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) January 25, 2011


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 fourth quarter and full year results through December 31, 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 January 25, 2011, announcing the fourth quarter and full year results through December 31, 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: January 25, 2011




Exhibit 99.1


AMERISERV FINANCIAL REPORTS EARNINGS FOR THE FOURTH QUARTER AND FULL YEAR OF 2010     


JOHNSTOWN, PA – AmeriServ Financial, Inc. (NASDAQ: ASRV) reported its strongest quarterly earnings of 2010 in the fourth quarter by posting net income of $1.1 million or $0.04 per diluted common share.  This represents a significant improvement of $2.8 million from the fourth quarter 2009 net loss of $1.7 million or ($0.09) per diluted common share.  For the year ended December 31, 2010, the Company reported net income of $1.3 million or $0.01 per diluted share which also represents an increase of $6.2 million when compared with the net loss of $4.9 million or ($0.28) per diluted common share reported for the full year of 2009.  The following table highlights the Company’s financial performance for both the quarters and years ended December 31, 2010 and 2009:     


 

Fourth Quarter 2010

Fourth Quarter 2009

 

Year Ended

December 31, 2010

Year Ended

December 31, 2009

 

 

 

 

 

 

Net income (loss)

$1,114,000

($1,679,000)

 

$1,282,000

($4,895,000)

Diluted earnings per share

          $ 0.04

          ( $ 0.09)

 

                   $ 0.01

($0.28)



Glenn L. Wilson, President and Chief Executive Officer, commented on the 2010 financial results: “Improvements in asset quality were a key factor causing our increased earnings in 2010.  I was particularly pleased that as a result of successful ongoing problem credit resolution efforts, there was an $11 million decrease in non-performing assets during the fourth quarter of 2010.  Only $1 million of this decline in non-performing assets related to actual loan losses realized through net charge-offs.  Additionally, our fourth quarter 2010 earnings included stable net interest margin performance and a record quarter of residential mortgage loan production that contributed to our strongest quarterly non-interest revenue in 2010.  AmeriServ Financial enters 2011 with a conservatively positioned balance sheet that is supported by strong capital, excellent liquidity, and reserves that provide solid coverage of problem loans.”        


The Company’s net interest income declined modestly in 2010 by $207,000 in the fourth quarter and by only $92,000 or 0.28% for the full year of 2010 when compared to the same periods in 2009. Careful management of funding costs during a period when interest revenues declined and the balance sheet contracted allowed the Company to increase its net interest margin by seven basis points to average 3.79% for the full year of 2010.  This solid net interest 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 $803 million for the full year of 2010, an increase of $41 million or 5.3% over 2009. Growth in non-interest bearing demand deposits was even greater at 7.4%.  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.  Overall, total loans have declined by $45 million or 6.2% since December 31, 2009 as the Company has successfully focused on reducing its commercial real estate exposure and non-performing assets during this period of economic weakness.


The improvements in asset quality evidenced by lower levels of non-performing assets and classified loans allowed the Company to reduce its provision for loan losses in 2010 while still increasing coverage ratios.  During the fourth quarter, total non-performing assets decreased by $10.9 million to $14.4 million or 2.12% of total loans as a result of successful resolution efforts.  As a result of this improvement, the Company did not record a provision for loan losses in the fourth quarter of 2010 compared to a $3.8 million provision in the fourth quarter of 2009.  For the year ended December 31, 2010, the Company recorded a $5.3 million provision for loan losses compared to a $15.2 million provision for the 2009 year, or a decrease of $9.9 million.  Actual credit losses realized through charge-offs in 2010 approximated the provision level but are higher than the prior year.  For the full year 2010, net charge-offs amounted to $5.2 million or 0.74% of total loans compared to net charge-offs of $4.4 million or 0.60% of total loans for the full year 2009.  The higher charge-offs in 2010 largely relate to two non-performing commercial real-estate loans, one of which was completely resolved in the first quarter ($1.2 million charge-off) and the second of which relates to a student housing project ($2.4 million charge-off) which the Company fully resolved through a note sale during the fourth quarter of 2010. 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.  In summary, the allowance for loan losses provided 145% coverage of non-performing loans and was 2.91% of total loans at December 31, 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 fourth quarter of 2010 increased by $344,000 from the prior year’s fourth quarter and for the full year 2010 was relatively consistent with 2009 as it increased by $39,000. The largest factor causing the improvement in 2010 was increased revenue generated on residential mortgage loan sales into the secondary market.  As a result of increased mortgage loan production, the realized gain on loan sales was $233,000 higher in the fourth quarter of 2010 and $307,000 higher for the full year 2010 when compared to the same 2009 periods.  This increased residential mortgage loan production also contributed to the $122,000 fourth quarter increase in other income due to higher underwriting and document preparation fees. The largest item negatively impacting both periods was a reduced level of deposit service charges which were down $138,000 in the fourth quarter and $485,000 for the full year 2010.  Customers have maintained higher balances in their checking accounts which have resulted in fewer overdraft fees in 2010.  Additionally, the fourth quarter 2010 deposit service charges were also fully impacted by regulatory changes which took effect in mid-August and are designed to limit customer overdraft fees on debit card transactions.    


Total non-interest expense in the fourth quarter of 2010 decreased by $420,000 from the prior year’s fourth quarter but for the full year 2010 increased by $540,000 or 1.4% when compared to the 2009 year.  The largest item responsible for the fourth quarter decline was a reduced level of other real estate owned expense in 2010.  For the full year 2010, total salaries and benefits were up by $1.1 million or 5.2% as a result of higher medical insurance costs, increased pension expense, and greater incentive compensation expense reflecting greater commission payments related to the residential mortgage activity.  Professional fees were also up for the full year 2010 by $331,000 or 8.2% due to increased consulting expenses and recruitment costs in the Trust company and higher legal fees and loan workout costs at the Bank.       


ASRV had total assets of $949 million and shareholders’ equity of $107 million or a book value of $4.07 per common share at December 31, 2010.  The Company continued to maintain strong capital ratios that considerably exceed the regulatory defined well capitalized status with a risk based capital ratio of 16.54%, an asset leverage ratio of 11.20% and a tangible common equity to tangible assets ratio of 7.94% at December 31, 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

December 31, 2010

(In thousands, except per share and ratio data)

(Unaudited)


2010

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income (loss)

$(918)

$477

$609

$1,114

$1,282

Net income (loss) available to common

    shareholders


(1,181)


215


346


852


232

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

(0.39)%

0.20%

0.25%

0.46%

0.13%

Return on average equity

(3.47)

1.79

2.24

4.06

1.19

Net interest margin

3.78

3.83

3.70

3.70

3.79

Net charge-offs as a percentage of

    average loans


0.69


1.13


0.56


0.57


0.74

Loan loss provision as a percentage of

    average loans


.72


0.68


0.57


-


0.75

Efficiency ratio

85.42

84.33

84.67

88.18

85.66

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income (loss):

 

 

 

 

 

Basic

$(0.06)

$0.01

$0.02

$0.04

$0.01

Average number of common shares

    outstanding


21,224


21,224


21,224


21,224


21,224

Diluted

(0.06)

0.01

0.02

0.04

0.01

Average number of common shares

    outstanding


21,224


21,245


21,225


21,224


21,226

 

 

 

 

 

 


2009

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

$533

$(939)

$(2,810)

$(1,679)

$(4,895)

Net income available to common

    shareholders


274


(1,202)


(3,073)


(1,941)


(5,942)

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

0.22%

(0.39)%

(1.15)%

(0.70)%

(0.51)%

Return on average equity

1.90

(3.29)

(9.83)

(6.01)

(4.33)

Net interest margin

3.72

3.66

3.57

3.75

3.72

Net charge-offs as a percentage of

    average loans


0.03


0.19


0.35


1.82


0.60

Loan loss provision as a percentage of

    average loans


1.02


1.81


3.42


2.05


2.09

Efficiency ratio

78.22

82.56

84.00

92.82

84.39

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income:

 

 

 

 

 

Basic

$0.01

$(0.06)

$(0.15)

$(0.09)

$(0.28)

Average number of common shares

    outstanding


21,137


21,151


21,178


21,219


21,172

Diluted

0.01

(0.06)

(0.15)

(0.09)

(0.28)

Average number of common shares

    outstanding


21,137


21,152


21,182


21,219


21,174

 

 

 

 

 

 


AMERISERV FINANCIAL, INC.

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

(Unaudited)


2010

 

1QTR

2QTR

3QTR

4QTR

 

PERFORMANCE DATA AT PERIOD END

 

 

 

 

 

Assets

$960,817

$962,282

$963,169

$948,974

 

Short-term investment in money

    market funds


2,105


4,216


3,611


3,461

 

Investment securities

150,073

157,057

165,291

172,635

 

Loans

712,929

693,988

699,394

678,181

 

Allowance for loan losses

21,516

20,737

20,753

19,765

 

Goodwill

12,950

12,950

12,950

12,950

 

Deposits

802,201

809,177

818,150

801,216

 

FHLB borrowings

25,296

17,777

13,119

14,300

 

Shareholders’ equity

106,393

108,023

108,391

107,058

 

Non-performing assets

20,322

19,815

25,267

14,364

 

Asset leverage ratio

11.01%

11.08%

11.07%

11.20%

 

Tangible common equity ratio

7.70

7.83

7.86

7.94

 

PER COMMON SHARE:

 

 

 

 

 

Book value (A)

$4.04

$4.11

$4.13

$4.07

 

Market value

1.67

1.61

1.81

1.58

 

Trust assets – fair market value (B)

$1,398,215

$1,329,495

$1,341,699

$1,366,929

 

 

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

 

Full-time equivalent employees

353

355

355

348

 

Branch locations

18

18

19

18

 

Common shares outstanding

21,223,942

21,223,942

21,223,942

21,207,670

 


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)

(Unaudited)


2010

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

INTEREST INCOME

 

 

 

 

TO DATE

 

Interest and fees on loans

$10,020

$9,984

$9,592

$9,500

$39,096

 

Total investment portfolio

1,445

1,466

1,468

1,356

5,735

 

Total Interest Income

11,465

11,450

11,060

10,856

44,831

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

Deposits

2,927

2,833

2,668

2,517

10,945

 

All borrowings

417

409

369

349

1,544

 

Total Interest Expense

3,344

3,242

3,037

2,866

12,489

 

 

 

 

 

 

 

 

NET INTEREST INCOME

8,121

8,208

8,023

7,990

32,342

 

Provision for loan losses

3,050

1,200

1,000

-

5,250

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


5,071


7,008


7,023


7,990


27,092

 

 

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

 

Trust fees

1,454

1,373

1,357

1,387

5,571

 

Net realized gains on investment securities

65

42

50

-

157

 

Net realized gains on loans held for sale

131

159

278

390

958

 

Service charges on deposit accounts

572

611

565

536

2,284

 

Investment advisory fees

187

167

171

188

713

 

Bank owned life insurance

254

258

260

455

1,227

 

Other income

637

778

832

810

3,057

 

Total Non-interest Income

3,300

3,388

3,513

3,766

13,967

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

Salaries and employee benefits

5,199

5,236

5,415

5,752

21,602

 

Net occupancy expense

736

639

620

696

2,691

 

Equipment expense

418

427

401

434

1,680

 

Professional fees

1,102

1,114

1,034

1,113

4,363

 

FDIC deposit insurance expense

331

341

430

473

1,575

 

Other expenses

1,978

2,029

1,874

1,905

7,786

 

Total Non-interest Expense

9,764

9,786

9,774

10,373

39,697

 

 

 

 

 

 

 

 

PRETAX INCOME (LOSS)

(1,393)

610

762

1,383

1,362

 

Income tax expense (benefit)

(475)

133

153

269

80

 

NET INCOME (LOSS)

(918)

477

609

1,114

1,282

 

Preferred stock dividends

263

262

263

262

1,050

 

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS


$(1,181)


$215


$346


$852


$232

 



2009

 

1QTR

2QTR

3QTR

3QTR

YEAR

 

INTEREST INCOME

 

 

 

 

TO DATE

 

Interest and fees on loans

$10,349

$10,544

$10,247

$10,310

$41,450

 

Total investment portfolio

1,586

1,511

1,451

1,457

6,005

 

Total Interest Income

11,935

12,055

11,698

11,767

47,455

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

Deposits

3,255

3,405

3,316

3,134

13,110

 

All borrowings

539

479

457

436

1,911

 

Total Interest Expense

3,794

3,884

3,773

3,570

15,021

 

 

 

 

 

 

 

 

NET INTEREST INCOME

8,141

8,171

7,925

8,197

32,434

 

Provision for loan losses

1,800

3,300

6,300

3,750

15,150

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


6,341


4,871


1,625


4,447


17,284

 

 

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

 

Trust fees

1,559

1,438

1,377

1,274

5,648

 

Net realized gains on investment securities

101

63

-

-

164

 

Net realized gains on loans held for sale

118

163

213

157

651

 

Service charges on deposit accounts

673

710

712

674

2,769

 

Investment advisory fees

137

152

176

183

648

 

Bank owned life insurance

250

254

258

446

1,208

 

Other income

723

711

718

688

2,840

 

Total Non-interest Income

3,561

3,491

3,454

3,422

13,928

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

Salaries and employee benefits

5,092

4,983

5,114

5,337

20,526

 

Net occupancy expense

722

641

602

667

2,632

 

Equipment expense

415

442

398

437

1,692

 

Professional fees

920

873

1,050

1,189

4,032

 

FDIC deposit insurance expense

32

691

311

636

1,670

 

Amortization of core deposit intangibles

108

-

-

-

108

 

Other expenses

1,873

2,006

2,091

2,527

8,497

 

Total Non-interest Expense

9,162

9,636

9,566

10,793

39,157

 

 

 

 

 

 

 

 

PRETAX INCOME (LOSS)

740

(1,274)

(4,487)

(2,924)

(7,945)

 

Income tax expense (benefit)

207

(335)

(1,677)

(1,245)

(3,050)

 

NET INCOME (LOSS)

533

(939)

(2,810)

(1,679)

(4,895)

 

Preferred stock dividends

259

263

263

262

1,047

 

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS


$274


$(1,202)


$(3,073)


$(1,941)


$(5,942)

 



AMERISERV FINANCIAL, INC.

Nasdaq: ASRV

Average Balance Sheet Data (In thousands)

(Unaudited)



2010

2009

 

 

TWELVE

 

TWELVE

 

4QTR

MONTHS

4QTR

MONTHS

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned

    income


$689,041


$701,502


$723,992


$725,241

Deposits with banks

1,790

1,795

1,772

1,782

Short-term investment in money market funds

4,631

4,375

6,745

9,022

Federal funds sold

4,073

3,834

1,491

490

Total investment securities

171,379

161,265

146,164

146,150

 

 

 

 

 

Total interest earning assets

870,914

872,771

880,164

882,685

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

16,331

15,297

14,363

14,498

Premises and equipment

10,813

10,212

9,230

9,213

Other assets

80,402

80,206

73,927

72,574

Allowance for loan losses

(20,828)

(21,218)

(19,626)

(13,382)

 

 

 

 

 

Total assets

$957,632

$957,268

$958,058

$965,588

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$57,732

$58,118

$63,828

$62,494

Savings

67,419

77,381

71,789

72,350

Money market

187,550

186,560

184,096

169,823

Other time

371,396

358,472

349,133

343,841

Total interest bearing deposits

684,097

680,531

668,846

648,508

Borrowings:

 

 

 

 

Federal funds purchased, securities sold under

    agreements to repurchase, and other short-

    term borrowings



3,586



3,119



11,329



21,028

Advanced from Federal Home Loan Bank

10,521

18,694

29,892

43,934

Guaranteed junior subordinated deferrable interest debentures


13,085


13,085


13,085


13,085

Total interest bearing liabilities

711,289

715,429

723,152

726,555

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

  Demand deposits

126,718

122,963

114,797

114,473

  Other liabilities

10,882

11,188

9,298

11,428

Shareholders’ equity

108,743

107,688

110,811

113,132

Total liabilities and shareholders’ equity

$957,632

$957,268

$958,058

$965,588