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 19 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 first quarter results through March 31, 2011.  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 19, 2011, announcing the first quarter results through March 31, 2011.



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 19, 2011




Exhibit 99.1


AMERISERV FINANCIAL REPORTS EARNINGS FOR THE FIRST QUARTER OF 2011     


JOHNSTOWN, PA – AmeriServ Financial, Inc. (NASDAQ: ASRV) continued its positive earnings momentum in the first quarter of 2011 by reporting net income of $1,263,000 or $0.05 per diluted common share.  This represents a significant improvement of $2.2 million from the first quarter 2010 net loss of $918,000 or ($0.06) per diluted common share.  The following table highlights the Company’s financial performance for the quarters ended March 31, 2011 and 2010:     


 

First Quarter 2011

First Quarter 2010

 

Change

 

 

 

 

 

Net income (loss)

$1,263,000

($918,000)

 

$2,181,000

Diluted earnings per share

          $ 0.05

          ($ 0.06)

 

                   $ 0.11



Glenn L. Wilson, President and Chief Executive Officer, commented on the first quarter 2011 financial results: “Continued improvements in asset quality were a key factor causing our increased earnings in the first quarter of 2011.  Non-performing assets declined by $5 million during the first quarter of 2011 as a result of our successful ongoing problem credit resolution efforts and they now represent 1.45% of total loans.  With excellent liquidity, a tier one capital to assets ratio of 11.40% and loan loss reserve coverage of non-performing loans of 206%, I believe that AmeriServ Financial is conservatively positioned to take advantage of an improving economy in 2011.  We are keenly focused on providing superior client service and expanding relationships in our major business lines:  Retail, Commercial, Trust and Wealth Management.”          


The Company’s net interest income in the first quarter of 2011 decreased by $155,000 or 1.9% from the prior year’s first quarter.  The Company’s first quarter 2011 net interest margin of 3.70% was eight basis points lower than the 2010 first quarter margin of 3.78% but was unchanged from the more recent fourth quarter 2010 net interest margin which also totaled 3.70%.  Reduced loan balances were the primary factor causing the drop in both net interest income and net interest margin between first quarter periods.  Specifically, total loans averaged $661 million in the first quarter of 2011 a decrease of $56 million or 7.8% from the first quarter of 2010.  The lower balances reflect the results of the Company’s focus on reducing its commercial real estate exposure and non-performing assets during this period along with weak commercial loan demand.  The Company has strengthened its excellent liquidity position by electing to reinvest these net loan paydowns in high quality investment securities and fed funds sold whose average balance has increased by $52 million over this same period.  Careful management of funding costs has allowed the Company to mitigate a significant portion of the drop in interest revenue during the past twelve months.  Specifically, quarterly interest expense has declined by $714,000 since the first quarter of 2010 due to reduced deposit costs and a lower borrowed funds position.  This reduction in deposit costs has not impacted average deposit balances which have increased by $26 million or 3.3% during this same period.  The Company is pleased that $16 million of this deposit growth has occurred in non-interest bearing demand deposit accounts whose balances have grown by 13.8% since the first quarter of 2010.  The Company believes that uncertainties in the economy have contributed to growth in deposits as consumers and businesses have looked for safety and liquidity in well capitalized community banks like AmeriServ Financial.  


The improvements in asset quality evidenced by lower levels of non-performing assets and classified loans allowed the Company to reverse a portion of the allowance for loan losses into earnings in the first quarter of 2011 while still increasing coverage ratios.  During the first quarter, total non-performing assets decreased by $5.0 million to $9.3 million or 1.45% of total loans as a result of successful resolution efforts.  Classified loans rated substandard or doubtful also dropped by $8.6 million or 21.8% during this same period.  As a result of this improvement, the Company recorded a negative provision for loan losses of $600,000 in the first quarter of 2011 compared to a $3.1 million provision in the first quarter of 2010.  Actual credit losses realized through net charge-offs in the first quarter of 2011 totaled $1.1 million or 0.70% of total loans which was comparable with the net charge-offs realized in the first 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 206% coverage of non-performing loans and was 2.80% of total loans at March 31, 2011, compared to 145% of non-performing loans and 2.91% of total loans at December 31, 2010.


The Company’s non-interest income in the first quarter of 2011 decreased by $195,000 or 5.9% from the prior year’s first quarter.  The largest factor causing the decline between periods was a $358,000 loss realized on the sale of $17 million of investment securities in the first quarter of 2011.  The Company took advantage of a steeper yield curve to position the investment portfolio for better future earnings by selling some of the lower yielding, longer duration securities in the portfolio and replacing them with higher yielding securities with a shorter duration.  The other item contributing to the decrease in non-interest income was a reduced level of deposit service charges which were down by $100,000 in the first quarter of 2011.  Deposit service charges were negatively impacted by regulatory changes which took effect in mid-2010 and were designed to limit customer overdraft fees on debit card transactions.  Also, customers have maintained higher balances in their checking accounts which have contributed to fewer overdraft fees in 2011.   These negative items were partially offset by increased revenue generated on residential mortgage loan sales into the secondary market, greater wealth management revenue, and higher other income.  As a result of increased mortgage loan production, the realized gain on loan sales was $131,000 higher in the first quarter of 2011.  Trust and investment advisory fees increased by $113,000 as these wealth management businesses benefitted from increased equity values in the first quarter of 2011.  The improvement in other income resulted primarily from an $80,000 gain realized on the sale of an other real estate owned property.   


Total non-interest expense in the first quarter of 2011 increased by $155,000 or 1.6% from the prior year’s first quarter.  Salaries and employee benefits costs increased by $301,000 due to higher medical insurance costs, increased pension expense, and greater incentive compensation expense reflecting greater commission payments related to the residential mortgage activity.  Other expenses declined by $187,000 due to a reduction in costs associated with the reserve for unfunded loan commitments and lower telephone expense resulting from the implementation of technology enhancements.  Professional fees also dropped by $122,000 in the first quarter of 2011 due to reduced legal fees and lower consulting expenses in the Trust Company.  Finally, the Company recorded an income tax expense of $489,000 in the first quarter of 2011 compared to an income tax benefit of $475,000 recorded in the first quarter of 2010 due to the pretax loss in last year’s first quarter.


ASRV had total assets of $961 million and shareholders’ equity of $108 million or a book value of $4.12 per common share at March 31, 2011.  The Company continued to maintain strong capital ratios that considerably exceed the regulatory defined well capitalized status with a risk based capital ratio of 16.90%, an asset leverage ratio of 11.40% and a tangible common equity to tangible assets ratio of 7.89% at March 31, 2011.    


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, 2011

(In thousands, except per share and ratio data)

(Unaudited)


2011

 

1QTR

 

 

 

 

 

 

 

 

 

 

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

$1,263

 

 

 

 

Net income available to common

    shareholders


973

 

 

 

 

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

0.54%

 

 

 

 

Return on average equity

4.77

 

 

 

 

Net interest margin

3.70

 

 

 

 

Net charge-offs as a percentage of

    average loans


0.70

 

 

 

 

Loan loss provision as a percentage of

    average loans


(0.37)

 

 

 

 

Efficiency ratio

89.53

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income:

 

 

 

 

 

Basic

$0.05

 

 

 

 

Average number of common shares

    outstanding


21,208

 

 

 

 

Diluted

0.05

 

 

 

 

Average number of common shares

    outstanding


21,230

 

 

 

 

 

 

 

 

 

 


2010

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

$(918)

$477

$609

$1,114

$1,282

Net income (loss) available to common

    shareholders


(1,209)


187


318


825


121

 

 

 

 

 

 

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


1.72


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

 

 

 

 

 

 


AMERISERV FINANCIAL, INC.

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

(Unaudited)


2011

 

1QTR

 

 

 

 

PERFORMANCE DATA AT PERIOD END

 

 

 

 

 

Assets

$961,067

 

 

 

 

Short-term investment in money

    market funds


2,379

 

 

 

 

Investment securities

195,272

 

 

 

 

Loans

644,836

 

 

 

 

Allowance for loan losses

18,025

 

 

 

 

Goodwill

12,613

 

 

 

 

Deposits

816,528

 

 

 

 

FHLB borrowings

9,736

 

 

 

 

Shareholders’ equity

108,170

 

 

 

 

Non-performing assets

9,328

 

 

 

 

Asset leverage ratio

11.40%

 

 

 

 

Tangible common equity ratio

7.89

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Book value (A)

$4.12

 

 

 

 

Market value

2.37

 

 

 

 

Trust assets – fair market value (B)

$1,410,755

 

 

 

 

 

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

 

Full-time equivalent employees

351

 

 

 

 

Branch locations

18

 

 

 

 

Common shares outstanding

21,207,670

 

 

 

 


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 and core deposit intangibles

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

7.85

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

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)


2011

 

1QTR

 

 

 

 

 

INTEREST INCOME

 

 

 

 

 

 

Interest and fees on loans

$9,083

 

 

 

 

 

Total investment portfolio

1,513

 

 

 

 

 

Total Interest Income

10,596

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

Deposits

2,294

 

 

 

 

 

All borrowings

336

 

 

 

 

 

Total Interest Expense

2,630

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

7,966

 

 

 

 

 

Provision (credit) for loan losses

(600)

 

 

 

 

 

NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES



8,566

 

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

 

Trust fees

1,556

 

 

 

 

 

Net realized gains (losses) on investment

    securities


(358)

 

 

 

 

 

Net realized gains on loans held for sale

262

 

 

 

 

 

Service charges on deposit accounts

472

 

 

 

 

 

Investment advisory fees

198

 

 

 

 

 

Bank owned life insurance

216

 

 

 

 

 

Other income

759

 

 

 

 

 

Total Non-interest Income

3,105

 

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

 

Salaries and employee benefits

5,500

 

 

 

 

 

Net occupancy expense

757

 

 

 

 

 

Equipment expense

429

 

 

 

 

 

Professional fees

980

 

 

 

 

 

FDIC deposit insurance expense

462

 

 

 

 

 

Other expenses

1,791

 

 

 

 

 

Total Non-interest Expense

9,919

 

 

 

 

 

 

 

 

 

 

 

 

PRETAX INCOME

1,752

 

 

 

 

 

Income tax expense

489

 

 

 

 

 

NET INCOME

1,263

 

 

 

 

 

Preferred stock dividends and accretion of

   preferred stock  


290

 

 

 

 

 

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$973

 

 

 

 

 


2010

 

1QTR

2QTR

3QTR

3QTR

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 and accretion of

   preferred stock  


291


290


291


289


1,161

 

NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS


$(1,209)


$187


$318


$825


$121

 


AMERISERV FINANCIAL, INC.

Nasdaq: ASRV

Average Balance Sheet Data (In thousands)

(Unaudited)



2011

2010

 

 

 

 

 

 

1QTR

 

1QTR

 

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned

    income


$661,061

 


$717,247

 

Deposits with banks

1,786

 

1,711

 

Short-term investment in money market funds

3,855

 

4,545

 

Federal funds sold

14,178

 

2,394

 

Total investment securities

188,537

 

148,399

 

 

 

 

 

 

Total interest earning assets

869,417

 

874,296

 

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

15,555

 

15,433

 

Premises and equipment

10,483

 

9,449

 

Other assets

79,615

 

79,643

 

Allowance for loan losses

(19,834)

 

(20,793)

 

 

 

 

 

 

Total assets

$955,236

 

$958,028

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$55,092

 

$57,365

 

Savings

78,545

 

75,287

 

Money market

185,933

 

187,276

 

Other time

360,137

 

350,229

 

Total interest bearing deposits

679,707

 

670,157

 

Borrowings:

 

 

 

 

Federal funds purchased, securities sold under

    agreements to repurchase, and other short-

    term borrowings



424

 



5,490

 

Advanced from Federal Home Loan Bank

9,743

 

32,494

 

Guaranteed junior subordinated deferrable interest debentures


13,085

 


13,085

 

Total interest bearing liabilities

702,959

 

721,226

 

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

  Demand deposits

133,049

 

116,954

 

  Other liabilities

11,859

 

12,620

 

Shareholders’ equity

107,369

 

107,228

 

Total liabilities and shareholders’ equity

$955,236

 

$958,028