AmeriServ Financial(ASRV) - 2024 Q3 - Quarterly Report

Financial Performance - The Company reported total revenue of $13,090,000 and net income of$ 1,183,000 for the three months ended September 30, 2024, compared to total revenue of $40,031,000 and net income of$ 2,712,000 for the nine months ended September 30, 2024[141]. - The company reported a net income of $1,183,000 for Q3 2024, representing an increase of$ 536,000 or 82.8% compared to Q3 2023's net income of $647,000[172]. - For the nine months ended September 30, 2024, the company reported net income of$ 2,712,000, a 37.3% increase from $1,975,000 in the same period of 2023[194]. - Non-interest income for the third quarter of 2024 totaled$ 4.2 million, a decrease of $53,000, or 1.2%, from the third quarter of 2023[191]. - Non-interest income totaled$ 13.5 million, a decline of $103,000, or 0.8%, from the first nine months of 2023[210]. Capital Ratios and Financial Health - As of September 30, 2024, the Company maintained a total capital ratio of 13.03% and a common equity tier 1 capital ratio of 11.82%, both exceeding the minimum required ratios of 8.00% and 4.50% respectively[123]. - The Company believes it remains "well capitalized" under the regulatory framework as of September 30, 2024, with no conditions that would change this status[122]. - The Company's common equity tier 1 capital ratio was 9.33% and total capital ratio was 12.87% at September 30, 2024, exceeding regulatory requirements[246]. - The tangible common equity to tangible assets ratio was 6.79% at September 30, 2024, reflecting an increase of 35 basis points compared to December 31, 2023[221]. - The tangible common equity ratio increased to 6.79% as of September 30, 2024, up from 6.44% at December 31, 2023[262]. Loan and Deposit Activity - Total average loans increased by$ 38.9 million or 3.9% year-over-year, with total loans averaging $1.033 billion in Q3 2024[176]. - Total average loans increased by$ 41.9 million, or 4.2%, in the nine months of 2024 compared to the same period in 2023[241]. - Total average deposits for Q3 2024 were $1.165 billion, an increase of$ 15.9 million or 1.4% from the previous year, indicating successful business development efforts[180]. - Total deposits increased by $31.0 million, or 2.7%, in the first nine months of 2024, indicating customer confidence and loyalty[219]. - The Company's loan to deposit ratio averaged 88.7% in the third quarter of 2024, indicating capacity for continued loan portfolio growth[241]. Interest Income and Expense - Interest income from loans and fees improved by$ 1.1 million or 8.7% compared to Q3 2023, driven by a higher interest rate environment[176]. - Total interest expense rose by $1.2 million or 17.8% year-over-year, primarily due to higher deposit and borrowings interest expenses[181]. - The company's net interest margin for Q3 2024 was 2.71%, a decrease of five basis points from 2.76% in Q3 2023, reflecting industry-wide margin compression[175]. - The company's net interest income for the first nine months of 2024 decreased by$ 922,000, or 3.4%, compared to the prior year, with a net interest margin of 2.72%, down 17 basis points from 2023[196]. - Total interest expense increased by $5.5 million, or 31.3%, driven by higher deposit and borrowings interest expense[201]. Credit Losses and Provisions - The company recorded a provision for credit losses recovery of$ 4,000 for the three months ended September 30, 2024, compared to a provision for credit losses expense of $48,000 for the same period in 2023[144]. - The company recorded a provision for credit losses recovery of$ 51,000 in Q3 2024, compared to a provision expense of $189,000 in Q3 2023, resulting in a net favorable change of$ 240,000[189]. - The allowance for credit losses related to unfunded commitments and standby letters of credit was $936,000 as of September 30, 2024, slightly down from$ 940,000 at December 31, 2023[144]. - The allowance for loan credit losses decreased by $633,000, or 4.2%, to$ 14.4 million at September 30, 2024, but was $2.1 million, or 17.1%, higher than the allowance at September 30, 2023[236]. - The Company recognized net loan charge-offs of$ 488,000, or 0.06% of total average loans, in the first nine months of 2024, compared to $187,000, or 0.03%, in the same period of 2023[227]. Segment Performance - The community banking segment generated total revenue of$ 14,344,000 and net income of $4,499,000 for the three months ended September 30, 2024[141]. - The wealth management segment reported total revenue of$ 3,049,000 and net income of $673,000 for the three months ended September 30, 2024[141]. - Community banking revenue for September 2024 was$ 14,285,000, a decrease of 65.4% from $41,314,000 in September 2023[142]. - Wealth management revenue for September 2024 was$ 2,845,000, down 66.0% from $8,383,000 in September 2023[142]. - The community banking segment reported a net income contribution of$ 13,484,000 for the nine months of 2024, an increase of $1,319,000 or 10.9% compared to the same period in 2023[213]. Shareholder Value and Stock Performance - The Company had approximately 16.5 million common shares outstanding with a book value of$ 6.55 per common share as of September 30, 2024[251]. - The Company repurchased 628,003 shares of common stock at a price of $2.38 per share, which was below tangible book value, making the repurchase accretive to shareholders[252]. - The Company aims to improve shareholder value by increasing earnings per share and managing revenue growth and expense control[276]. - The tangible book value per share rose to$ 5.72 as of September 30, 2024, compared to $5.16 at December 31, 2023[262]. Risk Management and Strategic Initiatives - The Company acknowledges various risks that could impact future results, including changes in economic conditions and interest rates[283]. - The Company is aware of the competitive landscape and the need to innovate in products and services to retain market position[283]. - The Company plans to explore branch consolidation opportunities and leverage union-affiliated revenue streams to enhance profitability[277]. - The Company aims to enhance customer service by providing a comprehensive range of financial solutions, including retail and business banking, home mortgages, and wealth management[278]. - The Company is committed to developing high-performing employees and managing staff attrition through a workforce succession plan[279]. Operational Efficiency and Technology - The Company emphasizes the importance of technological systems to improve operational efficiency and staff performance[279]. - The Company is focused on modernizing branches to meet the needs of the next generation of customers while retaining existing demographics[278]. - The Company has evaluated its disclosure controls and procedures, concluding they are effective as of September 30, 2024[284]. - There have been no changes in internal controls over financial reporting that materially affected the Company during the most recent quarter[284]. - The Company is subject to various lawsuits and claims arising in the ordinary course of business, but management believes there are no material pending legal proceedings[284].