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Fitch Affirms and Withdraws AmeriServ Financial's Ratings at 'BB'
June 4, 2014 / 8:37 PM / 3 years ago

Fitch Affirms and Withdraws AmeriServ Financial's Ratings at 'BB'

(The following statement was released by the rating agency) NEW YORK, June 04 (Fitch) Fitch Ratings has affirmed and withdrawn the ratings and outlook for AmeriServ Financial, Inc. (ASRV) and its principal banking subsidiary AmeriServ Financial Bank at 'BB' with a Stable Rating Outlook. Fitch has decided to discontinue the ratings, which are uncompensated. A full list of ratings follows at the end of this release. Fitch notes that there has been no material change in ASRV's credit risk profile since the bank's ratings were affirmed at the Community Bank committee in September 2013. KEY RATING DRIVERS - IDRs, VRs AND SENIOR DEBT The affirmation of AmeriServ Financial's (ASRV) ratings and outlook reflect its stable asset quality and earnings metrics. The bank has consistently reported above average credit quality with non-performing assets totaling to 0.31% of total loans plus OREO as of 1Q'14. Regulatory capital ratios remain in excess of well capitalized levels. However, Fitch views these levels necessary given the bank's geographic and commercial real estate concentrations. Non-owner occupied commercial real estate represents 299% of total capital as of 1Q'14. Ratings continue to be constrained by weaker profitability driven primarily by the bank's higher cost, organized labor force and lack of scale. ASRV is the smallest bank in Fitch's community bank peer group with assets totaling $1.1 billion at the end of 1Q'14. With an efficiency ratio of over 89%, ASRV has the weakest earnings profile of the community bank peer group. RATING SENSITIVITIES - IDRS, VRs, AND SENIOR DEBT Rating sensitivities are no longer relevant given today's rating withdrawal. KEY RATING DRIVERS - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Subordinated debt and other hybrid capital issued by ASRV, and its subsidiaries are all notched down from ASRV's Viability Rating (VR) of 'bb' in accordance with Fitch's assessment of each instrument's respective non-performance and relative Loss Severity risk profiles, which vary considerably. RATING SENSITIVITIES - SUBORDINATED DEBT AND OTHER HYBRID SECURITIES Rating sensitivities are no longer relevant given today's rating withdrawal. KEY RATING DRIVERS - SUBSIDIARY AND AFFILIATED COMPANY AmeriServ Financial Bank is a wholly owned subsidiary of ASRV. AmeriServ Financial Bank's ratings are aligned with ASRV reflecting Fitch's view that the bank subsidiary is core to the franchise. KEY RATING DRIVERS AND SENSITIVITIES - HOLDING COMPANY ASRV's IDR and VR are equalized with those of ASRVB, reflecting its role as the bank holding company, which is mandated in the U.S. to act as a source of strength for its bank subsidiaries. Rating sensitivities are no longer relevant given today's rating withdrawal. KEY RATING DRIVERS - SUPPORT RATING AND SUPPORT RATING FLOOR ASRV's Support Rating and Support Rating Floor of '5' and 'NF' reflect Fitch's view that the company is unlikely to procure extraordinary support should such support be needed. RATING SENSITIVITIES - SUPPORT RATING AND SUPPORT RATING FLOOR Rating sensitivities are no longer relevant given today's rating withdrawal. KEY RATING DRIVERS AND SENSITIVITIES - LONG- AND SHORT-TERM DEPOSIT RATINGS ASRV's uninsured deposit ratings are rated one notch higher than the company's IDR and senior unsecured debt because U.S. uninsured deposits benefit from depositor preference. U.S. depositor preference gives deposit liabilities superior recovery prospects in the event of default. Rating sensitivities are no longer relevant given today's rating withdrawal. Fitch has affirmed and withdrawn the following ratings: Ameriserv Financial, Inc. --Long-Term IDR at 'BB'; --Short-Term IDR at 'B'; --Viability Rating at 'bb'; --Support Rating at '5'; --Support Floor at 'NF'. Ameriserv Financial Bank --Long-Term IDR at 'BB'; --Long-Term deposits at 'BB+'; --Short-Term IDR at 'B'; --Short-Term deposits at 'B'; --Viability Rating at 'bb'; --Support Rating at '5'; --Support Floor at 'NF'. Ameriserv Capital Trust I --Preferred at 'B-'. Contact: Primary Analyst Ryan Doyle Director +1-212-908-9162 Fitch Ratings, Inc. 33 Whitehall Street New York, NY 10004 Secondary Analyst Bain Rumohr, CFA Director +1-312-368-3153 Committee Chairperson Meghan Neenan, CFA Senior Director +1-212-908-9121 Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email: brian.bertsch@fitchratings.com. Additional information is available on www.fitchratings.com. Applicable Criteria and Related Research: --'2014 Outlook: U.S. Banks', Nov. 21, 2013; --'U.S. Banks: Liquidity and Deposit Funding', Aug. 8, 2013 --'U.S. Banks: Interest Rate Risks (What Happens When Rates Rise)', June 18, 2013; --'U.S. Bank Mergers and Acquisitions -- When Will The Catalysts Kick In?', July 11, 2013; --'Fitch Fundamentals Index', Jan. 15, 2014; --'Risk Radar Global - 1Q14', April 1, 2014; --'Global Financial Institutions Rating Criteria', Jan. 31, 2014; --Assessing and Rating Bank Subordinated and Hybrid Securities Criteria', Jan. 31, 2014; --'Rating FI Subsidiaries and Holding Companies', Aug. 10, 2013. Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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