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 14, 2015


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 2015 results through March 31, 2015.  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 14, 2015, announcing the first quarter 2015 results through March 31, 2015.



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

President & CEO


Date: April 14, 2015







Exhibit 99.1


AMERISERV FINANCIAL REPORTS EARNINGS FOR THE FIRST QUARTER OF 2015   


JOHNSTOWN, PA – AmeriServ Financial, Inc. (NASDAQ: ASRV) reported first quarter 2015 net income available to common shareholders of $1,316,000, or $0.07 per diluted common share.  This represented a 40% increase in earnings per share from the first quarter of 2014 where net income available to common shareholders totaled $877,000 or $0.05 per diluted common share.  The following table highlights the Company’s financial performance for the quarters ended March 31, 2015 and 2014:  

     

 

First Quarter 2015

First Quarter 2014

$ Change

% Change

 

 

 

 

 

Net income

$1,369,000

$930,000

$439,000

47.2%

Net income available to common shareholders


$1,316,000


$877,000


$439,000


50.1%

Diluted earnings per share

          $ 0.07

          $ 0.05

$ 0.02

40.0%


Jeffrey A. Stopko, President and Chief Executive Officer, commented on the first quarter 2015 financial results: “Our improved financial performance in the first quarter of 2015 resulted from a combination of revenue growth and non-interest expense reduction.  Specifically, solid loan and deposit growth in our community banking business contributed to an increase of $409,000, or 4.8%, in net interest income.  Non-interest expense in the first quarter of 2015 declined as expected by $328,000 or 3.1% as we are realizing the savings from several profitability improvement initiatives that were implemented in late 2014.  We will focus on successfully executing our business plans to further improve profitability in 2015 while continuing to maintain excellent asset quality.”


The Company’s net interest income in the first quarter of 2015 increased by $409,000, or 4.8%, when compared to the first quarter of 2014.  The Company’s net interest margin of 3.57% for the first quarter of 2015 was comparable with the net interest margin of 3.56% for the first quarter 2014 and eight basis points better than the 3.49% margin reported for the more recently reported fourth quarter 2014 performance.  The Company has been able to increase net interest income and modestly improve its net interest margin by both growing its earning assets and controlling its cost of funds through disciplined deposit pricing. Specifically, the earning asset growth has occurred in the loan portfolio as total loans averaged $842 million in the first quarter of 2015 which is $54 million, or 6.9%, higher than the $787 million average for the first quarter of 2014.  This loan growth reflects the successful results of the Company’s sales calling efforts, with an emphasis on generating commercial loans and owner occupied commercial real estate loans particularly through its loan production offices.  Interest income in 2015 has also benefitted from an increased dividend from the FHLB of Pittsburgh and reduced premium amortization on mortgage backed securities due to slower mortgage prepayment speeds.  Overall, total interest income has increased by $428,000, or 4.2%, in the first quarter of 2015.  Total interest expense for the first quarter of 2015 has been well controlled as it increased by only $19,000, or 1.2%, due to the Company’s proactive efforts to reduce deposit costs.  Even with this reduction in deposit costs, the Company still experienced growth in deposits which we believe reflects the loyalty of our core deposit base and ongoing efforts to cross sell new loan customers into deposit products.  Specifically, total deposits averaged a record level of $897 million for the first quarter of 2015 which is $41 million, or 4.8%, higher than the $856 million average for the first quarter of 2014.  The Company is pleased that a meaningful portion of this deposit growth occurred in non-interest bearing demand deposit accounts.  This decreased interest expense for deposits has been offset by a $56,000 increase in the interest cost for borrowings as the Company has utilized more FHLB term advances to extend borrowings and provide protection against rising interest rates.


The Company recorded a $250,000 provision for loan losses in the first quarter of 2015 compared to no provision for loan losses in the first quarter of 2014.  This provision in the first quarter of 2015 was needed to support the continuing growth of the loan portfolio and cover net loan charge-offs.  The Company experienced net loan charge-offs of $184,000, or 0.09% of total loans, in the first quarter of 2015 compared to modest net loan recoveries of $5,000 in the first quarter of 2014.  Overall, the Company continued to maintain outstanding asset quality in the first quarter of 2015.  At March 31, 2015, non-performing assets totaled $3.0 million, or only 0.36% of total loans.  When determining the provision for loan losses, the Company considers a number of factors, some of which include periodic credit reviews, non-performing assets, 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 a strong 390% coverage of non-performing loans, and 1.14% of total loans, at March 31, 2015, compared to 400% coverage of non-performing loans, and 1.16% of total loans, at December 31, 2014.


Total non-interest income in the first quarter of 2015 increased by $180,000, or 5.1%, from the first quarter of 2014.  Increased revenue from bank owned life insurance, mortgage loan sales, and trust and investment advisory fees were the main factors causing the increase.  Specifically, revenue from bank owned life insurance increased by $176,000 due to the receipt of a death claim while gains realized on residential mortgage loan sales into the secondary market increased by $90,000 due to increased refinance activity.  Trust and investment advisory fees increased by $24,000 due to successful new business development efforts.  These positive items were partially offset by a $59,000 reduction in deposit service charges due to fewer overdraft fees and a $57,000 decrease in gains realized on investment security transactions as the Company did not execute any sale transactions in the first quarter of 2015.


The Company’s total non-interest expense in the first quarter of 2015 decreased by $328,000, or 3.1%, when compared to the first quarter of 2014.  Salaries and employee benefits were down by $241,000, or 3.8%, due to 29 fewer full time equivalent employees as certain employees who elected to participate in an early retirement program in late 2014 were not replaced in order to achieve efficiencies identified as part of a profitability improvement program.  Professional fees also declined by $97,000 due to lower legal fees and recruitment costs in the first quarter of 2015.  The remainder of the key non-interest expense categories were relatively consistent between years reflecting the Company’s focus on reducing and controlling costs.  Finally, the Company recorded an income tax expense of $617,000, or an effective tax rate of 31.1%, in the first quarter of 2015 which is higher when compared to the income tax expense of $389,000, or an effective tax rate of 29.5%, for the first quarter of 2014.  The higher income tax expense and effective tax rate is due to the Company’s increased earnings in the first quarter of 2015.


The Company had total assets of $1.1 billion, shareholders’ equity of $116 million, a book value of $5.06 per common share and a tangible book value of $4.42 per common share at March 31, 2015.  The Company continued to maintain strong capital ratios that exceed the regulatory defined well capitalized status and had a tangible common equity to tangible assets ratio of 7.64% at March 31, 2015.


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, 2015

(In thousands, except per share and ratio data)

(Unaudited)


2015

 

1QTR

 

 

 

 

 

 

 

 

 

 

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

$1,369

 

 

 

 

Net income available to common shareholders

1,316

 

 

 

 

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

0.51%

 

 

 

 

Return on average equity

4.80

 

 

 

 

Net interest margin

3.57

 

 

 

 

Net charge-offs as a percentage of average loans

0.09

 

 

 

 

Loan loss provision as a percentage of

    average loans


0.12

 

 

 

 

Efficiency ratio

82.29

 

 

 

 

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income:

 

 

 

 

 

Basic

$0.07

 

 

 

 

Average number of common shares outstanding

18,851

 

 

 

 

Diluted

0.07

 

 

 

 

Average number of common shares outstanding

18,909

 

 

 

 

Cash dividends declared

$0.01

 

 

 

 


2014

 

1QTR

2QTR

3QTR

4QTR

YEAR

 

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

 

Net income

$930

$979

$365

$749

$3,023

Net income available to common shareholders

877

927

312

697

2,813

 

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

 

Return on average assets

0.36%

0.37%

0.14%

0.28%

0.29%

Return on average equity

3.30

3.41

1.25

2.54

2.61

Net interest margin

3.56

3.47

3.42

3.49

3.52

Net charge-offs (recoveries) as a percentage

    of average loans


-


(0.02)


0.28


0.16


0.11

Loan loss provision as a percentage of

    average loans


-


-


-


0.18


0.05

Efficiency ratio

89.02

88.29

93.68

87.58

89.63

 

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

 

Net income:

 

 

 

 

 

Basic

$0.05

$0.05

$0.02

$0.04

$0.15

Average number of common shares outstanding

18,786

18,795

18,795

18,795

18,793

Diluted

0.05

0.05

0.02

0.04

0.15

Average number of common shares outstanding

18,904

18,936

18,908

18,887

18,908

Cash dividends declared

$0.01

$0.01

$0.01

$0.01

$0.04








AMERISERV FINANCIAL, INC.

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

(Unaudited)


2015

 

1QTR

 

 

 

FINANCIAL CONDITION  DATA AT PERIOD END

 

 

 

 

Assets

$1,103,416

 

 

 

Short-term investments/overnight funds

10,127

 

 

 

Investment securities

142,010

 

 

 

Loans and loans held for sale

853,972

 

 

 

Allowance for loan losses

9,689

 

 

 

Goodwill

11,944

 

 

 

Deposits

892,676

 

 

 

FHLB borrowings

71,219

 

 

 

Shareholders’ equity

116,328

 

 

 

Non-performing assets

3,046

 

 

 

Tangible common equity ratio

7.64

 

 

 

PER COMMON SHARE:

 

 

 

 

Book value (A)

$5.06

 

 

 

Tangible book value (A)

4.42

 

 

 

Market value

2.98

 

 

 

Trust assets – fair market value (B)

$1,932,894

 

 

 

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

318

 

 

 

Branch locations

17

 

 

 

Common shares outstanding

18,855,021

 

 

 


2014

 

1QTR

2QTR

3QTR

4QTR

FINANCIAL CONDITION  DATA AT PERIOD END

 

 

 

 

Assets

$1,051,108

$1,063,717

$1,070,431

$1,089,263

Short-term investments/overnight funds

9,019

8,013

6,662

9,092

Investment securities

154,754

153,603

150,471

146,950

Loans and loans held for sale

789,620

804,675

817,887

832,131

Allowance for loan losses

10,109

10,150

9,582

9,623

Goodwill

12,613

12,613

11,944

11,944

Deposits

875,333

873,908

872,170

869,881

FHLB borrowings

40,483

52,677

63,438

80,880

Shareholders’ equity

114,590

115,946

116,146

114,407

Non-performing assets

3,274

4,469

3,897

2,917

Tangible common equity ratio

7.80

7.83

7.86

7.56

PER COMMON SHARE:

 

 

 

 

Book value (A)

$4.97

$5.05

$5.06

$4.97

Tangible book value (A)

4.31

4.38

4.43

4.33

Market value

3.85

3.48

3.30

3.13

Trust assets – fair market value (B)

$1,692,663

$1,778,522

$1,774,988

$1,784,278

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

347

345

341

314

Branch locations

18

17

17

17

Common shares outstanding

18,793,388

18,794,888

18,794,888

18,794,888

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)


2015

 

1QTR

 

 

 

 

INTEREST INCOME

 

 

 

 

 

Interest and fees on loans

$9,456

 

 

 

 

Interest on investments

1,067

 

 

 

 

Total Interest Income

10,523

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

Deposits

1,174

 

 

 

 

All borrowings

415

 

 

 

 

Total Interest Expense

1,589

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

8,934

 

 

 

 

Provision for loan losses

250

 

 

 

 

NET INTEREST INCOME AFTER

   PROVISION FOR LOAN LOSSES


8,684

 

 

 

 

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

Trust and investment advisory fees

2,056

 

 

 

 

Service charges on deposit accounts

419

 

 

 

 

Net realized gains on loans held for sale

191

 

 

 

 

Mortgage related fees

115

 

 

 

 

Net realized gains on investment securities

-

 

 

 

 

Bank owned life insurance

363

 

 

 

 

Other income

568

 

 

 

 

Total Non-Interest Income

3,712

 

 

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

Salaries and employee benefits

6,073

 

 

 

 

Net occupancy expense

841

 

 

 

 

Equipment expense

466

 

 

 

 

Professional fees

1,211

 

 

 

 

FDIC deposit insurance expense

167

 

 

 

 

Other expenses

1,652

 

 

 

 

Total Non-Interest Expense

10,410

 

 

 

 

 

 

 

 

 

 

PRETAX INCOME

1,986

 

 

 

 

Income tax expense

617

 

 

 

 

NET INCOME

1,369

 

 

 

 

Preferred stock dividends

53

 

 

 

 

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$1,316

 

 

 

 

















2014

 

1QTR

2QTR

3QTR

4QTR

YEAR

INTEREST INCOME

 

 

 

 

TO DATE

Interest and fees on loans

$9,032

$8,939

$9,019

$9,352

$36,342

Interest on investments

1,063

1,044

1,000

992

4,099

Total Interest Income

10,095

9,983

10,019

10,344

40,441

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

Deposits

1,211

1,240

1,237

1,201

4,889

All borrowings

359

359

379

411

1,508

Total Interest Expense

1,570

1,599

1,616

1,612

6,397

 

 

 

 

 

 

NET INTEREST INCOME

8,525

8,384

8,403

8,732

34,044

Provision for loan losses

-

-

-

375

375

NET INTEREST INCOME AFTER

   PROVISION  FOR LOAN LOSSES


8,525


8,384


8,403


8,357


33,669

 

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

 

Trust and investment advisory fees

2,032

1,948

1,807

1,978

7,765

Service charges on deposit accounts

478

501

507

471

1,957

Net realized gains on loans held for sale

101

171

275

201

748

Mortgage related fees

117

160

190

123

590

Net realized gains on investment securities

57

120

-

-

177

Bank owned life insurance

187

185

188

189

749

Other income

560

553

626

598

2,337

Total Non-Interest Income

3,532

3,638

3,593

3,560

14,323

 

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

 

Salaries and employee benefits

6,314

6,107

6,139

6,400

24,960

Net occupancy expense

839

717

709

699

2,964

Equipment expense

470

494

468

460

1,892

Professional fees

1,308

1,464

1,360

1,277

5,409

FDIC deposit insurance expense

160

154

159

163

636

Goodwill impairment charge

-

-

669

-

669

Other expenses

1,647

1,684

1,739

1,771

6,841

Total Non-Interest Expense

10,738

10,620

11,243

10,770

43,371

 

 

 

 

 

 

PRETAX INCOME

1,319

1,402

753

1,147

4,621

Income tax expense

389

423

388

398

1,598

NET INCOME

930

979

365

749

3,023

Preferred stock dividends

53

52

53

52

210

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$877


$927


$312


$697


$2,813


















AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

Average Balance Sheet Data (In thousands)

(Unaudited)


2015

2014

 

 

 

 

 

 

1QTR

 

1QTR

 

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned income

$841,612

 

$787,306

 

Deposits with banks

11,296

 

5,881

 

Short-term investment in money market funds

2,017

 

4,272

 

Total investment securities

147,652

 

162,789

 

Total interest earning assets

1,002,577

 

960,248

 

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

17,293

 

15,970

 

Premises and equipment

12,953

 

13,149

 

Other assets

70,301

 

69,840

 

Allowance for loan losses

(9,673)

 

(10,142)

 

Total assets

$1,093,451

 

$1,049,065

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$92,926

 

$82,617

 

Savings

92,490

 

88,535

 

Money market

232,542

 

228,715

 

Other time

306,050

 

303,140

 

Total interest bearing deposits

724,008

 

703,007

 

Borrowings:

 

 

 

 

Federal funds purchased and other short-term borrowings

13,484

 

29,633

 

Advances from Federal Home Loan Bank

43,581

 

26,710

 

Guaranteed junior subordinated deferrable interest debentures

13,085

 

13,085

 

Total interest bearing liabilities

794,158

 

772,435

 

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

  Demand deposits

172,559

 

152,811

 

  Other liabilities

11,052

 

9,459

 

Shareholders’ equity

115,682

 

114,360

 

Total liabilities and shareholders’ equity

$1,093,451

 

$1,049,065