JOHNSTOWN, Pa., Aug. 26, 2021 /PRNewswire/ -- AmeriServ
Financial, Inc. (NASDAQ: ASRV) is pleased to announce that the
Company has completed a private placement of $27 million in aggregate principal amount of
fixed-to-floating rate subordinated notes due 2031 (the "Notes") to
certain qualified institutional buyers and accredited
investors.
The Notes have been structured to qualify as Tier 2 capital for
regulatory capital purposes. The Notes are unsecured and have a
ten-year term maturing September 1,
2031, and will bear interest at a fixed annual rate of
3.75%, payable semi-annually in arrears until September 1, 2026. From and including
September 1, 2026, the interest rate
will reset quarterly to the then current three-month Secured
Overnight Financing Rate (SOFR) plus 3.11%. The Company may
redeem the Notes, in whole or in part, on or after September 1, 2026, or at any time in whole upon
certain other specified events.
The Company intends to use approximately $20 million of the net proceeds to retire its
existing subordinated debt and trust preferred securities that have
a weighted average cost of 7.73%. This action alone will reduce the
Company's interest expense by approximately $500,000 annually. The remainder of the
proceeds will be utilized to support the growth of its subsidiaries
and other general corporate purposes.
Jeffrey A. Stopko, President and
Chief Executive Officer, stated: "We are very pleased to announce
the successful completion of our subordinated debt offering.
The transaction is strategically important to AmeriServ Financial
because the ongoing reduction in our debt costs along with the
flexibility the additional capital provides to support further loan
growth will have a meaningful positive impact on our financial
performance. Overall, we expect to see a $1.4 million annual reduction in interest expense
beginning in the fourth quarter of 2021 when the interest expense
savings from this transaction is combined with the use of core
deposits from our recently completed Somerset County branch acquisition to replace
higher cost institutional deposits."
Griffin Financial and PNC FIG Advisory acted as joint placement
agents for the offering. Stevens & Lee served as legal
counsel to AmeriServ Financial and Pillar Aught served as legal
counsel for the placement agents.
About AmeriServ Financial Inc.
AmeriServ Financial Inc. is the parent of AmeriServ Financial
Bank and AmeriServ Trust and Financial Services Company in
Johnstown, PA. The Company's
subsidiaries provide full-service banking and wealth management
services through seventeen community offices in southwestern
Pennsylvania and Hagerstown, Maryland. The Company also
operates loan production offices in Altoona and Monroeville, Pennsylvania. At June 30, 2021, AmeriServ had total assets of
$1.4 billion and a tangible book
value of $5.71 per share. The
Company's common stock trades on the NASDAQ Global Market under the
symbol "ASRV" while its trust preferred securities also trade on
NASDAQ under the symbol "ASRVP". For more information, visit
www.ameriserv.com.
Forward-Looking Statements
This press release contains forward-looking statements as
defined in the Securities Exchange Act of 1934 and is subject to
the safe harbors created therein. Such statements are not
historical facts and include expressions about management's
confidence and strategies and management's current views and
expectations about new and existing programs and products,
relationships, opportunities, technology, market conditions,
dividend program, proposed branch acquisition, including the
timing, anticipated benefits, and financial impact thereof, and
future payment obligations. These statements may be identified
by such forward-looking terminology as "continuing," "expect,"
"look," "believe," "anticipate," "may," "will," "should,"
"projects," "strategy," or similar statements. Actual results may
differ materially from such forward-looking statements, and no
reliance should be placed on any forward-looking statement. Factors
that may cause results to differ materially from such
forward-looking statements include, but are not limited to,
unanticipated changes in the financial markets and the direction of
interest rates; volatility in earnings due to certain financial
assets and liabilities held at fair value; competition levels; loan
and investment prepayments differing from our assumptions;
insufficient allowance for credit losses; a higher level of loan
charge-offs and delinquencies than anticipated; material adverse
changes in our operations or earnings; a decline in the economy in
our market areas; changes in relationships with major customers;
changes in effective income tax rates; higher or lower cash flow
levels than anticipated; inability to hire or retain qualified
employees; a decline in the levels of deposits or loss of alternate
funding sources; a decrease in loan origination volume or an
inability to close loans currently in the pipeline; changes in laws
and regulations; adoption, interpretation and implementation of
accounting pronouncements; operational risks, including the risk of
fraud by employees, customers or outsiders; unanticipated effects
of our banking platform; risks and uncertainties relating to the
duration of the COVID-19 pandemic, and actions that may be taken by
governmental authorities to contain the pandemic or to treat its
impact; expected timing and benefits of the proposed branch
acquisition; estimates of deposits and other assets to be acquired;
and the inability to successfully implement or expand new lines of
business or new products and services. These forward-looking
statements involve risks and uncertainties that could cause
AmeriServ's results to differ materially from management's current
expectations. Such risks and uncertainties are detailed in
AmeriServ's filings with the Securities and Exchange Commission,
including our Annual Report on Form 10-K for the year ended
December 31, 2020. Forward-looking
statements are based on the beliefs and assumptions of AmeriServ's
management and on currently available information. The statements
in this press release are made as of the date of this press
release, even if subsequently made available by AmeriServ on its
website or otherwise. AmeriServ undertakes no responsibility to
publicly update or revise any forward-looking statement.
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SOURCE AmeriServ Financial, Inc.