Activist Driver Management Demands Inspecting AmeriServ Financial’s Company Records

Activist Driver Management Demands Inspecting AmeriServ Financial’s Company Records

The heat was turned up for Pennsylvania-based bank AmeriServ Financial (United States: ASRV) this week as banking-focused hedge fund Driver Management Co took aim at the group’s management team.

Earlier today, Fintel reported that Driver Management Co LLC filed a Form 13D/A with the SEC disclosing ownership of 1,477,419 shares of AmeriServ Financial, Inc. (ASRV). representing 8.6% of the company’s capital. In the latest filing dated January 19, 2023, they said they own 8.60% of the company, indicating no change in their holdings.

Driver Management, founded and run by Abbott Cooper, filed two Form 13D/As this week highlighting letters that had been sent to the AmeriServ board.

In the first deposit ThursdayAbbott Cooper revealed that he sent a letter to AmeriServ Chairman Allan Dennison calling out the management team for poor financial performance attributed to him. “unique economic realities”.

Driver Management believes that the ASRV Board of Directors needs to be reconstituted due to the significant underperformance and recommended the appointment of three new directors at the next annual general meeting in 20203 which would commit to putting shareholders first.

In the last deposit fridayDriver Management has decided to exercise its right to inspect specific AmeriServ books and records regarding the following documents.

Cooper is looking for documents that describe and summarize the facts surrounding “unique economic realities” and any other documents that refer to management actions taken to mitigate these impacts.

The hedge fund plans to use these documents and references to determine whether AmeriServ was mismanaged in light of the challenges encountered.

Driver Management first disclosed its position in the company on October 18 with a 7.0% stake. The news of the activist’s entry into the shareholders’ register sent the stock up almost 10%.

AmeriServ currently has a market capitalization of $68.5 million and trades on a PE ratio of 8.2x with an annualized dividend yield of 3%. ASRV’s stock price has traded roughly flat for the past 5 years excluding the decline in stock price during the pandemic.

Fintel Management Effectiveness chart below from fFinancial indicators and ratios page for ASRV highlights a significant drop in the CROIC (cash return on investor capital) over 2022.

AmeriServ Financial, Inc. is the parent company of AmeriServ Financial Bank and AmeriServ Trust and Financial Services Company in Johnstown, Pennsylvania. The Company’s subsidiaries provide full-service banking and wealth management services through sixteen community offices in southwestern Pennsylvania and Hagerstown, Maryland. The Company also operates loan origination offices in Altoona and Monroeville, Pennsylvania. As of September 30, 2020, AmeriServ had total assets of $1.3 billion and a tangible book value of $5.36 per common share.

What are the other big shareholders doing?

Gendell Jeffrey L holds 1,054,816 shares representing 6.16% of the company’s capital. No change in the last quarter.

M3F, Inc. holds 945,074 shares representing 5.52% of the company’s capital. In its previous filing, the company said it held 986,762 shares, representing a decrease of 4.41%. The company decreases its portfolio allocation in ASRV by 0.22% over the last quarter.

Renaissance Technologies LLC holds 658,684 shares representing 3.85% of the company’s capital. In its previous filing, the company said it held 684,351 shares, representing a decrease 3.90%. The company increased its ASRV portfolio allocation of 10.94% over the last quarter.

West Chester Capital Advisors, Inc. holds 611,927 shares representing 3.58% of the company’s capital. In its previous filing, the company said it held 609,258 shares, representing a raise by 0.44%. The company decreases its ASRV portfolio allocation of 22.48% over the last quarter.

Bridgeway Capital Management Inc. holds 261,771 shares representing 1.53% of the company’s capital. No change in the last quarter.

What is the general sentiment of the fund?

There are 63 funds or institutions declaring positions in AmeriServ Financial, Inc.. This is a decrease of 0 owner(s) or 0.00%.

Average portfolio weight of all funds dedicated to AmeriServ Financial, Inc. is 0.1322%, down 8.8243%. The total number of shares held by institutions has decreased over the past three months by 2.28% to 7,178,039 shares.

Fintel’s Fund Sentiment Score is a quantitative model that ranks companies from zero to 100 based on Fund Sentiment. Fund sentiment is important because it tells you whether funds are buying or selling – and in particular how the company ranks against other companies in the investment universe. Click to view the Fintel fund sentiment score for ASRV / AmeriServ Financial, Inc..
This story originally appeared on Fintel.

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