AmeriServ Financial, Inc. Provides Earnings Guidance for the Fourth Quarter of 2017
January 11, 2018 at 04:00 pm
Share
AmeriServ Financial, Inc. provided earnings guidance for the fourth quarter of 2017. On December 22, 2017, ‘H.R.1,’ known as the ‘Tax Cuts and Jobs Act,’ was signed into law (the ‘Act’). The Act, among other things, reduces the corporate income tax rate from 35% to 21%, effective January 1, 2018. As of September 30, 2017, the company had a net deferred tax asset totaling $9.3 million. In light of the passage of the Act, the company performed a preliminary analysis to determine the impact of the revaluation of the deferred tax asset because of the new lower tax rate. Using information available at this time, the company estimates that it will reduce the value of its net deferred tax asset by approximately $2.6 million, which will be recorded as additional income tax expense in statement of operations during the fourth quarter of 2017. This additional non-cash income tax charge is estimated to negatively impact both earnings per share and tangible book value per share by approximately $0.14 in the fourth quarter of 2017. However, beginning in 2018, the expected reduction in the company’s effective tax rate from near 32% to approximately 20% will provide a meaningful boost to future earnings.
AmeriServ Financial, Inc. is a bank holding company of AmeriServ Financial Bank (the Bank). The Bank provides a range of services, including retail banking services and lending, depository, and related financial services. Its retail banking services include demand, savings, and time deposits, checking accounts, money market accounts, secured and unsecured consumer loans, mortgage loans, safe deposit boxes, holiday club accounts, and money order. It provides lending, depository, and related financial services to commercial, industrial, financial, and governmental customers, such as commercial real estate mortgage loans (CRE), short and medium-term loans, revolving credit arrangements, lines of credit, inventory and accounts receivable financing, real estate construction loans, business savings accounts, certificates of deposit, wire transfers, night depository, and lock box services. The Bank also operates 18 automated bank teller machines (ATMs) through its 24-hour banking network.