Ameriserv Financial Inc. · NASDAQ:ASRV
Ameriserv Financial — Investor Presentation (August 2007)
36 slides from Ameriserv Financial's investor presentation, Aug 30, 2007
Slide 1: AmeriServ Financial, Inc. Investor Meeting August 2007
AmeriServ Financial, Inc. Investor Meeting August 2007
Slide 2: Meeting Agenda
Meeting Agenda Discussion of financial performance for first half of 2007 Discussion of ASRV financial performance versus peer and identification of areas for improvement Discussion of key strategic issues to close the financial performance gap to peer 2
Slide 3: Net Income / (Loss)
Net Income / (Loss) (Thousands) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q Net Income 833 370 -10564 220 540 569 643 581 428 808 West North 3
Slide 4: Adjusted Pre-Tax Income
4 Adjusted Pre-Tax Income Excludes Security Gains & FHLB Prepayment/Restructuring Costs (Thousands) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q Net Int Inc 324 427 -1383 524 676 733 782 562 515 1083 NPA North
Slide 5: Net Interest Income
5 Net Interest Income (Thousands) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q Net Int Inc 6295 5991 5457 6368 6292 6191 6099 5896 5955 6013 NPA North
Slide 6: Net Interest Margin %
6 Net Interest Margin % 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q NIM 0.0275 0.0263 0.0243 0.0321 0.032 0.0316 0.0306 0.0293 0.0297 0.0301 NPA North
Slide 7: Average Loans
7 Average Loans (Millions) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q NIM 523 522 526 543 553 557 575 584 595 602 NPA North
Slide 8: Average Deposits
Average Deposits (Millions) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q NIM 680 712 698 712 719 733 743 745 757 764 NPA North 8
Slide 9: Average Investment Securities
Average Investment Securities (Millions) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q NIM 397 392 375 247 235 225 216 213 203 190 NPA North 9
Slide 10: Average Borrowings
Average Borrowings (Millions) 2003 34.9% 2004 30.1% 1Q '05 20.9% 2Q 17.0% 3Q 17.6% 4Q 6.5% 1Q '06 5.7% 2Q 3.5% 3Q 3.1% 4Q 3.3% 1Q '07 2.0% 2Q 0.7% Avg Borrow 371 336 210 169 173 56 50 30 27 29 18 6 West 31.6 North 43.9 Borrow/ Assets 10
Slide 11: All Other Non-Interest Revenue
All Other Non-Interest Revenue (Thousands) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q Op exp 3182 3301 3273 3314 3242 3268 3247 3084 3233 3592 West North 11
Slide 12: Operating Expense (Excludes Restructuring Costs)
Operating Expense (Excludes Restructuring Costs) (Thousands) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q Op exp 9153 9139 10013 9157 8859 8776 8565 8493 8673 8522 West North 12
Slide 13: Loan Loss Provision vs. Net Charge Offs
Loan Loss Provision vs. Net Charge Offs (Thousands) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q Loan Loss Provision 0 -275 100 0 0 -50 0 -75 0 0 Net Charge Offs 60 79 145 292 117 102 572 135 81 100 North 13
Slide 14: Non-Performing Assets
Non-Performing Assets (Thousands) 1Q '05 2Q 3Q 4Q 1Q '06 2Q 3Q 4Q 1Q '07 2Q NPA 3819 3334 3323 4315 4193 4624 2978 2292 2706 2825 North 14
Slide 15: Peer Bank Analysis
Peer Bank Analysis *+ === AMERISERV SSrinaNciau
Slide 16: Peer Banks Total Assets
Peer Banks Total Assets County National Bank, Clearfield $ 767 million Irwin Bank & Trust, Irwin $ 740 million 1st Summit, Johnstown $ 439 million Commercial Bank, Latrobe $ 338 million Somerset Trust Company, Somerset $ 446 million Omega Bank, State College $ 1,790 million Lorain National Bank $ 85
Slide 17: 2006 Composite: ASRV Bank vs Peer Group
18 | | 2006 Composite | ASRVBANK | Peer Group _ Difference from 2006_ Average - Average Interest Income | 5.36% 5.85% Interest Expense 2.42% 2.40% _ Net Interest Margin, 2.94% 3.46% Provfor LoanLoss 0.01% ==» 0.16% Nor Int Income Non-Int Expense Net Overhead | Pre-Tax Income 0.28% = 1.32% IncomeTaxe
Slide 18: 2006 Composite: ASRV, Inc. vs Peer Group
Interest Income Interest Expense Net Interest Margin Prov for Loan Loss Non-Int Income Non-Int Expense Net Overhead Pre-Tax Income Income Taxes Net Income (ROA) 2006 Composite 1) ASRV, INC Peer Group _ Difference from 2006 Average Average Peer 5.34% 5.85% -0.51% 2.53% 2.40% 0.13% 2.81% 3.46% 0.65% 0
Slide 19: ASRV, Inc. Pro-forma 2006 Composite vs Peer
20 ASRY, Inc. Pro-forma Pro-forma 2006 Adjustment Composite Peer Interest Income 46,565 4,563 51,128 Interest Expense 22,087 (4,111) 20,976 Net Interest Margin 24,478 5,674 30,152 Prov for Loan Loss (125) 1,523 1,398 Non-Int Income 12,841 Non-In Expense 34,692 Net Overhead (4,546) 17,305 8,697 11,44
Slide 20: Key Strategic Issues To Close Financial Performance Gap
Key Strategic Issues To Close Financial Performance Gap Net Interest Margin Deposit Growth Special Performance Improvement Projects Residential Mortgage Technology Small Business 21
Slide 21: Key Strategic Issues To Close Financial Performance Gap
Key Strategic Issues To Close Financial Performance Gap Productivity Trust Company Consumer Lending State College Customer Service Culture 22
Slide 22: Net Interest Margin
Net Interest Margin Most significant area that is lagging peer Focus on increasing the loan to deposit ratio from the current level of 78% to 90% ASRV has adequate liquidity in the securities portfolio to fund increased loans Also focusing on improving the yield on the commercial loan portfolio thro
Slide 23: Net Interest Margin
Net Interest Margin The short duration of the investment securities portfolio suggests an ability to reprice the portfolio up to current market yields over the next two and half years and narrow the short fall to peer The successful execution of these initiatives can potentially increase revenue by
Slide 24: Deposit Growth
Deposit Growth Focus on achieving consistent annual deposit growth of 4.0% Introduce an aggressive sales training program for all retail employees who touch customers Ensure we are developing full relationships with all lending customers Potential annual net interest margin benefit of $800,000 25
Slide 25: Special Performance Improvement Projects
Special Performance Improvement Projects Focus on business units that do not contribute appropriately to financial performance Comprehensive study of the branch network resulted in the following changes: The consolidation of two older branches in Nanty Glo into one new branch in the 4th quarter of 2
Slide 26: Special Performance Improvement Projects
Special Performance Improvement Projects Occupancy expense will be further reduced by the closure of the Westmont loan center. Staff will be relocated to our existing Main Office facility and the building will be sold to an external party Potential expense savings of $350,000 27
Slide 27: Residential Mortgage
Residential Mortgage Strive to become the premier mortgage lender in our branch footprint by year-end 2008 New management brought in second half 2006 and a full complement of originators in place by June 30, 2007 Positioned to significantly enhance mortgage loan production within our core markets wi
Slide 28: Technology
Technology After thorough RFP process, decision made to stay with Metavante our existing vendor Work to take full advantage of the software and hardware features available from the vendor to increase productivity and reduce costs Moved ATM processing from STAR to Metavante to achieve cost savings an
Slide 29: Small Business
Small Business During first quarter 2007 small business banking was completely re-staffed and realigned under commercial lending division New manager hired to oversee small business with lenders assigned by geographic region Focus is both on smaller commercial loan production and deposit generation
Slide 30: Productivity
Productivity Objective is to build on the success of the BETTER program to create a process which will be an on- going part of the ASRV culture Over the past four years identified expense savings have approximated $1 million annually Continued focus on technological enhancements to further reduce FT
Slide 31: Trust Company
Trust Company Strongest and most profitable performer during ASRV's period of difficulty Trust Company is organized under four business lines each of which is profitable Focus is on further improving the return on revenue while growing these businesses Opportunity to enhance revenues with the synerg
Slide 32: Consumer Lending
Consumer Lending Need to reenergize a product line that has displayed lackluster performance New management has worked on developing new customer service standards Focus on increasing new consumer loan production by 25% with improved sales skills, reporting and monitoring Potential revenue enhanceme
Slide 33: State College
State College State College / Centre County is one of the fastest growing and healthiest markets in Pennsylvania Presently an under performing business unit with significant upside potential Focus on expanding deposit market share and commercial loan outstandings Evaluating a third branch location t
Slide 34: Customer Service Culture
Customer Service Culture Create a vision for ASRV that incorporates customer focus as the key element Communicate the necessity of creating a customer service culture as the primary driver for all ASRV employees Establish metrics to measure our customer service performance in order to gauge our succ
Slide 35: Potential Revenue Enhancements
Loan Income Investment Income Deposit Growth Trust Company Mortgage Banking Potential Revenue Enhancement - $7,000,000 Potential Revenue Enhancements: 36
Slide 36: Slide 36
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