Ameriserv Financial Inc. · NASDAQ:ASRV
Ameriserv Financial — Investor Presentation (July 2018)
38 slides from Ameriserv Financial's investor presentation, Jul 27, 2018
Slide 1: AmeriServ Financial, Inc. (ASRV) Investor Presentation July 2018
AmeriServ Financial, Inc. (ASRV) Investor Presentation July 2018 1
Slide 2: Forward-Looking Statements
Forward - Looking Statements 2 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, incl udi ng statements th
Slide 3: 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 ▪ 15 Retail Branches ▪ 3 Loan Production Offices ▪ Sizable Wealth Management Company with $2 Billion Assets Under Administration ▪ Stable deposi
Slide 4: Strategic Plan 2017-2019
AmeriServ Financial, Inc. Strategic Plan 2017 - 2019 • Built around Banking for Life philosophy • Focuses on four key constituencies – Shareholders – Customers – Staff – Communities 4
Slide 5: Strategic Plan
AmeriServ Strategic Plan 5 Create long - term value for our shareholders by: – Maintaining financially strong balance sheet – Appropriately managing risk – Consistently improving shareholder returns
Slide 6: Financially Strong Balance Sheet: Loan Portfolio Composition
6 Financially Strong Balance Sheet Loan Portfolio Composition ($mm) As of June 30, 2018 Residential Mortgage $146.3 Home Equity & Consumer $105.1 Commercial & Industrial $170.2 Commercial Real Estate $473.6 $895.2 Million 72% Commercial / 28% Retail Non - Owner Occupied CRE / Total Capital Ratio: 34
Slide 7: Commercial Loan Portfolio Diversification
7 Financially Strong Balance Sheet Commercial Loan Portfolio Diversification ($mm) Loan Total = $ 642.2 Million As of June 30, 2018 $194.8 30% $223.5 35% $122.0 19% $101.9 16% Johnstown Pittsburgh Hagerstown State College/Altoona
Slide 8: Total Average Loans
Total Average Loans (Millions) 500 600 700 800 900 2012 2013 2014 2015 2016 2017 June 30 2018 689 746 805 857 888 894 882 8
Slide 9: Deposit Composition
9 Financially Strong Balance Sheet Deposit Composition ($mm) As of June 30, 2018 Demand Deposits $184.3 Savings, NOW & Money Market , $479.1 Certificates of Deposit $233.3 Jumbo Certificates of Deposit $31.5 $928.2 Million 20% 3% 25% 52%
Slide 10: Total Average Deposits
Total Average Deposits (Millions) 500 600 700 800 900 1,000 2012 2013 2014 2015 2016 2017 June 30 2018 833 847 872 893 956 976 958 10
Slide 11: Net Interest Margin
Net Interest Margin 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 2012 2013 2014 2015 2016 2017 June 30 2018 3.65% 3.56% 3.52% 3.49% 3.26% 3.32% 3.28% 11
Slide 12: Allowance for Loan Loss vs. Non-Performing Assets
$0 $4,000 $8,000 $12,000 1Q '16 2Q 3Q 4Q 1Q '17 2Q 3Q 4Q 1Q '18 2Q Loan Loss Reserve Non Performing Assets 317 % 437 % 510 % 612 % 677 % 440 % 193 % 337 % 460 % 821 % Allowance for Loan Loss vs. Non - Performing Assets (Thousands) 12
Slide 13: Regulatory Capital Ratios
9.99% 11.20% 13.01% 9.61% 10.53% 10.53% 11.59% 9.12% 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 Fully Phased - In Well Capitalized Regulatory Capital Ratios As of June 30, 2018 13
Slide 14: Strategic Plan: Shareholder Value Creation
AmeriServ Strategic Plan Shareholder value creation focuses on: – Increasing Earnings Per Share (EPS) – Providing Strong Capital Returns to Shareholders 14
Slide 15: Increasing Earnings Per Share
AmeriServ Strategic Plan 15 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 16: Earnings Per Share
Earnings Per Share $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 2012 2013 2014 2015 2016 2017 June 30 2018 $0.21 $0.26 $0.15 $0.31 $0.12 $0.18 $0.19 16
Slide 17: Earnings Per Share (excluding one time additional income tax expense)
Earnings Per Share (excluding the one time additional income tax expense) $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 2012 2013 2014 2015 2016 2017 June 30 2018 $0.21 $0.26 $0.15 $0.31 $0.12 $0.32 $0.19 17
Slide 18: Earnings per Share (quarterly)
-$0.10 -$0.05 $0.00 $0.05 $0.10 1Q '16 2Q 3Q 4Q 1Q '17 2Q 3Q 4Q 1Q '18 2Q - $0.07 $0.07 $0.06 $0.06 $0.07 $0.07 $0.08 - $0.05 $0.10 $0.10 Earnings per Share 18
Slide 19: 2017 Key Strategic Financial Accomplishments
AmeriServ Financial 2017 19 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 20: 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 20
Slide 21: 2017 Capital Returns
2017 Capital Returns 21 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 22: Tangible Book Value Per Share
Tangible Book Value Per Share $3.00 $3.50 $4.00 $4.50 $5.00 2012 2013 2014 2015 2016 2017 June 30 2018 $4.01 $4.24 $4.33 $4.56 $4.41 $4.59 $4.71 22
Slide 23: 2017 Key Strategic Customer Accomplishments
AmeriServ Financial 2017 23 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 24: 2017 Key Strategic Technology Accomplishments
AmeriServ Financial 2017 24 Key Strategic Technology Accomplishments – Cost 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 fe
Slide 25: 2017 Key Strategic Technology Accomplishments (continued)
AmeriServ Financial 2017 25 Key Strategic Technology Accomplishments – Technology 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 26: 2017 Key Strategic Employee Accomplishments
AmeriServ Financial 2017 26 Key Strategic Employee Accomplishments – New 4 - year labor contract with United Steelworkers of America – Key financial terms – • Annual wage increases of 3% • Transition of union employees to new exclusive health care provider plan insures better control of future healt
Slide 27: 2017 Key Strategic Wealth Management Accomplishments
AmeriServ Financial 2017 27 Key Strategic Wealth Management Accomplishments – Developed new strategic plan that focuses on revenue expansion of business lines – Continue to invest in talent within wealth management business – Unique ERECT Fund product allows us to leverage union relations for revenu
Slide 28: Total Wealth Management Revenue
28 Total Wealth Management Revenue (Thousands) 0 2,500 5,000 7,500 10,000 2012 2013 2014 2015 2016 2017 June 30 2018 7,784 8,391 8,117 8,682 8,747 9,171 4,873
Slide 29: 2018 Outlook: Key Strategic Initiatives
AmeriServ Financial 2018 29 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 30: 2018 Outlook: Growing Maryland Presence
AmeriServ Financial 2018 30 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 31: Hagerstown Loan Production Office Commercial Loans Outstanding
0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 2012 2013 2014 2015 2016 2017 8,800 42,899 67,523 90,547 110,732 125,822 31 Hagerstown, Maryland Loan Production Office Commercial Loans Outstanding (Thousands)
Slide 32: 2018 Outlook: Union-Related Revenue Streams
AmeriServ Financial 2018 32 Outlook 2018 – Key Strategic Initiatives – Further leverage union - related revenue streams through expansion of affinity group mortgage and consumer loan programs
Slide 33: PSEA Mortgage & Consumer Loan Production Since Inception
0 5,000 10,000 15,000 20,000 25,000 30,000 2013 2014 2015 2016 2017 4,200 10,600 15,300 26,900 20,400 33 Pennsylvania State Education Association (PSEA) Mortgage & Consumer Loan Production Since Inception (Thousands)
Slide 34: 2018 Outlook: Increase Common Stock Price
AmeriServ Financial 2018 34 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 35: 2018 Outlook: Strong Capital Returns to Shareholders
AmeriServ Strategic Plan 35 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 36: 2018 Outlook: Capital Returns and Buyback Program
AmeriServ Strategic Plan 36 Outlook 2018 – Strong Capital Returns to Shareholders – Accretive use of capital given all shares were repurchased at a price below tangible book value per share which currently rests at $4.71 – Buyback program beneficial to EPS; able to spread increased earnings over a s
Slide 37: Attractive Stock Valuation
AmeriServ Strategic Plan 37 Attractive Stock Valuation – Performance in 2017 and to date in 2018 demonstrates commitment to providing strong capital returns to shareholders – Despite sharply improved earnings and continued capital returns there has been little improvement in the common stock price i
Slide 38: Banking for Today. Banking for Tomorrow.
BANKING FOR TODAY. BANKING FOR TOMORROW. a AMERIS BANK’ BANKING FOR UFE
Ameriserv Financial — Investor Presentation (July 2018) on 6ix