SECURITIES AND EXCHANGE COMMISSION



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549


Form 8-K/A


Current Report

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


Date of Report (Date of earliest event reported) January 22, 2008


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/A 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/A


Item 2.02 Results of operation and financial condition.


AMERISERV FINANCIAL Inc. (the "Registrant") announced fourth quarter and full year 2007 results as of December 31, 2007 and implementation of a Stock Repurchase Program .  For a more detailed description of the announcement see the press release attached as Exhibit #99.1.  


Exhibits

--------


Exhibit 99.1

Press release dated January 22, 2008, announcing the fourth quarter and full year 2007 results as of December 31, 2007 and implementation of a Stock Repurchase Program ..



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

Senior Vice President

& CFO


Date: January 22, 2008







Exhibit 99.1


AMERISERV FINANCIAL REPORTS INCREASED EARNINGS FOR 2007 AND IMPLEMENTATION OF A STOCK REPURCHASE PROGRAM     


JOHNSTOWN, PA – AmeriServ Financial, Inc. (NASDAQ: ASRV) reported fourth quarter 2007 net income of $924,000 or $0.04 per diluted share.  This represents an increase of $343,000 or 59.0% over the fourth quarter 2006 net income of $581,000 or $0.03 per diluted share.  For the year ended December 31, 2007, the Company reported net income of $3.0 million or $0.14 per diluted share.  This represents an increase of $702,000 or 30.1% when compared to net income of $2.3 million or $0.11 per diluted share for the full year 2006.  The following table highlights the Company’s financial performance for both the quarters and years ended December 31, 2007 and 2006:

     

 

Fourth Quarter 2007

Fourth   Quarter 2006

 

Year Ended

 December 31, 2007

Year Ended

December 31, 2006

 

 

 

 

 

 

Net income

$924,000

$581,000

 

$3,034,000

$2,332,000

Diluted earnings per share

            $ 0.04

           $ 0.03

 

                        $ 0.14


$ 0.11


Additionally, the Company also announced that its Board of Directors approved a stock repurchase program which calls for AmeriServ Financial, Inc. to buyback up to 5% or approximately 1.1 million of its outstanding common shares.  The shares may be purchased in open market, negotiated, or block transactions.  This stock repurchase program does not obligate the Company to acquire any specific number of shares and may be suspended or discontinued at any time.  As of December 31, 2007, the Company had approximately 22.2 million shares of its common stock outstanding.  


ASRV had total assets of $905 million and shareholders’ equity of $90.3 million or a book value of $4.07 per share at December 31, 2007.  The Company’s asset leverage ratio remained strong at 10.47%.


 Allan R. Dennison, President and Chief Executive Officer, commented on the 2007 results and stock repurchase program, “Our focus on executing our strategic plan has caused AmeriServ Financial to report improved financial performance in 2007.  We enter 2008 with positive earnings momentum, a high quality balance sheet, and a strong capital position.  The announcement of this stock repurchase program reflects our belief that the ASRV stock price has been unfairly impacted by the recent credit concerns in the banking sector and the return of capital to our shareholders through a stock buyback program is an appropriate capital management strategy at this time.”


The Company’s net interest income in the fourth quarter of 2007 increased by $337,000 from the prior year’s fourth quarter and the net interest margin is up by 15 basis points over the same comparative period.    The increased net interest income and margin in the fourth quarter of 2007 reflects the benefits of solid loan growth experienced throughout 2007.  Since year-end 2006, total loans have grown by $46.7 million or 7.9% to $636.2 million at December 31, 2007.  The loan growth was most evident in the commercial loan portfolio with particularly strong performance during the second half of 2007.  The Federal Reserve reductions in short-term interest rates that began late in the third quarter of 2007 also contributed to the increased net interest income in the fourth quarter of 2007.  On a quarterly basis the Company’s net interest margin has shown improvement throughout 2007 increasing from 2.97% in the first quarter to 3.08% in the fourth quarter.  This helped to reverse a trend of four consecutive quarters of net interest income and margin contraction experienced in 2006 where the margin declined from 3.20% to a low of 2.93% in the fourth quarter.  When the full year 2007 is compared to the full year 2006, the Company’s net interest income decreased by $255,000 or 1.0% while the net interest margin declined by six basis points.  The full year decline in both net interest income and net interest margin resulted from the Company’s cost of funds increasing at a faster pace than the earning asset yield particularly during the first six months of 2007.  This resulted from deposit customer preference for higher yielding certificates of deposit and money market accounts due to the inverted/flat yield curve with short-term interest rates exceeding intermediate to longer term rates during that period.  As mentioned earlier, that trend changed during the second half of 2007 and the Company believes it is well positioned for net interest income and margin expansion in 2008.    


The Company recorded a $150,000 provision for loan losses in the fourth quarter of 2007 compared to a negative loan loss provision of $75,000 realized in the fourth quarter of 2006.  For the full year 2007, the provision for loan losses amounted to $300,000 compared to a negative loan loss provision of $125,000 for the full year 2006.  The Company did experience higher net charge-offs in 2007.  For the full year 2007, net charge-offs have amounted to $1.1 million or 0.19% of total loans compared to net charge-offs of $926,000 or 0.16% of total loans for the full year 2006.  Note that the Company’s 2007 net charge-offs were materially impacted by a third quarter $875,000 complete charge-off of a commercial loan that resulted from fraud committed by the borrower.  Net charge-offs decreased to only $16,000 or 0.01% of total loans in the fourth quarter of 2007; the Company’s best quarterly performance of 2007.  Non-performing assets totaled $5.3 million or 0.83% of total loans at December 31, 2007 which represented an increase from the approximate $2.4 million non-performing asset total at both September 30, 2007 and December 31, 2006.  The increase during the fourth quarter of 2007 resulted primarily from the transfer of a $2.4 million commercial real-estate loan into non-accrual status. The Company is pleased to report that this non-performing loan was subsequently paid-off in January 2008 with no loss to the bank.  The allowance for loan losses provided 137% coverage of non-performing assets and was 1.14% of total loans at December 31, 2007.  Note also that the Company has no exposure to sub-prime mortgage loans in either the loan or investment portfolios.

        

The Company’s non-interest income in the fourth quarter of 2007 increased by $776,000 from the prior year’s fourth quarter and for the full year 2007 increased by $1.9 million or 14.5% when compared to 2006.  The increase for both periods was due in part to the West Chester Capital Advisors acquisition, which closed in early March of 2007.  This accretive acquisition provided $268,000 of investment advisory fees in the fourth quarter of 2007 and $974,000 of fees for the full year 2007.  Trust fees also increased by $79,000 for the fourth quarter 2007 and by $234,000 or 3.6% for the full year 2007 due to continued successful new business development efforts and an increased value for trust assets.  The fair market value of trust assets totaled $1.9 billion at December 31, 2007.  The Company also realized an increase on gains realized on residential mortgage loan sales into the secondary market that amounted to $51,000 for the fourth quarter of 2007 and $202,000 for the full year 2007.  These increases reflect improved residential mortgage production from the Company’s primary market as this has been an area of emphasis in the strategic plan.  Finally, other income increased by $326,000 in the fourth quarter and $377,000 for the full year 2007 due in part to a $200,000 gain realized on the sale of a bank owned operations facility that was no longer being fully utilized.  The Company also benefited from a $69,000 gain realized on the sale of a closed branch facility in the third quarter of 2007.  


Total non-interest expense in the fourth quarter of 2007 increased by $211,000 from the prior year’s fourth quarter but for the full year 2007 declined by $20,000 when compared to the full year 2006. The largest factor responsible for the quarterly increase was the inclusion of $253,000 of non-interest expenses from West Chester Capital Advisors; the largest component of which was reflected in salaries and employee benefits.  West Chester Capital Advisors has contributed $820,000 in non-interest expenses for full year 2007.  The overall reduction in expenses for the full year 2007 reflects the Company’s continuing focus on containing and reducing non-interest expenses.  The largest expense reductions were experienced in equipment expense $304,000, other expenses $355,000 and FDIC deposit insurance expense $104,000.  


The Company recorded an income tax expense of $315,000 in the fourth quarter of 2007 compared to an income tax benefit of $19,000 in the fourth quarter of 2006.  The tax benefit in the fourth quarter of 2006 resulted from the elimination of a $100,000 income tax valuation allowance related to the deductibility of charitable contributions that management determined was no longer needed given the level of taxable income generated by the Company in 2006.  For the full year 2007, the Company recorded an income tax expense of $924,000, which reflects an estimated effective tax rate of 23.3%.  This compares to $420,000 of income tax expense or an effective tax rate of approximately 15.3% in 2006.  The higher effective tax rate in 2007 resulted from the Company’s improved profitability.


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

January 22, 2008

(In thousands, except per share and ratio data)

(All quarterly and 2007 data unaudited)

2007

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income  

$428

$808

$874

$924

$3,034

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

0.20%

0.37%

0.39%

0.41%

0.34%

Return on average equity

2.05

3.79

4.00

4.12

3.51

Net interest margin

2.97

3.01

3.00

3.08

3.06

Net charge-offs as a percentage of average loans

0.06

0.07

0.61

0.01

0.19

Loan loss provision as a percentage of average loans

-

-

0.10

0.09

0.05

Efficiency ratio

94.16

88.52

87.15

86.04

88.85

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income:

 

 

 

 

 

Basic

$0.02

$0.04

$0.04

$0.04

$0.14

Average number of common shares outstanding

22,159

22,164

22,175

22,184

22,171

Diluted

0.02

0.04

0.04

0.04

0.14

Average number of common shares outstanding

22,166

22,171

22,177

22,186

22,173

 

 

 

 

 

 



2006

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

$540

$568

$643

$581

$2,332

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

0.25%

0.26%

0.29%

0.26%

0.27%

Return on average equity

2.59

2.71

3.00

2.66

2.74

Net interest margin

3.20

3.16

3.06

2.93

3.12

Net charge-offs as a percentage of average loans

0.09

0.07

0.39

0.09

0.16

Loan loss provision as a percentage of average loans

-

(0.04)

-

(0.05)

(0.02)

Efficiency ratio

92.68

92.08

91.38

94.34

92.60

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income:

 

 

 

 

 

Basic

$0.02

$0.03

$0.03

$0.03

$0.11

Average number of common shares outstanding

22,119

22,143

22,148

22,154

22,141

Diluted

0.02

0.03

0.03

0.03

0.11

Average number of common shares outstanding

22,127

22,153

22,156

22,161

22,149

 

 

 

 

 

 


AMERISERV FINANCIAL, INC.

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

(All quarterly and 2007 data unaudited)


2007

 

1QTR

2QTR

3QTR

4QTR

PERFORMANCE DATA AT PERIOD END

 

 

 

 

Assets

$891,559

$876,160

$897,940

$904,878

Investment securities

185,338

174,508

170,765

163,474

Loans

603,834

604,639

629,564

636,155

Allowance for loan losses

8,010

7,911

7,119

7,252

Goodwill and core deposit intangibles

15,119

14,903

14,687

14,470

Deposits

768,947

762,902

763,771

710,439

FHLB borrowings

15,170

4,258

23,482

82,115

Stockholders’ equity

85,693

86,226

88,517

90,294

Trust assets – fair market value (B)

1,828,475

1,872,366

1,846,240

1,883,307

Non-performing assets

2,706

2,825

2,463

5,280

Asset leverage ratio

10.23%

10.36%

10.44%

10.47%

PER COMMON SHARE:

 

 

 

 

Book value (A)

$3.87

$3.89

$3.99

$4.07

Market value

4.79

4.40

3.33

2.77

Market price to book value

123.88%

113.12%

83.44%

68.07%

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

375

376

358

351

Branch locations

21

21

20

20

Common shares outstanding

22,161,445

22,167,235

22,180,650

22,188,997


2006

 

1QTR

2QTR

3QTR

4QTR

PERFORMANCE DATA AT PERIOD END

 

 

 

 

Assets

$876,393

$887,608

$882,837

$895,992

Investment securities

223,658

210,230

209,046

196,200

Loans

548,466

573,884

580,560

589,435

Allowance for loan losses

9,026

8,874

8,302

8,092

Goodwill and core deposit intangibles

12,031

11,815

11,599

11,382

Deposits

727,987

740,979

743,687

741,755

FHLB borrowings

45,223

43,031

31,949

50,037

Stockholders’ equity

84,336

84,231

86,788

84,684

Trust assets – fair market value (B)

1,669,525

1,679,634

1,702,210

1,778,652

Non-performing assets

4,193

4,625

2,978

2,292

Asset leverage ratio

10.36%

10.54%

10.52%

10.54%

PER COMMON SHARE:

 

 

 

 

Book value

$3.81

$3.80

$3.92

$3.82

Market value

5.00

4.91

4.43

4.93

Market price to book value

131.26%

129.09%

113.07%

128.98%

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

375

367

364

369

Branch locations

22

22

21

21

Common shares outstanding

22,140,172

22,145,639

22,150,767

22,156,094


    NOTES:

        (A) Other comprehensive income had a negative impact of $0.18 on book value per share at December 31, 2007.

        (B)  Not recognized on the balance sheet.


AMERISERV FINANCIAL, INC.

CONSOLIDATED STATEMENT OF INCOME

(In thousands)

(All quarterly and 2007 data unaudited)

2007

 

 

 

 

 

YEAR

INTEREST INCOME

1QTR

2QTR

3QTR

4QTR

TO DATE

Interest and fees on loans

$10,061

$10,303

$10,591

$10,608

$41,563

Total investment portfolio

2,114

2,005

1,863

1,834

7,816

Total Interest Income

12,175

12,308

12,454

12,442

49,379

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

Deposits

5,699

5,931

5,994

5,187

22,811

All borrowings

521

364

438

1,022

2,345

Total Interest Expense

6,220

6,295

6,432

6,209

25,156

 

 

 

 

 

 

NET INTEREST INCOME

5,955

6,013

6,022

6,233

24,223

Provision for loan losses

-

-

150

150

300

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


5,955


6,013


5,872


6,083


23,923

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

Trust fees

1,704

1,689

1,677

1,683

6,753

Net realized gains on loans held for sale

25

79

116

87

307

Service charges on deposit accounts

585

636

671

687

2,579

Investment advisory fees

102

329

275

268

974

Bank owned life insurance

258

265

479

266

1,268

Other income

559

594

804

869

2,826

Total Non-interest Income

3,233

3,592

4,022

3,860

14,707

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

Salaries and employee benefits

4,885

4,930

4,813

4,711

19,339

Net occupancy expense

664

615

618

597

2,494

Equipment expense

546

564

466

469

2,045

Professional fees

695

818

814

870

3,197

FDIC deposit insurance expense

22

22

22

22

88

Amortization of core deposit intangibles

216

216

216

217

865

Other expenses

1,645

1,357

1,824

1,818

6,644

Total Non-interest Expense

8,673

8,522

8,773

8,704

34,672

 

 

 

 

 

 

PRETAX INCOME

515

1,083

1,121

1,239

3,958

Income tax expense

87

275

247

315

924

NET INCOME  

$428

$808

$874

$924

$3,034

 

 

 

 

 

 



2006

 

 

 

 

 

YEAR

INTEREST INCOME

1QTR

2QTR

3QTR

4QTR

TO DATE

Interest and fees on loans

$8,900

$9,155

$9,677

$9,865

$37,597

Total investment portfolio

2,279

2,259

2,218

2,212

8,968

Total Interest Income

11,179

11,414

11,895

12,077

46,565

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

Deposits

4,026

4,563

5,143

5,500

19,232

All borrowings

861

660

653

681

2,855

Total Interest Expense

4,887

5,223

5,796

6,181

22,087

 

 

 

 

 

 

NET INTEREST INCOME

6,292

6,191

6,099

5,896

24,478

Provision for loan losses

-

(50)

-

(75)

(125)

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


6,292


6,241


6,099


5,971


24,603

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

Trust fees

1,641

1,671

1,603

1,604

6,519

Net realized gains on loans held for sale

23

20

26

36

105

Service charges on deposit accounts

627

651

645

638

2,561

Bank owned life insurance

256

260

428

263

1,207

Other income

695

666

545

543

2,449

Total Non-interest Income

3,242

3,268

3,247

3,084

12,841

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

Salaries and employee benefits

4,815

4,612

4,600

4,642

18,669

Net occupancy expense

655

591

573

591

2,410

Equipment expense

639

631

529

550

2,349

Professional fees

795

859

791

763

3,208

FDIC deposit insurance expense

73

74

22

23

192

Amortization of core deposit intangibles

216

216

216

217

865

Other expenses

1,665

1,794

1,833

1,707

6,999

Total Non-interest Expense

8,858

8,777

8,564

8,493

34,692

 

 

 

 

 

 

PRETAX INCOME

676

732

782

562

2,752

Income tax expense (benefit)

136

164

139

(19)

420

NET INCOME

$540

$568

$643

$581

$2,332

 

 

 

 

 

 


AMERISERV FINANCIAL, INC.

Nasdaq: ASRV

Average Balance Sheet Data (In thousands)

(All quarterly and 2007 data unaudited)


    Note:  2006 data appears before 2007.


2006

2007

 

 

TWELVE

 

TWELVE

 

4QTR

MONTHS

4QTR

MONTHS

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned income

$582,165

$564,173

$625,255

$607,507

Deposits with banks

688

706

603

500

Federal funds

248

62

85

2,278

Total investment securities

211,747

221,704

174,094

184,117

 

 

 

 

 

Total interest earning assets

794,848

786,645

800,037

794,402

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

18,439

18,841

17,797

17,750

Premises and equipment

8,285

8,324

8,328

8,623

Other assets

68,003

68,920

72,823

70,369

Allowance for loan losses

(8,237)

(8,750)

(7,181)

(7,755)

 

 

 

 

 

Total assets

$881,338

$873,980

$891,804

$883,389

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$59,280

$57,817

$55,853

$56,383

Savings

75,150

81,964

68,354

71,922

Money market

173,538

172,029

132,141

169,696

Other time

336,089

319,220

352,074

346,134

Total interest bearing deposits

644,057

631,030

608,422

644,135

Borrowings:

 

 

 

 

Federal funds purchased, securities sold under agreements to repurchase, and other short-term borrowings



27,910



32,821



54,051



19,844

Advanced from Federal Home Loan Bank

951

967

8,585

4,852

Guaranteed junior subordinated deferrable interest debentures


13,085


13,085


13,085


13,085

Total interest bearing liabilities

686,003

677,903

684,143

681,916

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

Demand deposits

101,188

104,266

108,214

105,306

Other liabilities

7,310

6,765

10,385

9,703

Stockholders’ equity

86,837

85,046

89,062

86,464

Total liabilities and stockholders’ equity

$881,338

$873,980

$891,804

$883,389