As filed with the Securities and Exchange Commission on October , 2004
Registration No. 333-
UNITED STATESWashington, ON OCTOBER 14, 2005
REGISTRATION NO. 333-______
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------- FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMERISERV FINANCIAL, INC.(Exact
(Exact name of registrant as specified in its charter)
Main
PENNSYLVANIA 25-1424278
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
MAIN & Franklin Streets
FRANKLIN STREETS
P.O. Box.BOX. 430Johnstown,
JOHNSTOWN, PA 15907-0430
(814)-533-5300(Address,
(Address, including zip code, and telephone number,
including
area code, of registrant's principal executive offices)
Allan
----------------------
ALLAN R. DennisonPresident and Chief Executive OfficerP.O. Box 430Johnstown, PA 15907-0430
DENNISON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
(814) 533-5300(Name,
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy To:Jeffrey
----------------------
COPY TO:
JEFFREY P. Waldron, EsquireStevensWALDRON, ESQUIRE
STEVENS & Lee,LEE, P.C.
620 Freedom Business CenterSuiteFREEDOM BUSINESS CENTER
SUITE 200
P.O.Box BOX 62330King of Prussia,
KING OF PRUSSIA, PA 19406
(610) 205-6028
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. o
[ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 of the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. ý
[X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. o
[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. o
[ ] ---------------------- CALCULATION OF REGISTRATION FEE
| Title of shares to be registered | Amount to be registered | Proposed maximumoffering price per Share | Proposed maximum aggregate offering price1 | Amount of registration fee | ||||
|---|---|---|---|---|---|---|---|---|
| Common Stock | 2,795,000 | $2.50 par value per share | $12,577,500.00 | $1,748.46 | ||||
The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities until
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1 Estimated solely for the purpose of calculating the registration statement filedfee, based
on the average of the high and low prices for the common stock as reported
on the Nasdaq Stock Market on October 11, 2005 in accordance with Rule 457
under the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Subject to Completion, Dated October , 2004
Act of 1933.
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AmeriServ Financial, Inc.2,795,000 SharesCommon Stock (par value IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED OCTOBER 14, 2005
PROSPECTUS
AMERISERV FINANCIAL, INC.
2,367,760 SHARES
COMMON STOCK (PAR VALUE $2.50 per share)
PER SHARE)
----------------------
This prospectus relates to the proposed sale from time to time by selling
shareholders of shares of common stock of AmeriServ Financial, Inc. The shares
were originally issued and sold by AmeriServ Financial, Inc. in a private
placement on October 8, 2004.September 29, 2005. This prospectus will be used by selling
shareholders to resell their shares of the common stock.
We will not receive any proceeds from the sale of the shares of common stock. Holders of the shares of our common stock may offer the common stock for sale at any time at market prices prevailing at the time of sale or at privately negotiated prices. Selling shareholders may sell the common stock directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions.
Our common stock is listed on The Nasdaq Stock Market under the symbol
"ASRV." The closing sales price of the common stock on October , 200413, 2005 was
$$4.40 per share.
Investing in our securities involves a high degree of risk. See "Risk Factors" beginning on page 3 of this prospectus to read about factors you should consider before buying our securities.
INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4 OF THIS PROSPECTUS TO READ ABOUT FACTORS YOU SHOULD CONSIDER BEFORE BUYING OUR SECURITIES. ---------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is October , 2004.
__, 2005.
| | Page | | Page | |||
|---|---|---|---|---|---|---|
Important Notice to Readers | 2 | Plan of Distribution | 12 | |||
Forward-Looking Statements | 2 | Legal Matters | 14 | |||
Our Company | 2 | Experts | 14 | |||
Risk Factors | 3 | Where You Can Find More Information | 14 | |||
Use of Proceeds | 11 | Incorporation of Certain Documents by Reference | 15 | |||
Selling Shareholders | 11 |
IMPORTANT NOTICE TO READERS.................................................. 1
FORWARD-LOOKING STATEMENTS................................................... 1
OUR COMPANY.................................................................. 1
RECENT DEVELOPMENTS.......................................................... 3
RISK FACTORS................................................................. 4
USE OF PROCEEDS.............................................................. 9
SELLING SHAREHOLDERS......................................................... 10
PLAN OF DISTRIBUTION......................................................... 11
LEGAL MATTERS................................................................ 13
EXPERTS...................................................................... 14
INDEMNIFICATION OF DIRECTORS AND OFFICERS.................................... 14
WHERE YOU CAN FIND MORE INFORMATION.......................................... 14
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............................. 15
(i)
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or SEC, using a "shelf" registration process. Under this shelf registration process, theSEC. The selling shareholders may, from
time to time, offer shares of our common stock owned by them.them pursuant to this
registration statement. Each time the selling shareholders offersoffer common stock
under this prospectus, they will provide a copy of this prospectus and, if
applicable, a copy of a prospectus supplement. You should read both this
prospectus and, if applicable, any prospectus supplement together with the
information incorporated by reference in this prospectus. See "Where You Can
Find More Information" and "Incorporation of Certain Documents by Reference" for
more information.
You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone else to provide you with different information. If anyone provides you with different information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any document incorporated by reference in this prospectus is accurate only as of the date on the front cover of the applicable document or as specifically indicated in the document. Our business, financial condition, results of operations and prospects may have changed since that date.
This prospectus, including the documents incorporated by reference, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These statements relate to future events or our future financial performance. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "could," "expect," "plan," "anticipate," "believe," "estimate," "predict," "intend," "potential" or "continue" or the negative of such terms or other comparable terminology. Without limiting the broader description of forward-looking statements above, we specifically note that statements regarding our business strategy, market trends, and projected sources and uses of funds from operations are forward-looking statements. We cannot assure you that our expectations and assumptions will prove to be correct. These statements reflect our current views and are based upon certain assumptions. Actual results could differ materially from those anticipated as a result of a number of factors, including the factors discussed under the heading "Risk Factors" in this prospectus and in other documents we may file with the Securities and Exchange Commission. We do not intend to update or revise any forward-looking statements, whether as a result of future events, new information or otherwise, except to the extent that the reports we are required to file under the Exchange Act contain such updates or revisions.
GENERAL
We are a bank holding company, incorporated under the Pennsylvania Business
Corporation Law. Our principal activities consist of owning and operating four
wholly owned subsidiaries, AmeriServ Financial Bank (the Bank), AmeriServ Trust
and Financial Services Company (the Trust Company), AmeriServ Associates, Inc.
(AmeriServ Associates), and AmeriServ Life Insurance Company (AmeriServ Life).
We and our subsidiaries derive substantially all of our income from banking and
bank-related services. We function primarily as a coordinating and servicing
unit for our subsidiaries in general management, accounting and taxes, loan
review, auditing, investment accounting, marketing and insurance risk
management
management. Our target market for banking services is Allegheny, Cambria, Centre, Somerset, and Westmoreland counties in southwest and central Pennsylvania. Our market for trust services includes this market area but also has a national focus with respect to its business of attracting union pension fund accounts. Our clients are primarily individuals, privately-owned businesses and, with respect to the Trust Company, union pension funds.
At June 30, 2004,2005, we had consolidated total assets, deposits, and
shareholders' equity of $1.2 billion, $670.9$996.8 million, $691.7 million and $67.2$86.3 million,
respectively. Our principal office is located at Main and Franklin Streets,
Johnstown, Pennsylvania and our telephone number is (814) 533-5300. Our website
address is http://www.ameriservfinancial.com. The information on our website is
not part of this prospectus.
The Bank
1
bank that operates through 23under the Pennsylvania Banking Code of
1965, as amended. Through 22 locations in Allegheny, Cambria, Centre, Dauphin, Somerset
and Westmoreland Counties, Pennsylvania. ThePennsylvania, the Bank conducts a general banking
business. It is a full-service bank offering both retail banking services and
financial services to institutions. The Bank also operates 2723 automated bank teller
machines (ATMs) through its 24-Hour Banking Network.Network that is linked with STAR, a
regional ATM network and CIRRUS, a national ATM network. The Bank's non-management employees are membersBank also offers
internet banking services and engages in the sale of the United Steelworkers of America.
The Trust Company
annuities, mutual funds and
insurance.
THE TRUST COMPANY
The Trust Company is a trust company organized under Pennsylvania law. The Trust Company offers a complete rangelaw in
October 1992. As one of the larger providers of trust and financialinvestment management
products and services between Pittsburgh and Harrisburg, the Trust Company is
committed to delivering personalized, professional service to its clients. Its
staff of approximately 40 professionals administers assets valued at
approximately $1.49 billion at June 30, 2005, and provides a wide spectrum of
services, which include trust and estate administration, union collective
investment funds (ERECT and BUILD Funds), pension, profit sharing, 401(k) and
403(b) plans, as well as custom designed accounts and non-qualified plans for
special purposes. At June 30, 2005, the Trust Company had $1.2$1.49 billion in
assets under management, at June 30, 2004. Included in theseand it had total assets underof $2.0 million and total
shareholder's equity of $1.5 million. The Trust Company is subject to regulation
and supervision by the Federal Reserve Bank of Philadelphia (the Federal
Reserve) and the Pennsylvania Department of Banking (the Department).
AMERISERV ASSOCIATES
AmeriServ Associates is a registered investment advisory firm that
administers investment portfolios, offers operational support systems and
provides asset and liability management are the ERECTservices to small and BUILD Funds which are collective investment funds for trade union controlled pension fund assets.mid-sized
financial institutions. At June 30, 2004,2005, AmeriServ Associates had total assets
of $279,000 and total shareholder's equity of $236,000.
AMERISERV LIFE
AmeriServ Life is a captive insurance company organized under the Trust Company managed approximately $301 million in union pension fund assets. The Trust Company's non-management employees are memberslaws
of the United SteelworkersState of America.
Our Recent Financing
Arizona. AmeriServ Life engages in underwriting as a reinsurer
of credit life and disability insurance within our market area. Operations of
AmeriServ Life are conducted in each office of the Bank. AmeriServ Life is
subject to supervision and regulation by the Arizona Department of Insurance,
the Pennsylvania Insurance Department, and the Federal Reserve. At June 30,
2005, AmeriServ Life had total assets of $1.6 million and total shareholder's
equity of $1.2 million.
MEMORANDUM OF UNDERSTANDING
On October 8, 2004 weFebruary 28, 2003, AmeriServ and the Bank entered into a Purchase AgreementMemorandum of
Understanding (MOU) with the selling shareholders pursuantFederal Reserve and the Department. The principal
requirements of the MOU require AmeriServ and the Bank to:
- improve credit quality and credit administration practices,
- improve data security and disaster recovery procedures,
- make periodic reports to which they purchased 2,795,000 sharesthe Federal Reserve and the Department
regarding compliance with the MOU, and
- appoint an independent committee of commonthe Board of Directors to monitor
compliance with the MOU.
The principal restrictions imposed by the MOU on AmeriServ and the Bank are
that without the approval of the Federal Reserve and the Department:
- we and the Bank may not declare dividends,
- we may not repurchase any of our own stock, including alland
2
sharesordinary course of
common stock offered hereby,business.
The MOU will remain in effect until terminated or modified by the Federal
Reserve and agreed to purchase an additional 2,936,533 sharesthe Department. We have been informed by the Federal Reserve and the
Department that we are in full compliance with the terms of common stock if (i) our shareholders approve the issuance of these additional shares atMOU.
RECENT DEVELOPMENTS
OUR RECENT FINANCINGS AND USE OF PROCEEDS
We completed a special meeting called for that purpose, which is expected to be held in December 2004, (ii) the volume weighted average priceprivate placement of our common stock on September 29, 2005.
Gross proceeds to us were $10.3 million prior to deducting expenses payable of
approximately $1.1 million, which included selling commissions of $640,000. We
used or expect to use the net proceeds of this offering as follows:
- We contributed approximately $1.0 million to the Bank. This
replenished the capital of the Bank, which was reduced by
approximately $10.5 million because the Bank deleveraged its balance
sheet by selling investment securities and using the proceeds to repay
all $100.0 million of remaining long-term Federal Home Loan Bank
convertible advances and terminated prior to maturity two related
interest rate swaps that hedged these advances. The Bank incurred a
loss on the sale of securities to fund this prepayment and incurred
prepayment penalties as a result of both the prepayment and the
termination prior to maturity of the interest rate swaps, all of
which, in the aggregate, totaled approximately $10.5 million, after
tax;
- We contributed approximately $1.0 million to the Trust Company, which
has experienced strong growth and which benefited from additional
capital to support further growth; and
- We will redeem approximately $7.2 million of our guaranteed junior
subordinated deferrable interest debentures that collateralized a like
amount of trust preferred securities issued by AmeriServ Capital Trust
I, a special purpose entity formed for the twenty (20) trading days precedingpurpose of issuing trust
preferred securities. This will result in the special meeting equals or exceeds $4.50write-off of
approximately $140,000, after tax, in deferred issuance costs;
Pending these uses, we intend to invest proceeds in money market funds and
(iii) we fulfill all other contingencies. If these contingencies are met, the second closing is expected to occur in December, 2004. We will file a registration statement to permit the selling shareholders to sell the shares of common stock purchased at the second closing
short-term, investment-grade, interest-bearing securities.
3
You
Investors should carefully consider the risks described below before
investing in our common stock. The risks described below are not the only ones
facing AmeriServ. Additional risks not currently known to us or that we
currently believe are immaterial also may also impair our business. Our business
could be harmed by any of these risks. The trading price of our common stock
could decline due to any of these risks, and you may lose all or part of your
investment. In assessing these risks, you should also refer to the other
information contained or incorporated by reference in this prospectus, including
our consolidated financial statements and related notes.
We sustained losses in 2002 and the first quarter of 2003 and we suffer from structural impediments that adversely affect our future earnings capacity, all of which have resulted in a regulatory enforcement action.
In 2002, we lost $5.2 million; we lost an additional $795,000 in the first quarter of 2003. These losses were primarily attributable to deteriorating asset quality, impairment of the value of mortgage servicing rights due to falling interest rates, poor expense management and three structural
impediments that adversely affected, and continue to affect, performance. These three structural impediments are:
The consequence of these poor results is that in February 2003, we and the Bank executed a Memorandum of Understanding ("MOU") with the Federal Reserve Bank of Philadelphia (the "Federal Reserve") and the Pennsylvania Department of Banking (the "Department"). This Memorandum of Understanding remains in effect and, among other things, mandates corrective measures and prohibits the repurchase of stock or the payment of dividends by us or the Bank.
Failure to successfully execute our turnaround strategy would adversely affect future earnings.
At the end of 2003, we adopted a turnaround strategy that consists of three distinct elements. These were:
We believe we have accomplished the first element of this turnaround strategy. Our recent financing was an initial step toward achieving the second goal. The final element of our turnaround strategy requires sustained execution of our business plan. If we are unable to complete our turnaround strategy, our financial condition and results of operations will not dramatically improve and may deteriorate.
The proceeds of our recent financing will not produce sufficient capital to address all of the structural impediments to improved performance.
Our recent financing provides sufficient capital to permit us to incur the costs associated with repaying approximately $100 million of FHLB advances and selling or closing Standard Mortgage Corporation. However, the net proceeds of the financing permits us to redeem only about $5.7 million of the $34.5 million of outstanding debentures. Therefore, we will have only fully addressed two of the three structural impediments to improved performance that we have identified. We will continue to bear the high debt service costs associated with over $29 million of debentures, of which, approximately $5.0 million will not qualify as Tier I capital under applicable banking regulations.
We may need to raise additional capital to fully address our structural impediments to improved performance but we may not be able to do so when needed or on favorable terms.
We may need to raise additional capital if we want to redeem the balance of our subordinated debentures and reduce our debt service burden significantly prior to maturity. We cannot predict the timing and amount of our future capital formation activities. Failure to raise capital and redeem the debentures could limit or eliminate our ability to grow and increase earnings. Moreover, even if capital is available, it may be upon terms that are not favorable to existing common shareholders and could dilute their interest.
Restructuring steps we are taking will cause us to incur a significant loss in 2004.
In the near future we expect the following things to occur:
The result of these steps will be that we will incur a consolidated loss in 2004.
Failure to obtain shareholder approval for the issuance of shares in the second offering could cause us to obtain less favorable financing in the future.
It is possible that we may seek additional capital in the future that would permit us to fully redeem the remaining trust preferred securities or further deleverage our balance sheet. However, there is no plan or arrangement to seek additional capital at this time, other than the through the proposed issuance of additional shares. If our shareholders do not approve the proposed issuance of the additional shares, we will have significantly less capital to address the identified structural impediments to improved performance. As a result, it would be more likely that we will seek additional capital either in a public offering that does not require shareholder approval or in a subsequent institutional placement after we been advised by counsel after consultation with The Nasdaq Stock Market, that shareholder approval would not be required. No assurance can be given that any subsequent offering will be on similar terms and conditions as the proposed institutional placement for which shareholder approval is currently being sought.
The Memorandum of Understanding imposes other restrictions on our operations that may adversely affect our financial results.
WE ARE SUBJECT TO THE MOU, WHICH IMPOSES RESTRICTIONS ON OUR OPERATIONS THAT MAY
ADVERSELY AFFECT OUR FINANCIAL RESULTS.
We signed a Memorandum of Understandingthe MOU with the Federal Reserve and the Pennsylvania Department, of Banking that imposedwhich
imposes restrictions on the payment of dividends and a number of other
restrictions. In addition to the restrictions on payment of dividends, the MOU
does not permit us to redeem any of our stock or incur any additional debt other
than in the ordinary course of business, in each case, without the prior written
approval of the Federal Reserve and the Department.
Other provisions of the MOU require us to:
The MOU will remain in effect until modified or terminated by the Federal
Reserve and the Department. We believehave been informed by the Federal Reserve and the
Department that we are in substantialfull compliance with the terms of the MOU, but we
cannot predict when or if the MOU will be terminated.
RESTRUCTURING STEPS WE TOOK IN 2004 IN CONNECTION WITH THE 2004 PRIVATE
PLACEMENT OF OUR COMMON STOCK CAUSED US TO INCUR A SIGNIFICANT LOSS IN 2004.
As a result of our 2004 private placement of common stock, we were able to
take the following steps to begin to address the structural impediments we face:
- We used $15.3 million of the net proceeds to redeem a portion of our
guaranteed junior subordinated deferrable interest debentures. This
resulted in the write-off of approximately $300,000, after tax, in
deferred issuance costs.
- The Bank prepaid approximately $125.0 million of primarily long-term
Federal Home Loan Bank advances. These prepayments were funded through
the sale of investment securities and cash flow from prepayments and
normal amortization of mortgage backed securities. As a result of this
prepayment, the Bank incurred prepayment penalties of approximately
$8.4 million, after tax, and losses on sales of securities of
approximately $400,000, after tax.
- The Bank sold its remaining mortgage servicing rights held by Standard
Mortgage Company of Georgia (SMC) and began the process of closing
SMC, which was completed in the second quarter of 2005. The sale of
the servicing rights and the closure of SMC resulted in a charge of
approximately $800,000, after tax, consisting principally of losses on
the sale of the servicing portfolio and severance expenses. An
additional net loss of $139,000 was incurred in the first six months
of 2005 with respect to the closure of SMC, which principally included
lease termination expenses.
4
failare unable to comply withachieve the MOU orlast element of our turnaround
strategy, our financial condition deteriorates,and results of operations will not
dramatically improve and may deteriorate.
WEAK LOAN GROWTH MAY HINDER OUR ABILITY TO IMPROVE EARNINGS PERFORMANCE.
In 2003, our Board of Directors articulated a strategy predicated upon a
return to traditional community banking. In order to improve our performance in
accordance with this strategy, we must increase our average balance of quality
loans. However, our market area is characterized by an aging and declining
population base and comparatively weak economic growth. Despite these
unattractive fundamentals, our market also is highly competitive. Accordingly,
throughout 2005, loan originations have been less than we projected. Unless loan
originations increase, our earnings performance may not improve to the degree we
have planned.
AFTER OUR RECENT PRIVATE PLACEMENT WE STILL HAVE APPROXIMATELY $12 MILLION OF
HIGH COST DEBT OUTSTANDING.
The private placement provided sufficient capital to permit us to incur the
costs associated with repaying all $100 million of remaining long-term FHLB
convertible advances and terminating prior to maturity related interest rate
swaps that hedged these borrowings. However, the net proceeds of the offering
will permit us to redeem only up to $7.2 million of our $19.2 million in
outstanding debentures. Therefore, we will continue to bear the high debt
service costs associated with approximately $12.0 million of debentures bearing
interest at the rate of 8.45% per annum.
RESTRUCTURING STEPS WE ARE TAKING WILL CAUSE US TO INCUR A SIGNIFICANT LOSS IN
2005.
The following things occurred in the third quarter of 2005 or are expected
to occur in the fourth quarter of 2005:
- The Bank prepaid all $100.0 million of remaining long-term Federal
Home Loan Bank convertible advances, which bear interest at a rate of
6% and mature in 2010. As a result of this prepayment, the Bank
incurred losses on the sale of securities to fund the prepayment and
related prepayment penalties of approximately $10,5 million, after
tax.
- We will use $7.2 million of the net proceeds from our recent private
placement to redeem a portion of our guaranteed junior subordinated
deferrable interest debentures. This will result in the write-off of
approximately $140,000 after tax, in deferred issuance costs.
The result of these steps will be that we will incur a consolidated loss in
2005.
5
subject to additional enforcement action.
perceived negatively by
investors and could have an adverse effect on the price of our common stock.
IF WE FAIL TO COMPLY WITH THE MOU OR OUR FINANCIAL CONDITION DETERIORATES, WE
MAY BE SUBJECT TO ADDITIONAL ENFORCEMENT ACTION.
An MOU is an enforcement action that the Federal Reserve and the Department
impose on companies under their regulatory authority. An MOU is more severe than
a request that a company adopt a board resolution to effect some corrective
action, but it is less severe than a formal written enforcement agreement or a
cease and desist order. We believehave been informed by the Federal Reserve and the
Department that we are in materialfull compliance with the terms of the MOU, but if we
fail to comply with the MOU in the future or our financial condition
deteriorates in the opinion of the Federal Reserve or the Department, these
regulators could impose more severe enforcement sanctions.
In particular, ifAMERISERV OPERATES UNDER SIGNIFICANT LIQUIDITY CONSTRAINTS AND MAY DO SO IN THE
FUTURE BECAUSE OF PLANNED LOSSES AT THE BANK.
We believe we are unableneed to raise capital to begin to address some ofimprove our structural impediments or we are unable to reduce our leverage program to mitigate our risk profile, we may be subject to further regulatory enforcement action. A full-scope regulatory exam began in late September and we expect that it will be completed in the fourth quarter.
We operate a significant leverage program that is subject to material interest rate risk.
At June 30, 2004, the Bank had outstanding approximately $397 million from the Federal Home Loan Bank of Pittsburgh and used the proceeds of these borrowings to fund the majority of its investment securities portfolio. Our goal is to make money on the difference between the interest rate earned on the investment securities and the rate paid on the borrowings. This is sometimes called a leverage program. Leverage programs entail greater risk than the traditional banking activity of gathering deposits and lending this money to borrowers. Although both deposit gathering and lending and a leverage program expose a financial institution to interest rate risk, a leverage program arguably exposes a bank to greater risk for two reasons. First, the difference between the interest rate earned on investment securities and the rate paid on borrowed funds is typically much smaller than the difference between the rate earned on loans and the rate paid on deposits. As a result the margin for error is smaller. Second, deposits are gathered from multiple customers in small amounts and changes in deposit behavior generally occur gradually even in changing interest rate environments. Borrowings are generally in large amounts and can be for significant duration. Changes in interest rates during the term of any borrowing can cause a material change in the value of the assets funded with the proceeds of the borrowings, the prepayment of these assets and the risk that the proceeds can be profitably reinvested. If we do not prudently manage our leverage program and the related interest rate risk, we may incur losses that could adversely affect our financial condition and results of operation.
Our leverage program has contributed positively to earnings since 1995, but it does constitute approximately 33.7% of total assets at June 30, 2004, which is greater than the leverage program conducted by most banking institutions. The Federal Reserve believes that this results in an increased risk profile for our institution compared to peer institutions and has indicated that it wants us to reduce our leverage program. In the near future we expect to repay approximately $100 million of FHLB advances and incur a related prepayment penalty of approximately $8 million, after tax, to address the Federal Reserve's concern. This would reduce our leverage program as a percent of total assets to approximately 27%.
Securities gains have contributed significantly to profits in recent quarters and may not be available in future periods.
In four of the last five quarters we have generated profits by taking advantage of falling interest rates to capture gains from the sale of securities in our investment portfolio. As interest rates rise, our ability to realize gains on the sale of investment securities is diminished or eliminated and we will be more dependent on net interest income to generate profits in future periods. For the six months ended June 30, 2004, our net interest margin was only 2.32% and therefore our ability to generate sufficient net interest income to generate profits in future periods may not be strong.
Our tangible common equity is below the tangible common equity of peer institutions and may be inconsistent with our risk profile.
At June 30, 2004, our ratio of tangible common equity to assets was 4.61%. This compares unfavorably to most similarly sized institutions. Moreover, given our poor recent earnings, our large leverage program, and our reduced ability to realize investment gains due to rising interest rates, the Federal Reserve believes this level of tangible common equity is inconsistent with the risk embedded in our balance sheet. Failure to increase capital to more appropriately balance tangible common equity and our embedded risk could lead to significant capital depletion in the event of adverse events such as deteriorating asset quality or sharp interest rate movements. As a result of our recent financing we expect that our ratio of tangible common equity to assets will increase to approximately 5.50%.
AmeriServ operates under significant liquidity constraints and may do so in the future because of planned losses at the Bank.
AmeriServ's current liquidity is unsatisfactory.liquidity. The payment of dividends by
the Bank to us is a primary source of funding for us and is also the principal
source of funds for us to pay dividends to our shareholders. Under federal
banking law, the Bank may only pay dividends out of accumulated earnings for the
current year and the prior two calendar years. Because the Bank incurred $2.6
million in losses in 2002, the Bank's ability to pay dividends to us was
eliminated. As a consequence, since 2002 we have relied on dividends from non-bank subsidiaries, a tax refund, inter-company tax payments and other short-term solutions to raise sufficient funds to make our interest payments onBecause of the debentures. Our ability to rely on these alternative sources of cash flow is temporary and uncertain. Moreover, we have no significant secondary sources of liquidity such as lines of credit. Since 2002,restructuring undertaken in 2004, the Bank has earned $3.4incurred
an additional loss of $8.0 million, and therefore it has limitedwhich extended the date on which the Bank's
dividend authority under federal law equal to the excess of earnings ofcould be restored. Furthermore, we expect that the Bank since 2002 overwill
incur a loss in 2005 as a result of restructuring steps the $2.6 million loss amount, or $721,000. However,Bank is taking. This
will further extend the date on which the Bank's dividend authority will be
restored. Finally, under the MOU, any dividend payment requires the prior
approval of the Federal Reserve and the Department. Furthermore,As a consequence, we expect thathave
relied on dividends from non-bank subsidiaries, a tax refund, inter-company tax
payments, $3.2 million of retained proceeds from the Bank will incur a loss in 2004 as a result of restructuring stepsprivate placement, and
other short-term solutions to provide the Bank is taking. This will once again eliminatecash needed to make interest payments
on the debentures. We believe we have sufficient cash on hand at the holding
company and from these alternative sources to make dividend payments on the
debentures until the Bank's dividend capacity until such time as it earns back this loss. Weauthority is restored, which we believe
will occur no later than the first quarter of 2008 if the MOU is terminated and
the Bank does not suffer future losses. However, we cannot assure you that the
BankMOU will generate greater earnings in future periodsbe terminated, or that the Bank's dividend authority will be restored.
Moreover, we have no significant secondary sources of liquidity such as lines of
credit. If the BankBank's dividend authority is not able to generate greater earnings in the future and have its dividend authority restored or we are not ableunable to
develop meaningful secondary sources of liquidity, AmeriServwe may continuenot be able to operate with less than satisfactoryimprove
our liquidity.
We have unionized employees, which increases our costs and may deter any acquisition proposal.
6
We will incur significant expense to comply with a provision of the Sarbanes-Oxley Act of
WE WILL INCUR SIGNIFICANT EXPENSE TO COMPLY WITH A PROVISION OF THE
SARBANES-OXLEY ACT OF 2002.
Section 404 of the Sarbanes-Oxley Act of 2002 requires all public companies
to prepare a report stating itstheir responsibility for establishing and
maintaining an adequate internal control structure and procedures for financial
reporting and to make an assessment of the internal control structure and
procedureprocedures for financial reporting. The auditorindependent registered public accounting
firm of each public company must also attest to, and report on, management's
assessment of its internal controls. We become subject to Section 404 for the
fiscal year ended December 31, 2005. We estimate that the initial external,
pre-tax cost of complying with this new requirement will be approximately
$300,000,$600,000 to $800,000, substantially all of which will be incurred in 2005.
Because our earnings capacity has been depressed, this This
expense may beis significant relative to our 2005 earnings.
A significant portion of our trust business is dependent on a union client base.
SIGNIFICANT PORTION OF OUR TRUST BUSINESS IS DEPENDENT ON A UNION CLIENT BASE.
In an effort to capitalize on the Bank's union affiliation, our Trust
Company operates two funds, the ERECT Fund and the BUILD Fund, that seek to
attract investment from union pension funds. These funds then use the
investments to make loans on construction projects that use union labor. At June
30, 2004,2005, approximately $301$340.3 million was invested by unions in the ERECT and
BUILD Funds. This represents approximately 24%22.9% of the total assets under
management held by the Trust Company. Furthermore, investments by union pension funds can be significant. The largest single union investment is approximately $38 million and the total number of unions invested in the funds is only 62. This means thatTherefore, the Trust Company is dependent
on a relatively narrowdiscrete union client base for a significant portion of its assets under
management and its resulting revenue and net income.
Changes in interest rates could reduce our income, cash flows and asset values.
CHANGES IN INTEREST RATES COULD REDUCE OUR INCOME, CASH FLOWS AND ASSET VALUES.
Our income and cash flows and the value of our assets depend to a great
extent on the difference between the interest rates we earn on interest-earning
assets, such as loans and investment securities, and the interest rates we pay
on interest-bearing liabilities such as deposits and borrowings. These rates are
highly sensitive to many factors which are beyond our control, including general
economic conditions and policies of various governmental and regulatory agencies
and, in particular, the Board of Governors of the Federal Reserve System.
Changes in monetary policy, including changes in interest rates, will influence
not only the interest we receive on our loans and investment securities and the
amount of interest we pay on deposits and borrowings, but it also will affect our
ability to originate loans and obtain deposits and the value of our investment
portfolio. If the rate of interest we pay on our deposits and other borrowings
increases more than the rate of interest we earn on our loans and other
investments, our net interest income, and therefore our earnings, could be
adversely affected. Our earnings also could be adversely affected if the rates
on our loans and other investments fall more quickly than those on our deposits
and other borrowings.
Because our operations are concentrated in Cambria and Somerset Counties, Pennsylvania, we are subject to economic conditions in this area, which typically lag behind economic activity in other areas.
BECAUSE OUR OPERATIONS ARE CONCENTRATED IN CAMBRIA AND SOMERSET COUNTIES, PENNSYLVANIA, WE ARE SUBJECT TO ECONOMIC CONDITIONS IN THIS AREA, WHICH TYPICALLY LAG BEHIND ECONOMIC ACTIVITY IN OTHER AREAS. Our loan and deposit activities are largely based in Cambria and Somerset Counties, Pennsylvania. As a result, our financial performance will depend largely upon economic conditions in this area. Economic activity in this geographic market generally lags behind the economic activity in Pennsylvania and the nation. Similarly, unemployment in this market area is typically higher than the unemployment rate in Pennsylvania and the nation. Adverse local economic conditions could cause us to experience an increase in loan delinquencies, a reduction in deposits, an increase in the number of borrowers who default on their loans and a reduction in the value of the collateral securing their loans, all of which could adversely affect our profitability.
We are subject to lending risks.
7
At June 30, 2004, 56%2005, 57.5% of our net loan portfolio consisted of commercial
construction and commercial mortgage loans, including construction loans. Commercial loans
are generally viewed as having more risk of default than residential real estate
loans or consumer loans. These types of loans also are typically larger than
residential real estate loans and consumer loans. Because our loan portfolio
contains a significant number of commercial, construction and commercial
mortgage loans with relatively large balances, the deterioration of one or a few
of these loans would cause a significant increase in nonperforming loans.
An increase in nonperforming loans could result in a net loss of earnings from these loans, an increase in our provision for loan losses and an increase in loan charge-offs.
Our financial condition and results of operations would be adversely affected if our allowance for loan losses is not sufficient to absorb actual losses or if we are required to increase our allowance.
OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS WOULD BE ADVERSELY AFFECTED IF
OUR ALLOWANCE FOR LOAN LOSSES IS NOT SUFFICIENT TO ABSORB ACTUAL LOSSES OR IF WE
ARE REQUIRED TO INCREASE OUR ALLOWANCE.
Despite our underwriting criteria, we may experience loan delinquencies and
losses for reasons beyond our control, such as general economic conditions. WeAt
June 30, 2005, we had nonperforming assets equal to 0.64% of total loans, and
loans held for sale, net of unearned income and other real estate owned; we
expect that the ratio at September 30, 2005 will be similar. In order to absorb
losses associated with nonperforming assets, we maintain an allowance for loan
losses based on, among other things, historical experience, an evaluation of
economic conditions, and regular reviews of delinquencies and loan portfolio
quality. Determination of the allowance inherently involves a high degree of
subjectivity and requires us to make significant estimates of current credit
risks and future trends, all of which may undergo material changes. We may be
required to increase our allowance for loan losses for any of several reasons.
State and federal regulators, in reviewing our loan portfolio as part of a
regulatory examination, may request that we increase our allowance for loan
losses. Changes in economic conditions affecting borrowers, new information
regarding existing loans, identification of additional problem loans and other
factors, both within and outside of our control, may require an increase in our
allowance. In addition, if charge-offs in future periods exceed our allowance
for loan losses, we will need additional increases in our allowance for loan
losses. Any increases in our allowance for loan losses will result in a decrease
in our net income and, possibly, our capital, and may materially affect our
results of operations in the period in which the allowance is increased.
Our future success will depend on our ability to compete effectively in a highly competitive market and geographic area.
OUR FUTURE SUCCESS WILL DEPEND ON OUR ABILITY TO COMPETE EFFECTIVELY IN A HIGHLY COMPETITIVE MARKET AND GEOGRAPHIC AREA. We face substantial competition in all phases of our operations from a variety of different competitors, including commercial banks, savings and loan associations, mutual savings banks, credit unions, consumer finance companies, factoring companies, insurance companies and money market mutual funds. There is very strong competition among financial services providers in our principal service area. Due to their size, many competitors can achieve economies of scale and, as a result, may offer a broader range of products and services as well as better pricing for those products and services than we can.
We believe that our ability to compete successfully depends on a number of factors, including:
8
Some of the financial services organizations with which we compete are not subject to the same degree of regulation as is imposed on federally insured financial institutions. As a result, those nonbank competitors may be able to access funding and provide various services more easily or at less cost than we can, adversely affecting our ability to compete effectively.
Environmental liability associated with lending activities could result in losses.
ENVIRONMENTAL LIABILITY ASSOCIATED WITH LENDING ACTIVITIES COULD RESULT IN LOSSES. In the course of our business, we may foreclose on and take title to properties securing our loans. If hazardous substances were discovered on any of these properties, we may be liable to governmental entities or third parties for the costs of remediation of the hazard, as well as for personal injury and
property damage. Many environmental laws can impose liability regardless of whether we knew of, or were responsible for, the contamination. In addition, if we arrange for the disposal of hazardous or toxic substances at another site, we may be liable for the costs of cleaning up and removing those substances from the site, even if we neither own nor operate the disposal site. Environmental laws may require us to incur substantial expenses and may materially limit use of properties we acquire through foreclosure, reduce their value or limit our ability to sell them in the event of a default on the loans they secure. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure to environmental liability.
We may be adversely affected by government regulation.
WE MAY BE ADVERSELY AFFECTED BY GOVERNMENT REGULATION. We are subject to extensive federal and state banking regulation and supervision. Banking regulations are intended primarily to protect our depositors' funds and the federal deposit insurance funds, not shareholders. Regulatory requirements affect our lending practices, capital structure, investment practices, dividend policy and growth. Our failure to meet minimum capital requirements will result in the imposition of limitations on our operations that would adversely impact our operations and could, if capital levels drop significantly, result in our being required to cease operations. Changes in governing law, regulations or regulatory practices could impose additional costs on us or adversely affect our ability to obtain deposits or make loans and, as a consequence, our revenues and profitability.
An investment in our common stock is not an insured deposit.
AN INVESTMENT IN OUR COMMON STOCK IS NOT AN INSURED DEPOSIT. Our common stock is not a bank deposit and, therefore, is not insured against loss by the Federal Deposit Insurance Corporation, commonly referred to as the FDIC, any other deposit insurance fund or by any other public or private entity. Investment in our common stock is inherently risky for the reasons described in this "Risk Factors" section and elsewhere in this prospectus and the documents incorporated by reference herein and is subject to the same market forces that affect the price of common stock in any company. As a result, if you acquire our common stock, you may lose some or all of your investment.
Banking laws, our articles of incorporation and our by-laws may have an anti-takeover effect.
FEDERAL AND STATE BANKING LAWS, OUR ARTICLES OF INCORPORATION AND OUR BY-LAWS MAY HAVE AN ANTI-TAKEOVER EFFECT. Federal law imposes restrictions, including regulatory approval requirements, on persons seeking to acquire control over us. Pennsylvania law also has provisions that may have an anti-takeover effect. In addition, our articles of incorporation and bylaws permit our board of directors to issue, without shareholder approval, preferred stock and additional shares of common stock that could adversely affect the voting power and other rights of existing common shareholders.
It is possible that the Company may seek additional capital in the future that would permit it to fully redeem the remaining trust preferred securities or further deleverage its balance sheet. Except for the proposed sale of 2,936,533 shares of our common stock, upon shareholder approval in December 2004, there is no present plan or arrangement to seek additional capital at this time. On the other hand, if shareholders of AmeriServ do not approve the proposed issuance of the additional shares, the Company will have significantly less capital to address the identified structural impediments to improved performance. As a result, it would be more likely that the Company will seek additional capital either in a public offering that does not require shareholder approval or in a subsequent institutional placement at such time as the Company is advised by counsel, after consultation with The Nasdaq Stock Market, that shareholder approval would not be required. No assurance can be given that any subsequent offering of Common Stock will be on similar terms and conditions as the proposed institutional placement for which shareholder approval is currently being sought.
We will receive no proceeds from the sale of the shares of common stock by the selling shareholders.
We originally issued the shares of common stock to the selling shareholders
in a private placement that closed on October 8, 2004.September 29, 2005. Selling shareholders
may offer and sell the shares of common stock they purchased in that private
placement pursuant to this prospectus.
The following table sets forth information as of October 8, 2004September 29, 2005 about
the amount of common stock beneficially owned by each selling shareholder and
the amount of such common stock that may be offered using this prospectus.
Each
Except as set forth below, each of the selling shareholders has represented
to us that it is not, nor is it affiliated with, a registered broker-dealer.
| Name and Address of Selling Shareholder | Number of Shares Beneficially Owned Prior to Offering(1) | Maximum Number of Shares Being Offered(1) | ||
|---|---|---|---|---|
| Wolf Creek Partners, L.P.—75 State Street, Boston Massachusetts 02109 | 37,500 | 37,500 | ||
| Wolf Creek Investors (Bermuda)—75 State Street, Boston Massachusetts 02109 | 63,100 | 63,100 | ||
| First Financial Fund, Inc.—75 State Street, Boston Massachusetts 02109 | 228,300 | 228,300 | ||
| Bay Pond Partners, L.P.—75 State Street, Boston Massachusetts 02109 | 221,942 | 221,942 | ||
| Bay Pond Investors (Bermuda) L.P.—75 State Street, Boston Massachusetts 02109 | 67,600 | 67,600 | ||
| Tontine Financial Partners, L.P.—55 Railroad Avenue, 3rd Floor, Greenwich, Ct 06830 | 533,929 | (2) | 121,913 | |
| SF Capital Partners Ltd.—3600 South Lake Drive, St. Francis, Wisconsin 53235 | 108,367 | 108,367 | ||
| Deutsche Bank AG London by DB Alternatives Trading, Inc.—280 Park Avenue, New York 10017 | 216,735 | 216,735 | ||
| LBI Group, Inc.—399 Park Avenue, 9th floor, New York, NY 10022 | 453,517 | 453,517 | ||
| Gerlach & Co., FBO Banc Fund VI L.P.—208 South LaSalle Street, Chicago, Illinois 60604-1003 | 162,551 | 162,551 | ||
| Gerlach & Co., FBO Banc Fund V L.P.—208 South LaSalle Street, Chicago, Illinois 60604-1003 | 162,551 | 162,551 | ||
| Financial Stocks—441 VWE Street Ste. 507, Cincinnati, OH 45202 | 950,924 | 950,924 |
the shares offered hereby and received a
commission, paid in cash, therefor.
* Represents less than 1% of outstanding common stock.
We prepared this table based on the information supplied to us by the
selling shareholders named in the table, and we have not sought to verify such
information. No selling shareholder has indicated that it has held any position
or office or had any other material relationship with us or our affiliates
(other than the purchase of the shares of common stock from us) during the past
three years. Theyears except that Lehman Brothers Inc., an affiliate of one of the selling
shareholders, listedserved as our exclusive placement agent in connection with the
above table may have sold or transferred, in transactions exempt from the registration requirementsinitial sale of the Securities Act, some or all of their shares of common stock since the date as of which theoffered hereby and received a commission, paid in
cash, therefor. Ownership information is presented in the above table. Information about the selling
shareholders may change over time. Any changed information supplied to us will be set forth in prospectus supplements or amendments to this prospectus.
Because the selling shareholders may offer all or some of their shares of
common stock from time to time, we cannot estimate the amount of shares of
common stock that will be held by the selling shareholders upon the termination
of any particular offering. See "Plan of Distribution."
The above table does not include any shares of common stock beneficially owned by the shareholders other than those purchased from us in the private placement, and therefore does not reflect any shares of common stock that the selling shareholders may have acquired, or may in the future acquire, through privately negotiated transactions, open market purchases, or by means of any other method of transfer.
We will not receive any of the proceeds of the sale of the shares of common stock offered by this prospectus. The shares of common stock may be sold from time to time to purchasers:
The selling shareholders and any such broker-dealers or agents who participate in the distribution of the shares of common stock may be deemed to be "underwriters." As a result, any profits on the sale of shares of the common stock by selling shareholders and any discounts, commissions or concessions received by any such broker-dealers or agents may be deemed to be underwriting discounts and commissions under the Securities Act. If the selling shareholders were deemed to be underwriters, the selling shareholders may be subject to statutory liabilities including, but not limited to, those of Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.
If the shares of common stock are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent's commissions.
The shares of common stock may be sold in one or more transactions at:
The selling shareholders may sell the securities from time to time on any
stock exchange or automated interdealer quotation system on which the securities
are listed, including The Nasdaq Stock Market in the case of the common stock, in the over-the-counter market, in privately negotiated
transactions or otherwise. The selling shareholders may sell the securities by
one or more of the following methods, without limitation:
12
an agentagents of selling shareholders. Broker-dealers may agree with
selling shareholders to sell a specified number of the securities at a
stipulated price per security. If the broker-dealer is unable to sell securities
acting as agent for selling shareholders, it may purchase as principal any
unsold securities at the stipulated price. Broker-dealers who acquire securities
as principals may thereafter resell the securities from time to time in
transactions in any stock exchange or automated interdealer quotation system on
which the securities are then listed, at prices and on terms then prevailing at
the time of sale, at prices related to the then-current market price or in
negotiated transactions. Broker-dealers may use block transactions and sales to
and through broker-dealers, including transactions of the nature described
above.
In connection with the sale of the shares of common stock, the selling
shareholders may enter into hedging transactions with broker-dealers. These
broker-dealersbroker- dealers may in turn engage in short sales of the shares of common stock
in the course of hedging their positions. The selling shareholders may also sell
the shares of common stock short and deliver the shares of common stock to close
out short positions, or loan or pledge the shares of common stock to
broker-dealers that, in turn, may sell the shares of common stock.
To our knowledge, there are currently no plans, arrangements or understandings between any selling shareholders and any underwriter, broker-dealer or agent regarding the sale of the common stock by the selling shareholders. Selling shareholders may decide not to sell all or a portion of the shares of common stock offered by them pursuant to this prospectus or may decide not to sell the common stock under this prospectus. In addition, any selling shareholder may transfer, devise or give the shares of common stock by other means not described in this prospectus. Any shares of common stock covered by this prospectus that qualifies for sale pursuant to Rule 144 or Rule 144A of the Securities Act, or Regulation S under the Securities Act, may be sold under Rule 144 or Rule 144A or Regulation S rather than pursuant to this prospectus. Our common stock is listed on The Nasdaq Stock Market under the trading symbol "ASRV."
The selling shareholders and any other persons participating in the distribution of the shares of common stock will be subject to the Exchange Act. The Exchange Act rules include, without limitation, Regulation M, which may limit the timing of purchases and sales of shares of the underlying common stock by the selling shareholders and any such other person. In addition, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of the shares of the common stock to engage in market-making activities with respect to the common stock being distributed for a period of up to five business days prior to the commencement of such distribution. This may affect the marketability of the shares of common stock and the ability to engage in market-making activities with respect to the shares of common stock.
Under the Purchase Agreement that is an exhibit to the registration
statement of which this prospectus is a part, we agreed to use our commercially reasonable best efforts
to keep the registration statement effective until the earliest of:
or Rule 144. Under the Purchase Agreement, we and the selling shareholders will each indemnify the other against certain liabilities, including certain liabilities under the Securities Act, or will be entitled to contribution in connection with these liabilities.
We have agreed to pay all of the expenses incidental to our performance of or compliance with the Purchase Agreement, including all registration and filing fees and printing expenses.
Stevens & Lee, P.C., Valley Forge, Pennsylvania, has passedwill pass upon the
validity of the shares of common stock being offered under this prospectus.
The financial statements for the years ended December 31, 2004 and 2003
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K10-K/A (Amendment No. 1) for the year ended December 31, 20032004 have been
audited by Deloitte & Touche LLP, an independent registered public accounting
firm, as stated in their report (which report expresses an unqualified opinion
and includes an explanatory paragraph relating to the restatements discussed in
Note 28), which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
With respect to the unaudited interim financial information for the periods
ended March 31, 20042005 and 20032004 and June 30, 20042005 and 20032004 which is incorporated
herein by reference, Deloitte & Touche LLP, an independent registered public
accounting firm, have applied limited procedures in accordance with standards of
the Public Company Accounting Oversight Board (United States) for a review of
such information. However, as stated in their reports included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 20042005 and June
30, 2004 and2005 incorporated by reference herein, they did not audit and they do not
express an opinion on that interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. Deloitte & Touche
LLP are not subject to the liability provisions of Section 11 of the Securities
Act of 1933 for their reports on the unaudited interim financial information
because those reports are not "reports" or a "part" of the registration
statement prepared or certified by an accountant within the meaning of Sections
7 and 11 of the Act.
Our financial statements
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pennsylvania law provides that a Pennsylvania corporation may indemnify
directors, officers, employees and agents of the corporation against liabilities
they may incur in such capacities for any action taken or any failure to act,
whether or not the corporation would have the power to indemnify the person
under any provision of law, unless such action or failure to act is determined
by a court to have constituted recklessness or willful misconduct. Pennsylvania
law also permits the adoption of a bylaw amendment, approved by shareholders,
providing for the year ended December 31, 2001 incorporated in this prospectus by referenceelimination of a director's liability for monetary damages for
any action taken or any failure to take any action unless (i) the director has
breached or failed to perform the duties of his office and (ii) the breach or
failure to perform constitutes self-dealing, willful misconduct or recklessness.
Our bylaws provide for (i) indemnification of our directors, officers,
employees and agents and (ii) the elimination of a director's liability for
monetary damages, to the Annual Report on Form 10-K forfullest extent permitted by Pennsylvania law unless the
year ended December 1, 2003 were audited by Arthur Anderson LLP. Arthur Andersendirector has ceased operations and, therefore, we are unablebreached or failed to obtain its consent toperform the incorporation by reference in this prospectusduties of its audit report with respect to these financial statements. Pursuant to Rule 437ahis or her office under
the Securities Act, we have filed the registration statementSubchapter B of which this prospectus is a part without Arthur Andersen's written consent. Because it has not consented to the incorporation by reference of its audit report, Arthur Anderson will not be liable to you under Section 11Chapter 17 of the Securities ActPennsylvania Business Corporation Law, and
such breach or failure to perform constitutes self-dealing, willful misconduct
or recklessness.
Directors and officers also are insured against certain liabilities for
any untrue statement of material fact contained in the financial statements auditedtheir actions, as such, by Arthur Andersen or any omission to state a material fact required to be stated in those financial statements.
an insurance policy obtained by us.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is a part of a shelf registration statement on Form S-3, which we
filed with the Securities and Exchange Commission ("SEC") under the Securities
Act. It omits some of the information set forth in the registration statement.
You can find additional information about us in the
shelf registration statement.
Copies of the shelf registration statement are on file at the offices of the SEC. You
may obtain them by paying the prescribed fee or you may examine them without
charge at the SEC's public reference facilities described below.
We are subject to the informational requirements of the Exchange Act and as
required by the Exchange Act, we file reports, proxy statements and other
information with the SEC. You may inspect these reports, proxy statements and
other information without charge and copy them at the Public Reference Room
maintained by the SEC at Judiciary Plaza, 450 Fifth100 F Street, N.W.N.E., Room 1580, Washington, D.C. 20549.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The information we file with the SEC is also
available through the SEC's web site (http://www.sec.gov) and our web site
(http://www.ameriservfinancial.com).
14
The following documents, which we have filed with the SEC, are incorporated herein by reference:
December 4, 1997. All documents which we file under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to termination of the offering shall be deemed to be incorporated by reference herein and to be a part of this prospectus from the date of the filing of such documents. Any statement contained in this prospectus or in a document incorporated by reference or deemed to be incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that the statement is modified or superseded by any other subsequently filed document which is incorporated or is deemed to be incorporated by reference herein. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Nothing in this prospectus shall be deemed to incorporate information furnished by us but not filed with the SEC pursuant to a Current Report on Form 8-K.
This prospectus incorporates documents by reference that are not presented
herein or delivered with this prospectus. We will provide without charge to each
person, including any beneficial owner, to whom this prospectus is delivered,
upon yoursuch person's written or oral request, a copy of any or all of the
documents referred to above which have been or may be incorporated into this
prospectus and deemed to be a part of this prospectus, other than exhibits to
the documents unless exhibits are specifically incorporated by reference in the
documents. These documents are available upon request from Jeffrey S. Stopko,
Chief Financial Officer at AmeriServ.AmeriServ Financial, Inc., Main and Franklin Streets,
Johnstown, Pennsylvania 15907. Our telephone number is (814) 533-5300 and our
website is located at www.ameriservfinancial.com. Information on our website is
not incorporated by reference into this prospectus.
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item
ITEM 14. Other Expenses of Issuance and Distribution.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth an itemized estimate (other than the SEC registration fee which is the actual, not estimated, fee) of fees and expenses payable by the registrant in connection with the offering described in this registration statement. No portion of these fees will be borne by the selling shareholders.
| SEC registration fee | $ | 1,748.46 | ||
| Printing, shipping & engraving expenses | 0 | |||
| Legal fees and expenses | $ | 10,000.00 | ||
| Accounting fees and expenses | 15,000.00 | |||
| Miscellaneous expenses | 0 | |||
| Total | $ | 26,748.46 | ||
Item
ITEM 15. Indemnification of Directors and Officers.
INDEMNIFICATION OF DIRECTORS AND OFFICERS. Pennsylvania law provides that a Pennsylvania corporation may indemnify directors, officers, employees and agents of the corporation against liabilities they may incur in such capacities for any action taken or any failure to act, whether or not the corporation would have the power to indemnify the person under any provision of law, unless such action or failure to act is determined by a court to have constituted recklessness or willful misconduct. Pennsylvania law also permits the adoption of a bylaw amendment, approved by shareholders, providing for the elimination of a director's liability for monetary damages for any action taken or any failure to take any action unless (i) the director has breached or failed to perform the duties of his office and (ii) the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness.
15
Directors and officers also are insured against certain liabilities for their actions, as such, by an insurance policy obtained by us.
Item
ITEM 16. Exhibits.
| Articles of Incorporation, as amended on | ||
| 3.2 | Bylaws, as amended and restated on | |
| January 26, 2005 (Incorporated by reference to Exhibit 3.2 to Form 8-K filed on January 26, 2005). 4.1 | Specimen Common Stock Certificate for shares of common stock, par value $2.50 per | |
| share (Incorporated by reference to Exhibit 4.1 to Form S-3 filed on December 13, 2004). 4.2 | Form of Stock Purchase Agreement dated as of | |
| 5.1 | Opinion of Stevens & Lee, P.C. | |
| Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm. | ||
| 23.2 | Consent of Stevens & Lee, P.C. (contained in the opinion filed as Exhibit 5.1 hereto). |
- ------------------- Note: Unless otherwise indicated, the SEC file number of each of the above referenced documents is 000-11204.
Item
ITEM 17. Undertakings.
UNDERTAKINGS. The undersigned registrant hereby undertakes:
Provided,statement; provided,
however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is
16
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration statementRegistration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Johnstown, Commonwealth of Pennsylvania, on October
22, 2004.
13, 2005.
AMERISERV FINANCIAL, INC.
By: /s/ Allan R. Dennison
-----------------------------
Allan R. Dennison, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Allan R. Dennison, Jeffrey A. Stopko and Jeffrey P. Waldron, and each of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statementRegistration Statement has been signed by the following persons in the
capacities indicatedand on October 22, 2004:
and Director October | ||||
October | ||||
Director | October | |||
13, 2005 - -------------------------------------------- Michael Adams, Jr. /s/ Edward J. Cernic, Jr. | Director | October | ||
13, 2005 - -------------------------------------------- Edward J. Cernic, Jr. /s/ Daniel R. DeVos | Director | October | ||
13, 2005 - -------------------------------------------- Daniel R. DeVos /s/ James C. Dewar | Director | October | ||
13, 2005 - -------------------------------------------- James C. Dewar Director October ____, 2005 - -------------------------------------------- Bruce E. Duke, III | ||||
/s/ James M. Edwards, Sr. | Director | October | ||
13, 2005 - -------------------------------------------- James M. Edwards, Sr. /s/ Craig G. Ford | Director and Chairman of the Board | October | ||
13, 2005 - -------------------------------------------- Craig G. Ford |
Director | October | |||
13, 2005 - -------------------------------------------- Kim W. Kunkle /s/ Margaret A. O'Malley | Director | October | ||
13, 2005 - -------------------------------------------- Margaret A. O'Malley /s/ Very Rev. Christian R. Oravec | Director | October | ||
13, 2005 - -------------------------------------------- Very Rev. Christian R. Oravec /s/ Mark E. Pasquerilla | Director | October | ||
13, 2005 - -------------------------------------------- Mark E. Pasquerilla /s/ Howard M. Picking, III | Director | October | ||
13, 2005 - -------------------------------------------- Howard M. Picking, III /s/ Sara A. Sargent | Director | October | ||
13, 2005 - -------------------------------------------- Sara A. Sargent /s/ Thomas C. Slater | Director | October | ||
13, 2005 - -------------------------------------------- Thomas C. Slater Director October ____, 2005 - -------------------------------------------- Robert L. Wise |