UPDATE: AmeriServ Financial, Johnstown, PA (ASRV)

Remarkably, everything I said in the intro to my January 2014 Timyan Bank Alert™ review of AmeriServ Financial is still true: AmeriServ is no "five star performer." Nor is it a "mismanaged underperformer." It is still, however, a pretty good bank that is trading below book value with not a single Wall Street analyst following it. Which makes it a great "seize the moment," no-brainer kind of buy for the enterprising investor.

Disclosure: As of this posting, I own shares of ASRV and may subsequently either dispose of them or purchase more.

Prospective Buyers
Although AmeriServ's #1 market share position in six Pennsylvania towns is attractive, its status as a unionized bank makes it unlikely another bank will seek to buy it.
F.N.B. Corp - Pittsburgh, PA (FNB) - relocated from Hermitage
Northwest Bancshares, Inc - Warren, PA (NWBI)
Financial Snapshot
as of 12/31/2016
Total assets:
$1.2B
Tangible book value per share:
$4.41
NPAs to assets:
0.1%
Price to book:
74%
Market cap:
$70.4M
Dividend yield:
1.6%
Trailing 12-month return on assets:
0.2%
Trailing 12-month return on equity:
2.3%
TARP:
$0*
*Repaid $20M in 2011
The Crew
Craig Ford, Chairman
Jeffrey Stopko, President and CEO (promoted from CFO)
Michael Lynch, Senior VP, CFO, Chief Risk and Investment Officer
The Skinny
This is still a pretty good bank. AmeriServ has reported profits in 24 out of the last 25 quarters.

Insiders know what an opportunity they have here. Insider ownership of ASRV remains pretty high at 8.8% and growing. There have been numerous insider buys in the open market in the past year alone, and only one sell.

Thankfully, AmeriServ Management is also shareholder friendly, as evidenced by their recent decision to buy back up to 5% of ASRV stock in the open market.

Investors can still make money here. ASRV is the cheapest billion dollar bank stock in the U.S. I believe that within two years, AmeriServ will be reporting quarterly earnings of 10¢ per share, book value will have hit the high $5 range, and ASRV will trading near book value. If I am right, that portends a healthy 50% gain over today's share price. 

Sources

  • Confidential interviews with Management, shareholders and analysts

UPDATE: HopFed Bancorp, Hopkinsville, KY (HFBC)


Since my June 2012 Timyan Bank Alert™ review of HopFed Bancorp / Heritage Bank, book value has fallen to $12.87 per share, a 25% reduction since the economic recovery began in 2009 and most of the nation's banks have materially increased their value. NPAs still linger above 2%. HFBC's ROA and ROE are shamefully low.

Disappointingly, there is no longer any reason to invest in HopFed unless Management sells the bank. It is too mismanaged. If you already own the stock like I do, I highly recommend letting HopFed management know you agree that the ethical thing to do is to sell the bank.

Disclosure: As of this posting, I own significant shares of HFBC and may subsequently either dispose of them or purchase more.



Prospective Buyers

Independence Bank, Owensboro, KY (private)
Old National Bancorp, Evansville, IN (ONB)
WesBanco, Inc, Wheeling, WV (WSBC)

Financial Snapshot
as of 12/31/2016
Total assets:
$891M
Tangible book value per share:
$12.87
NPAs to assets:
2%
Price to book:
116%
Market cap:
$100M
Dividend yield:
1.1%
Trailing 12-month return on assets:
0.33%
Trailing 12-month return on equity:
3.26%
TARP:$0M*
*Redeemed $18.4M 12/19/2012

Scoundrels

Harry Joseph Dempsey, Chairman (New!)
John Peck, President and CEO
Billy Duval, Senior VP, Treasurer, and CFO
Michael L. Woolfolk, Executive VP, Secretary, and COO 

Red Flags

(See HFBC Performance Timeline, below)

Sources

  • Confidential interviews with shareholders and analysts


HFBC Performance Timeline since 2012 review in Timyan Bank Alert™

DATE
EVENT
SHARE PRICE
2014
AUG 20
HFBC CFO Billy Duvall sells 1147 shares for $13,704
$12.37
2015
FEB 03
HFBC pays greenmail to investor Maltese Capital. Buys back 534,943 shares at $13.50
$13.25

FEB 09
HFBC Chief Credit Officer Michael Fokey buys 31 shares of HFBC stock for $412.00
$13.30

JUL 31
HFBC reports a Q2 loss of 2 cents per share
$11.66

AUG 17
HFBC COO Michael Woolfolk buys 79 shares for $908.50
$11.59
2016
MAR 29
HFBC revises compensation plans and decides to pay its executives’ personal income taxes
$11.45

JUN 01
HFBC CFO Billy Duvall sells 1500 shares for $18,165
$12.08

JUL 29
HFBC reports a 130% increase in non-accrual loans
$11.62

FALL
HFBC attempts to pay greenmail to investor Stilwell Group, which would hurt all other shareholders
$11s
2017
JAN 26
HFBC issues misleading 8K, which failed to disclose the real reason its largest investor didn't meet with HFBC management. In reality, Stilwell did not refuse to meet, but merely asked for an agenda in advance, anticipating another greenmail offer to go away
$14.00

FEB 06
Stilwell Group’s Megan Parisi sets the record straight about HFBC's false and misleading 8K in a letter to HFBC CEO John Peck
$14.60