Capital Adequacy - As of June 30, 2024, the Company reported total capital of $148,840 thousand, representing a ratio of 12.77% to risk-weighted assets, exceeding the minimum required ratio of 8.00%[132] - The Company maintained common equity tier 1 capital of $107,551 thousand, with a ratio of 9.23% to risk-weighted assets, above the minimum requirement of 4.50%[132] - The tier 1 capital was also reported at $107,551 thousand, with a ratio of 9.23% to risk-weighted assets, surpassing the minimum requirement of 6.00%[132] - The Company is categorized as "well capitalized" under the regulatory framework for prompt corrective action as of June 30, 2024[131] Hedging Activities - The Company has entered into interest rate swaps with a total notional value of $70 million as of June 30, 2024, to hedge interest rate risk associated with floating-rate time deposit accounts[144] - During the three months ended June 30, 2024, the Company recognized $199,000 in gains from cash flow hedges, resulting in a decrease in interest expense[147] - The maximum remaining length of time over which forecasted transactions are hedged is approximately two and a half years, with all hedge transactions terminating by December 2026[147] - The Company had $399,000 in gains from cash flow hedges during the six months ended June 30, 2024, leading to a decrease in interest expense[147] - The Company’s hedging policy permits a total maximum notional amount outstanding of $500 million for interest rate swaps, caps, and swaptions[150] Revenue Growth - Community banking segment revenue for the three months ended June 30, 2024, was $14,269,000, an increase from $13,671,000 in the same period of 2023, representing a growth of 4.4%[153] - Wealth management segment revenue for the three months ended June 30, 2024, was $3,056,000, up from $2,792,000 in the same period of 2023, indicating a growth of 9.5%[153] - Total net income for the six months ended June 30, 2024, was $1,529,000, compared to $1,328,000 for the same period in 2023, reflecting an increase of 15.1%[153] - The total revenue for the community banking segment for the six months ended June 30, 2024, was $28,917,000, compared to $27,029,000 for the same period in 2023, representing a growth of 7.0%[153] Credit and Commitments - The company had outstanding commitments to extend credit of approximately $248.0 million as of June 30, 2024, compared to $236.6 million as of December 31, 2023, showing an increase of 4.8%[154] - The allowance for credit losses related to unfunded commitments and standby letters of credit was $939,000 at June 30, 2024, slightly down from $940,000 at December 31, 2023[156] - The company recorded a provision for credit losses recovery on unfunded commitments of $3,000 for the three months ended June 30, 2024, compared to $17,000 for the same period in 2023[156] Pension and Benefits - The company recognized a settlement charge of $376,000 in connection with its defined benefit pension plan for the three months ended June 30, 2024, while no such charge was recognized in the same period of 2023[159] - The net periodic pension benefit for the three months ended June 30, 2024, was $(118,000), compared to $(341,000) for the same period in 2023, indicating an improvement in pension costs[162] - The company implemented a soft freeze of its defined benefit pension plan, affecting non-union employees hired on or after January 1, 2013, and union employees hired on or after January 1, 2014, to reduce future pension costs[160] Fair Value Measurements - As of June 30, 2024, individually evaluated loans using the collateral method had a carrying value of $3.6 million, reduced by a specific valuation allowance of $1.6 million, resulting in a net fair value of $2.0 million[170] - The fair value of other real estate owned and repossessed assets was reported at $1.8 million as of June 30, 2024, with a total of $1.8 million measured at Level 3[171] - The estimated fair value of investment securities held to maturity was $60.763 million as of June 30, 2024, compared to a carrying value of $66.446 million[177] - Loans, net of allowance for credit losses and unearned income, had a fair value of $952.143 million as of June 30, 2024, with a carrying value of $1,024.422 million[177] - Deposits with stated maturities had a carrying value of $327.566 million and a fair value of $326.983 million as of June 30, 2024[177] - The fair value of loans held for sale was $241,000 as of June 30, 2024, with a carrying value of $225,000[177] - The fair value of all other borrowings was $76.200 million as of June 30, 2024, compared to a carrying value of $77.618 million[177] - Fair values for financial instruments are primarily determined using independent third-party valuations, with approximately 90% of the company's assets and liabilities considered financial instruments[175] - Changes in assumptions or estimation methodologies may significantly affect the estimated fair values of the company's financial instruments[179] - The company had no individually evaluated loans using the collateral method carried at fair value as of December 31, 2023[170]
AmeriServ Financial(ASRV) - 2024 Q2 - Quarterly Report