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) October 20, 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 third quarter and first nine months of 2015 results through September 30, 2015.  For a more detailed description of the announcement see the press release attached as Exhibit 99.1.  


Item 8.01     Other Events.


On October 20, 2015, AmeriServ Financial, Inc. issued a press release announcing that its Board of Directors had declared a cash dividend of $0.01 per share, payable on November 16, 2015 to shareholders of record on November 2, 2015.  The press release, attached hereto as Exhibit 99.1, is incorporated herein.


Exhibits

--------


Exhibit 99.1

Press release dated October 20, 2015, announcing the third quarter and first nine months of 2015 results through September 30, 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/Michael D. Lynch

Michael D. Lynch

SVP & CFO


Date: October 20, 2015







Exhibit 99.1


AMERISERV FINANCIAL REPORTS INCREASED EARNINGS FOR THE THIRD QUARTER AND FIRST NINE MONTHS OF 2015 AND DECLARES QUARTERLY COMMON STOCK DIVIDEND   


JOHNSTOWN, PA – AmeriServ Financial, Inc. (NASDAQ: ASRV) continued its positive earnings momentum in the third quarter of 2015 by reporting net income available to common shareholders of $1,781,000, or $0.09 per diluted common share.  This represented a significant increase in earnings per share from the third quarter of 2014 where net income available to common shareholders totaled $312,000, or $0.02 per diluted common share.  The third quarter 2014 performance was negatively impacted by a $669,000 goodwill impairment charge.  For the nine month period ended September 30, 2015, the Company reported net income available to common shareholders of $4,466,000, or $0.24 per diluted share.  This represented a 118% increase in earnings per share from the first nine months of 2014 where net income available to common shareholders totaled $2,116,000, or $0.11 per diluted common share.  The following table highlights the Company’s financial performance for both the three and nine month periods ended September 30, 2015 and 2014:

          

 

Third Quarter 2015

Third Quarter 2014

 

Nine Months Ended

September 30, 2015

Nine Months Ended

September 30, 2014

 

 

 

 

 

 

Net income

$1,833,000

$365,000

 

$4,623,000

$2,274,000

Net income available to common shareholders


$1,781,000


$312,000

 


$4,466,000


$2,116,000

Diluted earnings per share

          $ 0.09

          $ 0.02

 

                   $ 0.24

$0.11


Jeffrey A. Stopko, President and Chief Executive Officer, commented on the period ended September 30, 2015 financial results: “One of our primary goals for 2015 was to have a disciplined focus on successfully executing our business plans to increase profitability and improve the earnings power of AmeriServ Financial Inc.  This progress was again evident in the third quarter of 2015 as we were able to both increase revenue and reduce non-interest expense to help achieve meaningful growth in earnings per share.  Additionally, I am pleased that we have shown sustained earnings improvement in 2015 while maintaining excellent asset quality and a strong capital position.”  


The Company’s net interest income in the third quarter of 2015 increased by $632,000, or 7.5%, from the prior year’s third quarter and for the first nine months of 2015 increased by $1,457,000, or 5.8%, when compared to the first nine months of 2014.  The Company has been able to increase its net interest income through a combination of earning asset growth and improved net interest margin performance.  The Company’s net interest margin of 3.52% for the first nine months of 2015 was four basis points better than the net interest margin of 3.48% for the first nine months of 2014.  Specifically, the earning asset growth has occurred in the loan portfolio as total loans averaged $853 million in the first nine months of 2015 which is $55 million, or 7.0%, higher than the $797 million average for the first nine months 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 in stronger growth markets of Pittsburgh and Altoona in Pennsylvania, and Hagerstown, Maryland.  Interest income in 2015 has also benefitted from greater prepayment fees on early loan payoffs and an increased dividend from the FHLB of Pittsburgh.  Overall, total interest income has increased by $648,000, or 6.5%, in the third quarter of 2015 and by $1.5 million, or 5.0%, in the first nine months of 2015.  


Total interest expense has been well controlled in 2015 as it increased by only $16,000 in the third quarter and $45,000, or 0.9%, in the first nine months of 2015 due to tight control of our cost of funds through disciplined deposit pricing.  Total deposit interest expense decreased by $169,000, or 4.6%, in the first nine months of 2015 from the same timeframe in 2014.  Even with this reduction in deposit costs, the Company continues to have a strong loyal core deposit base and success in cross-selling new loan customers into deposit products.  Specifically, total deposits averaged $887 million for the first nine months of 2015 which is $17 million, or 2.0%, higher than the $870 million average for the same period in 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 $214,000 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 $300,000 provision for loan losses in the third quarter of 2015 compared to no provision for loan losses in the third quarter of 2014.  For the nine month period in 2015, the Company recorded a $750,000 provision for loan losses compared to no provision for loan losses in the first nine months of 2014.  The provision recorded in 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 $245,000, or 0.11% of total loans, in the third quarter of 2015 compared to net loan charge-offs of $568,000, or 0.28% of total loans, in the third quarter of 2014.  For the nine month periods, there were net loan charge-offs of $601,000, or 0.09% of total loans, in 2015 compared to net loan charge-offs of $522,000, or 0.09% of total loans, in 2014.  Overall, the Company continued to maintain outstanding asset quality during the first nine months of 2015.  At September 30, 2015, non-performing assets totaled $2.3 million, or only 0.27% of total loans, and is $1.6 million lower than the September 30, 2014 level.  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 461% coverage of non-performing loans, and 1.13% of total loans, at September 30, 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 third quarter of 2015 increased by $422,000 from the prior year’s third quarter and for the first nine months of 2015 increased by $656,000, or 6.1%, when compared to the first nine months of 2014.  Increased revenue from trust and investment advisory fees and bank owned life insurance were two factors contributing to both the quarterly and nine month non-interest income increase.  Specifically, trust and investment advisory fees increased by $278,000, or 15.4%, for the quarter and $489,000, or 8.4%, for the nine month period due to increased assets under management which reflects successful new business development activities as well as effective management of existing customer accounts in this volatile market environment.  Trust assets under administration totaled $1.9 billion as of September 30, 2015.  Revenue from bank owned life insurance increased by $496,000 for the quarter and $658,000 for the nine month period due to the receipt of a total of three death claims in the first nine months of 2015.  These increases were partially offset by a reduction in deposit service charges in 2015 of $66,000 for the quarter and $197,000 for the nine month period due to fewer overdraft fees.  Mortgage related fees also dropped by $103,000 in the third quarter and $156,000 for the nine month period due to less mortgage refinance activity in 2015.  Finally, there was a net unfavorable shift of $185,000 in investment security transactions as the Company recognized a modest loss on the sale of lower yielding securities in the third quarter of 2015 compared to gains realized on the sale of rapidly pre-paying mortgage backed securities in 2014.


Total non-interest expense in the third quarter of 2015 decreased by $1,024,000, or 9.1%, from the prior year’s third quarter and for the first nine months of 2015 decreased by $1,733,000, or 5.3%, when compared to the first nine months of 2014.  The Company recognized a $669,000 goodwill impairment charge related to its investment advisory subsidiary in the third quarter of 2014.   There was no such charge in 2015.  Salaries and employee benefits were down by $60,000 in the third quarter and by $464,000, or 2.5%, in the first nine months of 2015, due to 23 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 declined by $154,000 in the third quarter of 2015 and by $440,000, or 10.6%, in the first nine month period due to lower legal fees, director’s fees and consulting costs in 2015.  The remainder of the key non-interest expense categories were relatively consistent or down between years reflecting the Company’s continuing focus on reducing and controlling costs.  Finally, the Company recorded an income tax expense of $1,947,000, or an effective tax rate of 29.6%, in the first nine months of 2015 compared to the income tax expense of $1,200,000, or an effective tax rate of 34.5%, for the first nine months of 2014.  The higher income tax expense is due to the Company’s increased earnings in the first nine months of 2015 as the Company’s effective tax rate is lower than 2014 due to an increase in tax free revenue from bank owned life insurance.  The higher effective tax rate in 2014 was also due to the non-deductibility of the goodwill impairment charge for tax purposes.


The Company had total assets of $1.1 billion, shareholders’ equity of $119 million, a book value of $5.21 per common share and a tangible book value of $4.58 per common share at September 30, 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 7.87% at September 30, 2015.  


QUARTERLY COMMON STOCK DIVIDEND


The Company also announced that its Board of Directors declared a $0.01 per share quarterly common stock cash dividend.  The cash dividend is payable November 16, 2015 to shareholders of record on November 2, 2015.  This cash dividend represents a 1.2% annualized yield using the October 13, 2015 closing common stock price of $3.24.  For the first nine months of 2015, the Company’s dividend payout ratio was 12.5%.


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

September 30, 2015

(In thousands, except per share and ratio data)

(Unaudited)


2015

 

1QTR

2QTR

3QTR

YEAR

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

Net income

$1,369

$1,421

$1,833

$4,623

Net income available to common shareholders

1,316

1,369

1,781

4,466

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

Return on average assets

0.51%

0.52%

0.66%

0.56%

Return on average equity

4.80

4.88

6.15

5.29

Net interest margin

3.57

3.45

3.52

3.52

Net charge-offs as a percentage of average loans

0.09

0.08

0.11

0.09

Loan loss provision as a percentage of

    average loans


0.12


0.09


0.14


0.12

Efficiency ratio

82.29

81.93

78.25

80.79

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

Net income:

 

 

 

 

Basic

$0.07

$0.07

$0.09

$0.24

Average number of common shares outstanding

18,851

18,859

18,869

18,860

Diluted

0.07

0.07

0.09

0.24

Average number of common shares outstanding

18,909

18,941

18,951

18,928

Cash dividends declared

$0.01

$0.01

$0.01

$0.03


2014

 

1QTR

2QTR

3QTR

YEAR

 

 

 

 

TO DATE

PERFORMANCE DATA FOR THE PERIOD:

 

 

 

 

Net income

$930

$979

$365

$2,274

Net income available to common shareholders

877

927

312

2,116

 

 

 

 

 

PERFORMANCE PERCENTAGES (annualized):

 

 

 

 

Return on average assets

0.36%

0.37%

0.14%

0.29%

Return on average equity

3.30

3.41

1.25

2.64

Net interest margin

3.56

3.47

3.42

3.48

Net charge-offs (recoveries) as a percentage

    of average loans


-


(0.02)


0.28


0.09

Loan loss provision as a percentage of

    average loans


-


-


-


-

Efficiency ratio

89.02

88.29

93.68

90.32

 

 

 

 

 

PER COMMON SHARE:

 

 

 

 

Net income:

 

 

 

 

Basic

$0.05

$0.05

$0.02

$0.11

Average number of common shares outstanding

18,786

18,795

18,795

18,792

Diluted

0.05

0.05

0.02

0.11

Average number of common shares outstanding

18,904

18,936

18,908

18,916

Cash dividends declared

$0.01

$0.01

$0.01

$0.03








AMERISERV FINANCIAL, INC.

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

(Unaudited)


2015

 

1QTR

2QTR

3QTR

 

FINANCIAL CONDITION  DATA AT PERIOD END

 

 

 

 

Assets

$1,103,416

$1,112,934

$1,110,843

 

Short-term investments/overnight funds

10,127

9,843

14,966

 

Investment securities

142,010

142,448

135,013

 

Loans and loans held for sale

853,972

866,243

868,213

 

Allowance for loan losses

9,689

9,717

9,772

 

Goodwill

11,944

11,944

11,944

 

Deposits

892,676

862,902

869,899

 

FHLB borrowings

71,219

109,430

100,988

 

Shareholders’ equity

116,328

117,305

119,408

 

Non-performing assets

3,046

2,565

2,294

 

Tangible common equity ratio

7.64

7.66

7.87

 

PER COMMON SHARE:

 

 

 

 

Book value (A)

$5.06

$5.11

$5.21

 

Tangible book value (A)

4.42

4.47

4.58

 

Market value

2.98

3.33

3.24

 

Trust assets – fair market value (B)

$2,033,573

$2,012,358

$1,935,495

 

 

 

 

 

 

STATISTICAL DATA AT PERIOD END:

 

 

 

 

Full-time equivalent employees

318

318

318

 

Branch locations

17

17

17

 

Common shares outstanding

18,855,021

18,861,811

18,870,811

 


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

$1,873,996

$1,872,088

$1,883,937

 

 

 

 

 

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

2QTR

3QTR

YEAR

INTEREST INCOME

 

 

 

TO DATE

Interest and fees on loans

$9,456

$9,480

$9,718

$28,654

Interest on investments

1,067

929

949

2,945

Total Interest Income

10,523

10,409

10,667

31,599

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

Deposits

1,174

1,171

1,174

3,519

All borrowings

415

438

458

1,311

Total Interest Expense

1,589

1,609

1,632

4,830

 

 

 

 

 

NET INTEREST INCOME

8,934

8,800

9,035

26,769

Provision for loan losses

250

200

300

750

NET INTEREST INCOME AFTER

   PROVISION FOR LOAN LOSSES


8,684


8,600


8,735


26,019

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

Trust and investment advisory fees

2,056

2,135

2,085

6,276

Service charges on deposit accounts

419

429

441

1,289

Net realized gains on loans held for sale

191

225

178

594

Mortgage related fees

115

109

87

311

Net realized gains(losses) on investment

  securities


-


28


(36)


(8)

Bank owned life insurance

363

171

684

1,218

Other income

568

595

576

1,739

Total Non-Interest Income

3,712

3,692

4,015

11,419

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

Salaries and employee benefits

6,073

5,944

6,079

18,096

Net occupancy expense

841

718

692

2,251

Equipment expense

466

480

409

1,355

Professional fees

1,211

1,275

1,206

3,692

FDIC deposit insurance expense

167

164

174

505

Other expenses

1,652

1,658

1,659

4,969

Total Non-Interest Expense

10,410

10,239

10,219

30,868

 

 

 

 

 

PRETAX INCOME

1,986

2,053

2,531

6,570

Income tax expense

617

632

698

1,947

NET INCOME

1,369

1,421

1,833

4,623

Preferred stock dividends

53

52

52

157

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$1,316


$1,369


$1,781


$4,466

















2014

 

1QTR

2QTR

3QTR

YEAR

INTEREST INCOME

 

 

 

TO DATE

Interest and fees on loans

$9,032

$8,939

$9,019

$26,990

Interest on investments

1,063

1,044

1,000

3,107

Total Interest Income

10,095

9,983

10,019

30,097

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

Deposits

1,211

1,240

1,237

3,688

All borrowings

359

359

379

1,097

Total Interest Expense

1,570

1,599

1,616

4,785

 

 

 

 

 

NET INTEREST INCOME

8,525

8,384

8,403

25,312

Provision for loan losses

-

-

-

-

NET INTEREST INCOME AFTER

   PROVISION  FOR LOAN LOSSES


8,525


8,384


8,403


25,312

 

 

 

 

 

NON-INTEREST INCOME

 

 

 

 

Trust and investment advisory fees

2,032

1,948

1,807

5,787

Service charges on deposit accounts

478

501

507

1,486

Net realized gains on loans held for sale

101

171

275

547

Mortgage related fees

117

160

190

467

Net realized gains on investment securities

57

120

-

177

Bank owned life insurance

187

185

188

560

Other income

560

553

626

1,739

Total Non-Interest Income

3,532

3,638

3,593

10,763

 

 

 

 

 

NON-INTEREST EXPENSE

 

 

 

 

Salaries and employee benefits

6,314

6,107

6,139

18,560

Net occupancy expense

839

717

709

2,265

Equipment expense

470

494

468

1,432

Professional fees

1,308

1,464

1,360

4,132

FDIC deposit insurance expense

160

154

159

473

Goodwill impairment charge

-

-

669

669

Other expenses

1,647

1,684

1,739

5,070

Total Non-Interest Expense

10,738

10,620

11,243

32,601

 

 

 

 

 

PRETAX INCOME

1,319

1,402

753

3,474

Income tax expense

389

423

388

1,200

NET INCOME

930

979

365

2,274

Preferred stock dividends

53

52

53

158

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS


$877


$927


$312


$2,116




















AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

Average Balance Sheet Data (In thousands)

(Unaudited)


2015

2014

 

 

NINE

 

NINE

 

3QTR

MONTHS

3QTR

MONTHS

Interest earning assets:

 

 

 

 

Loans and loans held for sale, net of unearned income

$858,752

$852,553

$808,731

$797,090

Short-term investment in money market funds

9,496

10,228

7,207

6,904

Deposits with banks

1,235

1,235

1,449

2,635

Total investment securities

144,958

146,348

155,816

158,651

Total interest earning assets

1,014,441

1,010,364

973,203

965,280

 

 

 

 

 

Non-interest earning assets:

 

 

 

 

Cash and due from banks

16,362

17,241

16,027

15,755

Premises and equipment

12,508

12,729

13,477

13,273

Other assets

69,021

69,732

69,528

69,635

Allowance for loan losses

(9,837)

(9,751)

(10,040)

(10,101)

 

 

 

 

 

Total assets

$1,102,495

$1,100,315

$1,062,195

$1,053,842

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

Interest bearing deposits:

 

 

 

 

Interest bearing demand

$101,494

$98,668

$104,197

$95,688

Savings

95,968

95,050

89,522

89,647

Money market

235,578

233,311

228,353

228,898

Other time

277,680

291,668

299,730

301,959

Total interest bearing deposits

710,720

718,697

721,802

716,192

Borrowings:

 

 

 

 

Federal funds purchased and other short-term borrowings

40,427

27,228

12,933

16,606

Advances from Federal Home Loan Bank

46,386

45,300

34,729

30,605

Guaranteed junior subordinated deferrable interest debentures

13,085

13,085

13,085

13,085

Total interest bearing liabilities

810,618

804,310

782,549

776,488

 

 

 

 

 

Non-interest bearing liabilities:

 

 

 

 

  Demand deposits

164,092

168,634

155,157

153,648

  Other liabilities

9,531

10,442

8,143

8,395

Shareholders’ equity

118,254

116,929

116,346

115,311

Total liabilities and shareholders’ equity

$1,102,495

$1,100,315

$1,062,195

$1,053,842