Company Quick10K Filing
Ameriserv Financial
Financials
Price4.20 EPS0
Shares18 P/E10
MCap74 P/FCF55
Net Debt-33 EBIT23
TEV40 TEV/EBIT2
TTM 2019-09-30, in MM, except price, ratios
Filings
10-Q 2020-03-31 Filed 2020-05-08
10-K 2019-12-31 Filed 2020-03-02
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-08-12
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-05
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-10
10-Q 2018-03-31 Filed 2018-05-11
10-K 2017-12-31 Filed 2018-03-02
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-03-03
10-Q 2016-09-30 Filed 2016-11-04
10-Q 2016-06-30 Filed 2016-08-05
10-Q 2016-03-31 Filed 2016-05-06
10-K 2015-12-31 Filed 2016-03-08
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-06
10-Q 2014-09-30 Filed 2014-11-07
10-Q 2014-06-30 Filed 2014-08-08
10-Q 2014-03-31 Filed 2014-05-09
10-K 2013-12-31 Filed 2014-02-28
10-Q 2013-09-30 Filed 2013-11-13
10-Q 2013-06-30 Filed 2013-08-09
10-Q 2013-03-31 Filed 2013-05-10
10-K 2012-12-31 Filed 2013-03-08
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-09
10-K 2011-12-31 Filed 2012-03-09
10-Q 2011-09-30 Filed 2011-11-10
10-Q 2011-06-30 Filed 2011-08-12
10-Q 2011-03-31 Filed 2011-05-06
10-K 2010-12-31 Filed 2011-03-07
10-Q 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-08-06
10-Q 2010-03-31 Filed 2010-05-07
10-K 2009-12-31 Filed 2010-02-26
Reports
8-K 2020-05-08 Officers, Exhibits
8-K 2020-04-28 Shareholder Vote, Regulation FD, Exhibits
8-K 2020-04-06 Amend Bylaw, Other Events, Exhibits
8-K 2020-03-31 Earnings, Other Events, Exhibits
8-K 2019-12-31 Earnings, Other Events, Exhibits
8-K 2019-10-18 Other Events, Exhibits
8-K 2019-10-17 Amend Bylaw, Exhibits
8-K 2019-09-30 Earnings, Exhibits
8-K 2019-07-19 Other Events, Exhibits
8-K 2019-06-30 Earnings, Exhibits
8-K 2019-04-23 Shareholder Vote, Regulation FD, Exhibits
8-K 2019-04-22 Other Events, Exhibits
8-K 2019-04-18 Amend Bylaw, Exhibits
8-K 2019-03-31 Earnings, Other Events, Exhibits
8-K 2019-01-24 Regulation FD
8-K 2019-01-23 Other Events, Exhibits
8-K 2018-12-31 Earnings, Exhibits
8-K 2018-10-22 Other Events, Exhibits
8-K 2018-09-30 Earnings, Exhibits
8-K 2018-07-27 Regulation FD, Exhibits
8-K 2018-07-20 Other Events, Exhibits
8-K 2018-06-30 Earnings, Other Events, Exhibits
8-K 2018-06-21 Amend Bylaw, Exhibits
8-K 2018-05-23 Amend Bylaw, Exhibits
8-K 2018-04-24 Shareholder Vote, Regulation FD, Exhibits
8-K 2018-04-19 Officers
8-K 2018-03-31 Earnings
8-K 2018-01-24 Other Events, Exhibits
8-K 2018-01-23 Earnings
8-K 2018-01-11 Other Events

ASRV 10Q Quarterly Report

Content
Item 1. Financial Statements
Item 2.
Part II Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
Exhibits
EX-15.1 tm2016914-ex15_1.htm
EX-15.2 tm2016914-ex15_2.htm
EX-31.1 tm2016914-ex31_1.htm
EX-31.2 tm2016914-ex31_2.htm
EX-32.1 tm2016914-ex32_1.htm
EX-32.2 tm2016914-ex32_2.htm

Ameriserv Financial Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
10-Q 1 tm2016914-1_10q.htm FORM 10-Q tm2016914-1_10q - none - 14.0952678s
​
​
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2020
☐   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from      to     
Commission File Number 0-11204
AmeriServ Financial, Inc.
(Exact name of registrant as specified in its charter)
​
Pennsylvania
​ ​
25-1424278
​
​
(State or other jurisdiction
of incorporation or organization)​
​ ​
(I.R.S. Employer
Identification No.)​
​
​
Main & Franklin Streets,
P.O. Box 430, Johnstown, PA
​ ​
15907-0430
​
​
(Address of principal executive offices)​
​ ​
(Zip Code)
​
Registrant’s telephone number, including area code (814) 533-5300
Securities registered pursuant to Section 12(b) of the Act:
​
Title Of Each Class
​ ​
Trading
Symbol
​ ​
Name of Each Exchange On Which Registered
​
​
Common Stock
​ ​
ASRV
​ ​
The NASDAQ Stock Market LLC
​
​
8.45% Beneficial Unsecured Securities, Series A
(AmeriServ Financial Capital Trust I)
​ ​
ASRVP
​ ​
The NASDAQ Stock Market LLC
​
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
​
Large accelerated filer ☐
​ ​
Accelerated filer ☐
​ ​
Non-accelerated filer ☒
​ ​
Smaller reporting company ☒
​
​ Emerging growth company ☐ ​
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).
☐ Yes ☒ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
​
Class
​ ​
Outstanding at May 1, 2020
​
​
Common Stock, par value $0.01
​ ​
17,043,644
​
​
​
AmeriServ Financial, Inc.
INDEX
​ ​ ​
Page No.
​
PART I. FINANCIAL INFORMATION: ​ ​
​
​ ​ ​ ​ 1 ​ ​
​ ​ ​ ​ 1 ​ ​
​ ​ ​ ​ 2 ​ ​
​ ​ ​ ​ 3 ​ ​
​ ​ ​ ​ 4 ​ ​
​ ​ ​ ​ 5 ​ ​
​ ​ ​ ​ 6 ​ ​
​
​ ​ ​ ​ 33 ​ ​
​
​ ​ ​ ​ 48 ​ ​
​
​ ​ ​ ​ 48 ​ ​
PART II. OTHER INFORMATION ​ ​
​
​ ​ ​ ​ 49 ​ ​
​
​ ​ ​ ​ 49 ​ ​
​
​ ​ ​ ​ 49 ​ ​
​
​ ​ ​ ​ 49 ​ ​
​
​ ​ ​ ​ 49 ​ ​
​
​ ​ ​ ​ 49 ​ ​
​
​ ​ ​ ​ 50 ​ ​
i
Item 1.   Financial Statements
AmeriServ Financial, Inc.
   
CONSOLIDATED BALANCE SHEETS
(In thousands except shares)
(Unaudited)
​ ​ ​
March 31,
2020
​ ​
December 31,
2019
​
ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and due from depository institutions
​ ​ ​ $ 17,675 ​ ​ ​ ​ $ 15,642 ​ ​
Interest bearing deposits
​ ​ ​ ​ 2,890 ​ ​ ​ ​ ​ 2,755 ​ ​
Short-term investments in money market funds
​ ​ ​ ​ 3,541 ​ ​ ​ ​ ​ 3,771 ​ ​
Total cash and cash equivalents
​ ​ ​ ​ 24,106 ​ ​ ​ ​ ​ 22,168 ​ ​
Investment securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Available for sale, at fair value
​ ​ ​ ​ 142,716 ​ ​ ​ ​ ​ 141,749 ​ ​
Held to maturity (fair value $44,236 on March 31, 2020 and $41,082 on December 31, 2019)
​ ​ ​ ​ 42,068 ​ ​ ​ ​ ​ 39,936 ​ ​
Loans held for sale
​ ​ ​ ​ 4,750 ​ ​ ​ ​ ​ 4,868 ​ ​
Loans
​ ​ ​ ​ 873,055 ​ ​ ​ ​ ​ 883,090 ​ ​
Less: Unearned income
​ ​ ​ ​ 406 ​ ​ ​ ​ ​ 384 ​ ​
Allowance for loan losses
​ ​ ​ ​ 9,334 ​ ​ ​ ​ ​ 9,279 ​ ​
Net loans
​ ​ ​ ​ 863,315 ​ ​ ​ ​ ​ 873,427 ​ ​
Premises and equipment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Operating lease right-of-use asset
​ ​ ​ ​ 825 ​ ​ ​ ​ ​ 846 ​ ​
Financing lease right-of-use asset
​ ​ ​ ​ 3,074 ​ ​ ​ ​ ​ 3,078 ​ ​
Other premises and equipment, net
​ ​ ​ ​ 14,660 ​ ​ ​ ​ ​ 14,643 ​ ​
Accrued interest income receivable
​ ​ ​ ​ 3,759 ​ ​ ​ ​ ​ 3,449 ​ ​
Goodwill
​ ​ ​ ​ 11,944 ​ ​ ​ ​ ​ 11,944 ​ ​
Bank owned life insurance
​ ​ ​ ​ 39,041 ​ ​ ​ ​ ​ 38,916 ​ ​
Net deferred tax asset
​ ​ ​ ​ 3,705 ​ ​ ​ ​ ​ 3,976 ​ ​
Federal Home Loan Bank stock
​ ​ ​ ​ 3,988 ​ ​ ​ ​ ​ 3,985 ​ ​
Federal Reserve Bank stock
​ ​ ​ ​ 2,125 ​ ​ ​ ​ ​ 2,125 ​ ​
Other assets
​ ​ ​ ​ 8,279 ​ ​ ​ ​ ​ 6,074 ​ ​
TOTAL ASSETS
​ ​ ​ $ 1,168,355 ​ ​ ​ ​ $ 1,171,184 ​ ​
LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Non-interest bearing deposits
​ ​ ​ $ 145,630 ​ ​ ​ ​ $ 136,462 ​ ​
Interest bearing deposits
​ ​ ​ ​ 811,963 ​ ​ ​ ​ ​ 824,051 ​ ​
Total deposits
​ ​ ​ ​ 957,593 ​ ​ ​ ​ ​ 960,513 ​ ​
Short-term borrowings
​ ​ ​ ​ 16,354 ​ ​ ​ ​ ​ 22,412 ​ ​
Advances from Federal Home Loan Bank
​ ​ ​ ​ 58,218 ​ ​ ​ ​ ​ 53,668 ​ ​
Operating lease liabilities
​ ​ ​ ​ 842 ​ ​ ​ ​ ​ 865 ​ ​
Financing lease liabilities
​ ​ ​ ​ 3,177 ​ ​ ​ ​ ​ 3,163 ​ ​
Guaranteed junior subordinated deferrable interest debentures, net
​ ​ ​ ​ 12,959 ​ ​ ​ ​ ​ 12,955 ​ ​
Subordinated debt, net
​ ​ ​ ​ 7,517 ​ ​ ​ ​ ​ 7,511 ​ ​
Total borrowed funds
​ ​ ​ ​ 99,067 ​ ​ ​ ​ ​ 100,574 ​ ​
Other liabilities
​ ​ ​ ​ 10,855 ​ ​ ​ ​ ​ 11,483 ​ ​
TOTAL LIABILITIES
​ ​ ​ ​ 1,067,515 ​ ​ ​ ​ ​ 1,072,570 ​ ​
SHAREHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Common stock, par value $0.01 per share; 30,000,000 shares authorized; 26,672,463 shares
issued and 17,043,644 shares outstanding on March 31, 2020; 26,650,728 shares issued
and 17,057,871 shares outstanding on December 31, 2019
​ ​ ​ ​ 267 ​ ​ ​ ​ ​ 267 ​ ​
Treasury stock at cost, 9,628,819 shares on March 31, 2020 and 9,592,857 shares on December 31, 2019
​ ​ ​ ​ (83,280) ​ ​ ​ ​ ​ (83,129) ​ ​
Capital surplus
​ ​ ​ ​ 145,938 ​ ​ ​ ​ ​ 145,888 ​ ​
Retained earnings
​ ​ ​ ​ 52,745 ​ ​ ​ ​ ​ 51,759 ​ ​
Accumulated other comprehensive loss, net
​ ​ ​ ​ (14,830) ​ ​ ​ ​ ​ (16,171) ​ ​
TOTAL SHAREHOLDERS’ EQUITY
​ ​ ​ ​ 100,840 ​ ​ ​ ​ ​ 98,614 ​ ​
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
​ ​ ​ $ 1,168,355 ​ ​ ​ ​ $ 1,171,184 ​ ​
See accompanying notes to unaudited consolidated financial statements.
1
AmeriServ Financial, Inc.
   
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
​ ​ ​
Three months ended
March 31,
​
​ ​ ​
2020
​ ​
2019
​
INTEREST INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest and fees on loans
​ ​ ​ $ 10,332 ​ ​ ​ ​ $ 10,418 ​ ​
Interest bearing deposits
​ ​ ​ ​ 4 ​ ​ ​ ​ ​ 6 ​ ​
Short-term investments in money market funds
​ ​ ​ ​ 72 ​ ​ ​ ​ ​ 69 ​ ​
Investment securities:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Available for sale
​ ​ ​ ​ 1,183 ​ ​ ​ ​ ​ 1,319 ​ ​
Held to maturity
​ ​ ​ ​ 353 ​ ​ ​ ​ ​ 352 ​ ​
Total Interest Income
​ ​ ​ ​ 11,944 ​ ​ ​ ​ ​ 12,164 ​ ​
INTEREST EXPENSE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ ​ 2,458 ​ ​ ​ ​ ​ 2,730 ​ ​
Short-term borrowings
​ ​ ​ ​ 12 ​ ​ ​ ​ ​ 102 ​ ​
Advances from Federal Home Loan Bank
​ ​ ​ ​ 284 ​ ​ ​ ​ ​ 235 ​ ​
Financing lease liabilities
​ ​ ​ ​ 29 ​ ​ ​ ​ ​ 30 ​ ​
Guaranteed junior subordinated deferrable interest debentures
​ ​ ​ ​ 280 ​ ​ ​ ​ ​ 280 ​ ​
Subordinated debt
​ ​ ​ ​ 130 ​ ​ ​ ​ ​ 130 ​ ​
Total Interest Expense
​ ​ ​ ​ 3,193 ​ ​ ​ ​ ​ 3,507 ​ ​
NET INTEREST INCOME
​ ​ ​ ​ 8,751 ​ ​ ​ ​ ​ 8,657 ​ ​
Provision (credit) for loan losses
​ ​ ​ ​ 175 ​ ​ ​ ​ ​ (400) ​ ​
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES
​ ​ ​ ​ 8,576 ​ ​ ​ ​ ​ 9,057 ​ ​
NON-INTEREST INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Wealth management fees
​ ​ ​ ​ 2,554 ​ ​ ​ ​ ​ 2,396 ​ ​
Service charges on deposit accounts
​ ​ ​ ​ 286 ​ ​ ​ ​ ​ 310 ​ ​
Net gains on sale of loans
​ ​ ​ ​ 237 ​ ​ ​ ​ ​ 62 ​ ​
Mortgage related fees
​ ​ ​ ​ 126 ​ ​ ​ ​ ​ 44 ​ ​
Bank owned life insurance
​ ​ ​ ​ 125 ​ ​ ​ ​ ​ 128 ​ ​
Other income
​ ​ ​ ​ 504 ​ ​ ​ ​ ​ 665 ​ ​
Total Non-Interest Income
​ ​ ​ ​ 3,832 ​ ​ ​ ​ ​ 3,605 ​ ​
NON-INTEREST EXPENSE ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Salaries and employee benefits
​ ​ ​ ​ 6,704 ​ ​ ​ ​ ​ 6,301 ​ ​
Net occupancy expense
​ ​ ​ ​ 671 ​ ​ ​ ​ ​ 658 ​ ​
Equipment expense
​ ​ ​ ​ 395 ​ ​ ​ ​ ​ 361 ​ ​
Professional fees
​ ​ ​ ​ 1,154 ​ ​ ​ ​ ​ 1,120 ​ ​
Supplies, postage and freight
​ ​ ​ ​ 179 ​ ​ ​ ​ ​ 173 ​ ​
Miscellaneous taxes and insurance
​ ​ ​ ​ 275 ​ ​ ​ ​ ​ 277 ​ ​
Federal deposit insurance expense
​ ​ ​ ​ 26 ​ ​ ​ ​ ​ 80 ​ ​
Other expense
​ ​ ​ ​ 1,229 ​ ​ ​ ​ ​ 1,323 ​ ​
Total Non-Interest Expense
​ ​ ​ ​ 10,633 ​ ​ ​ ​ ​ 10,293 ​ ​
PRETAX INCOME
​ ​ ​ ​ 1,775 ​ ​ ​ ​ ​ 2,369 ​ ​
Provision for income tax expense
​ ​ ​ ​ 366 ​ ​ ​ ​ ​ 491 ​ ​
NET INCOME
​ ​ ​ ​ 1,409 ​ ​ ​ ​ ​ 1,878 ​ ​
PER COMMON SHARE DATA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 0.08 ​ ​ ​ ​ $ 0.11 ​ ​
Average number of shares outstanding
​ ​ ​ ​ 17,043 ​ ​ ​ ​ ​ 17,578 ​ ​
Diluted:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 0.08 ​ ​ ​ ​ $ 0.11 ​ ​
Average number of shares outstanding
​ ​ ​ ​ 17,099 ​ ​ ​ ​ ​ 17,664 ​ ​
See accompanying notes to unaudited consolidated financial statements.
2
AmeriServ Financial, Inc.
   
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
​ ​ ​
Three Months Ended
March 31,
​
​ ​ ​
2020
​ ​
2019
​
COMPREHENSIVE INCOME ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 1,409 ​ ​ ​ ​ $ 1,878 ​ ​
Other comprehensive income (loss), before tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pension obligation change for defined benefit plan
​ ​ ​ ​ 528 ​ ​ ​ ​ ​ (1,835) ​ ​
Income tax effect
​ ​ ​ ​ (111) ​ ​ ​ ​ ​ 385 ​ ​
Unrealized holding gains on available for sale securities arising during period
​ ​ ​ ​ 1,170 ​ ​ ​ ​ ​ 1,763 ​ ​
Income tax effect
​ ​ ​ ​ (246) ​ ​ ​ ​ ​ (370) ​ ​
Other comprehensive income (loss)
​ ​ ​ ​ 1,341 ​ ​ ​ ​ ​ (57) ​ ​
Comprehensive income
​ ​ ​ $ 2,750 ​ ​ ​ ​ $ 1,821 ​ ​
See accompanying notes to unaudited consolidated financial statements.
3
AmeriServ Financial, Inc.
   
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands, except share data)
(Unaudited)
​ ​ ​
Three months ended
March 31,
​
​ ​ ​
2020
​ ​
2019
​
COMMON STOCK ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balance at beginning of period
​ ​ ​ ​ 267 ​ ​ ​ ​ ​ 266 ​ ​
New common shares issued for exercise of stock options (21,735 and 33,684 shares for the three months ended March 31, 2020 and 2019, respectively)
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Balance at end of period
​ ​ ​ ​ 267 ​ ​ ​ ​ ​ 266 ​ ​
TREASURY STOCK ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balance at beginning of period
​ ​ ​ ​ (83,129) ​ ​ ​ ​ ​ (80,579) ​ ​
Treasury stock, purchased at cost (35,962 and 112,311 shares for the three months ended March 31, 2020 and 2019, respectively)
​ ​ ​ ​ (151) ​ ​ ​ ​ ​ (476) ​ ​
Balance at end of period
​ ​ ​ ​ (83,280) ​ ​ ​ ​ ​ (81,055) ​ ​
CAPITAL SURPLUS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balance at beginning of period
​ ​ ​ ​ 145,888 ​ ​ ​ ​ ​ 145,782 ​ ​
New common shares issued for exercise of stock options (21,735 and 33,684 shares for the three months ended March 31, 2020 and 2019, respectively)
​ ​ ​ ​ 49 ​ ​ ​ ​ ​ 85 ​ ​
Stock option expense
​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 3 ​ ​
Balance at end of period
​ ​ ​ ​ 145,938 ​ ​ ​ ​ ​ 145,870 ​ ​
RETAINED EARNINGS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balance at beginning of period
​ ​ ​ ​ 51,759 ​ ​ ​ ​ ​ 46,733 ​ ​
Net income
​ ​ ​ ​ 1,409 ​ ​ ​ ​ ​ 1,878 ​ ​
Cash dividend declared on common stock ($0.025 and $0.020 per share for the three months ended March 31, 2020 and 2019, respectively)
​ ​ ​ ​ (423) ​ ​ ​ ​ ​ (349) ​ ​
Balance at end of period
​ ​ ​ ​ 52,745 ​ ​ ​ ​ ​ 48,262 ​ ​
ACCUMULATED OTHER COMPREHENSIVE LOSS, NET ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Balance at beginning of period
​ ​ ​ ​ (16,171) ​ ​ ​ ​ ​ (14,225) ​ ​
Other comprehensive income (loss)
​ ​ ​ ​ 1,341 ​ ​ ​ ​ ​ (57) ​ ​
Balance at end of period
​ ​ ​ ​ (14,830) ​ ​ ​ ​ ​ (14,282) ​ ​
TOTAL STOCKHOLDERS’ EQUITY
​ ​ ​ $ 100,840 ​ ​ ​ ​ $ 99,061 ​ ​
See accompanying notes to unaudited consolidated financial statements.
4
AmeriServ Financial, Inc.
   
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
​ ​ ​
Three months ended
March 31,
​
​ ​ ​
2020
​ ​
2019
​
OPERATING ACTIVITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 1,409 ​ ​ ​ ​ $ 1,878 ​ ​
Adjustments to reconcile net income to net cash provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Provision (credit) for loan losses
​ ​ ​ ​ 175 ​ ​ ​ ​ ​ (400) ​ ​
Depreciation and amortization expense
​ ​ ​ ​ 492 ​ ​ ​ ​ ​ 450 ​ ​
Net amortization of investment securities
​ ​ ​ ​ 65 ​ ​ ​ ​ ​ 66 ​ ​
Net gains on loans held for sale
​ ​ ​ ​ (237) ​ ​ ​ ​ ​ (62) ​ ​
Amortization of deferred loan fees
​ ​ ​ ​ (26) ​ ​ ​ ​ ​ (30) ​ ​
Origination of mortgage loans held for sale
​ ​ ​ ​ (15,264) ​ ​ ​ ​ ​ (3,866) ​ ​
Sales of mortgage loans held for sale
​ ​ ​ ​ 15,619 ​ ​ ​ ​ ​ 4,156 ​ ​
Increase in accrued interest receivable
​ ​ ​ ​ (310) ​ ​ ​ ​ ​ (443) ​ ​
Decrease in accrued interest payable
​ ​ ​ ​ (150) ​ ​ ​ ​ ​ (17) ​ ​
Earnings on bank owned life insurance
​ ​ ​ ​ (125) ​ ​ ​ ​ ​ (128) ​ ​
Deferred income taxes
​ ​ ​ ​ 351 ​ ​ ​ ​ ​ 532 ​ ​
Stock compensation expense
​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 3 ​ ​
Net change in operating leases
​ ​ ​ ​ (23) ​ ​ ​ ​ ​ (4) ​ ​
Other, net
​ ​ ​ ​ (2,603) ​ ​ ​ ​ ​ (434) ​ ​
Net cash provided by (used in) operating activities
​ ​ ​ ​ (626) ​ ​ ​ ​ ​ 1,701 ​ ​
INVESTING ACTIVITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Purchase of investment securities – available for sale
​ ​ ​ ​ (6,223) ​ ​ ​ ​ ​ (9,063) ​ ​
Purchase of investment securities – held to maturity
​ ​ ​ ​ (2,618) ​ ​ ​ ​ ​ — ​ ​
Proceeds from maturities of investment securities – available for sale
​ ​ ​ ​ 6,380 ​ ​ ​ ​ ​ 3,484 ​ ​
Proceeds from maturities of investment securities – held to maturity
​ ​ ​ ​ 467 ​ ​ ​ ​ ​ 214 ​ ​
Purchase of regulatory stock
​ ​ ​ ​ (2,010) ​ ​ ​ ​ ​ (4,104) ​ ​
Proceeds from redemption of regulatory stock
​ ​ ​ ​ 2,007 ​ ​ ​ ​ ​ 4,589 ​ ​
Long-term loans originated
​ ​ ​ ​ (42,615) ​ ​ ​ ​ ​ (49,039) ​ ​
Principal collected on long-term loans
​ ​ ​ ​ 52,578 ​ ​ ​ ​ ​ 48,654 ​ ​
Proceeds from sale of other real estate owned
​ ​ ​ ​ 21 ​ ​ ​ ​ ​ 176 ​ ​
Purchase of premises and equipment
​ ​ ​ ​ (421) ​ ​ ​ ​ ​ (1,395) ​ ​
Net cash provided by (used in) investing activities
​ ​ ​ ​ 7,566 ​ ​ ​ ​ ​ (6,484) ​ ​
FINANCING ACTIVITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net increase (decrease) in deposit balances
​ ​ ​ ​ (2,920) ​ ​ ​ ​ ​ 8,608 ​ ​
Net decrease in other short-term borrowings
​ ​ ​ ​ (6,058) ​ ​ ​ ​ ​ (10,117) ​ ​
Principal borrowings on advances from Federal Home Loan Bank
​ ​ ​ ​ 11,050 ​ ​ ​ ​ ​ 2,850 ​ ​
Principal repayments on advances from Federal Home Loan Bank
​ ​ ​ ​ (6,500) ​ ​ ​ ​ ​ (1,000) ​ ​
Principal payments on financing lease liabilities
​ ​ ​ ​ (49) ​ ​ ​ ​ ​ (41) ​ ​
Stock options exercised
​ ​ ​ ​ 49 ​ ​ ​ ​ ​ 85 ​ ​
Purchase of treasury stock
​ ​ ​ ​ (151) ​ ​ ​ ​ ​ (476) ​ ​
Common stock dividends
​ ​ ​ ​ (423) ​ ​ ​ ​ ​ (349) ​ ​
Net cash used in financing activities
​ ​ ​ ​ (5,002) ​ ​ ​ ​ ​ (440) ​ ​
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
​ ​ ​ ​ 1,938 ​ ​ ​ ​ ​ (5,223) ​ ​
CASH AND CASH EQUIVALENTS AT JANUARY 1
​ ​ ​ ​ 22,168 ​ ​ ​ ​ ​ 34,894 ​ ​
CASH AND CASH EQUIVALENTS AT MARCH 31
​ ​ ​ $ 24,106 ​ ​ ​ ​ $ 29,671 ​ ​
​
See accompanying notes to unaudited consolidated financial statements.
5
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1.
Principles of Consolidation
​
The accompanying consolidated financial statements include the accounts of AmeriServ Financial, Inc. (the Company) and its wholly-owned subsidiaries, AmeriServ Financial Bank (the Bank), AmeriServ Trust and Financial Services Company (the Trust Company), and AmeriServ Life Insurance Company (AmeriServ Life). The Bank is a Pennsylvania state-chartered full service bank with 15 locations in Pennsylvania and 1 location in Maryland. The Trust Company offers a complete range of trust and financial services and administers assets valued at $2.0 billion that are not reported on the Company’s Consolidated Balance Sheets at March 31, 2020. AmeriServ Life is a captive insurance company that engages in underwriting as a reinsurer of credit life and disability insurance.
In addition, the Parent Company is an administrative group that provides support in such areas as audit, finance, investments, loan review, general services, and marketing. Significant intercompany accounts and transactions have been eliminated in preparing the consolidated financial statements.
2.
Basis of Preparation
​
The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. In the opinion of management, all adjustments consisting of normal recurring entries considered necessary for a fair presentation have been included. They are not, however, necessarily indicative of the results of consolidated operations for a full-year.
For further information, refer to the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.
3.
Recent Accounting Pronouncements
​
In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses: Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted.
In November 2019, the FASB issued ASU 2019-10, Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). This update defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting companies, non-SEC filers, and all other companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company, as a smaller reporting company, continues to evaluate the impact that the Update will have on our consolidated financial statements. We are currently working with an industry leading third-party consultant and software provider to assist us in the implementation of this standard. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements. The overall impact of the amendment will be affected by the portfolio composition and quality at the adoption date as well as economic conditions and forecasts at that time.
6
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
4.
Revenue Recognition
​
ASU 2014-09, Revenue from Contracts with Customers — Topic 606, requires the Company to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers at the time the transfer of goods or services takes place. Management determined that the primary sources of revenue associated with financial instruments, including interest and fee income on loans and interest on investments, along with certain noninterest revenue sources including net realized gains (losses) on investment securities, mortgage related fees, net gains on loans held for sale, and bank owned life insurance are not within the scope of Topic 606. These sources of revenue cumulatively comprise 79.5% of the total revenue of the Company.
Non-interest income within the scope of Topic 606 are as follows:
•
Wealth management fees — Wealth management fee income is primarily comprised of fees earned from the management and administration of trusts and customer investment portfolios. The Company’s performance obligation is generally satisfied over a period of time and the resulting fees are billed monthly or quarterly, based upon the month end market value of the assets under management. Payment is generally received after month end through a direct charge to customers’ accounts. Due to this delay in payment, a receivable of $825,000 has been established as of March 31, 2020 and is included in other assets on the Consolidated Balance Sheets in order to properly recognize the revenue earned but not yet received. Other performance obligations (such as delivery of account statements to customers) are generally considered immaterial to the overall transactions price. Commissions on transactions are recognized on a trade-date basis as the performance obligation is satisfied at the point in time in which the trade is processed. Also included within wealth management fees are commissions from the sale of mutual funds, annuities, and life insurance products. Commissions on the sale of mutual funds, annuities, and life insurance products are recognized when sold, which is when the Company has satisfied its performance obligation.
​
•
Service charges on deposit accounts — The Company has contracts with its deposit account customers where fees are charged for certain items or services. Service charges include account analysis fees, monthly service fees, overdraft fees, and other deposit account related fees. Revenue related to account analysis fees and service fees is recognized on a monthly basis as the Company has an unconditional right to the fee consideration. Fees attributable to specific performance obligations of the Company (i.e. overdraft fees, etc.) are recognized at a defined point in time based on completion of the requested service or transaction.
​
•
Other non-interest income — Other non-interest income consists of other recurring revenue streams such as safe deposit box rental fees, gain (loss) on sale of other real estate owned and other miscellaneous revenue streams. Safe deposit box rental fees are charged to the customer on an annual basis and recognized when billed. However, if the safe deposit box rental fee is prepaid (i.e. paid prior to issuance of annual bill), the revenue is recognized upon receipt of payment. The Company has determined that since rentals and renewals occur consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Gains and losses on the sale of other real estate owned are recognized at the completion of the property sale when the buyer obtains control of the real estate and all the performance obligations of the Company have been satisfied.
​
7
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three month periods ending March 31, 2020 and 2019 (in thousands).
​ ​ ​
Three months ended
March 31,
​
​ ​ ​
2020
​ ​
2019
​
Non-interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
In-scope of Topic 606 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Wealth management fees
​ ​ ​ $ 2,554 ​ ​ ​ ​ $ 2,396 ​ ​
Service charges on deposit accounts
​ ​ ​ ​ 286 ​ ​ ​ ​ ​ 310 ​ ​
Other
​ ​ ​ ​ 390 ​ ​ ​ ​ ​ 420 ​ ​
Non-interest income (in-scope of Topic 606)
​ ​ ​ ​ 3,230 ​ ​ ​ ​ ​ 3,126 ​ ​
Non-interest income (out-of-scope of Topic 606)
​ ​ ​ ​ 602 ​ ​ ​ ​ ​ 479 ​ ​
Total non-interest income
​ ​ ​ $ 3,832 ​ ​ ​ ​ $ 3,605 ​ ​
​
5.
Earnings Per Common Share
​
Basic earnings per share include only the weighted average common shares outstanding. Diluted earnings per share include the weighted average common shares outstanding and any potentially dilutive common stock equivalent shares in the calculation. Treasury shares are excluded for earnings per share purposes. For the three month periods ending March 31, 2020 and 2019, options to purchase 29,500 common shares, with an exercise price of $3.90 to $4.22, and options to purchase 12,000 common shares, with an exercise price of $4.19 to $4.22, respectively, were outstanding but were not included in the computation of diluted earnings per common share because to do so would be antidilutive.
​ ​ ​
Three months ended
March 31,
​
​ ​ ​
2020
​ ​
2019
​
​ ​ ​
(In thousands, except per share data)
​
Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 1,409 ​ ​ ​ ​ $ 1,878 ​ ​
Denominator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Weighted average common shares outstanding (basic)
​ ​ ​ ​ 17,043 ​ ​ ​ ​ ​ 17,578 ​ ​
Effect of stock options
​ ​ ​ ​ 56 ​ ​ ​ ​ ​ 86 ​ ​
Weighted average common shares outstanding (diluted)
​ ​ ​ ​ 17,099 ​ ​ ​ ​ ​ 17,664 ​ ​
Earnings per common share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic
​ ​ ​ $ 0.08 ​ ​ ​ ​ $ 0.11 ​ ​
Diluted
​ ​ ​ ​ 0.08 ​ ​ ​ ​ ​ 0.11 ​ ​
​
6.
Consolidated Statement of Cash Flows
​
On a consolidated basis, cash and cash equivalents include cash and due from depository institutions, interest bearing deposits and short-term investments in money market funds. The Company made no income tax payments in the first three months of 2020 and 2019. The Company made total interest payments of $3,343,000 in the first three months of 2020 compared to $3,524,000 in the same 2019 period. The Company had no non-cash transfers to other real estate owned (OREO) in the first three months of 2020 compared to $18,000 non-cash transfers in the same 2019 period. During the first three months of 2020, the Company entered into a new financing lease related to office equipment and recorded a
8
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
right-of-use asset and lease liability of $63,000. As a result of the adoption of ASU 2016-02, Leases (Topic 842) as of January 1, 2019, the Company had non-cash transactions associated with the recognition of the right-of-use assets and lease liabilities. Specifically, the Company recognized a right-of-use asset and lease liability of $932,000 related to operating leases and a right-of-use asset and lease liability of $3.3 million related to financing leases during the first three months of 2019.
7.
Investment Securities
​
The cost basis and fair values of investment securities are summarized as follows (in thousands):
Investment securities available for sale (AFS):
​ ​ ​
March 31, 2020
​
​ ​ ​
Cost
Basis
​ ​
Gross
Unrealized
Gains
​ ​
Gross
Unrealized
Losses
​ ​
Fair
Value
​
US Agency
​ ​ ​ $ 3,895 ​ ​ ​ ​ $ 72 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 3,967 ​ ​
US Agency mortgage-backed securities
​ ​ ​ ​ 78,862 ​ ​ ​ ​ ​ 3,278 ​ ​ ​ ​ ​ (56) ​ ​ ​ ​ ​ 82,084 ​ ​
Municipal
​ ​ ​ ​ 14,925 ​ ​ ​ ​ ​ 899 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 15,824 ​ ​
Corporate bonds
​ ​ ​ ​ 41,693 ​ ​ ​ ​ ​ 470 ​ ​ ​ ​ ​ (1,322) ​ ​ ​ ​ ​ 40,841 ​ ​
Total
​ ​ ​ $ 139,375 ​ ​ ​ ​ $ 4,719 ​ ​ ​ ​ $ (1,378) ​ ​ ​ ​ $ 142,716 ​ ​
Investment securities held to maturity (HTM):
​ ​ ​
March 31, 2020
​
​ ​ ​
Cost
Basis
​ ​
Gross
Unrealized
Gains
​ ​
Gross
Unrealized
Losses
​ ​
Fair
Value
​
US Agency mortgage-backed securities
​ ​ ​ $ 10,510 ​ ​ ​ ​ $ 508 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 11,018 ​ ​
Municipal
​ ​ ​ ​ 25,527 ​ ​ ​ ​ ​ 1,674 ​ ​ ​ ​ ​ (50) ​ ​ ​ ​ ​ 27,151 ​ ​
Corporate bonds and other securities
​ ​ ​ ​ 6,031 ​ ​ ​ ​ ​ 42 ​ ​ ​ ​ ​ (6) ​ ​ ​ ​ ​ 6,067 ​ ​
Total
​ ​ ​ $ 42,068 ​ ​ ​ ​ $ 2,224 ​ ​ ​ ​ $ (56) ​ ​ ​ ​ $ 44,236 ​ ​
Investment securities available for sale (AFS):
​ ​ ​
December 31, 2019
​
​ ​ ​
Cost
Basis
​ ​
Gross
Unrealized
Gains
​ ​
Gross
Unrealized
Losses
​ ​
Fair
Value
​
US Agency
​ ​ ​ $ 5,084 ​ ​ ​ ​ $ 32 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 5,116 ​ ​
US Agency mortgage-backed securities
​ ​ ​ ​ 80,046 ​ ​ ​ ​ ​ 1,681 ​ ​ ​ ​ ​ (94) ​ ​ ​ ​ ​ 81,633 ​ ​
Municipal
​ ​ ​ ​ 14,678 ​ ​ ​ ​ ​ 509 ​ ​ ​ ​ ​ (17) ​ ​ ​ ​ ​ 15,170 ​ ​
Corporate bonds
​ ​ ​ ​ 39,769 ​ ​ ​ ​ ​ 342 ​ ​ ​ ​ ​ (281) ​ ​ ​ ​ ​ 39,830 ​ ​
Total
​ ​ ​ $ 139,577 ​ ​ ​ ​ $ 2,564 ​ ​ ​ ​ $ (392) ​ ​ ​ ​ $ 141,749 ​ ​
​
9
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
Investment securities held to maturity (HTM):
​ ​ ​
December 31, 2019
​
​ ​ ​
Cost
Basis
​ ​
Gross
Unrealized
Gains
​ ​
Gross
Unrealized
Losses
​ ​
Fair
Value
​
US Agency mortgage-backed securities
​ ​ ​ $ 9,466 ​ ​ ​ ​ $ 251 ​ ​ ​ ​ $ (4) ​ ​ ​ ​ $ 9,713 ​ ​
Municipal
​ ​ ​ ​ 24,438 ​ ​ ​ ​ ​ 941 ​ ​ ​ ​ ​ (53) ​ ​ ​ ​ ​ 25,326 ​ ​
Corporate bonds and other securities
​ ​ ​ ​ 6,032 ​ ​ ​ ​ ​ 58 ​ ​ ​ ​ ​ (47) ​ ​ ​ ​ ​ 6,043 ​ ​
Total
​ ​ ​ $ 39,936 ​ ​ ​ ​ $ 1,250 ​ ​ ​ ​ $ (104) ​ ​ ​ ​ $ 41,082 ​ ​
Maintaining investment quality is a primary objective of the Company’s investment policy which, subject to certain limited exceptions, prohibits the purchase of any investment security below a Moody’s Investor’s Service or Standard & Poor’s rating of “A.” At March 31, 2020, 52.1% of the portfolio was rated “AAA” as compared to 53.4% at December 31, 2019. Approximately 9.8% of the portfolio was either rated below “A” or unrated at March 31, 2020 as compared to 9.1% at December 31, 2019.
The Company sold no AFS securities during the first quarter of 2020 and 2019.
The carrying value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $117,364,000 at March 31, 2020 and $117,076,000 at December 31, 2019.
The following tables present information concerning investments with unrealized losses as of March 31, 2020 and December 31, 2019 (in thousands):
Total investment securities:
​ ​ ​
March 31, 2020
​
​ ​ ​
Less than 12 months
​ ​
12 months or longer
​ ​
Total
​
​ ​ ​
Fair
Value
​ ​
Unrealized
Losses
​ ​
Fair
Value
​ ​
Unrealized
Losses
​ ​
Fair
Value
​ ​
Unrealized
Losses
​
US Agency
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
US Agency mortgage-backed securities
​ ​ ​ ​ 2,363 ​ ​ ​ ​ ​ (19) ​ ​ ​ ​ ​ 1,885 ​ ​ ​ ​ ​ (37) ​ ​ ​ ​ ​ 4,248 ​ ​ ​ ​ ​ (56) ​ ​
Municipal
​ ​ ​ ​ 144 ​ ​ ​ ​ ​ (1) ​ ​ ​ ​ ​ 757 ​ ​ ​ ​ ​ (49) ​ ​ ​ ​ ​ 901 ​ ​ ​ ​ ​ (50) ​ ​
Corporate bonds and other securities
​ ​ ​ ​ 12,784 ​ ​ ​ ​ ​ (786) ​ ​ ​ ​ ​ 6,958 ​ ​ ​ ​ ​ (542) ​ ​ ​ ​ ​ 19,742 ​ ​ ​ ​ ​ (1,328) ​ ​
Total
​ ​ ​ $ 15,291 ​ ​ ​ ​ $ (806) ​ ​ ​ ​ $ 9,600 ​ ​ ​ ​ $ (628) ​ ​ ​ ​ $ 24,891 ​ ​ ​ ​ $ (1,434 ​ ​
Total investment securities:
​ ​ ​
December 31, 2019
​
​ ​ ​
Less than 12 months
​ ​
12 months or longer
​ ​
Total
​
​ ​ ​
Fair
Value
​ ​
Unrealized
Losses
​ ​
Fair
Value
​ ​
Unrealized
Losses
​ ​
Fair
Value
​ ​
Unrealized
Losses
​
US Agency
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
US Agency mortgage-backed securities
​ ​ ​ ​ 7,084 ​ ​ ​ ​ ​ (23) ​ ​ ​ ​ ​ 8,562 ​ ​ ​ ​ ​ (75) ​ ​ ​ ​ ​ 15,646 ​ ​ ​ ​ ​ (98) ​ ​
Municipal
​ ​ ​ ​ 2,269 ​ ​ ​ ​ ​ (18) ​ ​ ​ ​ ​ 1,123 ​ ​ ​ ​ ​ (52) ​ ​ ​ ​ ​ 3,392 ​ ​ ​ ​ ​ (70) ​ ​
Corporate bonds and other securities
​ ​ ​ ​ 7,797 ​ ​ ​ ​ ​ (85) ​ ​ ​ ​ ​ 11,783 ​ ​ ​ ​ ​ (243) ​ ​ ​ ​ ​ 19,580 ​ ​ ​ ​ ​ (328) ​ ​
Total
​ ​ ​ $ 17,150 ​ ​ ​ ​ $ (126) ​ ​ ​ ​ $ 21,468 ​ ​ ​ ​ $ (370) ​ ​ ​ ​ $ 38,618 ​ ​ ​ ​ $ (496) ​ ​
10
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
The unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the value of securities will decrease; as market yields fall, the fair value of securities will increase. There are 34 positions that are considered temporarily impaired at March 31, 2020. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. Management has also concluded that based on current information we expect to continue to receive scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities and does not believe it will be required to sell these securities before they recover in value or mature.
Contractual maturities of securities at March 31, 2020 are shown below (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties. The weighted average duration of the total investment securities portfolio at March 31, 2020 is 24.7 months and is lower than the duration at December 31, 2019 which was 36.9 months. The duration remains within our internal established guideline range of 24 to 60 months which we believe is appropriate to maintain proper levels of liquidity, interest rate risk, market valuation sensitivity and profitability.
Total investment securities:
​ ​ ​
March 31, 2020
​
​ ​ ​
Available for sale
​ ​
Held to maturity
​
​ ​ ​
Cost Basis
​ ​
Fair Value
​ ​
Cost Basis
​ ​
Fair Value
​
Within 1 year
​ ​ ​ $ 3,491 ​ ​ ​ ​ $ 3,486 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
After 1 year but within 5 years
​ ​ ​ ​ 23,276 ​ ​ ​ ​ ​ 23,068 ​ ​ ​ ​ ​ 7,530 ​ ​ ​ ​ ​ 7,732 ​ ​
After 5 years but within 10 years
​ ​ ​ ​ 39,693 ​ ​ ​ ​ ​ 40,334 ​ ​ ​ ​ ​ 20,094 ​ ​ ​ ​ ​ 21,386 ​ ​
After 10 years but within 15 years
​ ​ ​ ​ 21,766 ​ ​ ​ ​ ​ 22,749 ​ ​ ​ ​ ​ 7,707 ​ ​ ​ ​ ​ 8,116 ​ ​
Over 15 years
​ ​ ​ ​ 51,149 ​ ​ ​ ​ ​ 53,079 ​ ​ ​ ​ ​ 6,737 ​ ​ ​ ​ ​ 7,002 ​ ​
Total
​ ​ ​ $ 139,375 ​ ​ ​ ​ $ 142,716 ​ ​ ​ ​ $ 42,068 ​ ​ ​ ​ $ 44,236 ​ ​
As of March 31, 2020 and December 31, 2019, the Company reported $386,000 and $366,000, respectively, of equity securities within other assets on the Consolidated Balance Sheets. These equity securities are held within a nonqualified deferred compensation plan in which a select group of executives of the Company can participate. An eligible executive can defer a certain percentage of their current salary to be placed into the plan and held within a rabbi trust. The assets of the rabbi trust are invested in various publicly listed mutual funds. The gain or loss on the equity securities (both realized and unrealized) is reported within other income on the Consolidated Statements of Operations. For the first quarter of 2020, the Company recorded a realized gain of $6,000 and an unrealized loss of $6,000 was recognized in income on these equity securities. No gain or loss on equity securities (both realized and unrealized) was recognized during the first quarter of 2019. Additionally, the Company has recognized a deferred compensation liability, which is equal to the balance of the equity securities and is reported within other liabilities on the Consolidated Balance Sheets.
11
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
8.
Loans
​
The loan portfolio of the Company consists of the following (in thousands):
​ ​ ​
March 31,
2020
​ ​
December 31,
2019
​
Commercial: ​ ​ ​
Commercial and industrial
​ ​ ​ $ 166,911 ​ ​ ​ ​ $ 173,922 ​ ​
Commercial loans secured by owner occupied real estate
​ ​ ​ ​ 87,310 ​ ​ ​ ​ ​ 91,655 ​ ​
Commercial loans secured by non-owner occupied real estate
​ ​ ​ ​ 370,266 ​ ​ ​ ​ ​ 363,635 ​ ​
Real estate – residential mortgage
​ ​ ​ ​ 230,207 ​ ​ ​ ​ ​ 235,239 ​ ​
Consumer
​ ​ ​ ​ 17,955 ​ ​ ​ ​ ​ 18,255 ​ ​
Loans, net of unearned income
​ ​ ​ $ 872,649 ​ ​ ​ ​ $ 882,706 ​ ​
Loan balances at March 31, 2020 and December 31, 2019 are net of unearned income of $406,000 and $384,000, respectively. Real estate construction loans comprised 5.4% and 4.9% of total loans, net of unearned income at March 31, 2020 and December 31, 2019, respectively.
The effects of the COVID-19 pandemic are not fully reflected in the Company’s first quarter operating results. Certain loans within our commercial and commercial real estate portfolios are expected to be disproportionately adversely affected by the pandemic. Due to mandatory lockdowns and travel restrictions, certain industries, such as hospitality, travel, food service and restaurants and bars, may suffer greater losses as a result of COVID-19. The following table provides information regarding our potential COVID-19 risk concentrations for commercial and commercial real estate loans by industry type at March 31, 2020 (in thousands).
​ ​ ​
Commercial
and
industrial
​ ​
Commercial loans
secured by
owner
occupied
real estate
​ ​
Commercial loans
secured by
non-owner
occupied
real estate
​ ​
Total
​
1 – 4 unit residential
​ ​ ​ $ 1,603 ​ ​ ​ ​ $ 133 ​ ​ ​ ​ $ 3,439 ​ ​ ​ ​ $ 5,175 ​ ​
Multifamily/apartments/student housing
​ ​ ​ ​ — ​ ​ ​ ​ ​ 359 ​ ​ ​ ​ ​ 53,065 ​ ​ ​ ​ ​ 53,424 ​ ​
Office
​ ​ ​ ​ 37,929 ​ ​ ​ ​ ​ 10,280 ​ ​ ​ ​ ​ 38,218 ​ ​ ​ ​ ​ 86,427 ​ ​
Retail
​ ​ ​ ​ 4,129 ​ ​ ​ ​ ​ 21,333 ​ ​ ​ ​ ​ 108,763 ​ ​ ​ ​ ​ 134,225 ​ ​
Industrial/manufacturing/warehouse
​ ​ ​ ​ 101,464 ​ ​ ​ ​ ​ 17,698 ​ ​ ​ ​ ​ 40,115 ​ ​ ​ ​ ​ 159,277 ​ ​
Hotels
​ ​ ​ ​ 419 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 45,764 ​ ​ ​ ​ ​ 46,183 ​ ​
Eating and drinking places
​ ​ ​ ​ 887 ​ ​ ​ ​ ​ 4,434 ​ ​ ​ ​ ​ 597 ​ ​ ​ ​ ​ 5,918 ​ ​
Amusement and recreation
​ ​ ​ ​ 210 ​ ​ ​ ​ ​ 3,384 ​ ​ ​ ​ ​ 57 ​ ​ ​ ​ ​ 3,651 ​ ​
Mixed use
​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,574 ​ ​ ​ ​ ​ 65,631 ​ ​ ​ ​ ​ 67,205 ​ ​
Other
​ ​ ​ ​ 20,270 ​ ​ ​ ​ ​ 28,115 ​ ​ ​ ​ ​ 14,617 ​ ​ ​ ​ ​ 63,002 ​ ​
Total
​ ​ ​ $ 166,911 ​ ​ ​ ​ $ 87,310 ​ ​ ​ ​ $ 370,266 ​ ​ ​ ​ $ 624,487 ​ ​
12
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
9.
Allowance for Loan Losses
​
The following tables summarize the rollforward of the allowance for loan losses by portfolio segment for the three month periods ending March 31, 2020 and 2019 (in thousands).
​ ​ ​
Three months ended March 31, 2020
​
​ ​ ​
Balance at
December 31, 2019
​ ​
Charge-
Offs
​ ​
Recoveries
​ ​
Provision
(Credit)
​ ​
Balance at
March 31, 2020
​
Commercial
​ ​ ​ $ 3,951 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ (91) ​ ​ ​ ​ $ 3,860 ​ ​
Commercial loans secured by non-owner
occupied real estate
​ ​ ​ ​ 3,119 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 155 ​ ​ ​ ​ ​ 3,288 ​ ​
Real estate-residential mortgage
​ ​ ​ ​ 1,159 ​ ​ ​ ​ ​ (92) ​ ​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 68 ​ ​ ​ ​ ​ 1,141 ​ ​
Consumer
​ ​ ​ ​ 126 ​ ​ ​ ​ ​ (62) ​ ​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 42 ​ ​ ​ ​ ​ 120 ​ ​
Allocation for general risk
​ ​ ​ ​ 924 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 925 ​ ​
Total
​ ​ ​ $ 9,279 ​ ​ ​ ​ $ (154) ​ ​ ​ ​ $ 34 ​ ​ ​ ​ $ 175 ​ ​ ​ ​ $ 9,334 ​ ​
​
​ ​ ​
Three months ended March 31, 2019
​
​ ​ ​
Balance at
December 31, 2018
​ ​
Charge-
Offs
​ ​
Recoveries
​ ​
Provision
(Credit)
​ ​
Balance at
March 31, 2019
​
Commercial
​ ​ ​ $ 3,057 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 5 ​ ​ ​ ​ $ (448) ​ ​ ​ ​ $ 2,614 ​ ​
Commercial loans secured by non-owner occupied real estate
​ ​ ​ ​ 3,389 ​ ​ ​ ​ ​ (63) ​ ​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 36 ​ ​ ​ ​ ​ 3,373 ​ ​
Real estate-residential mortgage
​ ​ ​ ​ 1,235 ​ ​ ​ ​ ​ (61) ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 31 ​ ​ ​ ​ ​ 1,213 ​ ​
Consumer
​ ​ ​ ​ 127 ​ ​ ​ ​ ​ (82) ​ ​ ​ ​ ​ 18 ​ ​ ​ ​ ​ 62 ​ ​ ​ ​ ​ 125 ​ ​
Allocation for general risk
​ ​ ​ ​ 863 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (81) ​ ​ ​ ​ ​ 782 ​ ​
Total
​ ​ ​ $ 8,671 ​ ​ ​ ​ $ (206) ​ ​ ​ ​ $ 42 ​ ​ ​ ​ $ (400) ​ ​ ​ ​ $ 8,107 ​ ​
The Company recorded a $175,000 provision expense for loan losses in the first quarter of 2020 compared to a $400,000 provision recovery in the first quarter of 2019. The 2020 provision reflects the loan growth experienced since last year along with our decision to strengthen certain qualitative factors within our allowance for loan losses calculation due to the economic uncertainty caused by the COVID-19 pandemic. While future losses are possible due to the COVID-19 pandemic, losses were not incurred as of March 31, 2020 which is why the provision for the period isn’t higher. For the first three months of 2020, the Company experienced net loan charge-offs of $120,000, or 0.06% of total loans, compared to net loan charge-offs of $164,000, or 0.08% of total loans, in the first three months of 2019. Overall, the Company’s asset quality remains strong as its non-performing assets totaled $2.2 million, or only 0.26% of total loans, at March 31, 2020. The allowance for loan losses provided 416% coverage of non-performing assets, and 1.06% of total loans, at March 31, 2020, compared to 397% coverage of non-performing assets, and 1.05% of total loans, at December 31, 2019.
13
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
The following tables summarize the loan portfolio and allowance for loan loss by the primary segments of the loan portfolio (in thousands).
​ ​ ​
At March 31, 2020
​
​ ​ ​
Commercial
​ ​
Commercial Loans
Secured by
Non-Owner
Occupied
Real Estate
​ ​
Real Estate-
Residential
Mortgage
​ ​
Consumer
​ ​
Allocation for
General Risk
​ ​
Total
​
Loans: ​ ​ ​ ​ ​ ​ ​
Individually evaluated for impairment
​ ​ ​ $ 833 ​ ​ ​ ​ $ 8 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 841 ​ ​
Collectively evaluated for impairment
​ ​ ​ ​ 253,388 ​ ​ ​ ​ ​ 370,258 ​ ​ ​ ​ ​ 230,207 ​ ​ ​ ​ ​ 17,955 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 871,808 ​ ​
Total loans
​ ​ ​ $ 254,221 ​ ​ ​ ​ $ 370,266 ​ ​ ​ ​ $ 230,207 ​ ​ ​ ​ $ 17,955 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 872,649 ​ ​
Allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Specific reserve allocation
​ ​ ​ $ 79 ​ ​ ​ ​ $ 8 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 87 ​ ​
General reserve allocation
​ ​ ​ ​ 3,781 ​ ​ ​ ​ ​ 3,280 ​ ​ ​ ​ ​ 1,141 ​ ​ ​ ​ ​ 120 ​ ​ ​ ​ ​ 925 ​ ​ ​ ​ ​ 9,247 ​ ​
Total allowance for loan losses
​ ​ ​ $ 3,860 ​ ​ ​ ​ $ 3,288 ​ ​ ​ ​ $ 1,141 ​ ​ ​ ​ $ 120 ​ ​ ​ ​ $ 925 ​ ​ ​ ​ $ 9,334 ​ ​
​
​ ​ ​
At December 31, 2019
​ ​
​ ​ ​
Commercial
​ ​
Commercial Loans
Secured by
Non-Owner
Occupied
Real Estate
​ ​
Real Estate-
Residential
Mortgage
​ ​
Consumer
​ ​
Allocation for
General Risk
​ ​
Total
​ ​
Loans: ​ ​ ​ ​ ​ ​ ​ ​
Individually evaluated for impairment
​ ​ ​ $ 816 ​ ​ ​ ​ $ 8 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 824 ​ ​ ​ ​ ​
Collectively evaluated for impairment
​ ​ ​ ​ 264,761 ​ ​ ​ ​ ​ 363,627 ​ ​ ​ ​ ​ 235,239 ​ ​ ​ ​ ​ 18,255 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 881,882 ​ ​ ​ ​ ​
Total loans
​ ​ ​ $ 265,577 ​ ​ ​ ​ $ 363,635 ​ ​ ​ ​ $ 235,239 ​ ​ ​ ​ $ 18,255 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 882,706 ​ ​ ​ ​ ​
Allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Specific reserve allocation
​ ​ ​ $ 84 ​ ​ ​ ​ $ 8 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 92 ​ ​ ​
General reserve allocation
​ ​ ​ ​ 3,867 ​ ​ ​ ​ ​ 3,111 ​ ​ ​ ​ ​ 1,159 ​ ​ ​ ​ ​ 126 ​ ​ ​ ​ ​ 924 ​ ​ ​ ​ ​ 9,187 ​ ​ ​
Total allowance for loan losses
​ ​ ​ $ 3,951 ​ ​ ​ ​ $ 3,119 ​ ​ ​ ​ $ 1,159 ​ ​ ​ ​ $ 126 ​ ​ ​ ​ $ 924 ​ ​ ​ ​ $ 9,279 ​ ​ ​
The segments of the Company’s loan portfolio are disaggregated into classes that allows management to monitor risk and performance. The loan classes used are consistent with the internal reports evaluated by the Company’s management and Board of Directors to monitor risk and performance within various segments of its loan portfolio. The commercial loan segment includes both the commercial and industrial and the owner occupied commercial real estate loan classes while the remaining segments are not separated into classes as management monitors risk in these loans at the segment level. The residential mortgage loan segment is comprised of first lien amortizing residential mortgage loans and home equity loans secured by residential real estate. The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.
14
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
Management evaluates for possible impairment any individual loan in the commercial or commercial real estate segment that is in nonaccrual status or classified as a Troubled Debt Restructure (TDR). In addition, consumer and residential mortgage loans with a balance of $150,000 or more are evaluated for impairment. Loans are considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in evaluating impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.
Once the determination has been made that a loan is impaired, the determination of whether a specific allocation of the allowance is necessary is measured by comparing the recorded investment in the loan to the fair value of the loan using one of three methods: (a) the present value of expected future cash flows discounted at the loan’s effective interest rate; (b) the loan’s observable market price; or (c) the fair value of the collateral less selling costs for collateral dependent loans. The method is selected on a loan-by-loan basis, with management primarily utilizing the fair value of collateral method. The evaluation of the need and amount of a specific allocation of the allowance and whether a loan can be removed from impairment status is made on a quarterly basis. The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.
The need for an updated appraisal on collateral dependent loans is determined on a case-by-case basis. The useful life of an appraisal or evaluation will vary depending upon the circumstances of the property and the economic conditions in the marketplace. A new appraisal is not required if there is an existing appraisal which, along with other information, is sufficient to determine a reasonable value for the property and to support an appropriate and adequate allowance for loan losses. At a minimum, annual documented reevaluation of the property is completed by the Bank’s internal Assigned Risk Department to support the value of the property.
When reviewing an appraisal associated with an existing real estate collateral dependent transaction, the Bank’s internal Assigned Risk Department must determine if there have been material changes to the underlying assumptions in the appraisal which affect the original estimate of value. Some of the factors that could cause material changes to reported values include:
•
the passage of time;
​
•
the volatility of the local market;
​
•
the availability of financing;
​
•
natural disasters;
​
•
the inventory of competing properties;
​
•
new improvements to, or lack of maintenance of, the subject property or competing properties upon physical inspection by the Bank;
​
•
changes in underlying economic and market assumptions, such as material changes in current and projected vacancy, absorption rates, capitalization rates, lease terms, rental rates, sales prices, concessions, construction overruns and delays, zoning changes, etc.; and/or
​
•
environmental contamination.
​
15
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
The value of the property is adjusted to appropriately reflect the above listed factors and the value is discounted to reflect the value impact of a forced or distressed sale, any outstanding senior liens, any outstanding unpaid real estate taxes, transfer taxes and closing costs that would occur with sale of the real estate. If the Assigned Risk Department personnel determine that a reasonable value cannot be derived based on available information, a new appraisal is ordered. The determination of the need for a new appraisal, versus completion of a property valuation by the Bank’s Assigned Risk Department personnel, rests with the Assigned Risk Department and not the originating account officer.
The following tables present impaired loans by portfolio segment, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary (in thousands).
​ ​ ​
March 31, 2020
​
​ ​ ​
Impaired Loans with
Specific Allowance
​ ​
Impaired Loans with
no Specific Allowance
​ ​
Total Impaired Loans
​
​ ​ ​
Recorded
Investment
​ ​
Related
Allowance
​ ​
Recorded
Investment
​ ​
Recorded
Investment
​ ​
Unpaid
Principal
Balance
​
Commercial
​ ​ ​ $ 833 ​ ​ ​ ​ $ 79 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 833 ​ ​ ​ ​ $ 833 ​ ​
Commercial loans secured by non-owner occupied real estate
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 30 ​ ​
Total impaired loans
​ ​ ​ $ 841 ​ ​ ​ ​ $ 87 ​ ​ ​ ​ $    — ​ ​ ​ ​ $ 841 ​ ​ ​ ​ $ 863 ​ ​
​
​ ​ ​
December 31, 2019
​
​ ​ ​
Impaired Loans with
Specific Allowance
​ ​
Impaired Loans with
no Specific Allowance
​ ​
Total Impaired Loans
​
​ ​ ​
Recorded
Investment
​ ​
Related
Allowance
​ ​
Recorded
Investment
​ ​
Recorded
Investment
​ ​
Unpaid
Principal
Balance
​
Commercial
​ ​ ​ $ 816 ​ ​ ​ ​ $ 84 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 816 ​ ​ ​ ​ $ 816 ​ ​
Commercial loans secured by non-owner occupied real estate
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 30 ​ ​
Total impaired loans
​ ​ ​ $ 824 ​ ​ ​ ​ $ 92 ​ ​ ​ ​ $    — ​ ​ ​ ​ $ 824 ​ ​ ​ ​ $ 846 ​ ​
The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated (in thousands).
​ ​ ​
Three months ended
March 31,
​
​ ​ ​
2020
​ ​
2019
​
Average loan balance: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commercial
​ ​ ​ $ 825 ​ ​ ​ ​ $ — ​ ​
Commercial loans secured by non-owner occupied real estate
​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 11 ​ ​
Average investment in impaired loans
​ ​ ​ $ 833 ​ ​ ​ ​ $ 11 ​ ​
Interest income recognized: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commercial
​ ​ ​ $ 12 ​ ​ ​ ​ $ — ​ ​
Commercial loans secured by non-owner occupied real estate
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Interest income recognized on a cash basis on impaired loans
​ ​ ​ $ 12 ​ ​ ​ ​ $    — ​ ​
Management uses a nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized. The first five “Pass” categories are aggregated, while the Pass-6, Special Mention, Substandard and Doubtful categories are disaggregated to
16
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
separate pools. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than 90 days past due, or for which any portion of the loan represents a specific allocation of the allowance for loan losses are placed in Substandard or Doubtful.
To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process, which dictates that, at a minimum, credit reviews are mandatory for all commercial and commercial mortgage loan relationships with aggregate balances in excess of $1,000,000 within a 12-month period. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as bankruptcy, delinquency, or death occurs to raise awareness of a possible credit event. The Company’s commercial relationship managers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. Risk ratings are assigned by the account officer, but require independent review and rating concurrence from the Company’s internal Loan Review Department. The Loan Review Department is an experienced, independent function which reports directly to the Board’s Audit Committee. The scope of commercial portfolio coverage by the Loan Review Department is defined and presented to the Audit Committee for approval on an annual basis. The approved scope of coverage for 2020 requires review of a minimum of 40% of the commercial loan portfolio.
In addition to loan monitoring by the account officer and Loan Review Department, the Company also requires presentation of all credits rated Pass-6 with aggregate balances greater than $2,000,000, all credits rated Special Mention or Substandard with aggregate balances greater than $250,000, and all credits rated Doubtful with aggregate balances greater than $100,000 on an individual basis to the Company’s Loan Loss Reserve Committee on a quarterly basis. Additionally, the Asset Quality Task Force, which is a group comprised of senior level personnel, meets monthly to monitor the status of problem loans.
The following table presents the classes of the commercial and commercial real estate loan portfolios summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system (in thousands).
​ ​ ​
March 31, 2020
​
​ ​ ​
Pass
​ ​
Special
Mention
​ ​
Substandard
​ ​
Doubtful
​ ​
Total
​
Commercial and industrial
​ ​ ​ $ 154,456 ​ ​ ​ ​ $ 790 ​ ​ ​ ​ $ 11,665 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 166,911 ​ ​
Commercial loans secured by owner occupied real estate
​ ​ ​ ​ 84,661 ​ ​ ​ ​ ​ 1,345 ​ ​ ​ ​ ​ 1,304 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 87,310 ​ ​
Commercial loans secured by non-owner occupied real estate
​ ​ ​ ​ 368,681 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,577 ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 370,266 ​ ​
Total
​ ​ ​ $ 607,798 ​ ​ ​ ​ $ 2,135 ​ ​ ​ ​ $ 14,546 ​ ​ ​ ​ $ 8 ​ ​ ​ ​ $ 624,487 ​ ​
​
​ ​ ​
December 31, 2019
​
​ ​ ​
Pass
​ ​
Special
Mention
​ ​
Substandard
​ ​
Doubtful
​ ​
Total
​
Commercial and industrial
​ ​ ​ $ 161,147 ​ ​ ​ ​ $ 853 ​ ​ ​ ​ $ 11,922 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 173,922 ​ ​
Commercial loans secured by owner occupied real estate
​ ​ ​ ​ 88,942 ​ ​ ​ ​ ​ 1,384 ​ ​ ​ ​ ​ 1,329 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 91,655 ​ ​
Commercial loans secured by non-owner occupied real estate
​ ​ ​ ​ 362,027 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,600 ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 363,635 ​ ​
Total
​ ​ ​ $ 612,116 ​ ​ ​ ​ $ 2,237 ​ ​ ​ ​ $ 14,851 ​ ​ ​ ​ $ 8 ​ ​ ​ ​ $ 629,212 ​ ​
​
17
AmeriServ Financial, Inc.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 
It is generally the policy of the Bank that the outstanding balance of any residential mortgage loan that exceeds 90-days past due as to principal and/or interest is transferred to non-accrual status and an evaluation is completed to determine the fair value of the collateral less selling costs, unless the balance is minor. A charge down is recorded for any deficiency balance determined from the collateral evaluation. The remaining non-accrual balance is reported as impaired with no specific allowance. It is generally the policy of the Bank that the outstanding balance of any consumer loan that exceeds 90-days past due as to principal and/or interest is charged off. The following tables present the performing and non-performing outstanding balances of the residential and consumer portfolio classes (in thousands).
​ ​ ​
March 31, 2020
​
​ ​ ​
Performing
​ ​
Non-Performing
​ ​
Total
​
Real estate – residential mortgage
​ ​ ​ $ 228,803 ​ ​ ​ ​ $ 1,404 ​ ​ ​ ​ $ 230,207 ​ ​
Consumer
​ ​ ​ ​ 17,955 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 17,955 ​ ​
Total
​ ​ ​ $ 246,758 ​ ​ ​ ​ $ 1,404 ​ ​ ​ ​ $ 248,162 ​ ​
​
​ ​ ​
December 31, 2019
​
​ ​ ​
Performing
​ ​
Non-Performing
​ ​
Total
​
Real estate – residential mortgage
​ ​ ​ $ 233,760 ​ ​ ​ ​ $ 1,479 ​ ​ ​ ​ $ 235,239 ​ ​
Consumer
​ ​ ​ ​ 18,255 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 18,255 ​ ​
Total
​ ​ ​ $ 252,015 ​ ​ ​ ​ $ 1,479 ​ ​ ​ ​ $ 253,494 ​ ​
Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans (in thousands).