Ameriserv Financial Inc. · NASDAQ:ASRV
Ameriserv Financial — Investor Presentation (June 2023)
51 slides from Ameriserv Financial's investor presentation, Jun 1, 2023
Slide 1: Investor Presentation
2025 Investor Presentation
Slide 2: Michael D. Lynch, EVP, CFO, CIO, CRO
2 Michael D. Lynch Executive Vice President Chief Financial Officer Chief Investment Officer Chief Risk Officer
Slide 3: Forward-Looking Statements
3 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 inc
Slide 4: Annual Financial Results Through 2022
4 Annual Financial Results Through 2022
Slide 5: Net Income
5 Net Income (thousands) $0 $2,000 $4,000 $6,000 $8,000 2018 2019 2020 2021 2022 $7,768 $6,028 $4,598 $7,072 $7,448
Slide 6: Earnings Per Common Share
Earnings Per Common Share $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 2018 2019 2020 2021 2022 $0.43 $0.35 $0.27 $0.41 $0.43 6
Slide 7: Net-Interest Income
Net-Interest Income (thousands) $25,000 $35,000 $45,000 2018 2019 2020 2021 2022 $35,494 $35,442 $36,367 $39,083 $40,563 7
Slide 8: Net Interest Margin
Net Interest Margin % 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 2018 2019 2020 2021 2022 3.31% 3.29% 3.19% 3.15% 3.27% 8
Slide 9: Total Average Securities
Total Average Securities (Millions) 0 5 0 100 150 200 250 2018 2019 2020 2021 2022 185 194 188 210 245 9
Slide 10: Total Average Loans
Total Average Loans (Millions) 600 700 800 900 1,000 2018 2019 2020 2021 2022 882 875 923 989 978 10
Slide 11: Total Average Loans Excluding PPP Loans
Total Average Loans Excluding PPP Loans (Millions) 600 700 800 900 1,000 2018 2019 2020 2021 2022 882 875 878 943 973 11
Slide 12: Total Average Deposits
Total Average Deposits (Millions) 700 800 900 1,000 1,100 1,200 2018 2019 2020 2021 2022 960 980 1,035 1,154 1,156 12
Slide 13: Average Deposits Vs. Total Deposit Cost
Average Deposits Vs. Total Deposit Cost % 969 980 985 984 983 1,036 1,054 1,067 1,103 1,165 1,189 1,161 1,159 1,163 1,159 1,145 1.14% 1.17% 1.17% 1.09% 1.01% 0.73% 0.65% 0.59% 0.52% 0.45% 0.40% 0.31% 0.28% 0.33% 0.59% 1.02% 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 800 900 1,000 1,100 1,200 1Q '19 2
Slide 14: Loan Loss Provision vs. Net Charge Offs
($1,000) $0 $1,000 $2,000 $3,000 2018 2019 2020 2021 2022 -$600 $800 $2,375 $1,100 $50 $943 $192 $309 $47 $1,705 Loan Loss Provision Net Charge Offs Loan Loss Provision vs. Net Charge Offs (Thousands) 14
Slide 15: Non-Performing Assets
Non-Performing Assets (Thousands) $0 $2,000 $4,000 $6,000 2018 2019 2020 2021 2022 $1,378 $2,339 $3,331 $3,323 $5,200 15
Slide 16: Non-Interest Revenue
Non-Interest Revenue (excluding security sale gains/losses) (thousands) $12,000 $14,000 $16,000 $18,000 2018 2019 2020 2021 2022 $14,507 $15,155 $16,275 $17,677 $16,692 16
Slide 17: Total Wealth Management Fee Income
Total Wealth Management Fee Income (thousands) $6,500 $8,500 $10,500 $12,500 2018 2019 2020 2021 2022 $9,659 $9,730 $10,212 $11,986 $11,619 17
Slide 18: Non-Interest Expense
Non-Interest Expense (thousands) $30,000 $35,000 $40,000 $45,000 $50,000 2018 2019 2020 2021 2022 $40,936 $41,815 $44,455 $46,970 $48,004 18
Slide 19: Tangible Book Value
Tangible Book Value $3.75 $4.25 $4.75 $5.25 $5.75 $6.25 2018 2019 2020 2021 2022 $4.88 $5.08 $5.42 $6.02 $5.28 19
Slide 20: Securities Valuation Allowance
Securities Valuation Allowance (thousands) 3,341 4,302 4,445 4,481 2,972 3,625 3,035 1,755 (5,663) (11,096) -20,000 (19,159) (18,909) -15,000 -10,000 -5,000 0 5,000 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 With 2022 dramatic increases in interest rates, the
Slide 21: Pension Expense
2020 2021 2022 Normal Pension Expense 2,169 1,015 18 Settlement Charge - 1,736 2,498 Total Pension Expense 2,169 2,751 2,516 AmeriServ Financial, Inc. Pension Expense 21
Slide 22: Non-Interest Expense Excluding Pension Settlement Charge
Non-Interest Expense Excluding Pension Settlement Charge (thousands) $30,000 $35,000 $40,000 $45,000 $50,000 2018 2019 2020 2021 2022 $40,936 $41,815 $44,455 $45,234 $45,506 22
Slide 23: Earnings Per Common Share Excluding Pension Settlement Charge
Earnings Per Common Share Excluding Pension Settlement Charge (1)(2) $0.00 $0.15 $0.30 $0.45 $0.60 2018 2019 2020 2021 2022 $0.43 $0.35 $0.27 $0.50 $0.55 (1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release. (2) Adjusted for pension settlement cha
Slide 24: 2022 Summary
2022 Summary • The higher national interest rates resulted in an improved net interest margin performance as total interest income increased to a higher degree than the increase in total interest expense. • Effective asset quality management resulted in a significant reduction to the loan loss provi
Slide 25: 2022 Summary
2022 Summary • Non-interest expense was well-controlled despite the recognition of pension settlement charges throughout the year. • Overall, our improved earnings performance in 2022 reflects the full year benefit of several important strategic actions that management executed in 2021 to reduce our
Slide 26: Jeffrey A. Stopko, President / CEO
26 Jeffrey A. Stopko President / CEO
Slide 27: 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 $2.4 Billion Assets Under Administration ▪ Stable depo
Slide 28: Quarterly Net Income
28 $0 $500 $1,000 $1,500 $2,000 $2,500 1Q '21 2Q 3Q 4Q 1Q '22 2Q 3Q 4Q 1Q '23 2,081 1,708 1,431 1,851 2,418 1,981 2,102 947 1,515 Net Income (Thousands)
Slide 29: Earnings per Share
29 $0.00 $0.05 $0.10 $0.15 1Q '21 2Q 3Q 4Q 1Q '22 2Q 3Q 4Q 1Q '23 $0.12 $0.10 $0.08 $0.11 $0.14 $0.12 $0.12 $0.06 $0.09 Earnings per Share
Slide 30: Key Constituents We Manage For
30 Key Constituents We Manage For • Shareholders • Customers • Employees • Community AmeriServ Strategic Plan
Slide 31: AmeriServ Strategic Plan
31 Create long-term value for our shareholders by: • Maintaining financially strong balance sheet • Appropriately managing risk • Consistently improving shareholder returns AmeriServ Strategic Plan
Slide 32: Financially Strong Balance Sheet: Deposit Composition
32 Financially Strong Balance Sheet Demand Deposits $194.8 Savings, NOW & Money Market, $638.9 Certificates of Deposit $279.2 Jumbo Certificates of Deposit $18.9 $1.132 Billion 17% 2% 25% 56% Deposit Composition ($mm) As of March 31, 2023
Slide 33: Financially Strong Balance Sheet: Insured Deposits
33 Financially Strong Balance Sheet Insured Deposits Under $250,000 Public Funds that are Collateralized Uninsured Deposits 19% 11% 70% Analysis of Insured Deposits As of March 31, 2023
Slide 34: Financially Strong Balance Sheet: Loan Portfolio Composition
34 Financially Strong Balance Sheet Loan Portfolio Composition ($mm) As of March 31, 2023 Residential Mortgage $175.9 Home Equity & Consumer $99.8 Commercial & Industrial $151.3 Commercial Real Estate $553.9 $980.9 Million 72% Commercial / 28% Retail Non-Owner Occupied CRE / Total Capital Ratio: 340
Slide 35: Commercial Loan Portfolio Diversification
35 Financially Strong Balance Sheet Commercial Loan Portfolio Diversification ($mm) As of March 31, 2023 $234.1 33% $268.6 38% $103.4 15% $99.1 14% Johnstown Pittsburgh Hagerstown State College/Altoona Loan Total = $705.2 Million
Slide 36: Interest Rate Risk
36 Interest Rate Risk • Proactive steps taken to address net interest margin compression. • Executed $60 million of interest rate hedges in 2023 to bring the Company’s interest rate risk position to neutral. • Prudently extending FHLB borrowings to take advantage of the inverted yield curve. • Limit
Slide 37: Liquidity Risk
37 Liquidity Risk • Stable diverse core deposit base generated in our local communities. • Do not use brokered deposits as a funding source. • Bank has experienced deposit growth in 2023. • Available unused borrowing capacity in excess of $300 million at the FHLB which sharply exceeds our level of u
Slide 38: Credit Risk
38 Credit Risk • Long term history of disciplined underwriting and low net loan charge-offs. • Adopted CECL in the first quarter of 2023. • Non-performing assets well controlled and amounted to $4.6 million or 0.47% of total loans on March 31, 2023. • Have historically maintained solid loan loss res
Slide 39: Strategic Outlook for 2023
39 • Generate positive operating leverage by growing revenues at a faster pace than expenses. • Continue our diligent focus on capital allocation. • Further leverage union related revenue streams. Strategic Outlook for 2023
Slide 40: Revenue Diversification Promotes Positive Operating Leverage
40 Revenue Diversification Promotes Positive Operating Leverage Non-Interest Income 28% Net Interest Income 72% ASRV generates more revenue from non-interest income than our peers due to our strong wealth management company.
Slide 41: Revenue Diversification: Wealth Management
41 • Profitable Company with good financial contribution to ASRV. • Good Diversification of business lines within Wealth Management: • Retirement Services, Personal Trust, Investment Management, ERECT Fund & Diversified Services. • Scalable business model well positioned for further growth. Revenue
Slide 42: Wealth Management Revenue
42 Wealth Management Revenue $2,872 $3,023 $3,136 $2,955 $3,165 $2,976 $2,813 $2,665 $2,736 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 1Q 2021 2Q 2021 3Q 2021 4Q 2021 1Q 2022 2Q 2022 3Q 2022 4Q 2022 1Q 2023
Slide 43: Leverage Union Relationships to Generate Revenue
43 • Wealth Management Company is trustee for the $250 million ERECT FUND. • ASRV Bank is a preferred mortgage and consumer loan provider for the Pennsylvania State Education Association. • Expands our reach on these products to customers throughout Pennsylvania. • Since inception we have originated
Slide 44: Capital Allocation Strategies
44 • Return capital to shareholders through dividends, share repurchases, or both if feasible. • Focus on growing EPS, book value and tangible book value per share. • Capital return strategies are always subject to maintaining sufficient capital to support balance sheet growth. • We conservatively b
Slide 45: Regulatory Capital Ratios
45 10.52% 10.52% 14.17% 8.46% 11.52% 11.52% 12.73% 9.33% 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 March 31, 2023
Slide 46: Capital Returns to Shareholders
46 Capital Returns to Shareholders
Slide 47: Capital Allocation – Common Stock Dividends
47 • As a result of the Company’s improved earnings power, common stock dividend payments to shareholders increased by 15% in 2022. • These dividends provide shareholders with an ongoing cash return and a competitive dividend yield of 4.2% based upon the current stock price. • Our common dividend pa
Slide 48: Common Dividend per Share
48 $0.01 $0.015 $0.020 $0.025 $0.030 $0.00 $0.01 $0.02 $0.03 1Q '14 1Q '15 1Q '16 1Q '17 1Q '18 1Q '19 1Q '20 1Q '21 1Q '22 1Q '23 Common Dividend per Share
Slide 49: Capital Allocation – Common Stock Buybacks
49 • 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 50: Capital Allocation – ASRV Stock Price
50 • We generated positive total shareholder returns of 5% for the 2022 year which compared favorably to most bank stock indexes which produced negative total shareholder returns for 2022. • So far in 2023 our common stock price has declined by 27% which is comparable with the bank indexes we are in
Slide 51: 2025
2025 Investor Presentation
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