 $0.43 $0.35 Earnings Per Common Share 16 16
Slide 17: Tangible Book Value
Tangible Book Value $3.50 $4.00 $4.50 $5.00 $5.50 2015 2016 2017 2018 2019 $4.56 $4.41 $4.59 $4.88 $5.08 17 17
Slide 18: Net Interest Income
Net - Interest Income (thousands) $20,000 $30,000 $40,000 2015 2016 2017 2018 2019 $35,360 $34,134 $35,561 $35,494 $35,442 18 18
Slide 19: Net Interest Margin
Net Interest Margin % 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 2015 2016 2017 2018 2019 3.49% 3.26% 3.32% 3.31% 3.29% 19 19
Slide 20: Total Average Securities
Total Average Securities (Millions) $0 $50 $100 $150 $200 $250 2015 2016 2017 2018 2019 $145 $147 $173 $185 $194 20 20
Slide 21: Total Average Loans
Total Average Loans (Millions) $500 $600 $700 $800 $900 2015 2016 2017 2018 2019 $857 $888 $894 $882 $875 21 21
Slide 22: Total Average Deposits
Total Average Deposits (Millions) $500 $600 $700 $800 $900 $1,000 2015 2016 2017 2018 2019 $893 $956 $976 $960 $980 22 22
Slide 23: Loan Loss Provision
Loan Loss Provision (thousands) ($1,000) $0 $1,000 $2,000 $3,000 $4,000 2015 2016 2017 2018 2019 $1,250 $3,950 $800 ($600) $800 23 23
Slide 24: Loan Loss Provision to Net Charge-Offs
-$1,000 $0 $1,000 $2,000 $3,000 $4,000 2015 2016 2017 2018 2019 $1,250 $3,950 $800 ($600) $800 $952 $3,939 $518 $943 $192 Loan Loss Provision to Net Charge - Offs (thousands) 24 24
Slide 25: Non-Performing Assets
Non - Performing Assets (Thousands) 25 $0 $2,000 $4,000 $6,000 $8,000 2015 2016 2017 2018 2019 $6,297 $1,624 $3,034 $1,378 $2,339 25
Slide 26: Non-Interest Revenue
$10,000 $12,000 $14,000 $16,000 2015 2016 2017 2018 2019 $15,196 $14,461 $14,531 $14,507 $15,155 Non - Interest Revenue (excluding security sale gains/losses) (thousands) 26 26
Slide 27: Wealth Management Revenue
0 2,500 5,000 7,500 10,000 2015 2016 2017 2018 2019 8,682 8,747 9,170 9,660 9,730 Wealth Management Revenue (Thousands) 27 27
Slide 28: Securities Gains / Losses
Securities Gains / Losses (Thousands) -$500 -$300 -$100 $100 $300 2015 2016 2017 2018 2019 $71 $177 $115 ($283) ($382) 28 28
Slide 29: Non-Interest Expense
Non - Interest Expense (thousands) $30,000 $35,000 $40,000 $45,000 2015 2016 2017 2018 2019 $41,038 $41,615 $40,767 $40,936 $41,814 29 29
Slide 30: Regulatory Capital Ratios
10.47% 11.68% 13.49% 9.87% 11.17% 11.17% 12.23% 9.50% 0.00% 3.00% 6.00% 9.00% 12.00% 15.00% Common Equity Tier 1 Capital Ratio Tier 1 Capital Ratio Total Capital Ratio Tier 1 Leverage Ratio Consolidated Bank Regulatory Well Capitalized Requirement Regulatory Capital Ratios As of December 31, 2019 30
Slide 31: 2019 Summary
31 2019 Summary • Our earnings decline in 2019 was primarily the result of to two significant unfavorable events. • However, we continue to be encouraged by the success of our business model as demonstrated by strong loan production and total average deposits reaching a historical level. • Our net i
Slide 32: 2019 Summary
32 2019 Summary • The improv em ent in non - interest revenue offset a significant portion of the increase to non - interest expense which was necessary to make prudent investments in the franchise that positions us well in the rapidly changing financial services industry.
Slide 33: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. AMERISERV FINANCIAL,INGC.
Slide 34: Jeffrey A. Stopko, President & CEO
Jeffrey A. Stopko President & Chief Executive Officer AmeriServ Financial, Inc. 34
Slide 35: Overview of AmeriServ Financial Inc.
ASRV Branches Loan Production Offices Overview of AmeriServ Financial Inc. Branch Map Overview • $1.2 Billion Community Bank Headquartered in Johnstown, PA • 16 Retail Branches • 2 Loan Production Offices • Sizable Wealth Management Company with $2 Billion Assets Under Administration • Stable deposi
Slide 36: Net Income (Quarterly)
36 Net Income (Thousands) $0 $500 $1,000 $1,500 $2,000 $2,500 1Q '18 2Q 3Q 4Q 1Q '19 2Q 3Q 4Q 1Q '20 1,767 1,744 2,329 1,927 1,878 1,792 1,689 669 1,409
Slide 37: Earnings Per Share (Quarterly)
37 Earnings Per Share $0.00 $0.05 $0.10 $0.15 1Q '18 2Q 3Q 4Q 1Q '19 2Q 3Q 4Q 1Q '20 $0.10 $0.10 $0.13 $0.11 $0.11 $0.10 $0.10 $0.04 $0.08
Slide 38: AmeriServ Strategic Plan
AmeriServ Strategic Plan 38 Create long - term value for our shareholders by: – Maintaining financially strong balance sheet – Appropriately managing risk – Consistently improving shareholder returns
Slide 39: Financially Strong Balance Sheet: Deposit Composition
39 Financially Strong Balance Sheet Deposit Composition ($mm) As of March 31, 2020 Demand Deposits $145.6 Savings, NOW & Money Market , $500.5 Certificates of Deposit $272.8 Jumbo Certificates of Deposit $38.7 $957.6 Million 15% 4% 28% 52%
Slide 40: Financially Strong Balance Sheet: COVID Liquidity Position
Financially Strong Balance Sheet COVID - 19 Update Liquidity Position • As demonstrated on the previous chart, our loyal and stable core deposit base is a strong source of liquidity for AmeriServ. • AmeriServ deposits are currently at record levels as our customers have deposited funds received from
Slide 41: Loan Portfolio Composition
41 Financially Strong Balance Sheet Loan Portfolio Composition ($mm) As of March 31, 2020 Residential Mortgage $130.6 Home Equity & Consumer $100.7 Commercial & Industrial $167.0 Commercial Real Estate $479.1 $877.4 Million 74% Commercial / 26% Retail Non - Owner Occupied CRE / Total Capital Ratio:
Slide 42: Commercial Loan Portfolio Diversification
Financially Strong Balance Sheet 42 Commercial Loan Portfolio Diversification ($mm) As of March 31, 2020
Slide 43: Loan Portfolio COVID Update
Loan Portfolio Composition COVID 19 Update (dollars in thousands) 43 3/31/2020 Balance Requested Payment Relief % Requesting Relief CRE / Commercial $ 646,100 $ 182,470 28.2% Home Equity / Consumer $ 100,700 $ 3,967 3.9% Residential Mortgage $ 130,600 $ 4,033 3.1% Total $ 877,400 $ 190,470 21.7%
Slide 44: COVID Update: Type of Payment Relief
Loan Portfolio Composition COVID 19 Update Type of Payment Relief (dollars in thousands) 44 Number of Loans Dollar Value of Loans Interest Only Payments 3 to 6 Months 80 $ 92,778 Complete Payment Deferrals 3 to 6 Months 244 $ 97,692 Total 324 $ 190,470
Slide 45: CRE/Commercial Loans in Higher Risk Industries
Loan Portfolio Composition COVID 19 Update CRE/Comm. Loans in Higher Risk Industries (dollars in thousands) 45 Total Exposure Exposure as a % of Total Loans Customers Requesting Payment Relief Loan Value % of Total Exposure Requesting Relief Hotels $ 45,885 5.2% $ 40,326 88.0% Restaurants $ 6,453 0.
Slide 46: Higher Risk Industries: Loan Counts and Average Size
Loan Portfolio Composition COVID 19 Update CRE/Comm. Loans in Higher Risk Industries (dollars in thousands) 46 Total Exposure # of Loans Average Loan Size Hotels $ 45,885 15 $ 3,059 Restaurants $ 6,453 38 $ 170 Retail $ 129,034 115 $ 1,122 Data indicates that given the relatively low average loan si
Slide 47: Investment CRE Stressed Portfolio Characteristics
Loan Portfolio Composition Investment Commercial Real Estate Stressed Portfolio Characteristics 47 Total Portfolio Average Total Portfolio Range of All Categories Original Loan to Value * 70.0% 65.1% - 77.3% Current Calculated Loan to Value 64.1% 45.2% - 75.1% Low Stress LTV (1% cap rate increase) 7
Slide 48: Higher Risk CRE Stressed Portfolio Characteristics
Loan Portfolio Composition Higher Risk Commercial Real Estate Stressed Portfolio Characteristics 48 Hotels Retail Original Loan to Value 70.3% 67.2% Current Calculated Loan to Value 68.8% 56.5% Low Stress LTV (1% cap rate increase) 79.7% 64.3% Severe Stress LTV (3% cap rate increase) 99.4% 78.2% Cas
Slide 49: COVID - Paycheck Protection Program (PPP)
COVID - 19 Paycheck Protection Program (PPP) • Provides small businesses with funds to pay up to eight weeks of payroll costs and certain other expenses. • Targets small businesses with 500 or fewer employees. • PPP loans are eligible for full forgiveness. 49
Slide 50: COVID - Paycheck Protection Program (PPP)
COVID - 19 Paycheck Protection Program (PPP) • PPP loans have a 1% interest rate and are fully guaranteed by the SBA so there is no credit risk. • Banks earn an attractive processing fee for issuing loans. • As a community bank focusing on small business, the PPP loan program has been very successfu
Slide 51: Paycheck Protection Program Expected Fee Income
Paycheck Protection Program Expected Fee Income 51 Loan Amount # of Loans Approvals Fee % Fee Income Loans < $350,000 237 $17,097,000 5.0% $ 855,000 Loans > $350,000 and < $2 Million 31 $21,799,000 3.0% $ 654,000 Loans > $2 Million 2 $ 4,325,000 1.0% $ 43,000 Total 270 $43,221,000 3.6% $ 1,552,000
Slide 52: COVID - Paycheck Protection Program (PPP)
COVID - 19 Paycheck Protection Program (PPP) • PPP fee income in excess of $1.5 million is significant to AmeriServ as our quarterly pre - tax income has averaged $1.9 million over the past five quarters. • Will help provide net interest margin support during this period of low interest rates and a
Slide 53: COVID - Asset Quality Update March 31, 2020
COVID - 19 ASSET QUALITY UPDATE MARCH 31, 2020 • Allowance for loan losses totaled $9.3 million which represented 1.06% of total loans and provided 416% coverage of non - performing assets which remained at a low level of $2.2 million. • AmeriServ not operating under CECL so we continue to utilize t
Slide 54: COVID - Asset Quality Update March 31, 2020
COVID - 19 ASSET QUALITY UPDATE MARCH 31, 2020 • Strengthened economic risk qualitative factors within the allowance calculation during the first quarter 2020. • Within the allowance for loan losses, $925,000 or almost 10% is considered unallocated or available for general loan portfolio risk. 54
Slide 55: 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 – Focus on growing book value and tangible book value per share – Subject to maintaining sufficient capital to suppo
Slide 56: Capital Returns to Shareholders
Capital Returns to Shareholders 56 2017 2018 2019 Three Year Total Common Stock BuyBack Program 3,405,000 2,346,000 2,550,000 8,301,000 Common Stock Dividends 1,113,000 1,345,000 1,642,000 4,100,000 Total Capital Returned 4,518,000 3,691,000 4,192,000 12,401,000 Net Income 5,917,000 7,768,000 6,028,
Slide 57: Capital Return - Common Stock Buybacks
Capital Return 3 - Year Summary Common Stock Buybacks • Repurchased 1,975,000 shares at a total cost of $8.3 million or an average price of $4.20 per share. • This represented a 10.5% reduction in outstanding shares since January 1, 2017. • Since all shares were repurchased at a price below tangible
Slide 58: Capital Return - Common Stock Dividend
Capital Return 3 - Year Summary Common Stock Dividend • Quarterly common stock dividend increased in each of the past three years. • Common dividend payout ratio remained reasonable as it typically averaged less than 30% of net income. • Provides shareholders with ongoing cash return and a competiti
Slide 59: Capital Allocation COVID Update
CAPITAL ALLOCATION COVID - 19 UPDATE • While we work through the COVID - 19 pandemic, our focus is on preserving capital to support customer lending and managing heightened credit risk due to the downturn in the economy. • We fully completed our previously authorized common stock buyback program ear
Slide 60: Capital Allocation COVID Update
CAPITAL ALLOCATION COVID - 19 UPDATE • As a result of regulatory changes last year, the regulatory focus on banks with an asset size below $3 billion is now on bank capital levels rather than holding company capital levels. • This change may provide AmeriServ with an opportunity to reduce the cost o
Slide 61: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. AMERISERV FINANCIAL,INGC.
Slide 62: Report On Election
Report On Election BANKING FOR LIFE.
Slide 63: Question & Answer Period
Question & Answer Period BANKING FOR LIFE.
Slide 64: Stay well and stay safe! Thank you for joining us!
Stay well and stay safe! Thank you for joining us! 64
Slide 65: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. AMERISERV FINANCIAL,INGC.
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