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 14, 2009


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, 2009.  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 14, 2009, announcing the second quarter and first six months results through June 30, 2009.



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 14, 2009




Exhibit 99.1


JOHNSTOWN, PA –AmeriServ Financial, Inc. (NASDAQ: ASRV) reported a second quarter 2009 net loss of $939,000 or $0.06 per diluted share.  This represents a decrease of $2,455,000 from the second quarter 2008 net income of $1,516,000 or $0.07 per diluted share.  For the six month period ended June 30, 2009, the Company reported a net loss of $406,000 or $0.04 per diluted share.  This also represents a decrease of $3,151,000 when compared to net income of $2,745,000 or $0.13 per diluted share for the first six months of 2008.  The following table highlights the Company’s financial performance for both the three and six month periods ended June 30, 2009 and 2008:

     

 

Second Quarter 2009

Second Quarter 2008

 

Six Months Ended

June 30, 2009

Six Months Ended

June 30, 2008

 

 

 

 

 

 

Net income (loss)

($939,000)

$1,516,000

 

($406,000)

$2,745,000

Diluted earnings per share

          ($ 0.06)

           $ 0.07

 

                   ($ 0.04)

$0.13


Allan R. Dennison, President and Chief Executive Officer, commented on the second quarter 2009 financial results, “AmeriServ Financial reported a loss for the second quarter of 2009 due to an increased provision for loan losses and higher FDIC insurance expense.  We prudently increased our allowance for loan losses to respond to higher non-performing loans as the continued recessionary economic environment is negatively impacting our commercial borrowers.  This higher provision unfortunately more than offset increased net interest income that resulted from strong loan and deposit growth within our retail bank.  Overall at June 30, 2009, our allowance for loan losses provided 100% coverage of non-performing loans and represented 1.84% of total loans outstanding. With a tangible common equity ratio of 8.17% and an asset leverage ratio of 11.61%, AmeriServ Financial has good capital strength to work through this challenging economic period.”     

  

The Company’s net interest income in the second quarter of 2009 increased by $1.2 million from the prior year’s second quarter and for the first six months of 2009 increased by $2.6 million or 19.1% when compared to the first six months of 2008.  The Company’s net interest margin is also up by 8 and 24 basis points, respectively for the quarter and six-month periods ended June 30, 2009.  The increased net interest income and margin resulted from a combination of good balance sheet growth and the pricing benefits achieved from a steeper positively sloped yield curve.  Specifically, total loans averaged $723 million in the first six months of 2009, an increase of $94 million or 15.0% over the first half of 2008.  This loan growth caused overall interest income to increase for both 2009 periods.  The loan growth was driven by increased commercial and commercial real-estate loan production as the majority of increased residential mortgage loan production has been sold into the secondary market.  Total deposits averaged $742 million in the first six months of 2009, an increase of $43 million or 6.2% over the same 2008 period.  The Company believes that uncertainties in the financial markets and the economy have contributed to growth in both money market and demand deposits as consumers have looked for safety in well capitalized community banks like AmeriServ Financial.  Additionally, the Company also benefited from a favorable decline in interest expense caused by the more rapid downward repricing of both deposits and Federal Home Loan Bank borrowings due to the market decline in short-term interest rates.      


The Company appropriately strengthened its allowance for loan losses in the second quarter of 2009 in response to an increase in non-performing loans.  Specifically, non-performing assets increased by $9.6 million from $5.1 million or 0.70% of total loans at March 31, 2009 to $14.7 million or 1.98% of total loans at June 30, 2009.  The following two credits, both negatively impacted by weakening economic conditions, were primarily responsible for the increased level of non-performing assets: 1) a $5.9 million commercial loan to an information technology consulting company that is experiencing cash flow difficulties. A $3.4 million specific reserve has been established against this credit.  2) a $3.9 million commercial relationship with a paper manufacturer that has ceased operations.  This relationship consists of both an asset based line of credit and a commercial mortgage with an 80% government guarantee.  A $370,000 specific reserve has been established against this relationship.


Overall, the Company recorded a $3.3 million provision for loan losses in the second quarter of 2009 compared to a $1.4 million provision in the second quarter of 2008, or an increase of $1.9 million.  For the six month period ended June 30, 2009, the Company recorded a $5.1 million provision for loan losses compared to a $1.5 million provision for the first half of 2008, or an increase of $3.6 million. 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 addition to the higher level of non-performing loans, the increased loan loss provision in 2009 was also caused by the Company’s decision to strengthen its allowance for loan losses due to the downgrade of the rating classification of several performing commercial loans and uncertainties in the local and national economies.  For the six month period ended June 30, 2009, net charge-offs have amounted to $404,000 or 0.11% of total loans compared to net charge-offs of $814,000 or 0.26% of total loans for the same six month period in 2008.  In summary, the allowance for loan losses provided 100% coverage of non-performing loans and was 1.84% of total loans at June 30, 2009 compared to 264% of non-performing loans and 1.26% of total loans at December 31, 2008.  

        

The Company’s non-interest income in the second quarter of 2009 decreased by $1.9 million from the prior year’s second quarter and for the first six months of 2009 decreased by $2.1 million when compared to the first six months of 2008.  The largest item causing the decline was related to bank owned life insurance.  Bank owned life insurance revenue returned to a more typical level in 2009 as the 2008 revenue was impacted by the payment of $1.6 million in death claims.  Trust and investment advisory fees also declined by $365,000 for the second quarter and $685,000 for the six month period due to reductions in the market value of assets managed due to lower equity and real estate values in 2009.  These negative items were partially offset by increased gains on asset sales.  Specifically, gains realized on residential mortgage sales into the secondary market in 2009 increased by $42,000 for the second quarter and $71,000 for the six month period due to increased mortgage purchase and refinance activity in the Company’s primary market.  The Company also took advantage of market opportunities and generated $164,000 of gains on the sale of investment securities in 2009 compared to a $137,000 loss on a portfolio repositioning strategy executed in 2008.     


Total non-interest expense in the second quarter of 2009 increased by $611,000 from the prior year’s second quarter and for the first six months of 2009 increased by $994,000 or 5.6% when compared to the first six months of 2008.  Higher FDIC deposit insurance expense is the largest factor responsible for the non-interest expense increase in 2009.  Specifically, FDIC deposit insurance expense has increased by $681,000 due to the recognition of a $435,000 expense for a special five basis point assessment, mandated for all banks, that was accrued in the second quarter of 2009 and an increase in the recurring insurance premiums due to the need to strengthen the deposit insurance fund.  Total salaries and benefits expense in 2009 increased by $171,000 in the second quarter and $433,000 for the six month period due to greater salary costs as a result of merit increases and higher pension expense.  Other expenses have increased by $120,000 in the first six months of 2009 due primarily to increased other real estate owned expense.   These negative items were partially offset by a reduction in core deposit amortization expense of $216,000 for the second quarter and $324,000 for the six month period as a branch core deposit intangible was fully amortized in the first quarter of 2009.      


ASRV had total assets of $979 million and shareholders’ equity of $113 million or a book value of $4.37 per common share at June 30, 2009.  The Company’s asset leverage ratio remained strong at 11.61% and the Company had a tangible common equity to tangible assets ratio of 8.17% at June 30, 2009.    


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 14, 2009

(In thousands, except per share and ratio data)

(All quarterly and 2009 data unaudited)

2009

 

1QTR

2QTR

YEAR

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

Net income (loss)

$533

$(939)

$(406)

Net income (loss) 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

2.79

1.42

Efficiency ratio

78.22

82.56

79.93

 

 

 

 

PER COMMON SHARE:

 

 

 

Net income (loss):

 

 

 

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

 

 

 

 


2008

 

1QTR

2QTR

YEAR

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

Net income

$1,229

$1,516

$2,745

Net income available to common shareholders

1,229

1,516

2,745

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

Return on average assets

0.55%

0.71%

0.63%

Return on average equity

5.43

6.64

6.04

Net interest margin

3.32

3.58

3.45

Net charge-offs as a percentage of average loans

0.06

0.46

0.26

Loan loss provision as a percentage of average loans

0.10

0.89

0.49

Efficiency ratio

82.87

73.20

77.67

 

 

 

 

PER COMMON SHARE:

 

 

 

Net income:

 

 

 

Basic

$0.06

$0.07

$0.13

Average number of common shares outstanding

22,060

21,847

21,954

Diluted

0.06

0.07

0.13

Average number of common shares outstanding

22,062

21,848

21,955

 

 

 

 



AMERISERV FINANCIAL, INC.

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

(All quarterly and 2009 data unaudited)



2009

 

1QTR

2QTR

PERFORMANCE DATA AT PERIOD END

 

 

Assets

$975,062

$978,899

Short-term investment in money market funds

10,817

7,516

Investment securities

138,853

136,119

Loans

726,961

739,649

Allowance for loan losses

10,661

13,606

Goodwill and core deposit intangibles

13,498

13,498

Deposits

746,813

783,807

FHLB borrowings

90,346

57,702

Shareholders’ equity

114,254

112,880

Non-performing assets

5,099

14,670

Asset leverage ratio

11.82%

11.61%

Tangible common equity ratio

8.35

8.17

PER COMMON SHARE:

 

 

Book value (A)

$4.44

$4.37

Market value

1.67

1.85

Trust assets – fair market value (B)

$1,432,375

$1,376,272

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

Full-time equivalent employees

355

352

Branch locations

18

18

Common shares outstanding

21,144,700

21,156,801


2008

 

1QTR

2QTR

3QTR

4QTR

PERFORMANCE DATA AT PERIOD END

 

 

 

 

Assets

$902,349

$877,230

$911,306

$966,929

Short-term investment in money market funds

5,682

6,952

7,147

15,578

Investment securities

146,285

141,867

141,630

142,675

Loans

632,934

623,798

663,996

707,108

Allowance for loan losses

7,309

7,963

8,677

8,910

Goodwill and core deposit intangibles

14,254

14,038

13,821

13,605

Deposits

682,459

722,913

688,998

694,956

FHLB borrowings

106,579

40,214

106,897

133,778

Shareholders’ equity

91,558

92,248

93,671

113,252

Non-performing assets

3,050

3,717

4,390

4,572

Asset leverage ratio

9.78%

10.47%

10.37%

12.15%

Tangible common equity ratio

8.70

9.06

8.90

8.31

PER COMMON SHARE:

 

 

 

 

Book value  (A)

$4.19

$4.22

$4.29

$4.39

Market value

2.79

2.98

2.51

1.99

Trust assets – fair market value (B)

$1,838,029

$1,813,231

$1,678,398

$1,554,351

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

350

353

352

353

Branch locations

19

18

18

18

Common shares outstanding

21,842,691

21,850,773

21,859,409

21,128,831


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 2009 data unaudited)

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)

 

 

 

 


2008

 

 

 

YEAR

INTEREST INCOME

1QTR

2QTR

TO DATE

Interest and fees on loans

$10,462

$9,862

$20,324

Total investment portfolio

1,820

1,588

3,408

Total Interest Income

12,282

11,450

23,732

 

 

 

 

INTEREST EXPENSE

 

 

 

Deposits

4,499

3,861

8,360

All borrowings

1,048

623

1,671

Total Interest Expense

5,547

4,484

10,031

 

 

 

 

NET INTEREST INCOME

6,735

6,966

13,701

Provision for loan losses

150

1,375

1,525

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES


6,585


5,591


12,176

 

 

 

 

NON-INTEREST INCOME

 

 

 

Trust fees

1,790

1,737

3,527

Net realized losses on investment securities

-

(137)

(137)

Net realized gains on loans held for sale

89

121

210

Service charges on deposit accounts

734

807

1,541

Investment advisory fees

226

218

444

Bank owned life insurance

249

1,923

2,172

Other income

750

674

1,424

Total Non-interest Income

3,838

5,343

9,181

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

Salaries and employee benefits

4,830

4,812

9,642

Net occupancy expense

661

653

1,314

Equipment expense

431

414

845

Professional fees

769

910

1,679

FHLB prepayment penalty

-

91

91

FDIC deposit insurance expense

22

20

42

Amortization of core deposit intangibles

216

216

432

Other expenses

1,850

1,909

3,759

Total Non-interest Expense

8,779

9,025

17,804

 

 

 

 

PRETAX INCOME

1,644

1,909

3,553

Income tax expense

415

393

808

NET INCOME

$1,229

$1,516

$2,745

Preferred stock dividends

-

-

-

NET INCOME AVAILABLE TO COMMON

    SHAREHOLDERS


$1,229


$1,516


$2,745



AMERISERV FINANCIAL, INC.

Nasdaq: ASRV

Average Balance Sheet Data (In thousands)

(All quarterly and 2009 data unaudited)



2009

2008

 

 

SIX

 

SIX

 

2QTR

MONTHS

2QTR

MONTHS

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned income

$732,568

$723,410

$624,193

$629,003

Deposits with banks

1,715

1,731

446

395

Short-term investment in money market funds

10,579

11,051

6,399

6,402

Federal funds

-

28

-

212

Total investment securities

144,863

146,664

143,490

155,274

 

 

 

 

 

Total interest earning assets

889,725

882,884

774,528

791,286

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

14,005

14,747

17,056

17,495

Premises and equipment

9,122

9,284

9,101

8,993

Other assets

72,074

71,539

69,798

69,766

Allowance for loan losses

(11,101)

(10,123)

(7,350)

(7,329)

 

 

 

 

 

Total assets

$973,825

$968,331

$863,133

$880,211

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$61,316

$61,836

$65,495

$64,902

Savings

72,988

72,373

70,976

69,822

Money market

171,019

156,231

105,308

104,744

Other time

347,422

336,821

350,229

348,681

Total interest bearing deposits

652,745

627,261

592,008

588,149

Borrowings:

 

 

 

 

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


52,358


73,629


35,822


56,409

Advanced from Federal Home Loan Bank

13,840

13,847

11,822

11,770

Guaranteed junior subordinated deferrable interest debentures

13,085

13,085

13,085

13,085

Total interest bearing liabilities

732,028

727,822

652,737

669,413

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

Demand deposits

115,248

114,273

109,316

109,980

Other liabilities

11,914

12,090

9,220

9,374

Shareholders’ equity

114,635

114,146

91,860

91,444

Total liabilities and shareholders’ equity

$973,825

$968,331

$863,133

$880,211