Intrinsic value of AmeriServ Financial - ASRV

Previous Close

$4.30

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$4.30

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as ASRV.

We calculate the intrinsic value of ASRV stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -100.00
  10.20
  9.68
  9.21
  8.79
  8.41
  8.07
  7.76
  7.49
  7.24
  7.01
  6.81
  6.63
  6.47
  6.32
  6.19
  6.07
  5.96
  5.87
  5.78
  5.70
  5.63
  5.57
  5.51
  5.46
  5.41
  5.37
  5.34
  5.30
  5.27
  5.24
Revenue, $m
  0
  54
  59
  65
  70
  76
  82
  89
  95
  102
  110
  117
  125
  133
  141
  150
  159
  169
  179
  189
  200
  211
  223
  235
  248
  261
  275
  290
  305
  321
  338
Variable operating expenses, $m
 
  50
  55
  60
  66
  71
  77
  83
  89
  95
  102
  109
  116
  124
  132
  140
  148
  157
  166
  176
  186
  196
  207
  219
  231
  243
  256
  270
  284
  299
  315
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  0
  50
  55
  60
  66
  71
  77
  83
  89
  95
  102
  109
  116
  124
  132
  140
  148
  157
  166
  176
  186
  196
  207
  219
  231
  243
  256
  270
  284
  299
  315
Operating income, $m
  0
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  15
  15
  16
  17
  18
  19
  20
  21
  22
  23
EBITDA, $m
  2
  131
  143
  156
  170
  184
  199
  215
  231
  248
  265
  283
  302
  321
  342
  363
  385
  408
  432
  457
  483
  510
  538
  568
  599
  631
  665
  701
  738
  777
  818
Interest expense (income), $m
  0
  58
  56
  61
  66
  72
  77
  83
  89
  95
  102
  108
  115
  123
  130
  138
  146
  155
  164
  173
  182
  192
  203
  214
  225
  237
  250
  263
  277
  291
  306
Earnings before tax, $m
  3
  -54
  -52
  -57
  -61
  -66
  -72
  -77
  -82
  -88
  -94
  -100
  -107
  -113
  -120
  -128
  -135
  -143
  -151
  -160
  -169
  -178
  -188
  -198
  -208
  -219
  -231
  -243
  -256
  -269
  -283
Tax expense, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  2
  -54
  -52
  -57
  -61
  -66
  -72
  -77
  -82
  -88
  -94
  -100
  -107
  -113
  -120
  -128
  -135
  -143
  -151
  -160
  -169
  -178
  -188
  -198
  -208
  -219
  -231
  -243
  -256
  -269
  -283

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,154
  1,038
  1,139
  1,244
  1,353
  1,467
  1,585
  1,709
  1,836
  1,969
  2,108
  2,251
  2,400
  2,556
  2,717
  2,885
  3,061
  3,243
  3,433
  3,632
  3,839
  4,055
  4,281
  4,517
  4,764
  5,022
  5,291
  5,574
  5,869
  6,179
  6,503
Adjusted assets (=assets-cash), $m
  1,154
  1,038
  1,139
  1,244
  1,353
  1,467
  1,585
  1,709
  1,836
  1,969
  2,108
  2,251
  2,400
  2,556
  2,717
  2,885
  3,061
  3,243
  3,433
  3,632
  3,839
  4,055
  4,281
  4,517
  4,764
  5,022
  5,291
  5,574
  5,869
  6,179
  6,503
Revenue / Adjusted assets
  0.000
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
  0.052
Average production assets, $m
  0
  1,269
  1,391
  1,520
  1,653
  1,792
  1,937
  2,087
  2,243
  2,406
  2,575
  2,750
  2,932
  3,122
  3,319
  3,525
  3,739
  3,962
  4,194
  4,437
  4,690
  4,954
  5,230
  5,518
  5,819
  6,135
  6,464
  6,809
  7,170
  7,548
  7,944
Working capital, $m
  0
  -1,159
  -1,271
  -1,389
  -1,511
  -1,638
  -1,770
  -1,907
  -2,050
  -2,198
  -2,353
  -2,513
  -2,680
  -2,853
  -3,033
  -3,221
  -3,416
  -3,620
  -3,833
  -4,054
  -4,285
  -4,527
  -4,779
  -5,042
  -5,318
  -5,605
  -5,907
  -6,222
  -6,552
  -6,897
  -7,259
Total debt, $m
  33
  1,044
  1,134
  1,229
  1,327
  1,430
  1,536
  1,647
  1,762
  1,882
  2,006
  2,135
  2,270
  2,409
  2,555
  2,706
  2,864
  3,028
  3,199
  3,378
  3,564
  3,759
  3,962
  4,175
  4,397
  4,629
  4,872
  5,126
  5,392
  5,670
  5,962
Total liabilities, $m
  1,058
  935
  1,025
  1,119
  1,218
  1,320
  1,427
  1,538
  1,653
  1,772
  1,897
  2,026
  2,160
  2,300
  2,445
  2,597
  2,755
  2,919
  3,090
  3,269
  3,455
  3,650
  3,853
  4,065
  4,287
  4,519
  4,762
  5,016
  5,282
  5,561
  5,852
Total equity, $m
  95
  104
  114
  124
  135
  147
  159
  171
  184
  197
  211
  225
  240
  256
  272
  289
  306
  324
  343
  363
  384
  406
  428
  452
  476
  502
  529
  557
  587
  618
  650
Total liabilities and equity, $m
  1,153
  1,039
  1,139
  1,243
  1,353
  1,467
  1,586
  1,709
  1,837
  1,969
  2,108
  2,251
  2,400
  2,556
  2,717
  2,886
  3,061
  3,243
  3,433
  3,632
  3,839
  4,056
  4,281
  4,517
  4,763
  5,021
  5,291
  5,573
  5,869
  6,179
  6,502
Debt-to-equity ratio
  0.347
  10.050
  9.960
  9.880
  9.810
  9.740
  9.690
  9.640
  9.600
  9.550
  9.520
  9.490
  9.460
  9.430
  9.400
  9.380
  9.360
  9.340
  9.320
  9.300
  9.280
  9.270
  9.260
  9.240
  9.230
  9.220
  9.210
  9.200
  9.190
  9.180
  9.170
Adjusted equity ratio
  0.082
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2
  -54
  -52
  -57
  -61
  -66
  -72
  -77
  -82
  -88
  -94
  -100
  -107
  -113
  -120
  -128
  -135
  -143
  -151
  -160
  -169
  -178
  -188
  -198
  -208
  -219
  -231
  -243
  -256
  -269
  -283
Depreciation, amort., depletion, $m
  2
  127
  139
  152
  165
  179
  194
  209
  224
  241
  257
  275
  293
  312
  332
  352
  374
  396
  419
  444
  469
  495
  523
  552
  582
  613
  646
  681
  717
  755
  794
Funds from operations, $m
  9
  73
  87
  95
  104
  113
  122
  132
  142
  152
  163
  175
  187
  199
  212
  225
  239
  253
  268
  284
  300
  317
  335
  354
  374
  394
  415
  438
  461
  486
  512
Change in working capital, $m
  2
  -107
  -112
  -117
  -122
  -127
  -132
  -137
  -143
  -148
  -154
  -160
  -167
  -173
  -180
  -188
  -196
  -204
  -212
  -222
  -231
  -241
  -252
  -263
  -275
  -288
  -301
  -315
  -330
  -345
  -362
Cash from operations, $m
  7
  180
  199
  212
  226
  240
  254
  269
  285
  301
  318
  335
  353
  372
  392
  413
  434
  457
  481
  505
  532
  559
  587
  617
  649
  682
  717
  753
  791
  831
  873
Maintenance CAPEX, $m
  0
  -116
  -127
  -139
  -152
  -165
  -179
  -194
  -209
  -224
  -241
  -257
  -275
  -293
  -312
  -332
  -352
  -374
  -396
  -419
  -444
  -469
  -495
  -523
  -552
  -582
  -613
  -646
  -681
  -717
  -755
New CAPEX, $m
  -1
  -108
  -123
  -128
  -134
  -139
  -145
  -150
  -156
  -162
  -169
  -175
  -182
  -190
  -197
  -205
  -214
  -223
  -232
  -242
  -253
  -264
  -276
  -288
  -301
  -315
  -330
  -345
  -361
  -378
  -396
Cash from investing activities, $m
  -25
  -224
  -250
  -267
  -286
  -304
  -324
  -344
  -365
  -386
  -410
  -432
  -457
  -483
  -509
  -537
  -566
  -597
  -628
  -661
  -697
  -733
  -771
  -811
  -853
  -897
  -943
  -991
  -1,042
  -1,095
  -1,151
Free cash flow, $m
  -18
  -44
  -51
  -55
  -60
  -64
  -70
  -75
  -80
  -86
  -92
  -98
  -104
  -111
  -118
  -125
  -132
  -140
  -148
  -156
  -165
  -174
  -184
  -194
  -204
  -215
  -226
  -238
  -251
  -264
  -277
Issuance/(repayment) of debt, $m
  0
  -26
  90
  94
  98
  102
  107
  111
  115
  120
  124
  129
  134
  140
  145
  151
  158
  164
  171
  179
  186
  195
  203
  212
  222
  232
  243
  254
  266
  278
  292
Issuance/(repurchase) of shares, $m
  -21
  171
  62
  67
  72
  78
  83
  89
  95
  101
  108
  115
  122
  129
  137
  144
  153
  161
  170
  180
  189
  200
  210
  221
  233
  245
  258
  271
  285
  300
  315
Cash from financing (excl. dividends), $m  
  5
  145
  152
  161
  170
  180
  190
  200
  210
  221
  232
  244
  256
  269
  282
  295
  311
  325
  341
  359
  375
  395
  413
  433
  455
  477
  501
  525
  551
  578
  607
Total cash flow (excl. dividends), $m
  -13
  101
  102
  107
  111
  116
  120
  125
  130
  135
  140
  146
  152
  158
  164
  171
  178
  186
  193
  202
  211
  220
  230
  240
  251
  262
  274
  287
  301
  315
  330
Retained Cash Flow (-), $m
  24
  -171
  -62
  -67
  -72
  -78
  -83
  -89
  -95
  -101
  -108
  -115
  -122
  -129
  -137
  -144
  -153
  -161
  -170
  -180
  -189
  -200
  -210
  -221
  -233
  -245
  -258
  -271
  -285
  -300
  -315
Prev. year cash balance distribution, $m
 
  13
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Cash available for distribution, $m
 
  -57
  40
  39
  39
  38
  37
  36
  35
  34
  33
  31
  30
  29
  28
  27
  25
  24
  23
  22
  21
  20
  19
  19
  18
  17
  16
  16
  15
  15
  14
Discount rate, %
 
  15.50
  16.28
  17.09
  17.94
  18.84
  19.78
  20.77
  21.81
  22.90
  24.05
  25.25
  26.51
  27.84
  29.23
  30.69
  32.22
  33.83
  35.53
  37.30
  39.17
  41.13
  43.18
  45.34
  47.61
  49.99
  52.49
  55.11
  57.87
  60.76
  63.80
PV of cash for distribution, $m
 
  -50
  29
  25
  20
  16
  13
  10
  7
  5
  4
  3
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  31.2
  19.6
  12.4
  7.9
  5.0
  3.2
  2.1
  1.3
  0.9
  0.6
  0.4
  0.2
  0.2
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

AmeriServ Financial, Inc. is a bank holding company of AmeriServ Financial Bank (the Bank). The Company's principal activities consist of owning and operating its three subsidiary entities. The Company's segments include retail banking, commercial banking, trust and investment/parent. Its Retail banking segment includes the deposit-gathering branch franchise and lending to both individuals and small businesses. Its Commercial banking to businesses includes commercial loans and commercial real estate mortgage (CRE) loans. The trust segment contains its wealth management businesses, which include the Trust Company, WCCA, its registered investment advisory firm and financial services. Wealth management includes personal trust products and services, such as personal portfolio investment management, estate planning and administration, custodial services and pre-need trusts. The investment/parent segment includes the net results of investment securities and borrowing activities.

FINANCIAL RATIOS  of  AmeriServ Financial (ASRV)

Valuation Ratios
P/E Ratio 40.6
Price to Sales 0
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 11.6
Price to Free Cash Flow 13.5
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate -19.7%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 34.7%
Total Debt to Equity 34.7%
Interest Coverage 0
Management Effectiveness
Return On Assets 0.2%
Ret/ On Assets - 3 Yr. Avg. 0.6%
Return On Total Capital 1.3%
Ret/ On T. Cap. - 3 Yr. Avg. 2.2%
Return On Equity 1.9%
Return On Equity - 3 Yr. Avg. 3.2%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 33.3%
Eff/ Tax Rate - 3 Yr. Avg. 32.8%
Payout Ratio 50%

ASRV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASRV stock intrinsic value calculation we used $49 million for the last fiscal year's total revenue generated by AmeriServ Financial. The default revenue input number comes from 2016 income statement of AmeriServ Financial. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ASRV stock valuation model: a) initial revenue growth rate of 10.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 15.5%, whose default value for ASRV is calculated based on our internal credit rating of AmeriServ Financial, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of AmeriServ Financial.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ASRV stock the variable cost ratio is equal to 93.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ASRV stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for AmeriServ Financial.

Corporate tax rate of 27% is the nominal tax rate for AmeriServ Financial. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ASRV stock is equal to 0.4%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ASRV are equal to 2349.3%.

Life of production assets of 10 years is the average useful life of capital assets used in AmeriServ Financial operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ASRV is equal to -2146.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $0 million for AmeriServ Financial - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 18 million for AmeriServ Financial is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of AmeriServ Financial at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

Financial statements of ASRV
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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