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) April 16, 2013


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 first quarter 2013 results through March 31, 2013.  For a more detailed description of the announcement see the press release attached as Exhibit #99.1.  


Exhibits

--------


Exhibit 99.1

Press release dated April 16, 2013, announcing the first quarter 2013 results through March 31, 2013.



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: April 16, 2013







Exhibit 99.1


AMERISERV FINANCIAL REPORTS EARNINGS FOR THE FIRST QUARTER OF 2013     


JOHNSTOWN, PA – AmeriServ Financial, Inc. (NASDAQ: ASRV) reported first quarter 2013 net income available to common shareholders of $1,004,000 or $0.05 per diluted common share.  This represented a 25.0% increase in earnings per share from the most recent fourth quarter of 2012 where net income available to common shareholders totaled $683,000 or $0.04 per diluted common share.  Earnings per share in the first quarter of 2013 declined by 16.7% when compared to the first quarter of 2012 where net income available to common shareholders totaled $1,302,000 or $0.06 per diluted common share.  The following table highlights the Company’s quarterly financial performance:     

     

 

First Quarter 2013

Fourth Quarter 2012

First Quarter 2012

 

 

 

 

Net income

$1,056,000

$735,000

$1,565,000

Net income available to

  common shareholders


$1,004,000


$683,000


$1,302,000

Diluted earnings per share

          $ 0.05

          $ 0.04

                   $ 0.06


Glenn L. Wilson, President and Chief Executive Officer, commented on the first quarter 2013 financial results: “This was a good quarter overall for AmeriServ Financial.  We have grown our loan portfolio by $47 million or 6.9% over the past 12 months which has been an important factor in keeping our level of net interest income relatively stable during this period of record low interest rates.  Non-interest income grew nicely, mainly attributable to continued strong residential mortgage originations and subsequent sale into the secondary market.  We also reported strong asset quality metrics in the first quarter of 2013 consistent with our continued conservative credit discipline and effective loan workout strategies.  At March 31, 2013, non-performing assets were only 0.61% of total loans and our allowance for loan losses provided 344% coverage of non-performing loans.  Our high quality balance sheet is well positioned for further growth which will be needed to increase earnings as we work through 2013.”  


The Company’s net interest income in the first quarter of 2013 has been relatively stable as it decreased by only $16,000 or 0.2% when compared to the first quarter of 2012.  The Company’s first quarter 2013 net interest margin of 3.59% was 11 basis points lower than the net interest margin of 3.70% for the first quarter of 2012.  The lower net interest margin reflects the challenges of a flatter yield curve which has pressured interest revenue and demonstrates the impact of Federal Reserve low interest rate policies.  The Company has been able to counteract some of this net interest margin pressure and keep net interest income relatively constant by reducing its cost of funds and growing its earning assets, particularly loans.  Specifically, total loans have averaged $728 million in the first quarter of 2013, which is $61 million or 9.1% higher than the $667 million average in the first quarter of 2012.  This loan growth reflects the successful results of the Company’s more intensive sales calling efforts with an emphasis on generating commercial loans and owner occupied commercial real estate loans which qualify as Small Business Lending Fund (SBLF) loans, particularly through its loan production offices.  As a result of this growth in SBLF qualified loans, the Company will continue to pay the lowest preferred share dividend rate of 1% available under the SBLF program.  Despite this solid growth in loans, total interest revenue dropped by $422,000 between years and reflects the lower interest rate environment.  Interest revenue has also been negatively impacted by premium amortization on mortgage backed securities due to accelerated mortgage prepayment speeds and lower overall total investment security balances.  However, careful management of funding costs has allowed the Company to mitigate a significant portion of this drop in interest revenue during the past year.  Specifically, total interest expense for the first quarter of 2013 declined by $406,000 from the first quarter of 2012 due to the Company’s proactive efforts to reduce deposit costs.  Even with this reduction in deposit costs, the Company still experienced solid growth in deposits which increased by $27 million or 3.3% over the past year.  The Company continues to maintain strong liquidity as evidenced by a loan to deposit ratio of 84.7% at March 31, 2013.   


Improvements in asset quality evidenced by lower levels of non-performing assets and classified loans allowed the Company to again reverse a portion of the allowance for loan losses into earnings in the first quarter of 2013 while still maintaining especially strong coverage ratios.  During the first quarter of 2013, total non-performing assets declined to $4.4 million or 0.61% of total loans as a result of successful ongoing resolution efforts.  Classified loans (loans rated substandard or doubtful) also dropped by $8 million or 35.7% during this same period due to the improving financial condition of certain borrowers and, to a lesser extent, charge-offs of loans that were previously classified.  As a result of these improvements, the Company recorded a negative provision for loan losses of $250,000 in the first quarter of 2013 compared to a negative provision of $625,000 in the first quarter of 2012.  Consequently, there has been $375,000 less earnings benefit from a negative loan loss provision in 2013.  Net charge-offs in the first quarter of 2013 totaled $1.4 million or 0.76% of total loans, compared to net charge-offs of $220,000 or 0.13% of total loans in the first quarter of 2012.  The higher net charge-offs in the first quarter of 2013 reflect the resolution of a $2 million problem commercial real estate loan for which the Company had previously established reserves for in 2012.  When determining the provision for loan losses, the Company considers a number of factors some of which include periodic credit reviews, non-performing assets, loan delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends.  In summary, the allowance for loan losses provided 344% coverage of non-performing loans, and was 1.54% of total loans, at March 31, 2013, compared to 210% of non-performing loans, and 1.74% of total loans, at December 31, 2012.


The Company’s non-interest income in the first quarter of 2013 increased by $142,000 or 3.9% from the prior year’s first quarter.  The first quarter 2013 non-interest income increase was driven by increased revenue from residential mortgage banking activities and a gain realized on the sale of investment securities.  Specifically, gains realized on residential mortgage loan sales into the secondary market increased by $110,000 due to increased mortgage loan production in the first quarter of 2013.  The higher residential mortgage loan production reflected both increased refinance and purchase activity.  The Company also realized a $71,000 investment security gain in the first quarter of 2013 due to the sale of several smaller balance mortgage backed securities that were experiencing rapid prepayment speeds.  There were no investments security sales in the first quarter of 2012.              


Total non-interest expense in the first quarter of 2013 increased by $508,000 or 5.0% from the prior year’s first quarter.  Salaries and employee benefits increased by $345,000 due to higher salaries expense, incentive compensation, and pension expense in the first quarter of 2013.  The higher incentive compensation relates to incentives earned on the increased levels of both residential mortgage and commercial loan production.  The higher pension expense relates to the Company’s defined benefit pension plan and reflects the negative impact that the low interest rate environment is having on the discount rate used to calculate the plan liabilities.  This increasing pension cost was a key factor causing the Company to implement a soft freeze of its defined benefit pension plan to provide that non-union employees hired on or after January 1, 2013 are not eligible to participate.  Instead, such employees are eligible to participate in a qualified 401(k) plan.  Professional fees also increased by $112,000 in the first quarter of 2013 due largely to higher legal costs and moderate increases in several other professional fee categories.  Finally, the Company recorded an income tax expense of $430,000 or an effective tax rate of 28.9% for the first quarter of 2013 compared to an income tax expense of $678,000 or an effective tax rate of 30.2% for the first quarter of 2012.  The lower income tax expense and effective rate in 2013 reflects the Company’s reduced pre-tax earnings combined with a relatively consistent level of tax free earnings from bank owned life insurance.


ASRV had total assets of $1.0 billion, shareholders’ equity of $111 million, a book value of $4.72 per common share and a tangible book value of $4.06 per common share at March 31, 2013.  The Company has increased its tangible book value per share by 5.7% over the past twelve months.  The Company continued to maintain strong capital ratios that considerably exceed the regulatory defined well capitalized status with a risk based capital ratio of 16.11%, an asset leverage ratio of 11.58% and a tangible common equity to tangible assets ratio of 7.88% at March 31, 2013.  


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

March 31, 2013

(In thousands, except per share and ratio data)

(Unaudited)


2013

 

1QTR

 

 

 

 

 

 

 

 

 

 

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

$1,056

 

 

 

 

Net income available to common

    shareholders


1,004

 

 

 

 

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

0.43%

 

 

 

 

Return on average equity

3.86

 

 

 

 

Net interest margin

3.59

 

 

 

 

Net charge-offs (recoveries) as a percentage

    of average loans


0.76

 

 

 

 

Loan loss provision (credit) as a percentage of

    average loans


(0.14)

 

 

 

 

Efficiency ratio

89.52

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income:

 

 

 

 

 

Basic

$0.05

 

 

 

 

Average number of common shares

    outstanding


19,168

 

 

 

 

Diluted

0.05

 

 

 

 

Average number of common shares

    outstanding


19,257

 

 

 

 

 

 

 

 

 

 


2012

 

1QTR

2QTR

3QTR

4QTR

FULL

 

 

 

 

 

YEAR

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

$1,565

$1,432

$1,307

$735

$5,039

Net income available to common

    shareholders


1,302


1,170


1,056


683


4,211

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

0.65%

0.59%

0.52%

0.29%

0.51%

Return on average equity

5.60

5.19

4.66

2.60

4.51

Net interest margin

3.70

3.59

3.59

3.55

3.65

Net charge-offs (recoveries) as a percentage

    of average loans


0.13


(0.02)


0.16


0.45


0.19

Loan loss provision (credit) as a percentage of

    average loans


(0.38)


(0.30)


(0.11)


0.30


(0.11)

Efficiency ratio

86.17

86.34

85.50

86.61

86.16

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income:

 

 

 

 

 

Basic

$0.06

$0.06

$0.05

$0.04

$0.21

Average number of common shares

    outstanding


20,679


19,584


19,275


19,209


19,685

Diluted

0.06

0.06

0.05

0.04

0.21

Average number of common shares

    outstanding


20,722


19,652


19,351


19,289


19,747


AMERISERV FINANCIAL, INC.

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

(Unaudited)


2013

 

1QTR

 

 

 

FINANCIAL CONDITION  DATA AT PERIOD END

 

 

 

 

Assets

$999,718

 

 

 

Short-term investments/overnight funds

23,995

 

 

 

Investment securities

162,866

 

 

 

Loans and loans held for sale

717,852

 

 

 

Allowance for loan losses

10,960

 

 

 

Goodwill

12,613

 

 

 

Deposits

847,189

 

 

 

FHLB borrowings

16,000

 

 

 

Shareholders’ equity

111,445

 

 

 

Non-performing assets

4,387

 

 

 

Asset leverage ratio

11.58%

 

 

 

Tangible common equity ratio

7.88

 

 

 

PER COMMON SHARE:

 

 

 

 

Book value (A)

$4.72

 

 

 

Tangible book value (A)

4.06

 

 

 

Market value

3.13

 

 

 

Trust assets – fair market value (B)

$1,566,236

 

 

 

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

357

 

 

 

Branch locations

18

 

 

 

Common shares outstanding

19,168,188

 

 

 


2012

 

1QTR

2QTR

3QTR

4QTR

FINANCIAL CONDITION  DATA AT PERIOD END

 

 

 

 

Assets

$967,401

$997,102

$1,002,281

$1,000,991

Short-term investments/overnight funds

7,398

14,158

14,210

9,012

Investment securities

190,089

191,791

181,319

165,261

Loans and loans held for sale

671,328

690,815

706,624

731,741

Allowance for loan losses

13,778

13,317

12,829

12,571

Goodwill

12,613

12,613

12,613

12,613

Deposits

820,105

854,017

850,125

835,734

FHLB borrowings

6,390

3,000

12,000

28,660

Shareholders’ equity

112,270

110,810

112,311

110,468

Non-performing assets

4,801

5,077

5,372

7,224

Asset leverage ratio

11.83%

11.60%

11.45%

11.44%

Tangible common equity ratio

8.24

7.84

7.95

7.78

PER COMMON SHARE:

 

 

 

 

Book value (A)

$4.46

$4.66

$4.74

$4.67

Tangible book value (A)

3.84

4.00

4.09

4.01

Market value

2.74

2.82

2.97

3.01

Trust assets – fair market value (B)

$1,469,789

$1,447,877

$1,511,012

$1,512,387

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

353

353

355

350

Branch locations

18

18

18

18

Common shares outstanding

20,465,521

19,284,521

19,255,221

19,164,721

NOTES:

(A)

Preferred stock of $21 million received through the Small Business Lending Fund is excluded from the book value per

common share and tangible book value per common share calculations.

        (B) Not recognized on the consolidated balance sheets.


AMERISERV FINANCIAL, INC.

CONSOLIDATED STATEMENT OF INCOME

(In thousands)

(Unaudited)


2013

 

1QTR

 

 

 

 

INTEREST INCOME

 

 

 

 

 

Interest and fees on loans

$8,628

 

 

 

 

Total investment portfolio

1,074

 

 

 

 

Total Interest Income

9,702

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

Deposits

1,350

 

 

 

 

All borrowings

310

 

 

 

 

Total Interest Expense

1,660

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

8,042

 

 

 

 

Provision (credit) for loan losses

(250)

 

 

 

 

NET INTEREST INCOME AFTER

   PROVISION (CREDIT) FOR LOAN

   LOSSES



8,292

 

 

 

 

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

Trust fees

1,667

 

 

 

 

Investment advisory fees

214

 

 

 

 

Net realized gains on investment securities

71

 

 

 

 

Net realized gains on loans held for sale

386

 

 

 

 

Service charges on deposit accounts

511

 

 

 

 

Bank owned life insurance

201

 

 

 

 

Other income

766

 

 

 

 

Total Non-Interest Income

3,816

 

 

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

Salaries and employee benefits

6,331

 

 

 

 

Net occupancy expense

773

 

 

 

 

Equipment expense

455

 

 

 

 

Professional fees

1,035

 

 

 

 

FDIC deposit insurance expense

134

 

 

 

 

Other expenses

1,894

 

 

 

 

Total Non-Interest Expense

10,622

 

 

 

 

 

 

 

 

 

 

PRETAX INCOME

1,486

 

 

 

 

Income tax expense

430

 

 

 

 

NET INCOME

1,056

 

 

 

 

Preferred stock dividends

52

 

 

 

 

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$1,004

 

 

 

 


2012

 

1QTR

2QTR

3QTR

4QTR

FULL

INTEREST INCOME

 

 

 

 

YEAR

Interest and fees on loans

$8,729

$8,552

$8,807

$8,727

$34,815

Total investment portfolio

1,395

1,333

1,223

1,151

5,102

Total Interest Income

10,124

9,885

10,030

9,878

39,917

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

Deposits

1,762

1,668

1,587

1,485

6,502

All borrowings

304

296

301

311

1,212

Total Interest Expense

2,066

1,964

1,888

1,796

7,714

 

 

 

 

 

 

NET INTEREST INCOME

8,058

7,921

8,142

8,082

32,203

Provision (credit) for loan losses

(625)

(500)

(200)

550

(775)

NET INTEREST INCOME AFTER

   PROVISION (CREDIT) FOR LOAN

   LOSSES



8,683



8,421



8,342



7,532



32,978

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

Trust fees

1,697

1,628

1,533

1,669

6,527

Investment advisory fees

193

177

182

189

741

Net realized gains on investment securities

-

12

-

-

12

Net realized gains on loans held for sale

276

251

262

343

1,132

Service charges on deposit accounts

535

517

567

576

2,195

Bank owned life insurance

215

212

217

219

863

Other income

758

936

888

891

3,473

Total Non-Interest Income

3,674

3,733

3,649

3,887

14,943

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

Salaries and employee benefits

5,986

5,976

6,132

6,330

24,424

Net occupancy expense

729

702

698

671

2,800

Equipment expense

451

473

395

445

1,764

Professional fees

923

937

977

1,033

3,870

FDIC deposit insurance expense

129

114

104

94

441

Other expenses

1,896

1,865

1,781

1,800

7,342

Total Non-Interest Expense

10,114

10,067

10,087

10,373

40,641

 

 

 

 

 

 

PRETAX INCOME

2,243

2,087

1,904

1,046

7,280

Income tax expense

678

655

597

311

2,241

NET INCOME

1,565

1,432

1,307

735

5,039

Preferred stock dividends

263

262

251

52

828

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$1,302


$1,170


$1,056


$683


$4,211


AMERISERV FINANCIAL, INC.

Nasdaq: ASRV

Average Balance Sheet Data (In thousands)

(Unaudited)


2013

2012

 

 

 

 

 

 

1QTR

 

1QTR

 

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned income

$727,505

 

$666,575

 

Deposits with banks

8,339

 

4,027

 

Short-term investment in money market funds

3,209

 

5,168

 

Total investment securities

163,636

 

194,576

 

Total interest earning assets

902,689

 

870,346

 

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

17,220

 

17,163

 

Premises and equipment

12,151

 

10,826

 

Other assets

81,999

 

82,302

 

Allowance for loan losses

(12,548)

 

(14,486)

 

 

 

 

 

 

Total assets

$1,001,511

 

$966,151

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$62,978

 

$56,346

 

Savings

87,195

 

83,678

 

Money market

213,203

 

202,156

 

Other time

314,019

 

327,680

 

Total interest bearing deposits

677,395

 

669,860

 

Borrowings:

 

 

 

 

Federal funds purchased and other short-term borrowings

7,864

 

4,233

 

Advances from Federal Home Loan Bank

15,548

 

8,493

 

Guaranteed junior subordinated deferrable interest debentures

13,085

 

13,085

 

Total interest bearing liabilities

713,892

 

695,671

 

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

  Demand deposits

158,251

 

142,106

 

  Other liabilities

18,409

 

16,067

 

Shareholders’ equity

110,959

 

112,307

 

Total liabilities and shareholders’ equity

$1,001,511

 

$966,151