Ameriserv Financial Inc. · NASDAQ:ASRV
Ameriserv Financial — Shareholder Meeting (April 2022)
65 slides from Ameriserv Financial's shareholder meeting presentation, Apr 27, 2022
Slide 1: 2022 Annual Shareholder Meeting
2022 Annual Shareholder Meeting Tuesday, April 26, 2022 *+, == AMERISERV FINANCIAL,INCG
Slide 2: AmeriServ Financial, Inc. - Chairman
AmeriServ Financial, Inc. Allan R. Dennison Chairman
Slide 3: Meeting transmitted via webcast
This meeting is being transmitted in its entirety via webcast to all interested shareholders and prospective investors. S}AvERseRv
Slide 4: Welcome to our Annual Shareholder Meeting
4 Welcome to our Annual Shareholder Meeting. We appreciate your ongoing loyalty and support. Welcome
Slide 5: Agenda
5 • Proxy Items • Chief Financial Officer Presentation • President & CEO Comments • Final Report on Proxy Items • Question & Answer Period Agenda
Slide 6: Election of Class III Directors
6 Kim W. Kunkle Jeffrey A. Stopko Election of Class III Directors
Slide 7: Ratification of Appointment of S.R. Snodgrass
7 Audit financial records for fiscal year ending 12-31-22 Ratification of Appointment of S.R. Snodgrass
Slide 8: Advisory Vote on Executive Compensation
8 Compensation of Named Executive Officers of AmeriServ Financial, Inc. Advisory (Non-Binding) Vote
Slide 9: Recognition of past and present directors
9 Recognition of past and present directors Board of Directors
Slide 10: Michael D. Lynch, Chief Financial Officer
10 Michael D. Lynch Executive Vice President Chief Financial Officer Chief Investment Officer Chief Risk Officer
Slide 11: Forward-Looking Statements
11 Forward-Looking Statements 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 that in
Slide 12: Annual Financial Results Through 2021
12 Annual Financial Results Through 2021
Slide 13: Net Income
13 Net Income (thousands) $3,293 $7,768 $6,028 $4,598 $7,072 $0 $2,000 $4,000 $6,000 $8,000 20172018201920202021
Slide 14: Earnings Per Common Share
14 Earnings Per Common Share $0.18 $0.43 $0.35 $0.27 $0.41 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 20172018201920202021
Slide 15: Net Interest Income
15 Net Interest Income (thousands) $35,561 $35,494 $35,442 $36,367 $39,083 $20,000 $30,000 $40,000 20172018201920202021
Slide 16: Net Interest Margin
16 Net Interest Margin % 3.32% 3.31% 3.29% 3.19% 3.15% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 20172018201920202021
Slide 17: Total Average Loans
17 894 882 875 923 989 600 700 800 900 1,000 20172018201920202021 Total Average Loans (millions)
Slide 18: Total Average Loans Excluding PPP Loans
18 894 882 875 878 943 600 700 800 900 1,000 20172018201920202021 Total Average Loans Excluding PPP Loans (millions)
Slide 19: Total Average Securities
19 173 185 194 188 210 0 50 100 150 200 250 20172018201920202021 Total Average Securities (millions)
Slide 20: Total Average Short-Term Investments
20 9 8 12 32 47 0 10 20 30 40 50 20172018201920202021 Total Average Short-Term Investments (millions)
Slide 21: Total Average Deposits
21 976 960 980 1,035 1,154 700 800 900 1,000 1,100 1,200 20172018201920202021 Total Average Deposits (millions)
Slide 22: Average Deposits vs. Total Deposit Cost
22 969 980 985 984 983 1,036 1,054 1,067 1,103 1,165 1,189 1,161 1.14% 1.17%1.17% 1.09% 1.01% 0.73% 0.65% 0.59% 0.52% 0.45% 0.40% 0.31% 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 700 800 900 1,000 1,100 1,200 1Q '192Q3Q4Q1Q '202Q3Q4Q1Q '212Q3Q4Q Average Deposits vs. Total Deposit Cost %
Slide 23: Loan Loss Provision
23 $800 ($600) $800 $2,375 $1,100 -$1,000 $0 $1,000 $2,000 $3,000 $4,000 20172018201920202021 Loan Loss Provision (thousands)
Slide 24: Loan Loss Provision to Net Charge-Offs
24 $800 ($600) $800 $2,375 $1,100 $518 $943 $192 $309 $47 -$1,000 $0 $1,000 $2,000 $3,000 20172018201920202021 Loan Loss Provision to Net Charge-Offs (thousands)
Slide 25: Non-Performing Assets
25 $3,034 $1,378 $2,339 $3,331 $3,323 $0 $2,000 $4,000 20172018201920202021 Non-Performing Assets (thousands)
Slide 26: Commitment for Customers Approved for Payment Relief
26 Aggregate Commitment for Customers Approved for Payment Relief (millions) 200 7.7 0 50 100 150 200 250 May-20Dec-21
Slide 27: Non-Interest Revenue
27 Non-Interest Revenue (excluding security sale gains/losses) (thousands) $14,531 $14,507 $15,155 $16,275 $17,677 $12,000 $14,000 $16,000 $18,000 20172018201920202021
Slide 28: Total Wealth Management Net Income Contribution
28 Total Wealth Management Net Income Contribution (thousands) $1,372 $1,875 $1,919 $2,006 $2,869 $0 $1,000 $2,000 $3,000 20172018201920202021
Slide 29: Non-Interest Expense
29 Non-Interest Expense (thousands) $40,767 $40,936 $41,815 $44,455 $46,970 $30,000 $35,000 $40,000 $45,000 $50,000 20172018201920202021
Slide 30: Tangible Book Value
30 Tangible Book Value $4.59 $4.88 $5.08 $5.42 $6.02 $3.75 $4.25 $4.75 $5.25 $5.75 $6.25 20172018201920202021
Slide 31: Regulatory Capital Ratios
31 Regulatory Capital Ratios As of December 31, 2021 10.29%10.29% 14.04% 8.17% 11.41% 11.41% 12.66% 9.12% 0.00% 3.00% 6.00% 9.00% 12.00% 15.00% Common Equity Tier 1 Capital Ratio Tier 1 Capital RatioTotal Capital RatioTier 1 Leverage Ratio Consolidated Bank Regulatory Well Capitalized Requirement
Slide 32: 2021 Summary
32 2021 Summary • Our 2021 earnings demonstrates meaningful improvement as we realized the benefits of several important strategic actions that the Company executed during the year. • The Company continued to generate record levels of both loans and deposits as we serve as an important financial res
Slide 33: 2021 Summary
33 2021 Summary • The good diversification of the Company’s revenue was evident as 31.2% of our total revenue in 2021 came from non-interest income sources which included record contributions from our strong wealth management business. • We will continue to provide premier banking and wealth managem
Slide 34: Jeffrey A. Stopko, President / CEO
34 Jeffrey A. Stopko President / CEO
Slide 35: Overview of AmeriServ Financial Inc.
ASRV Branches Loan Production Offices Overview of AmeriServ Financial Inc. Branch Map Overview $1.3 Billion Community Bank Headquartered in Johnstown, PA 17 Retail Branches 2 Loan Production Offices Sizable Wealth Management Company with $2.6 Billion Assets Under Administration Stable depo
Slide 36: Net Income (quarterly)
36 Net Income (thousands) 1,409 1,419 1,078 692 2,081 1,708 1,431 1,851 2,418 $0 $500 $1,000 $1,500 $2,000 $2,500 1Q '202Q3Q4Q1Q '212Q3Q4Q1Q '22
Slide 37: Earnings per Share (quarterly)
37 Earnings per Share $0.08$0.08 $0.06 $0.04 $0.12 $0.10 $0.08 $0.11 $0.14 $0.00 $0.05 $0.10 $0.15 1Q '202Q3Q4Q1Q '212Q3Q4Q1Q '22
Slide 38: AmeriServ Strategic Plan
38 Create long-term value for our shareholders by: • Maintaining financially strong balance sheet • Appropriately managing risk • Consistently improving shareholder returns AmeriServ Strategic Plan
Slide 39: Financially Strong Balance Sheet: Deposit Composition
39 Financially Strong Balance Sheet Demand Deposits $206.9 Savings, NOW & Money Market, $649.5 Certificates of Deposit $249.6 Jumbo Certificates of Deposit$34.9 $1.141 Billion 18% 3% 22% 57% Deposit Composition ($mm) As of March 31, 2022
Slide 40: Financially Strong Balance Sheet: Loan Portfolio Composition
40 Financially Strong Balance Sheet Loan Portfolio Composition ($mm) As of March 31, 2022 Residential Mortgage $180.1 Home Equity & Consumer $94.3 Commercial & Industrial $135.6 Commercial Real Estate $560.9 $978.7 Million 72% Commercial / 28% Retail Non-Owner Occupied CRE / Total Capital Ratio: 340
Slide 41: Commercial Loan Portfolio Diversification
41 Financially Strong Balance Sheet Commercial Loan Portfolio Diversification ($mm) As of March 31, 2022
Slide 42: Strategic Outlook for 2022
42 • Generate positive operating leverage by growing revenues at a faster pace than expenses. • Conservatively manage our asset quality while continuing to work with customers experiencing pandemic related challenges. • Continue our diligent focus on capital allocation. Strategic Outlook for 2022
Slide 43: Important Strategic Accomplishments in 2021
43 Important Strategic Accomplishments in 2021 • Successful completion of the Somerset County branch acquisition. • Issuance of $27 million in new subordinated debt. • The full financial benefits of these strategic actions will be realized in 2022 in the form of a lower cost of funding.
Slide 44: Somerset County Branch Acquisition
44 Somerset County Branch Acquisition • Acquired approximately $42 million of low-cost core deposits associated with two Riverview Bank branches and 2,500 new customers to AmeriServ Financial. • Logical expansion within our existing market that caused ASRV to move up to the fourth largest market sha
Slide 45: Somerset County Branch Acquisition
45 • We utilized $33 million of these low-cost deposits to replace an institutional deposit that matured in September with a rate of 2.95%. • This replacement alone reduced annual interest expense by approximately $800,000 and eliminated a deposit concentration with a large customer. • Given the sig
Slide 46: New Subordinated Debt Issuance
46 New Subordinated Debt Issuance • Issued $27 million of new subordinated debt with an attractive interest rate of 3.75% in late August 2021. • Used $20 million of the proceeds to retire trust preferred securities and existing sub debt that had a weighted average cost of 7.73%. • This strategic act
Slide 47: Paycheck Protection Program Fee Income
47 Paycheck Protection Program Fee Income PPP Fee Income in 2020 $ 1,411,000 PPP Fee Income in 2021 $ 1,809,000 PPP Fee Income in 1Q 2022 $ 210,000 Remaining PPP Fees $ 179,000 Expected PPP Fee Income for 2022 $ 389,000
Slide 48: Generate Positive Operating Leverage: Net Interest Income
48 • Well positioned in 2022 to replace the $1.5 million in reduced PPP fee income due to the reduction in our cost of funding from the 2021 key strategic actions. • Commercial loan pipelines suggest that we will also be able to redeploy some of our strong liquidity into the higher yielding commerci
Slide 49: Revenue Diversification Promotes Positive Operating Leverage
49 Revenue Diversification Promotes Positive Operating Leverage Non-Interest Income 31% Net Interest Income69% ASRV generates more revenue from non-interest income than our peers due to our strong wealth management company.
Slide 50: Revenue Diversification: Wealth Management
50 • Profitable Company with increasing financial contribution to ASRV. • Good Diversification of business lines within Wealth Management: • Retirement Services, Personal Trust, Investment Management, ERECT Fund & Diversified Services. Revenue Diversification Promotes Positive Operating Leverage Wea
Slide 51: Revenue Diversification: Wealth Management
51 • Unique ERECT Fund product allows us to leverage union relationships. • Effective management of customer assets throughout the pandemic has caused a significant increase in revenue. • Scalable business model well positioned for further growth. Revenue Diversification Promotes Positive Operating
Slide 52: Wealth Management Revenue
52 Wealth Management Revenue $2,554 $2,471 $2,604 $2,583 $2,872 $3,023 $3,136 $2,955 $3,165 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 1Q 20202Q 20203Q 20204Q 20201Q 20212Q 20213Q 20214Q 20211Q 2022
Slide 53: Conservatively Manage Asset Quality
53 Conservatively Manage Asset Quality March 31, 2022 • Conservative credit culture with strong asset quality and prudent provisioning throughout the pandemic. • Allowance for loan losses totaled $11.9 million which represented 1.22% of total loans and provided 351% coverage of non-performing assets
Slide 54: Conservatively Manage Asset Quality
54 • Recorded a $400,000 provision recovery in the first quarter of 2022 due to the upgrade of several criticized loans as a result of their improved financial performance. • AmeriServ continues to utilize the incurred loss methodology when determining loan loss reserves but will be adopting CECL in
Slide 55: Capital Allocation Strategies
55 • Return capital to shareholders through dividends, share repurchases, or both if feasible. • Focus on growing book value and tangible book value per share. • Capital return strategies are always subject to maintaining sufficient capital to support balance sheet growth. Capital Allocation Strateg
Slide 56: Capital Allocation – Response to Pandemic
56 • As a result of the pandemic, we shifted our focus to capital preservation rather than capital returns. • This change was necessary to support strong balance sheet growth, increased customer lending, and to manage heightened credit risk due to the downturn in the economy. • This capital preserva
Slide 57: Capital Returns to Shareholders
57 Capital Returns to Shareholders
Slide 58: Capital Allocation – Common Stock Dividends
58 Capital Allocation – Common Stock Dividends • As a result of the Company’s improved earnings power, the Board of Directors increased the quarterly common stock cash dividend by 20% to $0.03 per quarter on April 19, 2022. • This dividend provides shareholders with an ongoing cash return and a comp
Slide 59: Common Dividend per Share
59 $0.00 $0.010 $0.015 $0.020 $0.025 $0.030 $0.00 $0.01 $0.02 $0.03 1Q '131Q '141Q '151Q '161Q '171Q '181Q '191Q '201Q '211Q '22 Common Dividend per Share
Slide 60: Capital Allocation – Common Stock Buybacks
60 • The Board of Directors understands the value of returning capital to shareholders through common stock buybacks. • Our longer-term capital allocation decisions reflect the consistent use of common stock buybacks to improve tangible book value and earnings per share. • There is currently no comm
Slide 61: Capital Allocation – ASRV Stock Price
61 • The ASRV stock price has increased by approximately 4% so far in 2022 and is currently trading around $4.00 per share. • Even with this improvement, ASRV stock continues to trade at attractive multiples of 9.3 times trailing 12-month earnings and 70% of tangible book value. Capital Allocation –
Slide 62: Report On Election
Report On Election S}AvERseRv
Slide 63: Question & Answer Period
63 Question & Answer Period
Slide 64: Thank you for joining us
64 Stay well and stay safe. Thank you for joining us.
Slide 65: Annual Shareholder Meeting
2022 Annual Shareholder Meeting Tuesday, April 26, 2022 *+, == AMERISERV FINANCIAL,INCG
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