Intangible Valuation
Value, contrarian, coat tail rider, idiosyncratic research

AmeriServ Financial: 20% Discount To Tangible Book, Bright Long-Term Prospects

AmeriServ Financial (NASDAQ:ASRV) is a well-capitalized Pennsylvania community bank. After an 8% drop last Friday, AmeriServ trades at a market capitalization of $52.5 million, below its $66.7 million tangible book value. That is about a 20% discount to tangible book value. AmeriServ has been very conservative, as we will see when we look at its historical loss development. This conservatism, combined with its rare unionized status and poor interest rate environment, has possibility resulted in rather low ROEs:

To the extent that AmeriServ sells below book, its earnings yield will be above its ROE -- as it is above. Before Friday, AmeriServ had a TTM earnings yield of around 7.8%. After Friday, the TTM earnings yield is 8.6%....

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