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 22, 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 fourth quarter and full year 2012 results through December 31, 2012.  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, 2013, announcing the fourth quarter and full year 2012 results through December 31, 2012.



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 22, 2013







Exhibit 99.1


AMERISERV FINANCIAL REPORTS EARNINGS FOR THE FOURTH QUARTER AND FULL YEAR OF 2012     


JOHNSTOWN, PA – AmeriServ Financial, Inc. (NASDAQ: ASRV) reported fourth quarter 2012 net income available to common shareholders of $683,000 or $0.04 per diluted common share.  This represented a 42.9% decrease in earnings per share from the fourth quarter of 2011 where net income available to common shareholders totaled $1,505,000 or $0.07 per diluted common share.  For the year ended December 31, 2012, the Company reported net income available to common shareholders of $4,211,000 or $0.21 per diluted share.  This represented a 12.5% decline in earnings per share from the full year 2011 where net income available to common shareholders totaled $5,153,000 or $0.24 per diluted share.  The largest factor causing the reduction in net income for both the fourth quarter and full year of 2012 was the provision for loan losses.  The Company recorded a $550,000 loan loss provision in the fourth quarter of 2012 compared to a negative loan loss provision of $1,250,000 in the fourth quarter of 2011.  For the full year 2012, the Company recorded a negative provision of $775,000 but this was at a lesser level than the $3,575,000 negative provision for the 2011 year.  The following table highlights the Company’s financial performance for both the quarters and years ended December 31, 2012 and 2011:         

     

 

Fourth Quarter 2012

Fourth Quarter 2011

 

Year Ended

December 31, 2012

Year Ended

December 31, 2011

 

 

 

 

 

 

Net income

$735,000

$1,770,000

 

$5,039,000

$6,537,000

Net income available to

  common shareholders


$683,000


$1,505,000

 


$4,211,000


$5,153,000

Diluted earnings per share

          $ 0.04

          $ 0.07

 

                   $ 0.21

$0.24


Glenn L. Wilson, President and Chief Executive Officer, commented on the 2012 financial results: “AmeriServ Financial was able to accomplish several important strategic initiatives during 2012.  We have now reported seven consecutive quarters of loan growth which has caused our total loan portfolio to increase by $61 million or 9.1% for the full year 2012.  Our new loan production offices contributed to this growth in loan categories that qualify for the Small Business Lending Fund (SBLF) and as a result we will continue to pay the lowest preferred share dividend rate available under the program.  I was also pleased with our strong growth in non-interest revenue in 2012 which reflected a record year in residential mortgage related revenues and a second consecutive year of double digit growth in the net income contribution from our wealth management businesses.  Finally, we are well positioned for further growth in 2013 which will be supported by our strong and conservative balance sheet.  We ended 2012 with our allowance for loan losses providing 210% coverage of non-performing loans and a tier one capital to average assets ratio of 11.44%.”                


The Company’s net interest income has been relatively stable this year as it decreased by $31,000 or 0.4% in the fourth quarter of 2012 from the prior year’s fourth quarter and for the full year 2012 decreased by only $80,000 or 0.2% when compared to the full year 2011.  The Company’s full year 2012 net interest margin of 3.65% was seven basis points lower than the net interest margin of 3.72% for the 2011 year.  The decreased net interest margin reflects the challenges of a flatter yield curve which has pressured interest revenue in 2012 and demonstrates the impact of Federal Reserve low interest rate policies.  The Company has been able to overcome 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 outstanding have increased for seven consecutive quarters and now are $61 million or 9.1% higher than they were at December 31, 2011.  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 loans, particularly through its new loan production offices.  Despite this growth in loans, total interest revenue dropped by $2,047,000 between years and reflects the lower interest rate environment and flatter yield curve.  Interest revenue has also been negatively impacted by increased premium amortization on mortgage backed securities due to faster mortgage prepayment speeds.  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 full year of 2012 declined by $1,967,000 from the 2011 year due to the Company’s proactive efforts to reduce deposit and borrowing costs.  Even with this reduction in deposit costs, the Company still experienced solid growth in deposits which increased by $19 million or 2.4% over the past year.  The Company continues to maintain strong liquidity as evidenced by a loan to deposit ratio of 87.6% at December 31, 2012.   


The Company recorded a $550,000 provision for loan losses in the fourth quarter of 2012 compared to a $1,250,000 negative provision recorded in the fourth quarter of 2011.  The $550,000 provision was needed to address a $1.9 million increase in non-performing assets that occurred during the fourth quarter of 2012.  This increase largely relates to one problem commercial real estate loan which had been on our watch list and reflects the Company’s consistent practice of quickly identifying and managing problem credits in order to minimize losses during the workout process.  Even with this uptick, non-performing assets are still at a very manageable level at December 31, 2012, as they now total $7.2 million or 0.99% of total loans.  For the full year 2012, the Company was able to reverse a portion of the allowance for loan losses into earnings while still maintaining strong coverage ratios.  For the 2012 year, the negative loan loss provision amounted to $775,000 compared to a $3,575,000 negative provision for the 2011 year.  Consequently, there has been $2.8 million less earnings benefit from negative loan loss provisions in 2012.  The Company continued to realize overall low levels of net charge-offs during 2012, despite an increase in the fourth quarter.  Specifically, net charge-offs for the 2012 year totaled $1.3 million or 0.19% of total loans which represents a decrease from the 2011 year when net charge-offs totaled $1.6 million or 0.24% of total loans.  Criticized and classified loans also dropped by $4.2 million or 8.5% during the past 12 months.  When determining the provision for loan losses, the Company considers a number of factors some of which include periodic credit reviews, non-performing asset, 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 210% coverage of non-performing loans, and was 1.72% of total loans, at December 31, 2012, compared to 288% of non-performing loans, and 2.18% of total loans, at December 31, 2011.


The Company’s strong growth in non-interest income has also been a financial performance highlight in 2012.  Total non-interest income in the fourth quarter of 2012 increased by $401,000 or 11.5% from the prior year’s fourth quarter and for the full year 2012 increased by $1.4 million or 10.1% when compared to the 2011 year.  The 2012 non-interest income increase was driven by increased revenue from residential mortgage banking activities and our Trust Company’s wealth management businesses.  Specifically, gains realized on residential mortgage loan sales into the secondary market increased by $134,000 for the fourth quarter and by $320,000 or 39.4% for the full year due to increased mortgage loan production in 2012.  The higher residential mortgage loan production reflected both increased purchase and refinance activity.  Trust fees also increased by $239,000 for the fourth quarter and by $354,000 for the full year as our wealth management businesses benefited from the implementation of new fee schedules and improved asset values under management in 2012.  Higher fees related to residential mortgage banking activities along with increased revenue from financial services (annuity and mutual funds sales) were the key factors responsible for the $34,000 quarterly increase and $411,000 full year increase in other income in 2012.  Finally, the Company realized a modest $12,000 investment security gain in 2012 compared to a $358,000 investment security loss in the first quarter of 2011 that resulted from a portfolio repositioning strategy.            


Total non-interest expense in the fourth quarter of 2012 increased by only $14,000 from the prior year’s fourth quarter and for the full year 2012 increased by $604,000 or 1.5% when compared to the 2011 year.  Salaries and employee benefits increased by $490,000 for the fourth quarter and $1.8 million or 8.0% for the 2012 year due to higher salaries expense, incentive compensation, and pension expense.  The 2012 personnel expenses also reflect the staffing costs associated with new loan production offices in Altoona, Harrisburg and Hagerstown, Maryland.  These negative items were partially offset by a $60,000 reduction in FDIC deposit insurance expense for the fourth quarter of 2012 and an $897,000 reduction for the full year. This reduction resulted from a change in the calculation methodology which took effect in the second half of 2011 and the Company’s improved risk profile.  Additionally, the Company incurred a $240,000 prepayment penalty on the early retirement of $5.7 million of FHLB term advances in the fourth quarter of 2011.  There was no such prepayment charge in 2012.  Finally, the Company recorded an income tax expense for the full year of 2012 of $2.2 million which was lower than the 2011 full year tax expense of $2.9 million due to reduced pre-tax earnings in 2012.  The 2012 effective tax rate of 30.8% was comparable with the 2011 effective tax rate of 30.4%.  


ASRV had total assets of $1.0 billion and shareholders’ equity of $110 million or a book value of $4.67 per common share and a tangible book value of $4.01 per common share at December 31, 2012. During the full year 2012, the Company repurchased 1,758,000 shares or 8.4% of its outstanding common stock at an average price of $2.51 in conjunction with the terms of its recently completed common stock repurchase program.  This was a key factor contributing to a 6.6% growth in tangible book value per share since the end of 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 15.92%, an asset leverage ratio of 11.44% and a tangible common equity to tangible assets ratio of 7.74% at December 31, 2012.  


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, 2012

(In thousands, except per share and ratio data)

(Unaudited)


2012

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

 

 

 

 

TO DATE

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

 

 

 

 

 

 


2011

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

$1,263

$1,938

$1,566

$1,770

$6,537

Net income available to common

    shareholders


973


1,648


1,027


1,505


5,153

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

0.54%

0.81%

0.64%

0.72%

0.68%

Return on average equity

4.77

7.11

5.52

6.19

5.90

Net interest margin

3.70

3.71

3.68

3.64

3.72

Net charge-offs as a percentage of

    average loans


0.70


(0.07)


0.20


0.12


0.24

Loan loss provision (credit) as a percentage of

    average loans


(0.37)


(0.72)


(0.33)


(0.73)


(0.54)

Efficiency ratio

89.53

85.53

84.83

89.26

87.26

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income:

 

 

 

 

 

Basic

$0.05

$0.08

$0.05

$0.07

$0.24

Average number of common shares

    outstanding


21,208


21,208


21,208


21,114


21,184

Diluted

0.05

0.08

0.05

0.07

0.24

Average number of common shares

    outstanding


21,230


21,236


21,227


21,128


21,205


AMERISERV FINANCIAL, INC.

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

(Unaudited)


2012

 

1QTR

2QTR

3QTR

4QTR

FINANCIAL CONDITION  DATA AT PERIOD END

 

 

 

 

Assets

$967,401

$997,102

$1,002,281

$1,005,828

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

7.74

PER COMMON SHARE:

 

 

 

 

Book value (A)

$4.46

$4.66

$4.74

$4.67

Tangible book value

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


2011

 

1QTR

2QTR

3QTR

4QTR

FINANCIAL CONDITION  DATA AT PERIOD END

 

 

 

 

Assets

$961,067

$954,893

$973,439

$979,076

Short-term investments/overnight funds

26,769

4,338

17,941

7,845

Investment securities

195,272

198,770

195,784

195,203

Loans and loans held for sale

644,836

656,838

667,409

670,847

Allowance for loan losses

18,025

16,958

16,069

14,623

Goodwill and core deposit intangibles

12,613

12,613

12,613

12,613

Deposits

816,528

810,082

827,358

816,420

FHLB borrowings

9,736

9,722

9,707

21,765

Shareholders’ equity

108,170

111,410

114,164

112,352

Non-performing assets

9,328

7,433

5,344

5,199

Asset leverage ratio

11.40%

11.60%

11.70%

11.66%

Tangible common equity ratio

7.89

8.29

8.38

8.15

PER COMMON SHARE:

 

 

 

 

Book value (A)

$4.12

$4.28

$4.39

$4.37

Tangible book value

3.53

3.68

3.80

3.76

Market value

2.37

1.95

1.90

1.95

Trust assets – fair market value (B)

$1,410,755

$1,390,534

$1,313,440

$1,382,745

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

351

352

342

347

Branch locations

18

18

18

18

Common shares outstanding

21,207,670

21,208,421

21,208,421

20,921,021

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)


2012

 

1QTR

2QTR

3QTR

4QTR

YEAR

INTEREST INCOME

 

 

 

 

TO DATE

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


2011

 

1QTR

2QTR

3QTR

4QTR

YEAR

INTEREST INCOME

 

 

 

 

TO DATE

Interest and fees on loans

$9,083

$8,804

$8,888

$8,924

$35,699

Total investment portfolio

1,513

1,726

1,604

1,422

6,265

Total Interest Income

10,596

10,530

10,492

10,346

41,964

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

Deposits

2,294

2,106

2,038

1,897

8,335

All borrowings

336

338

336

336

1,346

Total Interest Expense

2,630

2,444

2,374

2,233

9,681

 

 

 

 

 

 

NET INTEREST INCOME

7,966

8,086

8,118

8,113

32,283

Provision (credit) for loan losses

(600)

(1,175)

(550)

(1,250)

(3,575)

NET INTEREST INCOME AFTER

   PROVISION (CREDIT) FOR LOAN

   LOSSES



8,566



9,261



8,668



9,363



35,858

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

Trust fees

1,556

1,617

1,570

1,430

6,173

Investment advisory fees

198

198

172

186

754

Net realized losses on investment securities

(358)

-

-

-

(358)

Net realized gains on loans held for sale

262

155

186

209

812

Service charges on deposit accounts

472

549

640

580

2,241

Bank owned life insurance

216

218

227

224

885

Other income

759

717

729

857

3,062

Total Non-interest Income

3,105

3,454

3,524

3,486

13,569

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

Salaries and employee benefits

5,500

5,574

5,702

5,840

22,616

Net occupancy expense

757

742

680

721

2,900

Equipment expense

429

411

435

411

1,686

Professional fees

980

911

983

1,001

3,875

FDIC deposit insurance expense

462

460

262

154

1,338

 

 

 

 

240

240

Other expenses

1,791

1,779

1,820

1,992

7,382

Total Non-interest Expense

9,919

9,877

9,882

10,359

40,037

 

 

 

 

 

 

PRETAX INCOME

1,752

2,838

2,310

2,490

9,390

Income tax expense

489

900

744

720

2,853

NET INCOME

1,263

1,938

1,566

1,770

6,537

Preferred stock dividends and accretion of

   preferred stock  


290


290


539


265


1,384

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$973


$1,648


$1,027


$1,505


$5,153


AMERISERV FINANCIAL, INC.

Nasdaq: ASRV

Average Balance Sheet Data (In thousands)

(Unaudited)


2012

2011

 

 

TWELVE

 

TWELVE

 

4QTR

MONTHS

4QTR

MONTHS

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned income

$717,959

$688,736

$675,657

$662,746

Deposits with banks

5,064

10,634

9,961

6,853

Short-term investment in money market funds

4,716

1,889

2,355

2,224

Federal funds sold

-

-

-

5,838

Total investment securities

175,114

186,775

195,925

197,916

Total interest earning assets

902,853

888,034

883,898

875,577

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

18,219

17,136

16,779

15,893

Premises and equipment

11,446

11,055

10,539

10,513

Other assets

81,804

81,796

79,201

79,293

Allowance for loan losses

(12,511)

(13,500)

(16,155)

(17,771)

 

 

 

 

 

Total assets

$1,001,811

$984,521

$974,262

$963,505

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$64,131

$60,810

$59,707

$57,784

Savings

84,995

85,112

82,238

81,490

Money market

221,732

211,744

202,220

193,536

Other time

320,007

327,557

337,730

348,915

Total interest bearing deposits

690,865

685,223

681,895

681,725

Borrowings:

 

 

 

 

Federal funds purchased and other short-term borrowings

7,005

5,342

3,343

1,216

Advances from Federal Home Loan Bank

11,478

5,661

9,888

9,769

Guaranteed junior subordinated deferrable interest debentures

13,085

13,085

13,085

13,085

Total interest bearing liabilities

722,433

709,311

708,211

705,795

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

  Demand deposits

152,861

147,887

140,797

135,298

  Other liabilities

14,156

15,517

11,721

11,699

Shareholders’ equity

112,361

111,806

113,533

110,713

Total liabilities and shareholders’ equity

$1,001,811

$984,521

$974,262

$963,505