AmeriServ, Bank Sub Downgraded

AmeriServ Financial Inc., Johnstown, Pa., which recently sold the servicing rights on $450 million of mortgage loans, has been downgraded by Fitch Ratings, along with its banking subsidiary, AmeriServ Financial Bank.The long-term debt rating of the parent company was lowered from BB to B and the long-term debt and long-term deposit ratings of the bank were lowered from BB-plus to BB-minus. Their individual ratings were lowered from C/D to D. The ratings actions were "driven by the increased uncertainty regarding the company's ability to meet future financial obligations, particularly with respect to its trust preferred debt," Fitch said. The rating agency cited the sale of the mortgage servicing rights and other strategic initiatives as "steps in the right direction. However, the Rating Outlook Negative reflects execution risk in improving the company's financial and credit profile, heightened by minimal financial flexibility."