Ameriserv Financial Inc. · NASDAQ:ASRV
Ameriserv Financial — Shareholder Meeting (April 2016)
66 slides from Ameriserv Financial's shareholder meeting presentation, Apr 27, 2016
Slide 1: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. ®s AMERI. FINANCIAL,ING.
Slide 2: Meeting transmitted via webcast to shareholders
2 This meeting is being transmitted in its entirety beyond this room via webcast to all interested shareholders and prospective investors. This is the first year we are employing this technology and it is a notable step forward for our company.
Slide 3: 2016 Annual Shareholders' Meeting
3 2016 Annual Shareholders ' Meeting
Slide 4: Kerri Mueller, SVP Retail Banking
Kerri Mueller Senior Vice President – Retail Banking 4
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 III Directors
Election of Class III Directors Daniel R. DeVos Bruce E. Duke, III, M.D. Craig G. Ford Kim W. Kunkle 8
Slide 9: Honored Guests
Honored Guest • Elected Officials • Labor Officials • Distinguished Guests • Past Directors • Present Directors • AmeriServ ® Employees • Our Shareholders 9
Slide 10: Banking industry change and AmeriServ results
• Banking – An industry subject to continuing change • AmeriServ – Committed to carefully planned, positive change • Record Growth • Lower level of troubled loans • Deposit Increase – Year end record • Positive Customer Response 10
Slide 11: Trust company technology update
• Trust Company – Technology Update • Conversion Error - Expense Incurred • 2015 – Stronger year result than previous four years 11
Slide 12: Bank process discipline and energy markets
• Bank Process – Discipline • Credit Source for Western Pennsylvania and Northern Maryland regions. • Oil Reservoirs – Natural Gas – Marcellus Shale • World Markets – Adjustment will take time • Loss for AmeriServ 12
Slide 13: Why is AmeriServ Here? For You!
13 Why is AmeriServ Here ? For You!
Slide 14: Loan portfolio and energy loan charge-off
• Excellent Loan Portfolio – 99+% paying on time • Energy Industry Loan – Necessary to charge off • Protecting the AmeriServ Franchise – AmeriServ will never risk the safety and soundness of this Company . 14
Slide 15: Wall Street valuation and community banking
• Wall Street Valuing and a Unionized Bank • AmeriServ Rust Belt Location • Community Banking – Loyalty to our C ommunities 15
Slide 16: Focused on the long term interest of shareholders
16 AmeriServ Financial Focused on the long term interest of our Shareholders.
Slide 17: Tangible Book Value Per Share
Tangible Book Value Per Share 17 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 2011 2012 2013 2014 2015 $3.76 $4.01 $4.24 $4.33 $4.56 5% Compound Annual Growth Rate
Slide 18: Personal involvement is the charm of community banking
18 AmeriServ Financial The opportunity for personal involvement is the charm of community banking.
Slide 19: Michael D. Lynch, CFO
Michael D. Lynch Senior Vice President Chief Financial Officer Chief Investment Officer 19
Slide 20: 2015 and Q1 2016 financial review
• 2015 Financial Performance Review • 2016 First Quarter Financial Results 20
Slide 21: Annual Financial Results Through 2015
21 Annual Financial Results Through 2015
Slide 22: Net Income
Net Income (Thousands) $0 $2,000 $4,000 $6,000 $8,000 2011 2012 2013 2014 2015 6,537 5,039 5,193 3,023 5,997 22
Slide 23: Pre Tax, Pre Loan Loss Provision Income
Pre Tax, Pre Loan Loss Provision Income (Thousands) $0 $2,000 $4,000 $6,000 $8,000 $10,000 2011 2012 2013 2014 2015 5,814 6,505 6,382 4,996 9,590 23
Slide 24: Net Interest Income
Net Interest Income (Thousands) $16,000 $21,000 $26,000 $31,000 $36,000 2011 2012 2013 2014 2015 32,283 32,203 32,861 34,044 35,360 24
Slide 25: Net Interest Margin
Net Interest Margin 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 2011 2012 2013 2014 2015 3.72% 3.65% 3.56% 3.52% 3.49% 25
Slide 26: Total Average Loans
Total Average Loans (Millions) 475 575 675 775 875 2011 2012 2013 2014 2015 663 689 746 805 857 26
Slide 27: Total Average Deposits
Total Average Deposits (Millions) 500 600 700 800 900 2011 2012 2013 2014 2015 817 833 847 872 893 27
Slide 28: Non-Interest Revenue
Non - Interest Revenue (Thousands) 8,000 10,000 12,000 14,000 16,000 18,000 2011 2012 2013 2014 2015 13,569 14,944 15,744 14,323 15,267 28
Slide 29: Non-Interest Expense
Non - Interest Expense (Thousands) 20,000 25,000 30,000 35,000 40,000 45,000 2011 2012 2013 2014 2015 40,038 40,641 42,223 43,372 41,038 29
Slide 30: Loan Loss Provision
Loan Loss Provision (Thousands) (4,000) (2,000) 0 2,000 2011 2012 2013 2014 2015 Ϳ 3,575 ; Ϳ 775 ; Ϳ 1,100 ; 375 1,250 30
Slide 31: Non-Performing Assets
Non - Performing Assets (Thousands) 0 2,500 5,000 7,500 2011 2012 2013 2014 2015 5,199 7,224 4,109 2,917 6,297 31
Slide 32: Tangible Book Value Per Share
Tangible Book Value Per Share $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 2011 2012 2013 2014 2015 $3.76 $4.01 $4.24 $4.33 $4.56 32
Slide 33: Earnings Per Share
Earnings Per Share $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 2011 2012 2013 2014 2015 $0.24 $0.21 $0.26 $0.15 $0.31 33
Slide 34: 2015 Financial Results Summary
2015 Financial Results Summary • We experienced significant improvement in our earnings power through a combination of revenue growth and non - interest expense reduction. • Solid loan and deposit growth to record levels was achieved through successful business development efforts while maintaining
Slide 35: Financial Results Through 1st Quarter 2016
35 Financial Results Through 1 st Quarter 2016
Slide 36: Net Income (Quarterly)
($1,500) ($1,000) ($500) $0 $500 $1,000 $1,500 $2,000 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 930 979 365 749 1,369 1,422 1,832 1,375 Ϳ 1,267 ; Net Income (Thousands) 36
Slide 37: Earnings per Share (Quarterly)
-$0.10 -$0.05 $0.00 $0.05 $0.10 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 $0.05 $0.05 $0.02 $0.04 $0.07 $0.07 $0.09 $0.07 $0.07 Ͳ Earnings per Share 37
Slide 38: Net Interest Income (Quarterly)
Net Interest Income (Thousands) $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 8,525 8,384 8,403 8,732 8,934 8,800 9,035 8,591 8,558 38
Slide 39: Net Interest Margin (Quarterly)
Net Interest Margin % 2.00% 2.50% 3.00% 3.50% 4.00% 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 3.56% 3.47% 3.42% 3.49% 3.57% 3.45% 3.52% 3.30% 3.30% 39
Slide 40: Average Loans
Average Loans (Millions) $500 $600 $700 $800 $900 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 787 795 809 828 842 857 859 870 881 40
Slide 41: Average Deposits
Average Deposits (Millions) $600 $700 $800 $900 $1,000 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 856 877 877 877 897 891 875 910 910 41
Slide 42: Non-Interest Income
Non - Interest Income (Thousands) $1,500 $2,500 $3,500 $4,500 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 3,532 3,638 3,593 3,560 3,712 3,693 4,014 3,849 3,437 42
Slide 43: Non-Interest Expense (Quarterly)
Non - Interest Expense (Thousands) 43 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 10,737 10,621 11,244 10,770 10,410 10,239 10,219 9,865 10,345 366 10,711 305 10,170
Slide 44: Loan Loss Provision (Quarterly)
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 0 0 0 375 250 200 300 500 3,100 Loan Loss Provision (Thousands) 44
Slide 45: Loan Loss Provision vs. Net Charge Offs
($500) $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 0 0 0 375 250 200 300 500 3,100 ( 5 ) ( 40 ) 567 334 184 172 245 351 3,501 Loan Loss Provision Net Charge Offs Loan Loss Provision vs. Net Charge Offs (Thousands) 45
Slide 46: Non-Performing Assets (Quarterly)
Non - Performing Assets (Thousands) $0 $2,500 $5,000 $7,500 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 3,274 4,469 3,897 2,917 3,046 2,565 2,294 6,297 3,007 46
Slide 47: Allowance for Loan Loss vs. Non-Performing Assets
$0 $5,000 $10,000 $15,000 1Q '14 2Q 3Q 4Q 1Q '15 2Q 3Q 4Q 1Q '16 Loan Loss Reserve Non Performing Assets 309% 227% 246% 330% 318% 379% 426% 158% 317% Allowance for Loan Loss vs. Non - Performing Assets ( Thousands) 47
Slide 48: Regulatory Capital Ratios As of March 31, 2016
Regulatory Capital Ratios As of March 31, 2016 48
Slide 49: 2016 First Quarter Summary
2016 First Quarter Summary • The asset quality issue that caused AmeriServ to recognize a loss in the first quarter is now resolved and our asset quality has returned to a strong level. • We expect to quickly return to profitability through solid loan and deposit growth along with the expense saving
Slide 50: Jeffrey A. Stopko, President & CEO
Jeffrey A. Stopko President & Chief Executive Officer AmeriServ Financial, Inc . 50
Slide 51: Key Goal: Build on Banking for Life Theme
Key Goal • Build on Banking for Life Theme • Be a Leading Community Bank in the Markets we Serve 51
Slide 52: Lifetime Financial Partner
• Lifetime Financial Partner – To meet the customer’s financial needs wherever they are in life’s journey. • Maintain a safe and sound balance sheet • Leader in economic development and growth 52
Slide 53: Key Goal: Invest Prudently in Technology
Key Goal • Continue to Invest Prudently in Technology 53
Slide 54: Invest in Technology
Invest in Technology • Improve customer service and competitiveness • Increase efficiency • Helps address cyber security 54
Slide 55: Key Goal: Increase Profitability and Capital Returns
Key Goal • Increase Profitability • Improve Shareholder Value by Increasing Capital Returns 55
Slide 56: Increase Profitability
Increase Profitability • Return to typical profitability levels in second quarter 2016 • Further increase Earnings per Share and Tangible Book Value per Share • Increase revenue through earning asset growth and growth of Trust and Wealth Management fees 56
Slide 57: Increase Profitability: Reduce Non-Interest Expense
• Reduce Non - Interest Expense – Consolidated State College Market Branch Offices – Eliminated One Executive Office Position • Should Result in Total Annual Expense Savings of $750,000 57 Increase Profitability
Slide 58: SBLF Preferred Stock Payoff
• 2016 First Quarter Payoff $21 million of SBLF Preferred Stock • Accomplished by using funds from a $7.65 million subordinated debt issuance and internal funds 58 Improve Shareholder Value by Increasing Capital Returns
Slide 59: Improve Shareholder Value by Increasing Capital Returns
Improve Shareholder Value by Increasing Capital Returns • Consider more active return of capital to shareholders in second half 2016 – Increased common dividend payments – Common stock buyback program • Preserve capital to support balance sheet growth 59
Slide 60: Thank You!
Thank You! • Customers • Shareholders • AmeriServ’s Commitment to You and the Communities We Serve ! 60
Slide 61: James Huerth, President AmeriServ Trust
James Huerth President AmeriServ Trust & Financial Services Company 61
Slide 62: Mike Baylor, EVP Chief Commercial Banking Officer
Mike Baylor Executive Vice President Chief Commercial Banking Officer 62
Slide 63: Carolyn Concannon, Chief Risk Officer
Carolyn Concannon Executive Vice President Chief Risk Officer Chief Credit Officer 63
Slide 64: Report On Election
BANKING FOR LIFE Report On Election
Slide 65: Question & Answer Period
BANKING FOR LIFE Question & Answer Period Bn
Slide 66: Banking for Today. Banking for Tomorrow. Banking for Life.
BANKING FOR TODAY. BANKING FOR TOMORROW. BANKING FOR LIFE. ®s AMERI. FINANCIAL,ING.
Ameriserv Financial — Shareholder Meeting (April 2016) on 6ix