AMERISERV FINANCIAL REPORTS EARNINGS FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF 2024

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The earnings report for AmeriServ Financial, Inc. reveals a mixed performance for the second quarter and the first half of 2024. Net loss of $375,000 for Q2 2024, up from a $187,000 net loss in Q2 2023, points to challenges in the company's operations despite a 15.1% increase in net income over the six-month period. This increase in income, reaching $1.529 million, represents growth compared to the first six months of 2023, yet the quarterly performance highlights ongoing pressure.

Revenue analysis shows that non-interest income contributed 35% of total revenue in the first half of 2024, indicating diversification efforts. However, the net interest income decreased by $235,000 for the quarter and $1 million for the six months, reflecting industry-wide challenges due to a tightening monetary policy. This compression of the net interest margin (NIM) from 2.74% to 2.72% over six months, although showing quarterly improvements, remains a concern as it affects the core profitability of banking operations.

On the positive side, total average loans increased by approximately $43.5 million or 4.4% and the loan interest income saw an uptick of $1.4 million for Q2 and $2.9 million for the six months. This indicates strong loan demand and prudent loan pricing strategies. However, the increased provision for credit losses in Q2 2024, due to loan growth, reflects a cautious stance towards credit risk, especially with non-performing assets rising to $12.8 million.

For retail investors, the settlement with Driver Opportunity Partners and the subsequent reduction in activism defense-related expenses are positives, potentially stabilizing future earnings. The bank's book value per share increasing by 3.6% is another positive outcome from the share repurchase from Driver. However, the increased interest expenses due to higher deposit and borrowing rates, along with a competitive deposit market, will likely continue to impact net margins.

Overall, while there are signs of improvement in some areas, the mixed results and the challenges faced in net interest margin and credit costs suggest a cautious outlook for the short term.

AmeriServ Financial's recent earnings report indicates several key positives and negatives that impact its market positioning. Notably, the company's wealth management business continues to perform strongly, contributing significantly to non-interest income. Wealth management fees increased by $270,000 for Q2 and $798,000 for the six months, benefiting from new business growth and favorable market conditions. This segment is important for diversifying the bank's revenue streams, particularly amid challenges in core banking operations.

However, the net interest margin compression remains a significant headwind, a common issue in the banking sector due to the Federal Reserve's monetary tightening. With the NIM decreasing to 2.74% in Q2 2024, albeit improving sequentially, the bank's core earnings power is under pressure. The proactive execution of $70 million in interest rate hedge transactions to stabilize deposit costs is a positive step, though it highlights the ongoing challenges in managing funding costs.

On the liability side, the company's ability to increase total average deposits by $7.8 million or 0.7% despite a competitive market is commendable. This deposit growth helps ensure liquidity and supports the bank's loan growth strategy. Moreover, the increase in shareholders' equity and tangible book value per share due to the accretive stock repurchase from Driver is a strategic win, improving shareholder value and capital ratios.

For investors, the bank's strong liquidity position, demonstrated by its ample borrowing capacity with the Federal Home Loan Bank and other sources, is reassuring. This liquidity support is important during economic volatility and positions the bank well for future growth opportunities. Additionally, the anticipated end to activism-related expenses should further stabilize the earnings outlook, enhancing future profitability.

In summary, AmeriServ Financial displays strengths in its diversified income sources and liquidity management. However, persistent margin compression and increased credit costs necessitate caution. Investors should weigh these factors when considering the company's future prospects.

07/16/2024 - 08:00 AM

JOHNSTOWN, Pa., July 16, 2024 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) reported a second quarter 2024 net loss of $375,000, or $0.02 per diluted common share. This earnings performance represented a $188,000 decrease from the second quarter of 2023 when the net loss totaled $187,000, or $0.01 per diluted common share. For the six-month period ended June 30, 2024, the Company reported net income of $1,529,000, or $0.09 per diluted common share. This represented a 15.1% increase in earnings from the six-month period of 2023 when net income totaled $1,328,000, or $0.08 per diluted common share. The following table details the Company's financial performance for the three- and six-month periods ended June 30, 2024 and 2023:


	Second Quarter 2024		Second Quarter 2023		Six Months Ended June 30, 2024		Six Months Ended June 30, 2023

Net income (loss)	$	(375,000)	$	(187,000)	$	1,529,000	$	1,328,000
Diluted earnings per share	$	(0.02)	$	(0.01)	$	0.09	$	0.08

Jeffrey A. Stopko, President and Chief Executive Officer, commented on the 2024 second quarter financial results: "Our community banking business continued to benefit from diversified revenue streams, with another quarter of strong revenue and profit contribution from our wealth management business. Total non-interest income represented 35% of total revenue for the first half of 2024. Both total average loans and deposits have grown this year, demonstrating the strength and loyalty of our customer base and helping to drive two consecutive quarters of net interest margin improvement. We believe that our balance sheet is well positioned for further quarterly net interest income growth through the remainder of 2024 and into 2025. Following our settlement with Driver Opportunity Partners in June, we do not expect to incur additional activism defense-related expenses, which amounted to $1.3 million and caused the net loss reported for the second quarter of 2024. However, our book value per share increased during the second quarter by 3.6% to $6.28, largely due to the accretive repurchase of our common stock from the activist investor."

All second quarter and six months of 2024 financial performance metrics within this document are compared to the second quarter and six months of 2023 unless otherwise noted.

The Company's net interest income in the second quarter of 2024 decreased by $235,000, or 2.6%, from the prior year's second quarter and, for the first six months of 2024, decreased by $1.0 million, or 5.4%, when compared to the first six months of 2023. The Company's net interest margin of 2.74% for the second quarter of 2024 and 2.72% for the six months of 2024 represents a 15-basis point decrease for the quarter and a 24-basis point decline for the six months. The decrease reflects net interest margin compression which has been prevalent in the banking industry since the Federal Reserve began tightening monetary policy to control inflation and as the U.S. Treasury yield curve continues to be inverted. While the Company's net interest margin percentage in both time periods of 2024 compares unfavorably to last year, it did improve for a second consecutive quarter and is 11-basis points higher than the fourth quarter of 2023. This improvement reflects the Federal Reserve keeping interest rates stable since July 2023 along with the impact of management's pricing of loans and deposits. The Company's provision for credit losses increased in the second quarter of 2024 compared to the 2023 second quarter but compares favorably to 2023 for the first six months of the year. Total non-interest income demonstrates a significant improvement in the second quarter of 2024 compared to last year's second quarter but is slightly lower than last year through six months. Total non-interest expense in both 2024 time periods is modestly higher than what was experienced in 2023. Overall, for the second quarter of 2024, non-interest income improvement was more than offset by unfavorable comparisons in all other major categories and resulted in the lower level of earnings compared to the second quarter of 2023. Earnings improvement for the six-month period in 2024 was driven by the favorable comparison in the provision for credit losses which more than offset a lower level of net interest income.

Total average loans in both the second quarter and first six months of 2024 are higher than the 2023 average by approximately $43.5 million, or 4.4%. So far in 2024, new loan originations have slightly exceeded payoff activity through six months and resulted in total loan volumes, on an end of period basis, remaining relatively consistent since December 31, 2023. Overall, total loans continue to be above the $1.0 billion threshold averaging $1.030 billion for the 2024 second quarter. The higher interest rate environment along with the higher average total loans outstanding resulted in total loan interest income improving by $1.4 million, or 11.1%, for the second quarter of 2024, and by $2.9 million, or 11.6%, for the six months of 2024 when compared to both time periods of last year.

Total investment securities averaged $256.6 million for the first half of 2024 which is $7.2 million, or 2.7%, lower than the $263.9 million average for the first half of last year. The decrease reflects management's strategy to allocate more cash flow from the securities portfolio to higher yielding loans while the Company controlled the amount of high cost overnight borrowed funds. Thus, new investment security purchases were primarily used to replace cash flow from maturing securities to maintain appropriate balances for pledging purposes related to public funds deposits. The improved yields for new securities purchases along with management's execution of a late December 2023 investment portfolio repositioning strategy caused interest income from investments to increase by $387,000, or 8.5%, in the first six months of 2024 compared to the same time-period in 2023. Overall, the 2024 first six-month average balance of total interest earning assets increased since last year's six-month average by $35.9 million, or 2.9%, while total interest income increased by $3.3 million, or 11.1%, since the first six months of 2023.

On the liability side of the balance sheet, through six months, total average deposits are $7.8 million, or 0.7%, higher compared to total average deposits in the first six months of 2023. The increase reflects the Company's successful business development efforts which more than offset a portion of the funds from the government stimulus programs leaving the balance sheet and greater pricing competition in the market to retain deposits because of the higher interest rates. The Company's core deposit base continued to demonstrate the strength and stability that it has had for many years. On June 30, 2024, total deposits grew by $12.0 million, or 1.0%, since December 31, 2023, demonstrating customer loyalty and confidence in AmeriServ Financial Bank. In addition to its loyal core deposit base, the Company has several other sources of liquidity, including a significant unused borrowing capacity at the Federal Home Loan Bank (FHLB), overnight lines of credit at correspondent banks and access to the Federal Reserve Discount Window. The Company does not utilize brokered deposits as a funding source. The loan to deposit ratio averaged 88.5% in the second quarter of 2024, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support our customers and our community during times of economic volatility.

Total interest expense increased by $1.9 million, or 32.3%, for the second quarter of 2024, and by $4.3 million, or 39.7%, for the six months of 2024 when compared to both time periods of last year, due to higher deposit and borrowings interest expense. Deposit interest expense was higher by $1.4 million, or 27.3%, for the quarter and by $3.4 million, or 36.7%, for the six months as the 2024 average volume of total interest-bearing deposits grew by $23.8 million, or 2.5%, for the quarter and by $26.3 million, or 2.7%, for the six months. The rising national interest rates in 2023 resulted in certain deposit products, particularly public funds, which are tied to a market index, repricing upward with the move in short-term interest rates causing interest expense to increase. Additionally, increased market competition resulted in the Company raising rates on certain shorter-term certificates of deposit to retain funds. Another factor contributing to net interest margin compression was an unfavorable deposit mix shift as the 2024 average of non-interest bearing demand deposits declined in both time periods by approximately $18.5 million, or 9.3%, while, as mentioned above, total interest-bearing deposits increased. For interest rate risk management purposes and to offset a portion of the unfavorable impact that rising funding costs are having on net interest income, management proactively executed $70 million of interest rate hedge transactions during 2023 to fix the cost of certain deposits that are indexed and move with short-term interest rates. Finally, the increasing trend in total deposit costs experienced since the Federal Reserve began to tighten monetary policy has slowed significantly in 2024 with the Federal Open Market Committee keeping the Fed Funds rate stable since July 2023. This slowdown in deposit costs has contributed to the previously mentioned recent improvement in the net interest margin. Overall, total deposit cost averaged 2.18% in the first half of 2024, which is 57-basis points higher than total deposit cost of 1.61% for the first half of 2023.

Total borrowings interest expense increased by $496,000, or 66.1%, in the second quarter of 2024 and by $911,000, or 56.5%, when compared to the first six months of 2023. The increase primarily results from the impact that the higher interest rates had on total borrowings cost. The Company's utilization of overnight borrowed funds so far in 2024 has been relatively consistent with the 2023 level in both time periods while the level of advances from the Federal Home Loan Bank have increased. Advances from the Federal Home Loan Bank averaged $49.3 million in the first half of 2024 which is $31.3 million, or 174.7%, higher than the $17.9 million average in the first half of 2023. Management's strategy to increase term advances to lock in lower rates than overnight borrowings due to the inversion in the yield curve has favorably impacted net interest income.

The Company recorded a $434,000 provision for credit losses in the second quarter of 2024 after recording a $43,000 provision for credit losses in the second quarter of 2023 which caused an increase in expense of $391,000. For the first six months of 2024, the Company recognized a $123,000 provision for credit losses recovery after recognizing $1.2 million of provision expense in the first six months of 2023, resulting in a net favorable change of $1.3 million. The increased provision in the second quarter of 2024 primarily reflects a $244,000 additional contribution to the reserve for a corporate AFS security that was established in the first quarter of 2024. The remainder of the increase to the provision in the second quarter of 2024 includes $183,000 of expense added to the provision for credit losses in the loan portfolio due to $12.7 million of loan growth experienced since March 31, 2024. The provision for credit losses net recovery for the six-month timeframe reflects first quarter 2024 recoveries recognized in both the loan and securities portfolios which was described in the Company's first quarter 2024 press release.

Non-performing assets increased from $12.2 million at March 31, 2024 to $12.8 million at June 30, 2024 primarily due to one commercial real estate loan that is over 90 days past due. Non-performing assets are at 1.23% of total loans. The Company recognized net loan charge-offs of $332,000, or 0.06% of total average loans, in the first six months of 2024 compared to net loan charge-offs of $61,000, or 0.01% of total average loans, in the first six months of 2023. The allowance for loan credit losses at June 30, 2024 is $2.4 million, or 19.6%, higher than the allowance for loan credit losses at June 30, 2023. The increase since last year's second quarter end is due to the Company strengthening its allowance for loan credit losses during the fourth quarter of 2023. Overall, the Company continues to maintain solid coverage of both total loans and non-performing assets as the allowance for loan credit losses provided 114% coverage of non-performing assets and 1.41% of total loans at June 30, 2024.

Total non-interest income in the second quarter of 2024 increased by $510,000, or 13.2%, from the prior year's second quarter but declined by $50,000, or 0.5%, in the first half of 2024 when compared to the first half of 2023. The slight decrease for the six-month period is primarily attributed to the Company recognizing a $1.7 million gain in the first quarter of 2023 from AmeriServ Financial Bank selling all 7,859 shares of the Class B common stock of Visa Inc. There was no such gain this year. Wealth management fees improved by $270,000, or 9.7%, for the quarter and by $798,000, or 14.4%, for the six months due in part to a strong performance from our Financial Services division that resulted from new business growth. Also, the increase in wealth management fees reflects the improving market conditions particularly for equity securities as major market indexes continue their ascent to record highs in 2024. Overall, the fair market value of wealth management assets totaled $2.6 billion at June 30, 2024 and increased by $133.8 million, or 5.5%, since June 30, 2023. Other income is $194,000, or 40.5%, higher for the second quarter and $749,000, or 80.0%, higher for the first six months of 2024 due to a favorable adjustment to the fair market value of an interest rate swap related risk participation agreement as well as the recognition of a positive credit valuation adjustment to the market value of the interest rate swap contracts that the Company executed to accommodate the needs of certain borrowers while managing our interest rate risk position. These favorable adjustments totaled $422,000 for the six-month period and were impacted by the increase in interest rates since year-end 2023. Also favorably impacting other income was the Company recognizing a $250,000 signing bonus in the first quarter of 2024 that resulted from successful negotiations related to the renewal of an expiring contract with Visa. Finally, bank owned life insurance revenue (BOLI) increased by $96,000, or 20.0%, for the six months due to the receipt of a death claim.

Total non-interest expense in the second quarter of 2024 increased by $120,000, or 0.9%, when compared to the second quarter of 2023 and increased slightly by $21,000, or 0.1%, during the first half of 2024 when compared to the first half of 2023. Salaries and employee benefits expense decreased by $678,000, or 4.5%, for the six months of 2024 due to the net impact of certain items within this broad category. Total salaries cost was down by $593,000, or 5.6%, after the Company incurred additional salary expense in 2023 related to a strategy to consolidate certain executive level positions in the wealth management business. This is part of our previously announced earnings improvement program and was designed to lower future employee costs, which is occurring in 2024. Also, total health care cost was $422,000, or 22.0%, lower compared to last year and reflects management's effective negotiations with our current health care provider that resulted in not having to recognize any premium costs in January 2024. These favorable items were partially offset by an increased level of incentive compensation by $383,000, or 78.5%, which corresponds to the strong performance of our wealth management division. Other expenses are $494,000, or 22.0%, higher for the six months of 2024 when compared to the first six months of 2023. The Company was required to recognize a settlement charge in connection with its defined benefit pension plan in the second quarter of 2024. The amount of the 2024 charge was $376,000. A settlement charge must be recognized when the total dollar amount of lump sum distributions paid from the pension plan to retired employees exceeds a threshold of expected annual service and interest costs in the current year. It is important to note that since the retired employees have chosen to take the lump sum payments, these individuals are no longer included in the pension plan. Therefore, the Company's normal annual pension expense will continue to be lower in the future. This was evident in 2023 and so far in 2024 as the Company has recognized a pension credit in both years. FDIC insurance increased by $205,000, or 68.3%, due to an increase in both the asset assessment base as well as the assessment rate. Data processing and IT expenses increased by $143,000, or 6.6%, in the first six months of 2024 due to additional expenses related to monitoring our computing and network environment.

Professional fees in both 2024 and 2023 were impacted by litigation and responses to the actions of an activist investor. These activist related costs amounted to $1.3 million for the second quarter of 2024 and $1.5 million for the first six months of 2024 compared to activist costs of $1.1 million for the second quarter of 2023 and $1.7 million for the first six months of 2023. As a result of a Cooperation and Settlement Agreement reached with activist investor Driver Opportunity Partners (Driver), which was described in a Current Report on Form 8-K filed on June 14, 2024, the Company anticipates that it will not incur any further activist related costs in the second half of 2024.

The Company recorded an income tax benefit of $109,000 in the second quarter of 2024 and income tax expense of $374,000, or an effective tax rate of 19.7%, in the first six months of 2024, which compares to an income tax benefit of $61,000, in the second quarter of 2023 and income tax expense of $311,000, or an effective tax rate of 19.0%, for the first six months of 2023.

The Company had total assets of $1.4 billion, shareholders' equity of $103.7 million, a book value of $6.28 per common share and a tangible book value(1) of $5.45 per common share on June 30, 2024. Book value per common share increased by $0.22, or 3.6%, and tangible book value per common share increased by $0.19, or 3.6% since March 31, 2024, due largely to the Company's repurchase of 628,003 shares of common stock from Driver at a price of $2.38 in accordance with a Stock Purchase Agreement that is also described in the June 14, 2024, 8-K filing. Since these Driver shares were acquired at a price below tangible book value, the stock repurchase was accretive to AmeriServ shareholders. The Company continued to maintain strong capital ratios that exceed the regulatory defined well capitalized status as of June 30, 2024.

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, 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, the level of inflation, 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; ability to successfully execute the Earnings Improvement Program and achieve the anticipated benefits in the amounts and at times estimated; operational risks, including the risk of fraud by employees, customers or outsiders; unanticipated effects to our banking platform; 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, 2023. 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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(1) Non-GAAP Financial Information. See "Reconciliation of Non-GAAP Financial Measures" at end of release.

AMERISERV FINANCIAL, INC. NASDAQ: ASRV SUPPLEMENTAL FINANCIAL PERFORMANCE DATA June 30, 2024 (Dollars in thousands, except per share and ratio data) (Unaudited) 2024

		1QTR		2QTR			YEAR TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income (loss)	$	1,904		$	(375)		$	1,529

PERFORMANCE PERCENTAGES (annualized):
Return on average assets		0.55	%		(0.11)	%		0.22	%
Return on average equity		7.51			(1.47)			3.00
Return on average tangible common equity (1)		8.67			(1.70)			3.47
Net interest margin		2.70			2.74			2.72
Net charge-offs (recoveries) as a percentage of average loans		0.05			0.08			0.06
Efficiency ratio (3)		86.60			100.33			93.35

EARNINGS PER COMMON SHARE:
Basic	$	0.11		$	(0.02)		$	0.09
Average number of common shares outstanding		17,147			17,030			17,089
Diluted	$	0.11		$	(0.02)		$	0.09
Average number of common shares outstanding		17,147			17,030			17,089
Cash dividends paid per share	$	0.03		$	0.03		$	0.06

2023

		1QTR		2QTR			YEAR TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income (loss)	$	1,515		$	(187)		$	1,328

PERFORMANCE PERCENTAGES (annualized):
Return on average assets		0.45	%		(0.06)	%		0.20	%
Return on average equity		5.85			(0.72)			2.55
Return on average tangible common equity (1)		6.73			(0.82)			2.93
Net interest margin		3.03			2.89			2.96
Net charge-offs (recoveries) as a percentage of average loans		0.05			(0.02)			0.01
Efficiency ratio (3)		79.58			101.55			89.76

EARNINGS PER COMMON SHARE:
Basic	$	0.09		$	(0.01)		$	0.08
Average number of common shares outstanding		17,131			17,147			17,139
Diluted	$	0.09		$	(0.01)		$	0.08
Average number of common shares outstanding		17,155			17,147			17,148
Cash dividends paid per share	$	0.03		$	0.03		$	0.06

AMERISERV FINANCIAL, INC. NASDAQ: ASRV --CONTINUED-- (Dollars in thousands, except per share, statistical, and ratio data) (Unaudited) 2024

	1QTR			2QTR
FINANCIAL CONDITION DATA AT PERIOD END:
Assets	$	1,384,516		$	1,403,438
Short-term investments/overnight funds		3,353			2,925
Investment securities, net of allowance for credit losses - securities		230,419			230,425
Total loans and loans held for sale, net of unearned income		1,026,586			1,039,258
Allowance for credit losses - loans		14,639			14,611
Intangible assets		13,705			13,699
Deposits		1,176,578			1,170,359
Short-term and FHLB borrowings		60,858			85,495
Subordinated debt, net		26,695			26,706
Shareholders' equity		103,933			103,661
Non-performing assets		12,161			12,817
Tangible common equity ratio (1)		6.58	%		6.47	%
Total capital (to risk weighted assets) ratio		13.10			12.77
PER COMMON SHARE:
Book value	$	6.06		$	6.28
Tangible book value (1)		5.26			5.45
Market value (2)		2.60			2.26
Wealth management assets – fair market value (4)	$	2,603,493		$	2,580,402

STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees		304			310
Branch locations		16			16
Common shares outstanding		17,147,270			16,519,267

2023

	1QTR			2QTR			3QTR			4QTR
FINANCIAL CONDITION DATA AT PERIOD END:
Assets	$	1,345,957		$	1,345,721		$	1,361,789		$	1,389,638
Short-term investments/overnight funds		4,116			3,366			3,598			4,349
Investment securities, net of allowance for credit losses - securities		238,613			232,259			229,335			229,690
Total loans and loans held for sale, net of unearned income		980,877			988,221			1,002,306			1,038,401
Allowance for credit losses - loans		12,132			12,221			12,313			15,053
Intangible assets		13,731			13,724			13,718			13,712
Deposits		1,131,789			1,127,569			1,129,290			1,158,360
Short-term and FHLB borrowings		69,124			72,793			85,568			85,513
Subordinated debt, net		26,654			26,665			26,675			26,685
Shareholders' equity		105,899			103,565			101,326			102,277
Non-performing assets		4,599			5,650			5,939			12,393
Tangible common equity ratio (1)		6.92	%		6.74	%		6.50	%		6.44	%
Total capital (to risk weighted assets) ratio		14.17			14.00			13.72			13.03
PER COMMON SHARE:
Book value	$	6.18		$	6.04		$	5.91		$	5.96
Tangible book value (1)		5.38			5.24			5.11			5.16
Market value (2)		3.05			2.54			2.65			3.24
Wealth management assets – fair market value (4)	$	2,354,498		$	2,446,639		$	2,385,590		$	2,521,501

STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees		308			315			308			307
Branch locations		17			17			17			17
Common shares outstanding		17,147,270			17,147,270			17,147,270			17,147,270

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NOTES:
(1)	Non-GAAP Financial Information. See "Reconciliation of Non-GAAP Financial Measures" at end of release.
(2)	Based on closing price reported by the principal market on which the share is traded on the last business day of the corresponding reporting period.
(3)	Ratio calculated by dividing total non-interest expense by tax equivalent net interest income plus total non-interest income.
(4)	Not recognized on the consolidated balance sheets.

AMERISERV FINANCIAL, INC. NASDAQ: ASRV CONSOLIDATED STATEMENT OF INCOME (Dollars in thousands) (Unaudited) 2024

	1QTR		2QTR			YEAR TO DATE
INTEREST INCOME
Interest and fees on loans	$	13,776		$	14,003		$	27,779
Interest on investments		2,448			2,507			4,955
Total Interest Income		16,224			16,510			32,734

INTEREST EXPENSE
Deposits		6,199			6,389			12,588
All borrowings		1,278			1,246			2,524
Total Interest Expense		7,477			7,635			15,112

NET INTEREST INCOME		8,747			8,875			17,622
Provision (recovery) for credit losses		(557)			434			(123)
NET INTEREST INCOME AFTER PROVISION (RECOVERY) FOR CREDIT LOSSES		9,304			8,441			17,745

NON-INTEREST INCOME
Wealth management fees		3,266			3,059			6,325
Service charges on deposit accounts		293			293			586
Net realized gains on loans held for sale		10			59			69
Mortgage related fees		29			48			77
Gain on sale of Visa Class B shares		0			0			0
Bank owned life insurance		337			240			577
Other income		1,012			673			1,685
Total Non-Interest Income		4,947			4,372			9,319

NON-INTEREST EXPENSE
Salaries and employee benefits		7,117			7,108			14,225
Net occupancy expense		791			730			1,521
Equipment expense		386			391			777
Professional fees		1,002			2,094			3,096
Data processing and IT expense		1,159			1,142			2,301
FDIC deposit insurance expense		255			250			505
Other expenses		1,154			1,582			2,736
Total Non-Interest Expense		11,864			13,297			25,161

PRETAX INCOME (LOSS)		2,387			(484)			1,903
Income tax expense (benefit)		483			(109)			374
NET INCOME (LOSS)	$	1,904		$	(375)		$	1,529

2023

	1QTR		2QTR			YEAR TO DATE
INTEREST INCOME
Interest and fees on loans	$	12,276		$	12,609		$	24,885
Interest on investments		2,298			2,270			4,568
Total Interest Income		14,574			14,879			29,453

INTEREST EXPENSE
Deposits		4,189			5,019			9,208
All borrowings		863			750			1,613
Total Interest Expense		5,052			5,769			10,821

NET INTEREST INCOME		9,522			9,110			18,632
Provision (recovery) for credit losses		1,179			43			1,222
NET INTEREST INCOME AFTER PROVISION (RECOVERY) FOR CREDIT LOSSES		8,343			9,067			17,410

NON-INTEREST INCOME
Wealth management fees		2,738			2,789			5,527
Service charges on deposit accounts		266			280			546
Net realized gains on loans held for sale		26			38			64
Mortgage related fees		33			34			67
Gain on sale of Visa Class B shares		1,748			0			1,748
Bank owned life insurance		239			242			481
Other income		457			479			936
Total Non-Interest Income		5,507			3,862			9,369

NON-INTEREST EXPENSE
Salaries and employee benefits		7,175			7,728			14,903
Net occupancy expense		772			713			1,485
Equipment expense		415			422			837
Professional fees		1,308			1,907			3,215
Data processing and IT expense		1,078			1,080			2,158
FDIC deposit insurance expense		125			175			300
Other expenses		1,090			1,152			2,242
Total Non-Interest Expense		11,963			13,177			25,140

PRETAX INCOME (LOSS)		1,887			(248)			1,639
Income tax expense (benefit)		372			(61)			311
NET INCOME (LOSS)	$	1,515		$	(187)		$	1,328

AMERISERV FINANCIAL, INC. NASDAQ: ASRV AVERAGE BALANCE SHEET DATA (Dollars in thousands) (Unaudited)

	2024				2023
	2QTR		SIX MONTHS		2QTR		SIX MONTHS
Interest earning assets:
Loans and loans held for sale, net of unearned income	$	1,029,662	$	1,029,752	$	986,111	$	986,302
Short-term investments and bank deposits		3,359		3,786		3,727		4,051
Total investment securities		256,541		256,643		261,769		263,882
Total interest earning assets		1,289,562		1,290,181		1,251,607		1,254,235

Non-interest earning assets:
Cash and due from banks		14,460		14,516		16,612		16,512
Premises and equipment		18,733		18,492		17,299		17,394
Other assets		82,272		81,645		74,608		74,853
Allowance for credit losses		(14,924)		(15,518)		(13,332)		(12,739)
Total assets	$	1,390,103	$	1,389,316	$	1,346,794	$	1,350,255

Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand	$	222,639	$	222,827	$	225,260	$	225,993
Savings		120,126		120,337		129,672		131,096
Money market		313,056		311,350		303,950		300,776
Other time		326,765		326,824		299,913		297,215
Total interest bearing deposits		982,586		981,338		958,795		955,080
Borrowings:
Federal funds purchased and other short-term borrowings		28,325		30,985		24,967		32,843
Advances from Federal Home Loan Bank		50,670		49,298		18,209		17,949
Subordinated debt		27,000		27,000		27,000		27,000
Lease liabilities		4,466		4,335		3,206		3,241
Total interest bearing liabilities		1,093,047		1,092,956		1,032,177		1,036,113

Non-interest bearing liabilities:
Demand deposits		180,468		179,999		198,984		198,431
Other liabilities		13,911		14,024		10,720		10,709
Shareholders' equity		102,677		102,337		104,913		105,002
Total liabilities and shareholders' equity	$	1,390,103	$	1,389,316	$	1,346,794	$	1,350,255

AMERISERV FINANCIAL, INC. NASDAQ: ASRV CHANGES IN SHAREHOLDERS' EQUITY (Dollars in thousands) (Unaudited) 2024

	COMMON STOCK		TREASURY STOCK		SURPLUS		RETAINED EARNINGS		ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME		TOTAL
Balance at December 31, 2023	$	268	$	(83,280)	$	146,364	$	58,901	$	(19,976)	$	102,277
Net income		0		0		0		1,904		0		1,904
Exercise of stock options and stock option expense		0		0		8		0		0		8
Adjustment for defined benefit pension plan		0		0		0		0		(131)		(131)
Adjustment for unrealized loss on available for sale securities		0		0		0		0		(241)		(241)
Market value adjustment for interest rate hedge		0		0		0		0		630		630
Common stock cash dividend		0		0		0		(514)		0		(514)
Balance at March 31, 2024	$	268	$	(83,280)	$	146,372	$	60,291	$	(19,718)	$	103,933
Net loss		0		0		0		(375)		0		(375)
Treasury stock, purchased at cost		0		(1,511)		0		0		0		(1,511)
Adjustment for defined benefit pension plan		0		0		0		0		2,177		2,177
Adjustment for unrealized loss on available for sale securities		0		0		0		0		(119)		(119)
Market value adjustment for interest rate hedge		0		0		0		0		71		71
Common stock cash dividend		0		0		0		(515)		0		(515)
Balance at June 30, 2024	$	268	$	(84,791)	$	146,372	$	59,401	$	(17,589)	$	103,661

2023

	COMMON STOCK		TREASURY STOCK		SURPLUS		RETAINED EARNINGS		ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME		TOTAL
Balance at December 31, 2022	$	267	$	(83,280)	$	146,225	$	65,486	$	(22,520)	$	106,178
Net income		0		0		0		1,515		0		1,515
Exercise of stock options and stock option expense		1		0		106		0		0		107
Adjustment for defined benefit pension plan		0		0		0		0		0		0
Adjustment for unrealized gain on available for sale securities		0		0		0		0		449		449
Market value adjustment for interest rate hedge		0		0		0		0		(655)		(655)
Cumulative effect adjustment for change in accounting principal		0		0		0		(1,181)		0		(1,181)
Common stock cash dividend		0		0		0		(514)		0		(514)
Balance at March 31, 2023	$	268	$	(83,280)	$	146,331	$	65,306	$	(22,726)	$	105,899
Net loss		0		0		0		(187)		0		(187)
Exercise of stock options and stock option expense		0		0		12		0		0		12
Adjustment for defined benefit pension plan		0		0		0		0		0		0
Adjustment for unrealized loss on available for sale securities		0		0		0		0		(2,560)		(2,560)
Market value adjustment for interest rate hedge		0		0		0		0		916		916
Common stock cash dividend		0		0		0		(515)		0		(515)
Balance at June 30, 2023	$	268	$	(83,280)	$	146,343	$	64,604	$	(24,370)	$	103,565
Net income		0		0		0		647		0		647
Exercise of stock options and stock option expense		0		0		11		0		0		11
Adjustment for defined benefit pension plan		0		0		0		0		0		0
Adjustment for unrealized loss on available for sale securities		0		0		0		0		(2,700)		(2,700)
Market value adjustment for interest rate hedge		0		0		0		0		316		316
Common stock cash dividend		0		0		0		(513)		0		(513)
Balance at September 30, 2023	$	268	$	(83,280)	$	146,354	$	64,738	$	(26,754)	$	101,326
Net loss		0		0		0		(5,321)		0		(5,321)
Exercise of stock options and stock option expense		0		0		10		0		0		10
Adjustment for defined benefit pension plan		0		0		0		0		1,688		1,688
Adjustment for unrealized gain on available for sale securities		0		0		0		0		6,019		6,019
Market value adjustment for interest rate hedge		0		0		0		0		(929)		(929)
Common stock cash dividend		0		0		0		(516)		0		(516)
Balance at December 31, 2023	$	268	$	(83,280)	$	146,364	$	58,901	$	(19,976)	$	102,277

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

RETURN ON AVERAGE TANGIBLE COMMON EQUITY, TANGIBLE COMMON EQUITY RATIO, AND TANGIBLE BOOK VALUE PER SHARE

(Dollars in thousands, except per share and ratio data)

(Unaudited)

The press release contains certain financial information determined by methods other than in accordance with generally accepted accounting principles in the United States (GAAP). These non-GAAP financial measures are "return on average tangible common equity", "tangible common equity ratio", and "tangible book value per share". This non-GAAP disclosure has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. These non-GAAP measures are used by management in their analysis of the Company's performance or, management believes, facilitate an understanding of the Company's performance. We also believe that presenting non-GAAP financial measures provides additional information to facilitate comparison of our historical operating results and trends in our underlying operating results. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends.

2024

	1QTR			2QTR			YEAR TO DATE
RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income (loss)	$	1,904		$	(375)		$	1,529

Average shareholders' equity		101,997			102,677			102,337
Less: Average intangible assets		13,708			13,701			13,705
Average tangible common equity		88,289			88,976			88,632

Return on average tangible common equity (annualized)		8.67	%		(1.70)	%		3.47	%

	1QTR			2QTR
TANGIBLE COMMON EQUITY
Total shareholders' equity	$	103,933			$	103,661
Less: Intangible assets		13,705				13,699
Tangible common equity		90,228				89,962

TANGIBLE ASSETS
Total assets		1,384,516				1,403,438
Less: Intangible assets		13,705				13,699
Tangible assets		1,370,811				1,389,739

Tangible common equity ratio		6.58	%			6.47	%

Total shares outstanding		17,147,270				16,519,267

Tangible book value per share	$	5.26			$	5.45

2023

	1QTR			2QTR			YEAR TO DATE
RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income (loss)	$	1,515		$	(187)		$	1,328

Average shareholders' equity		105,092			104,913			105,002
Less: Average intangible assets		13,734			13,727			13,731
Average tangible common equity		91,358			91,186			91,271

Return on average tangible common equity (annualized)		6.73	%		(0.82)	%		2.93	%


	1QTR			2QTR				3QTR		4QTR
TANGIBLE COMMON EQUITY
Total shareholders' equity	$	105,899		$	103,565		$	101,326			$	102,277
Less: Intangible assets		13,731			13,724			13,718				13,712
Tangible common equity		92,168			89,841			87,608				88,565

TANGIBLE ASSETS
Total assets		1,345,957			1,345,721			1,361,789				1,389,638
Less: Intangible assets		13,731			13,724			13,718				13,712
Tangible assets		1,332,226			1,331,997			1,348,071				1,375,926

Tangible common equity ratio		6.92	%		6.74	%		6.50	%			6.44	%

Total shares outstanding		17,147,270			17,147,270			17,147,270				17,147,270

Tangible book value per share	$	5.38		$	5.24		$	5.11			$	5.16

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SOURCE AmeriServ Financial, Inc.

FAQ

What was AmeriServ Financial's (ASRV) net income for Q2 2024?

AmeriServ Financial (ASRV) reported a net loss of $375,000, or $0.02 per diluted share, for Q2 2024.

How did AmeriServ Financial's (ASRV) net income for H1 2024 compare to H1 2023?

AmeriServ Financial's (ASRV) net income for H1 2024 was $1,529,000, representing a 15.1% increase from $1,328,000 in H1 2023.

What was the impact of activism defense-related expenses on AmeriServ Financial's (ASRV) Q2 2024 results?

AmeriServ Financial (ASRV) incurred $1.3 million in activism defense-related expenses in Q2 2024, which contributed to the reported net loss for the quarter.

How did AmeriServ Financial's (ASRV) average loans change in Q2 2024 compared to the previous year?

AmeriServ Financial's (ASRV) average loans increased by approximately $43.5 million, or 4.4%, in Q2 2024 compared to the same period in 2023.

What was AmeriServ Financial's (ASRV) book value per share as of June 30, 2024?

AmeriServ Financial's (ASRV) book value per share was $6.28 as of June 30, 2024, representing a 3.6% increase from the previous quarter.

AMERISERV FINANCIAL REPORTS EARNINGS FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF 2024

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How did AmeriServ Financial's (ASRV) average loans change in Q2 2024 compared to the previous year?

What was AmeriServ Financial's (ASRV) book value per share as of June 30, 2024?

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AMERISERV FINANCIAL REPORTS EARNINGS FOR THE SECOND QUARTER AND FIRST SIX MONTHS OF 2024

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What was AmeriServ Financial's (ASRV) net income for Q2 2024?

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