JOHNSTOWN, Pa., Dec. 13 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) has received shareholder approval to close a second
tranche of a private offering of common stock that will result in an
additional $13.2 million in new capital. The first tranche -- totaling $12.6
million -- was completed on October 8. The combined $25.8 million in capital
raised through the two-tranche private placement of common stock will be used
to strengthen AmeriServ's balance sheet. Lehman Brothers Inc. acted as
exclusive placement agent for the financing.
Shareholders approved the second closing during a specially assembled
meeting held in Johnstown on December 10. The vote was necessary because of
the size of the demand for AmeriServ stock after the initial opening of the
private offering. Under NASDAQ rules, the issuance of more than 20 percent of
outstanding stock in a private placement requires shareholder approval. The
approval for the second sale -- representing the amount above 20 percent --
was received during the December 10 meeting.
The vote by AmeriServ shareholders is a vote of confidence in AmeriServ's
direction, according to President and CEO Allan R. Dennison.
"Leading investors have demonstrated their confidence in AmeriServ's
future through their commitment of significant funds," said Dennison. "With
this vote our shareholders agree that the new capital will accelerate
AmeriServ's turnaround progress by eliminating or reducing structural
impediments to our growth."
AmeriServ will use the net proceeds of the private placement to
significantly strengthen its balance sheet. The specific actions include a
$125 million reduction in the level of high-cost long-term borrowings from the
Federal Home Loan Bank (FHLB) of Pittsburgh, a $15.5 million redemption of the
AmeriServ Trust Preferred Stock, and an exit from lines of business which are
typically not associated with a community bank. These actions will result in a
one-time after tax charge of approximately $10 million during the current
quarter. While the restructuring will create a loss for the fourth quarter and
for the full year 2004, AmeriServ expects to return to a significantly
improved level of profitability in the first quarter of 2005, according to
Dennison.
"We remain committed to returning to our community bank roots," AmeriServ
Chairman Craig G. Ford told shareholders at the December 10 meeting. "This
successful private placement makes AmeriServ a stronger community bank for our
region, our employees and our shareholders."
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, 2003, 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; 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 the Bank's 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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