SECURITIES AND EXCHANGE COMMISSION



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549


Form 8-K


Current Report

Pursuant to Section 13 or 15(d) of the Securities Act of 1934


Date of Report (Date of earliest event reported) July 20, 2010


AMERISERV FINANCIAL, Inc.

(exact name of registrant as specified in its charter)


Pennsylvania        0-11204        25-1424278

(State or other     (commission    (I.R.S. Employer

jurisdiction        File Number)   Identification No.)

of Incorporation)


Main and Franklin Streets, Johnstown, Pa.  15901

(address or principal executive offices)   (Zip Code)


Registrant's telephone number, including area code: 814-533-5300


N/A

(Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8-K filing is intended to

simultaneously satisfy the filing obligation of the registrant under

any of the following provisions:


( ) Written communications pursuant to Rule 425 under the Securities

Act (17 CFR 230.425)


( ) Soliciting material pursuant to Rule 14a-12 under the Exchange

Act (17 CFR 240.14a-12)


( ) Pre-commencement communications pursuant to Rule 14d-2(b) under the

Exchange Act (17 CFR 240.14d-2(b))


( ) Pre-commencement communications pursuant to Rule 13e-4(c) under the

Exchange Act (17 CFR 240.13e-4c))













Form 8-K


Item 2.02 Results of operation and financial condition.


AMERISERV FINANCIAL Inc. (the "Registrant") announced second quarter and first six months results through June 30, 2010.  For a more detailed description of the announcement see the press release attached as Exhibit #99.1.  


Exhibits

--------


Exhibit 99.1

Press release dated July 20, 2010, announcing the second quarter and first six months results through June 30, 2010.



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



AMERISERV FINANCIAL, Inc.


By /s/Jeffrey A. Stopko

Jeffrey A. Stopko

Executive Vice President

& CFO


Date: July 20, 2010




Exhibit 99.1


AMERISERV FINANCIAL REPORTS EARNINGS FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF 2010     


JOHNSTOWN, PA – AmeriServ Financial, Inc. (NASDAQ: ASRV) returned to profitability in the second quarter of 2010 by reporting net income of $477,000 or $0.01 per diluted common share.  This represents an increase of $1.4 million from the second quarter 2009 net loss of $939,000 or $0.06 per diluted common share.  For the six month period ended June 30, 2010, the Company reported a net loss of $441,000 or $0.05 per diluted share which is comparable with the net loss of $406,000 reported for the same six month period in 2009.  The following table highlights the Company’s financial performance for both the three and six month periods ended June 30, 2010 and 2009:     


 

Second Quarter 2010

Second Quarter 2009

 

Six Months Ended

June 30, 2010

Six Months Ended

June 30, 2009

 

 

 

 

 

 

Net income (loss)

$477,000

($939,000)

 

($441,000)

($406,000)

Diluted earnings per share

          $ 0.01

          ( $ 0.06)

 

                   ($ 0.05)

($0.04)


Glenn L. Wilson, President and Chief Executive Officer, commented on the 2010 second quarter financial results, “Stabilization in our asset quality allowed us to record a lower provision for loan losses which was an important factor in our return to profitability in the second quarter of 2010.  The benefits of our ongoing disciplined approach to monitoring our loan portfolio were evident this quarter as AmeriServ continued to maintain strong reserve coverage ratios even with the reduced loan loss provision.  Specifically, the allowance for loan losses provided 108% coverage of non-performing loans at June 30, 2010 and represented 2.99% of total loans outstanding.  I was also pleased with our capital strength and the revenue contribution of our retail bank during this difficult economic period.  The continued growth of deposits throughout our community bank network was a positive factor contributing to our strong balance sheet liquidity and good net interest margin performance.”        


The Company’s net interest income has been relatively consistent in 2010 increasing by $37,000 in the second quarter and $17,000 for the first six months of 2010 compared to the same periods in 2009.  Careful management of funding costs during a period when interest revenues are declining has allowed the Company to increase its net interest margin by 12 basis points to average 3.81% for the first half of 2010.  This continued stability in net interest income and improved margin performance is reflective of the Company’s strong liquidity position and its ability to reduce its funding costs during a period of deposit growth.  Specifically, total deposits averaged $795 million in the first six months of 2010, an increase of $53 million or 7.1% over the first half of 2009.  The Company believes that uncertainties in the economy have contributed to growth in money market accounts, certificates of deposit and demand deposits as consumers and businesses have looked for safety in well capitalized community banks like AmeriServ Financial.  The net interest margin also benefitted from approximately $150,000 in loan prepayment penalties in 2010 as the Company has focused on reducing its commercial real estate exposure during this period of economic weaknesses.  Overall, total loans outstanding have dropped by $29 million or 4.0% since December 31, 2009.


The Company has appropriately strengthened its allowance for loan losses over the past year in response to ongoing careful monitoring of the commercial loan and commercial real estate portfolios in this weak economic environment.  When determining the provision for loan losses, the Company considers a number of factors some of which include periodic credit reviews, non-performing, delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends. Overall, the Company recorded a $1.2 million provision for loan losses in the second quarter of 2010 compared to a $3.3 million provision in the second quarter of 2009, or a decrease of $2.1 million.  For the six month period ended June 30, 2010, the Company recorded a $4.3 million provision for loan losses compared to a $5.1 million provision for the first half of 2009, or a decrease of $850,000.  Actual credit losses realized through charge-offs in 2010, however, are running below the provision level but are higher than the prior year.  For the first six months of 2010, net charge-offs amounted to $3.2 million or 0.91% of total loans compared to net charge-offs of $404,000 or 0.11% of total loans for the first half of 2009.  The higher charge-offs in 2010 primarily relate to two non-performing commercial real-estate loans, one of which was completely resolved in the first quarter      and the second of which relates to a student housing project which the Company currently expects to resolve through a note sale during the second half of 2010.  During the second quarter, total non-performing assets declined modestly to $19.8 million or 2.85% of total loans.  In summary, the allowance for loan losses provided 108% coverage of non-performing loans and was 2.99% of total loans at June 30, 2010, compared to 115% of non-performing loans and 2.72% of total loans at December 31, 2009.


The Company’s non-interest income in the second quarter of 2010 decreased by $103,000 from the prior year’s second quarter and for the first six months of 2010 decreased by $364,000 when compared to the first six months of 2009.  The largest item responsible for the decline in both periods was a reduced level of deposit service charges which were down $99,000 in the second quarter and $200,000 for the first six months of 2010.  Customers have maintained higher balances in their checking accounts which has resulted in fewer overdraft fees in 2010.  Non-interest income has also been negatively impacted by a decrease in trust fees as a result of reductions in the market value of certain real estate assets we manage in our specialty real estate funds in 2010.  Trust fees were $65,000 lower in the second quarter and $170,000 lower for the six month period.  These negative items were partially offset by an increase in investment advisory fees due to overall improved equity values in 2010 and a continued strong level of revenue generated on residential mortgage loan sales into the secondary market.       


Total non-interest expense in the second quarter of 2010 increased by $150,000 or 1.6% from the prior year’s second quarter and for the first six months of 2010 increased by $752,000 or 4.0% when compared to the first six months of 2009.  Professional fees increased by $241,000 in the second quarter and $423,000 for the six month period due to increased consulting expenses and recruitment costs in the Trust company and higher legal fees and workout costs at the Bank in 2010.  Total salaries and benefits were up by $253,000 for the second quarter and $360,000 for the six month period as a result of higher medical insurance costs and increased pension expense in 2010.  These negative items were partially offset by a $350,000 FDIC deposit insurance expense decline in the second quarter and a $51,000 drop for the six month period due to the recognition of a special five basis point or $435,000 assessment in the 2009 second quarter.      


ASRV had total assets of $962 million and shareholders’ equity of $108 million or a book value of $4.11 per common share at June 30, 2010.  The Company continued to maintain strong capital ratios that exceed the regulatory defined well capitalized status with a risk based capital ratio of 15.90%, an asset leverage ratio of 11.08% and a tangible common equity to tangible assets ratio of 7.83% at June 30, 2010.    


This news release may contain forward-looking statements that involve risks and uncertainties, as defined in the Private Securities Litigation Reform Act of 1995, including the risks detailed in the Company's Annual Report and Form 10-K to the Securities and Exchange Commission.  Actual results may differ materially.   


Nasdaq: ASRV

SUPPLEMENTAL FINANCIAL PERFORMANCE DATA

July 20, 2010

(In thousands, except per share and ratio data)

(All quarterly and 2010 data unaudited)

2010

 

1QTR

2QTR

YEAR

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

Net income (loss)

$(918)

$477

$(441)

Net income (loss) available to common

    shareholders


(1,181)


215


(966)

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

Return on average assets

(0.39)%

0.20%

(0.09)%

Return on average equity

(3.47)

1.79

(0.83)

Net interest margin

3.78

3.83

3.81

Net charge-offs as a percentage of

    average loans


0.69


1.13


0.91

Loan loss provision as a percentage of

    average loans


1.72


0.68


1.20

Efficiency ratio

85.42

84.33

84.87

 

 

 

 

PER COMMON SHARE:

 

 

 

Net income (loss):

 

 

 

Basic

$(0.06)

$0.01

$(0.05)

Average number of common shares

    outstanding


21,224


21,224


21,224

Diluted

(0.06)

0.01

(0.05)

Average number of common shares

    outstanding


21,224


21,245


21,231

 

 

 

 


2009

 

1QTR

2QTR

YEAR

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

Net income

$533

$(939)

$(406)

Net income available to common

    shareholders


274


(1,202)


(928)

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

Return on average assets

0.22%

(0.39)%

(0.08)%

Return on average equity

1.90

(3.29)

(0.72)

Net interest margin

3.72

3.66

3.69

Net charge-offs as a percentage of

    average loans


0.03


0.19


0.11

Loan loss provision as a percentage of

    average loans


1.02


1.81


1.42

Efficiency ratio

78.22

82.56

79.93

 

 

 

 

PER COMMON SHARE:

 

 

 

Net income:

 

 

 

Basic

$0.01

$(0.06)

$(0.04)

Average number of common shares

    outstanding


21,137


21,151


21,144

Diluted

0.01

(0.06)

(0.04)

Average number of common shares

    outstanding


21,137


21,152


21,144

 

 

 

 


AMERISERV FINANCIAL, INC.

(In thousands, except per share, statistical, and ratio data)

(All quarterly and 2010 data unaudited)


2010

 

1QTR

2QTR

PERFORMANCE DATA AT PERIOD END

 

 

Assets

$960,817

$962,282

Short-term investment in money

    market funds


2,105


4,216

Investment securities

150,073

157,057

Loans

712,929

693,988

Allowance for loan losses

21,516

20,737

Goodwill

12,950

12,950

Deposits

802,201

809,177

FHLB borrowings

25,296

17,777

Shareholders’ equity

106,393

108,023

Non-performing assets

20,322

19,815

Asset leverage ratio

11.01%

11.08%

Tangible common equity ratio

7.70

7.83

PER COMMON SHARE:

 

 

Book value (A)

$4.04

$4.11

Market value

1.67

1.61

Trust assets – fair market value (B)

$1,398,215

$1,329,495

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

Full-time equivalent employees

353

355

Branch locations

18

18

Common shares outstanding

21,223,942

21,223,942


2009

 

1QTR

2QTR

3QTR

4QTR

PERFORMANCE DATA AT PERIOD END

 

 

 

 

Assets

$975,062

$978,899

$959,344

$970,026

Short-term investment in money

    market funds


10,817


7,516


6,565


3,766

Investment securities

138,853

136,119

138,715

142,883

Loans

726,961

739,649

722,540

722,904

Allowance for loan losses

10,661

13,606

19,255

19,685

Goodwill and core deposit

    intangibles


13,498


13,498


12,950


12,950

Deposits

746,813

783,807

779,185

786,011

FHLB borrowings

90,346

57,702

44,451

51,579

Shareholders’ equity

114,254

112,880

110,706

107,254

Non-performing assets

5,099

14,670

23,689

18,337

Asset leverage ratio

11.82%

11.61%

11.41%

11.06%

Tangible common equity ratio

8.35

8.17

8.16

7.71

PER COMMON SHARE:

 

 

 

 

Book value (A)

$4.44

$4.37

$4.25

$4.09

Market value

1.67

1.85

1.80

1.67

Trust assets – fair market value (B)

$1,432,375

$1,376,272

$1,340,119

$1,358,570

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

355

352

350

345

Branch locations

18

18

18

18

Common shares outstanding

21,144,700

21,156,801

21,215,115

21,221,909


NOTES:

(A) Preferred stock received through the Capital Purchase Program is excluded from the book value per common share calculation.

        (B)  Not recognized on the balance sheet.




AMERISERV FINANCIAL, INC.

CONSOLIDATED STATEMENT OF INCOME

(In thousands)

(All quarterly and 2010 data unaudited)

2010

 

1QTR

2QTR

YEAR

INTEREST INCOME

 

 

TO DATE

Interest and fees on loans

$10,020

$9,984

$20,004

Total investment portfolio

1,445

1,466

2,911

Total Interest Income

11,465

11,450

22,915

 

 

 

 

INTEREST EXPENSE

 

 

 

Deposits

2,927

2,833

5,760

All borrowings

417

409

826

Total Interest Expense

3,344

3,242

6,586

 

 

 

 

NET INTEREST INCOME

8,121

8,208

16,329

Provision for loan losses

3,050

1,200

4,250

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


5,071


7,008


12,079

 

 

 

 

NON-INTEREST INCOME

 

 

 

Trust fees

1,454

1,373

2,827

Net realized gains on investment securities

65

42

107

Net realized gains on loans held for sale

131

159

290

Service charges on deposit accounts

572

611

1,183

Investment advisory fees

187

167

354

Bank owned life insurance

254

258

512

Other income

637

778

1,415

Total Non-interest Income

3,300

3,388

6,688

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

Salaries and employee benefits

5,199

5,236

10,435

Net occupancy expense

736

639

1,375

Equipment expense

418

427

845

Professional fees

1,102

1,114

2,216

FDIC deposit insurance expense

331

341

672

Other expenses

1,978

2,029

4,007

Total Non-interest Expense

9,764

9,786

19,550

 

 

 

 

PRETAX INCOME (LOSS)

(1,393)

610

(783)

Income tax expense (benefit)

(475)

133

(342)

NET INCOME (LOSS)

(918)

477

(441)

Preferred stock dividends

263

262

525

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS


$(1,181)


$215


$(966)


2009

 

 

 

YEAR

INTEREST INCOME

1QTR

2QTR

TO DATE

Interest and fees on loans

$10,349

$10,544

$20,893

Total investment portfolio

1,586

1,511

3,097

Total Interest Income

11,935

12,055

23,990

 

 

 

 

INTEREST EXPENSE

 

 

 

Deposits

3,255

3,405

6,660

All borrowings

539

479

1,018

Total Interest Expense

3,794

3,884

7,678

 

 

 

 

NET INTEREST INCOME

8,141

8,171

16,312

Provision for loan losses

1,800

3,300

5,100

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


6,341


4,871


11,212

 

 

 

 

NON-INTEREST INCOME

 

 

 

Trust fees

1,559

1,438

2,997

Net realized gains on investment securities

101

63

164

Net realized gains on loans held for sale

118

163

281

Service charges on deposit accounts

673

710

1,383

Investment advisory fees

137

152

289

Bank owned life insurance

250

254

504

Other income

723

711

1,434

Total Non-interest Income

3,561

3,491

7,052

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

Salaries and employee benefits

5,092

4,983

10,075

Net occupancy expense

722

641

1,363

Equipment expense

415

442

857

Professional fees

920

873

1,793

FDIC deposit insurance expense

32

691

723

Amortization of core deposit intangibles

108

-

108

Other expenses

1,873

2,006

3,879

Total Non-interest Expense

9,162

9,636

18,798

 

 

 

 

PRETAX INCOME (LOSS)

740

(1,274)

(534)

Income tax expense (benefit)

207

(335)

(128)

NET INCOME (LOSS)

533

(939)

(406)

Preferred stock dividends

259

263

522

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS


$274


$(1,202)


$(928)


AMERISERV FINANCIAL, INC.

Nasdaq: ASRV

Average Balance Sheet Data (In thousands)

(All quarterly and 2010 data unaudited)


2010

2009

 

 

SIX

 

SIX

 

2QTR

MONTHS

2QTR

MONTHS

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned

    income


$705,288


$711,267


$732,568


$723,410

Deposits with banks

1,743

1,776

1,715

1,731

Short-term investment in money market funds

3,403

3,925

10,579

11,051

Federal funds sold

2,683

2,539

-

28

Total investment securities

157,390

152,894

144,863

146,664

 

 

 

 

 

Total interest earning assets

870,507

872,401

889,725

882,884

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

14,534

14,984

14,005

14,747

Premises and equipment

9,940

9,694

9,122

9,284

Other assets

79,894

79,769

72,074

71,539

Allowance for loan losses

(22,075)

(21,434)

(11,101)

(10,123)

 

 

 

 

 

Total assets

$952,800

$955,414

$973,825

$968,331

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$58,361

$57,863

$61,316

$61,836

Savings

78,778

77,032

72,988

72,373

Money market

183,850

185,563

171,019

156,231

Other time

357,938

354,084

347,422

336,821

Total interest bearing deposits

678,927

674,542

652,745

627,261

Borrowings:

 

 

 

 

Federal funds purchased, securities sold under

    agreements to repurchase, and other short-

    term borrowings



2,140



3,815



52,358



73,629

Advanced from Federal Home Loan Bank

18,332

25,413

13,840

13,847

Guaranteed junior subordinated deferrable interest debentures


13,085


13,085


13,085


13,085

Total interest bearing liabilities

712,484

716,855

732,028

727,822

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

Demand deposits

123,064

120,009

115,248

114,273

Other liabilities

10,625

11,623

11,914

12,090

Shareholders’ equity

106,627

106,927

114,635

114,146

Total liabilities and shareholders’ equity

$952,800

$955,414

$973,825

$968,331