JOHNSTOWN, Pa., Sept. 27 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) President and CEO Allan R. Dennison announced that
AmeriServ has entered into definitive agreements with institutional investors
for a $10.3 million private placement of its Common Stock. The private
placement was led by new shareholder Crestview Capital and included
commitments from existing shareholders Financial Stock Capital Partners III
L.P., and institutional investors managed by a large Boston-based investment
adviser. Lehman Brothers Inc. acted as exclusive placement agent for the
financing and Griffin Financial Group served as financial advisor to
AmeriServ's Board of Directors.
AmeriServ secured commitments from investors to purchase 2,367,760 shares
of its Common Stock at a price of $4.35 per share. The closing of the
transaction is expected to occur on or about September 29, 2005.
AmeriServ will contribute $1.0 million of the net proceeds to the capital
of AmeriServ Financial Bank and $1.0 million to the capital of AmeriServ's
growing trust company subsidiary. Additionally, AmeriServ will use the
remaining $7.2 million of net proceeds to redeem outstanding 8.45% Trust
Preferred Securities, which will result in annual pre-tax savings of
approximately $600,000.
Also, AmeriServ has undertaken a balance sheet restructuring that will be
completed by the end of the third quarter. The restructuring steps include a
prepayment of all $100 million of AmeriServ Financial Bank's remaining long-
term convertible advances from the Federal Home Loan Bank (FHLB) of Pittsburgh
and termination of the related interest rate swaps. Penalties in connection
with the prepayment of the FHLB advances, losses on sales of securities to
fund the prepayment and the write-off of deferred issuance costs in connection
with the redemption of the Trust Preferred Securities will result in a one-
time after tax charge of approximately $10 million to $11 million in the third
quarter of 2005.
Together, the prepayment of the FHLB advances, the termination of the
related interest rate swaps and the redemption of the Trust Preferred
Securities, will significantly improve AmeriServ's interest rate risk position
and position the company for future increased earnings performance.
As part of this transaction, AmeriServ Financial will file a registration
statement covering the resale of the shares of Common Stock acquired in this
offering.
In announcing the transaction, Dennison commented, "We are extremely
pleased by the vote of confidence by the professional investors who are
participating in this sale. We believe that the reduction of our debt burden
and AmeriServ Financial Bank's leverage will improve our interest rate risk
exposure and position us to continue the earnings improvement we have seen
this year."
AmeriServ Financial, Inc. is the parent of AmeriServ Financial Bank and
AmeriServ Trust & Financial Services Company in Johnstown, AmeriServ
Associates of State College, and AmeriServ Life Insurance Company.
This release may contain forward-looking statements, which are included in
accordance with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, and accordingly, the cautionary statements
contained in AmeriServ Financial's Annual Report on Form 10-K for the year
ended Dec. 31, 2004, and other filings with the Securities and Exchange
Commission are incorporated herein by reference. These factors include, but
are not limited to: the effect of interest rate and currency exchange
fluctuations; competition in the financial services market for both deposits
and loans; AmeriServ's ability to efficiently incorporate acquisitions into
its operations; the ability of AmeriServ and its subsidiaries to increase its
customer base; the effect of regulatory and legislative action; possible
rejection by our shareholders of the proposal to approve the second part of
this offering; and regional and general economic conditions. Actual results
and performance in future periods may be materially different from any future
results or performance suggested by the forward-looking statements in this
release. AmeriServ expressly disclaims any obligation to update or revise any
forward-looking statements found herein to reflect any changes in its
expectations of results or any change in events.
SOURCE AmeriServ Financial, Inc.
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Related links:
http://www.ameriservfinancial.com
CONTACT:
Jeffrey Stopko, Senior Vice President, Chief
Financial Officer of AmeriServ Financial, Inc., +1-814-533-5310
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