AMERISERV FINANCIAL INC /PA/

Previous wording

The Company reported a second quarter 2025 net loss of $282,000, or $0.02 per diluted common share. This performance represented a $93,000 improvement from the second quarter of 2024 when the net loss totaled $375,000, or $0.02 per diluted common share. The resolution of our largest problem loan in the second quarter of 2025 resulted in an increased provision for credit losses which caused the modest loss reported for the quarter. Nevertheless, the Company again achieved positive operating leverage in the second quarter of 2025 as total revenue increased while non-interest expenses declined. The increase in total revenue was caused by meaningful improvement in net interest income as the second quarter net interest margin increased by 36-basis points from the prior year’s second quarter leading to a $1.5 million increase in net interest income.

Current wording

The Company reported third quarter 2025 net income of $2,544,000, or $0.15 per diluted common share. This performance represented a $1,361,000, or 115.0%, improvement from the third quarter of 2024 when net income totaled $1,183,000, or $0.07 per diluted common share. Record quarterly earnings were achieved in the third quarter of 2025 due to the Company’s continued focus on generating positive operating leverage. The increase in total revenue was caused by meaningful improvement in net interest income as the third quarter net interest margin increased by 56-basis points from the prior year’s third quarter leading to a $2.1 million increase in net interest income. In addition, the Company’s increased third quarter earnings reflected continued improvement in core performance along with higher than typical revenue from income sources such as loan prepayment fees and bank owned life insurance (BOLI).

Previous wording

The following table compares the Company’s net interest income performance for the second quarter of 2025 to the second quarter of 2024 (in thousands, except percentages):

Current wording

The following table compares the Company’s net interest income performance for the third quarter of 2025 to the third quarter of 2024 (in thousands, except percentages):

Previous wording

The Company's net interest income in the second quarter of 2025 increased by $1.5 million, or 17.1%, from the prior year's second quarter while the net interest margin of 3.10% for the second quarter of 2025 represented a 36-basis point improvement from the second quarter of 2024. The increase reflects controlled balance sheet growth, as both total loans and total deposits were at higher levels due to the Company’s effective business development strategies. This, combined with effective pricing strategies, resulted in both the total earning asset yield and cost of interest-bearing funds improving between years. The Federal Reserve’s action to lower short-term interest rates during the latter portion of 2024 favorably impacted total interest-bearing deposits and borrowings costs. In addition, while the U.S. Treasury yield curve remained modestly inverted on the short end, the mid to long end of the curve demonstrated higher yields and a steeper upward slope which favorably impacted earning asset yields. Management believes that the Company’s balance sheet is well positioned for further quarterly net interest income growth and net interest margin improvement.

Current wording

The Company's net interest income in the third quarter of 2025 increased by $2.1 million, or 23.9%, from the prior year's third quarter while the net interest margin of 3.27% for the third quarter of 2025 represented a 56-basis point improvement from the third quarter of 2024. The increase reflects controlled balance sheet growth, as both total loans and total deposits were at higher levels due to the Company’s effective business development strategies. This, combined with effective pricing strategies, resulted in both the total earning asset yield and cost of interest-bearing funds improving between years. The Federal Reserve’s action to lower short-term interest rates during the latter portion of 2024 favorably impacted total interest-bearing deposits and borrowings costs. In addition, while the U.S. Treasury yield curve remained modestly inverted on the short end, the mid to long end of the curve demonstrated higher yields and a steeper upward slope which favorably impacted earning asset yields. Management believes that the Company’s balance sheet is well positioned for further quarterly net interest income growth and net interest margin improvement.

Previous wording

Total average loans in the second quarter of 2025 were higher than the 2024 second quarter average by $39.5 million, or 3.8%, due to consistent new loan funding opportunities throughout 2024. During the second quarter of 2025, new loan originations exceeded payoff activity and resulted in total loan volumes, on an end of period basis, increasing since March 31, 2025. Overall, total loans continue to be well above the $1.0 billion threshold, averaging $1.069 billion for the second quarter of 2025. Total loan interest income improved in the second quarter of 2025 compared to last year’s second quarter due to the increased level of average total loans outstanding, and a portion of commercial real estate (CRE) loans, that were booked at the onset of the COVID pandemic when interest rates were low, have been repricing upward during 2025. These favorable items resulted in total loan interest income improving by $929,000, or 6.6%, when the 2025 second quarter is compared to 2024.

Current wording

Total average loans in the third quarter of 2025 were higher than the 2024 third quarter average by $33.4 million, or 3.2%, due to consistent new loan funding opportunities throughout 2024. However, during the third quarter of 2025, payoff activity exceeded new loan originations and resulted in total loan volumes, on an end of period basis, decreasing since June 30, 2025. Overall, total loans continue to be well above the $1.0 billion threshold, averaging $1.067 billion for the third quarter of 2025. Total loan interest income improved in the third quarter of 2025 compared to last year’s third quarter due to the increased level of average total loans outstanding, and a portion of commercial real estate (CRE) loans, that were booked at the onset of the COVID pandemic when interest rates were low, have been repricing upward during 2025. Also favorably impacting loan interest income was a higher level of loan fee income primarily due to prepayment fees collected on the increased early payoff activity experienced during the quarter. These favorable items resulted in total loan interest income improving by $1.4 million, or 9.7%, when the 2025 third quarter is compared to 2024.

Previous wording

Investment securities, including the available for sale, held to maturity, and trading portfolios, averaged $247.2 million for the second quarter of 2025, which was $9.3 million, or 3.9%, higher than the $237.8 million average for the second quarter of last year. The increase reflects the strengthening of the Company’s liquidity position during 2025 due to deposit growth. Therefore, more funds were available to invest in the securities portfolio during a time when security yields improved, making purchases more attractive. During the second quarter of 2025, the Company established an investment trading account which holds primarily U.S. Treasury and municipal (taxable and tax-exempt) securities. New investment security purchases were also necessary to replace cash flow from maturing securities to maintain appropriate balances for pledging purposes related to public funds deposits. The increased level of average investment securities along with improved yields for new securities purchases caused interest income from investments to increase by $136,000, or 5.6%, for the second quarter of 2025 compared to the same period in 2024. Overall, the average balance of total interest earning assets increased from last year’s second quarter average by $55.9 million, or 4.4%, while total interest income increased by $1.2 million or 7.1%, from the second quarter of 2024.

Current wording

Investment securities, including the available for sale, held to maturity, and trading portfolios, averaged $247.6 million for the third quarter of 2025, which was $9.1 million, or 3.8%, higher than the $238.5 million average for the third quarter of last year. The increase reflects the higher level of loan prepayment activity, as well as the strengthening of the Company’s liquidity position during 2025 due to deposit growth. Therefore, more funds were available to invest in the securities portfolio during a time when security yields improved, making purchases more attractive. New investment security purchases were also necessary to replace cash flow from maturing securities to maintain appropriate balances for pledging purposes related to public funds deposits. The increased level of average investment securities along with improved yields for new securities purchased caused interest income from investments to increase by $299,000, or 12.7%, for the third quarter of 2025 compared to the same period in 2024. Overall, the average balance of total interest earning assets increased from last year’s third quarter average by $51.8 million, or 4.1%, while total interest income increased by $1.8 million, or 10.6%, from the third quarter of 2024.

Previous wording

On the liability side of the balance sheet, total average deposits of $1.240 billion for the second quarter of 2025 were $77.3 million, or 6.6%, higher than the 2024 second quarter average. The increase reflects the Company’s successful business development efforts. Additionally, the Company’s core deposit base continued to demonstrate the strength and stability that it has for many years due to customer loyalty and confidence in AmeriServ Financial Bank. The Company does not utilize brokered deposits as a funding source. The loan to deposit ratio averaged 86.2% in the second quarter of 2025, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support its customers and community during times of economic volatility.

Current wording

On the liability side of the balance sheet, total average deposits of $1.238 billion for the third quarter of 2025 were $72.8 million, or 6.3%, higher than the 2024 third quarter average. The increase reflects the Company’s successful business development efforts. Additionally, the Company’s core deposit base continued to demonstrate the strength and stability that it has for many years due to customer loyalty and confidence in AmeriServ Financial Bank. The Company does not utilize brokered deposits as a funding source. The loan to deposit ratio averaged 86.2% in the third quarter of

Previous wording

Total borrowings interest expense decreased by $359,000, or 28.8%, for the second quarter of 2025 when compared to the second quarter of 2024. The Company’s utilization of overnight borrowed funds in the second quarter of 2025 was significantly lower than the 2024 second quarter level by $24.7 million, or 87.3%, due to the higher level of total average deposits. The decrease in borrowings interest expense also reflects the Federal Reserve’s 2024 action to ease monetary policy by 100 basis points which had an immediate and favorable impact on the cost of overnight borrowed funds. Advances from the Federal Home Loan Bank averaged $50.9 million for the second quarter of 2025, which was $229,000, or 0.5%, higher than the $50.7 million average for the 2024 second quarter. Management’s strategy to increase term advances to lock in lower rates than overnight borrowings was due to the inversion in the short end of the yield curve and has favorably impacted net interest income.

Current wording

Total borrowings interest expense decreased by $379,000, or 29.0%, for the third quarter of 2025 when compared to the third quarter of 2024. The Company’s average utilization of overnight borrowed funds in the third quarter of 2025 was significantly lower than the 2024 third quarter average level by $19.5 million, or 68.0%, due to the higher level of total average deposits. The decrease in borrowings interest expense also reflects the Federal Reserve’s 2024 action to ease monetary policy by 100 basis points which had an immediate and favorable impact on the cost of overnight borrowed funds. Additionally, advances from the Federal Home Loan Bank averaged $47.7 million for the third quarter of 2025, which was $5.7 million, or 10.7%, lower than the $53.4 million average for the 2024 third quarter.

Previous wording

The table that follows provides an analysis of net interest income on a tax-equivalent basis (non-GAAP) for the three-month periods ended June 30, 2025 and 2024 setting forth (i) average assets, liabilities, and shareholders’ equity, (ii) interest income earned on interest earning assets and interest expense paid on interest bearing liabilities, (iii) average yields earned on interest earning assets and average rates paid on interest bearing liabilities, (iv) the Company’s interest rate spread (the difference between the average yield earned on interest earning assets and the average rate paid on interest bearing liabilities), and (v) the Company’s net interest margin (net interest income as a percentage of average total interest earning assets). For purposes of this table, loan balances include non-accrual loans and interest income on loans includes loan fees or amortization of such fees which have been deferred. Regulatory stock is included within available for sale investment securities for this analysis. Additionally, a tax rate of 21% was used to compute tax-equivalent interest income and yields (non-GAAP). The tax equivalent adjustments to interest income on loans and trading securities for the three months ended June 30, 2025 and 2024 was $14,000 and $6,000, respectively, which is reconciled to the corresponding GAAP measure at the bottom of the table. Differences between the net interest spread and margin from a GAAP basis to a tax-equivalent basis were not material.

Current wording

The table that follows provides an analysis of net interest income on a tax-equivalent basis (non-GAAP) for the three-month periods ended September 30, 2025 and 2024 setting forth (i) average assets, liabilities, and shareholders’ equity, (ii) interest income earned on interest earning assets and interest expense paid on interest bearing liabilities, (iii) average yields earned on interest earning assets and average rates paid on interest bearing liabilities, (iv) the Company’s interest rate spread (the difference between the average yield earned on interest earning assets and the average rate paid on interest bearing liabilities), and (v) the Company’s net interest margin (net interest income as a percentage of average total interest earning assets). For purposes of this table, loan balances include non-accrual loans and interest income on loans includes loan fees or amortization of such fees which have been deferred. Regulatory stock is included within available for sale investment securities for this analysis. Additionally, a tax rate of 21% was used to compute tax-equivalent interest income and yields (non-GAAP). The tax equivalent adjustments to interest income on loans and trading securities for the three months ended September 30, 2025 and 2024 was $19,000 and $7,000, respectively, which is reconciled to the corresponding GAAP measure at the bottom of the table. Differences between the net interest spread and margin from a GAAP basis to a tax-equivalent basis were not material.

Previous wording

**…..NON-INTEREST INCOME…..**Non-interest income for the second quarter of 2025 totaled $4.1 million and decreased by $276,000, or 6.3%, from the second quarter of 2024 performance. Factors contributing to the lower level of non-interest income for the quarter included:

Current wording

**…..NON-INTEREST INCOME…..**Non-interest income for the third quarter of 2025 totaled $4.4 million and increased by $198,000, or 4.7%, from the third quarter of 2024 performance. Factors contributing to the higher level of non-interest income for the quarter included:

Previous wording

**…..NON-INTEREST EXPENSE…..**Non-interest expense for the second quarter of 2025 totaled $11.7 million and decreased by $1.6 million, or 11.9%, from the prior year’s second quarter. Factors contributing to the lower level of non-interest expense for the quarter included:

Current wording

**…..NON-INTEREST EXPENSE…..**Non-interest expense for the third quarter of 2025 totaled $12.0 million and increased by $243,000, or 2.1%, from the prior year’s third quarter. Factors contributing to the higher level of non-interest expense for the quarter included:

Previous wording

For the six-month period ended June 30, 2025, the Company reported net income of $1,626,000, or $0.10 per diluted common share. This represented an 11.1% increase in earnings per share from the six-month period of 2024 when net income totaled $1,529,000, or $0.09 per diluted common share. The Company achieved positive operating leverage in both quarters of 2025 as total revenue increased while non-interest expenses declined. The increase in total revenue was caused by meaningful improvement in net interest income as the net interest margin increased by 34-basis points for the first six months of 2025. Additionally, our non-interest expense has favorably declined in both quarters of 2025 as management works to carefully control operating costs.

Current wording

For the nine-month period ended September 30, 2025, the Company reported net income of $4,170,000, or $0.25 per diluted common share. This represented a 56.3% increase in earnings per share from the nine-month period of 2024 when net income totaled $2,712,000, or $0.16 per diluted common share. An increase in total revenue was caused by meaningful improvement in net interest income for the first nine months of 2025 because of effective balance sheet management. Specifically, the Company’s net interest margin increased by 41-basis points for the first nine months of 2025 leading to a $4.8 million increase in net interest income which is important since this category represents approximately 70% of total revenue. Additionally, non-interest expense has favorably declined for the first nine months of 2025 as the Company continues to diligently focus on both revenue growth and expense control to further improve its operating efficiency.

Previous wording

Unfavorably impacting earnings was the Company recognizing a significantly higher provision for credit losses for the first six months of 2025 when compared to the same time period of 2024. Also, non-interest income was lower than what was recognized last year. Overall, the improvement in the Company’s performance including increased net interest income and lower total non-interest expense more than offset the higher provision for credit losses and lower level of non-interest income resulting in earnings through six months of 2025 exceeding earnings through the first six months of 2024 by $97,000, or 6.3%.

Current wording

Unfavorably impacting earnings was the Company recognizing a higher provision for credit losses for the nine months of 2025 when compared to 2024. Overall, the Company’s earnings performance through the first nine months of 2025 exceeded earnings through the first nine months of 2024 by $1.5 million, or 53.8%, and resulted from increased net interest income and lower total non-interest expense which more than offset the higher provision for credit losses and lower level of non-interest income.

Previous wording

**…..NET INTEREST INCOME AND MARGIN…..**The following table compares the Company’s net interest income performance for the first six months of 2025 to the first six months of 2024 (in thousands, except percentages):

Current wording

**…..NET INTEREST INCOME AND MARGIN…..**The following table compares the Company’s net interest income performance for the first nine months of 2025 to the first nine months of 2024 (in thousands, except percentages):

Previous wording

The Company's net interest income for the first six months of 2025 increased by $2.7 million, or 15.3%, when compared to the first six months of 2024. The Company’s net interest margin of 3.06% for the six months of 2025 represents a 34-basis point increase. As previously discussed for the quarterly comparison, the increase reflects controlled balance sheet growth, as both total loans and total deposits are at higher levels due to management’s effective business development strategies. This, combined with effective pricing strategies, resulted in both the total earning asset yield and cost of interest-bearing funds improving between years. The Federal Reserve’s action to lower short-term interest rates during the latter portion of 2024 favorably impacted total interest-bearing deposits and borrowings costs. Also, while the U.S. Treasury yield curve remains modestly inverted on the short end, yields in the mid to long end of the curve are higher and demonstrated a steeper upward slope which favorably impacted earning asset yields. Management believes the net interest margin will continue to improve through the second half of 2025.

Current wording

The Company's net interest income for the first nine months of 2025 increased by $4.8 million, or 18.2%, when compared to the first nine months of 2024. The Company’s net interest margin of 3.13% for the nine months of 2025 represented a 41-basis point increase. As previously discussed for the quarterly comparison, the increase reflects controlled balance sheet growth, as both total loans and total deposits are at higher average levels due to management’s effective business development strategies. This, combined with effective pricing strategies, resulted in both the total earning asset yield and cost of interest-bearing funds improving between years. The Federal Reserve’s action to lower short-term interest rates during the latter portion of 2024 favorably impacted total interest-bearing deposits and borrowings costs. Also, while the U.S. Treasury yield curve remains modestly inverted on the short end, yields in the mid to long end of the curve are higher and demonstrated a steeper upward slope which favorably impacted earning asset yields. Management believes the net interest margin will continue to improve through the remainder of 2025 given the Company’s effective execution of strategy along with the Federal Reserve’s action to ease monetary policy in September and October 2025, which should further reduce funding costs.

Previous wording

Total average loans in the first six months of 2025 grew from the 2024 six-month average by $37.2 million, or 3.6%, due to consistent new loan funding opportunities throughout 2024. So far in 2025, loan originations modestly exceed payoff activity and resulted in an $811,000, or 0.1%, increase in total loans since December 31, 2024. Total loan interest income improved in the first half of 2025 compared to the first half of 2024 due to the increased level of average total loans outstanding, and a portion of commercial real estate (CRE) loans, that were booked at the onset of the COVID pandemic when interest rates were low, have been repricing upward during the first six months of 2025. These favorable items resulted in total loan interest income improving by $1.7 million, or 6.0%, when the first half of 2025 is compared to first half of 2024.

Current wording

Total average loans in the first nine months of 2025 grew from the 2024 nine-month average by $35.9 million, or 3.5%, due to consistent new loan funding opportunities throughout 2024. So far in 2025, loan payoff activity has exceeded originations and resulted in a $12.7 million, or 1.2%, decrease in total loans since December 31, 2024. Total loan interest income improved in the first nine months of 2025 compared to the first nine months of 2024 due to the increased level of average total loans outstanding, and a portion of CRE loans, that were booked at the onset of the COVID pandemic when interest rates were low, have been repricing upward during the first nine months of 2025. As previously discussed for the quarterly comparison, loan interest income was also favorably impacted by a higher level of loan fee income primarily due to prepayment fees collected on the increased early payoff activity experienced so far this year. Total 2025 year to date loan fee income was $544,000, or 95.8%, higher when compared to the same timeframe in 2024. These favorable items resulted in total loan interest income improving by $3.0 million, or 7.2%, when the first nine months of 2025 are compared to the first nine months of 2024.

Previous wording

Total investment securities averaged $236.8 million for the first half of 2025, which was $1.5 million, or 0.6%, lower than the $238.3 million average for the first half of 2024. The decrease reflects management’s 2024 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. However, our liquidity position strengthened during the first six months of 2025 due to deposit growth. Therefore, as previously discussed for the quarterly comparison, more funds were available to invest in the securities portfolio during a time when security yields improved, making purchases more attractive. As a result, the securities portfolio grew by $17.9 million, or 8.1%, since December 31, 2024. The improved yields for new securities purchases caused interest income from investments to increase by $155,000, or 3.2%, for the first six months of 2025 compared to last year’s first six months. Overall, through six months, the average balance of total interest earning assets increased from last year’s average by $45.5 million, or 3.6%, while total interest income increased by $2.0 million, or 6.0%, from the first half of 2024.

Current wording

2025 due to deposit growth. Therefore, as previously discussed for the quarterly comparison, more funds were available to invest in the securities portfolio during a time when security yields improved, making purchases more attractive. As a result, the securities portfolio grew by $17.3 million, or 7.9%, since December 31, 2024. The improved yields for new securities purchased as well as several subordinated debt instruments being called during 2025 and replaced with higher yielding investments caused interest income from investments to increase by $369,000, or 5.1%, for the first nine months of 2025 compared to last year’s first nine months.

Previous wording

On the liability side of the balance sheet, total average deposits through the first six months of 2025 were $67.8 million, or 5.8%, higher when compared to the first six months of 2024 due to the Company’s successful business development efforts. Additionally, as previously mentioned, the Company’s core deposit base continues to demonstrate the strength and stability that it has for many years demonstrating what we believe is customer loyalty and confidence in AmeriServ Financial Bank. The Company does not utilize brokered deposits as a funding source.

Current wording

On the liability side of the balance sheet, total average deposits through the first nine months of 2025 were $69.5 million, or 6.0%, higher when compared to the first nine months of 2024 due to the Company’s successful business development efforts. Additionally, as previously mentioned, the Company’s core deposit base continues to demonstrate the strength and stability that it has for many years indicating what we believe is customer loyalty and confidence in AmeriServ Financial Bank. The Company does not utilize brokered deposits as a funding source.

Previous wording

Total interest expense favorably decreased by $726,000, or 4.8%, for the first half of 2025 when compared to the same time period of 2024. Deposit interest expense declined by $56,000, or 0.4%, through the first six months of 2025 despite total average interest-bearing deposits growing by $68.7 million, or 7.0%, compared to the first six months of last year. The year to date decrease in deposit interest expense reflects total interest-bearing deposit cost demonstrating a declining trend that coincided with the Federal Reserve easing monetary policy during the final four months of 2024. Overall, total deposit cost (including the benefit of non-interest-bearing demand deposits which remained relatively

Current wording

Total interest expense favorably decreased by $1.1 million, or 4.7%, for the first nine months of 2025 when compared to the same time period of 2024. Deposit interest expense declined by $22,000, or 0.1%, through the first nine months of 2025 despite total average interest-bearing deposits growing by $71.9 million, or 7.3%, compared to the first nine months of last year. The year to date decrease in deposit interest expense reflects total interest-bearing deposit cost demonstrating a declining trend that coincided with the Federal Reserve easing monetary policy during the final four months of 2024. The Federal Reserve’s action to ease monetary policy in September and October 2025 is anticipated to have a favorable impact on fourth quarter interest bearing deposit costs. Overall, total deposit cost (including the benefit of non-interest-bearing demand deposits which declined modestly between years) averaged 2.07% in the first nine months of 2025, which is a 12-basis point improvement from the first nine months of 2024.

Previous wording

Total borrowings interest expense declined by $670,000, or 26.5%, for the first six months of 2025 when compared to the same time period of 2024. The Company’s utilization of overnight borrowed funds in the first half of 2025 was significantly lower than the first half of 2024 by $26.0 million, or 83.8%, due to the higher level of total average deposits. The decrease in borrowings interest expense also reflects the Federal Reserve’s 2024 action to ease monetary policy by 100 basis points which had an immediate and favorable impact on the cost of overnight borrowed funds. Advances from the Federal Home Loan Bank averaged $52.9 million for the first half of 2025, which is $3.6 million, or 7.3%, higher than the $49.3 million average for the first half of 2024. Management’s strategy to increase term advances to lock in lower rates than overnight borrowings was due to the inversion in the short end of the yield curve and has favorably impacted net interest income.

Current wording

Total borrowings interest expense declined by $1.0 million, or 27.4%, for the first nine months of 2025 when compared to the same time period of 2024. The Company’s utilization of overnight borrowed funds for the nine months of 2025 was significantly lower than the first nine months of 2024, resulting in the year-to-date average decreasing by $23.8 million, or 78.8%, due to the higher level of total average deposits. The decrease in borrowings interest expense also reflects the Federal Reserve’s 2024 action to ease monetary policy by 100 basis points which had an immediate and favorable impact on the cost of overnight borrowed funds.

Previous wording

The table that follows provides an analysis of net interest income on a tax-equivalent basis (non-GAAP) for the six-month periods ended June 30, 2025 and 2024. For a detailed discussion of the components and assumptions included in the table, see the paragraph before the quarterly table on page 42. The tax equivalent adjustments to interest income on loans and trading securities for the six months ended June 30, 2025 and 2024 was $21,000 and $12,000, respectively, which is reconciled to the corresponding GAAP measure at the bottom of the table. Differences between the net interest spread and margin from a GAAP basis to a tax-equivalent basis were not material.

Current wording

The table that follows provides an analysis of net interest income on a tax-equivalent basis (non-GAAP) for the nine-month periods ended September 30, 2025 and 2024. For a detailed discussion of the components and assumptions included in the table, see the paragraph on page 42 before the quarterly table. The tax equivalent adjustments to interest income on loans and trading securities for the nine months ended September 30, 2025 and 2024 was $45,000 and $19,000, respectively, which is reconciled to the corresponding GAAP measure at the bottom of the table. Differences between the net interest spread and margin from a GAAP basis to a tax-equivalent basis were not material.

Previous wording

**…..PROVISION FOR CREDIT LOSSES…..For the first **six months of 2025, the Company recognized a $3.0 million provision for credit losses after recognizing a provision recovery of $123,000 in the first six months of 2024, resulting in a net unfavorable change of $3.2 million. The provision for credit losses in 2025 primarily reflects the resolution of the Company’s largest problem asset, a loan secured by a mixed use commercial real estate retail/office property in the Pittsburgh market. The provision covers an additional $2.8 million charge-down that was necessary to write this loan down to a court approved sales price. The 2025 provision for credit losses also reflects an increase in historical loss rates, due to this large charge-down, used to calculate the allowance for loan credit losses. In addition, the

Current wording

**…..PROVISION FOR CREDIT LOSSES…..For the first **nine months of 2025, the Company recognized a $3.4 million provision for credit losses after recognizing a provision recovery of $174,000 in the first nine months of 2024, resulting in a net unfavorable change of $3.6 million. The provision for credit losses in 2025 primarily reflects the resolution of the Company’s largest problem asset, a loan secured by a mixed use commercial real estate retail/office property in the Pittsburgh market. The provision covered an additional $2.8 million charge-down that was necessary to write this loan down to a court approved sales price. The 2025 provision for credit losses also reflects an increase in the specific reserves related to a commercial/owner-occupied CRE loan relationship. In addition, the Company recognized

Previous wording

Company recognized $636,000 of provision expense for the investment securities portfolio related to establishing a full reserve for an available for sale corporate security due to further credit deterioration after a partial reserve for this particular security was established last year. Partially offsetting these provision expenses was the recognition of a $720,000 provision recovery on unfunded commitments based primarily upon the results of an independent third-party validation recommendation to adjust the utilization rates used to calculate the provision.

Current wording

$645,000 of provision expense for the investment securities portfolio related to establishing a full reserve for an available for sale corporate security due to further credit deterioration after a partial reserve for this particular security was established last year. It should be noted that this non-performing security was charged off against the $1.0 million allowance during the third quarter of 2025. Partially offsetting these provision expenses was the recognition of a $692,000 provision recovery on unfunded commitments based primarily upon the results of an independent third-party validation recommendation to adjust the utilization rates used to calculate the provision.

Previous wording

**…..NON-INTEREST INCOME…..**Non-interest income for the first six months of 2025 totaled $8.2 million and declined by $1.1 million, or 11.8%, from the first six months of 2024 performance. Factors contributing to the lower level of non-interest income for the six-month period included:

Current wording

**…..NON-INTEREST INCOME…..**Non-interest income for the first nine months of 2025 totaled $12.6 million and declined by $904,000, or 6.7%, from the first nine months of 2024 performance. Factors contributing to the lower level of non-interest income for the nine-month period included:

Previous wording

**…..NON-INTEREST EXPENSE…..**Non-interest expense for the first six months of 2025 totaled $23.5 million and decreased by $1.7 million, or 6.7%, from the prior year’s first six months. Factors contributing to the lower level of non-interest expense for the six-month period included:

Current wording

**…..NON-INTEREST EXPENSE…..**Non-interest expense for the first nine months of 2025 totaled $35.4 million and decreased by $1.4 million, or 3.9%, from the prior year’s first nine months. Factors contributing to the lower level of non-interest expense for the nine-month period included:

Previous wording

**…..INCOME TAX EXPENSE…..**The Company recorded an income tax expense of $408,000, or an effective tax rate of 20.1%, in the first six months of 2025. This compares to an income tax expense of $374,000, or an effective tax rate of 19.7%, for the first six months of 2024. The higher level of income tax expense this year was due to the increased level of pre-tax income.

Current wording

**…..INCOME TAX EXPENSE…..**The Company recorded an income tax expense of $948,000, or an effective tax rate of 18.5%, in the first nine months of 2025. This compares to an income tax expense for the first nine months of 2024

Previous wording

**…..BALANCE SHEET…..**The Company’s total consolidated assets were $1.4 billion at June 30, 2025, which increased by $26.4 million, or 1.9%, from the December 31, 2024 asset level. This change was related primarily to higher levels of cash and cash equivalents and investment securities which were partially offset by reduced other real estate owned (OREO) and repossessed assets. Investment securities, including held to maturity, available for sale and trading, increased by $22.1 million, or 10.1%, as the Company’s liquidity position strengthened during the first six months of 2025 allowing more funds to be available to invest in the securities portfolio. Further, during the second quarter of 2025, the Company established an investment trading account which holds primarily U.S. Treasury and municipal (taxable and tax-exempt) securities. The increased liquidity also resulted in cash and cash equivalents increasing by $7.3 million, or 41.1%. OREO and repossessed assets decreased $1.5 million, or 85.0%, since year-end due primarily to the sale of a foreclosed office property during the first quarter of 2025.

Current wording

**…..BALANCE SHEET…..**The Company’s total consolidated assets were $1.5 billion at September 30, 2025, which increased by $39.1 million, or 2.8%, from the December 31, 2024 asset level. This change was related primarily to higher levels of cash and cash equivalents and investment securities which were partially offset by reduced levels of loans and loans held for sale and other real estate owned (OREO) and repossessed assets. Investment securities, including held to maturity, available for sale and trading, increased by $21.7 million, or 9.9%, as the Company’s liquidity position strengthened during the first nine months of 2025 allowing more funds to be available to invest in the securities portfolio. Further, during the second quarter of 2025, the Company established an investment trading account which holds primarily U.S. Treasury and municipal (taxable and tax-exempt) securities. The increased liquidity also resulted in cash and cash equivalents increasing by $36.0 million, or 203.0%. Loans and loans held for sale decreased by $12.7 million, or 1.2%, since year-end due to payoff activity exceeding new loan originations. OREO and repossessed assets decreased $1.5 million, or 86.1%, due primarily to the sale of a foreclosed office property during the first quarter of 2025.

Previous wording

Total deposits increased by $43.5 million, or 3.6%, in the first six months of 2025. Management believes this demonstrates customer confidence and the strength and loyalty of the Company’s core deposit base. As of June 30, 2025, the 25 largest depositors represented 27.2% of total deposits, which remained relative stable from December 31, 2024 when it was 27.6%. As of June 30, 2025 and December 31, 2024, the estimated amount of uninsured deposits was $468.7 million and $435.7 million, respectively. The estimate of uninsured deposits was done at the single account level and does not take into account total customer balances in the Bank. It should be noted that approximately 60% of these uninsured deposits relate to public funds from municipalities, government entities, and school districts which by law are required to be collateralized by investment securities or FHLB letters of credit to protect these depositor funds. Total short-term and FHLB borrowings were reduced by $19.1 million, or 27.0%, since year-end 2024 as a result of the higher level of deposits. Specifically, short-term borrowings decreased by $12.0 million, or 81.6%, while FHLB term advances decreased $7.1 million, or 12.7%, in the first six months of 2025.

Current wording

Total deposits increased by $57.6 million, or 4.8%, in the first nine months of 2025. Management believes this demonstrates customer confidence as well as the strength and loyalty of the Company’s core deposit base. As of September 30, 2025, the 25 largest depositors represented 29.8% of total deposits, which increased from December 31, 2024 when it was 27.6%. As of September 30, 2025 and December 31, 2024, the estimated amount of uninsured deposits was $490.8 million and $435.7 million, respectively. The estimate of uninsured deposits was done at the single account level and does not take into account total customer balances in the Bank. It should be noted that approximately 60% of these uninsured deposits relate to public funds from municipalities, government entities, and school districts which by law are required to be collateralized by investment securities or FHLB letters of credit to protect these depositor funds. Total short-term and FHLB borrowings were reduced by $22.7 million, or 32.1%, since year-end 2024 as a result of the higher level of deposits. Specifically, short-term borrowings decreased by $14.6 million, while FHLB term advances decreased $8.0 million, or 14.3%, in the first nine months of 2025.

Previous wording

The Company’s total shareholders’ equity increased by $3.7 million, or 3.4%, during the first six months of 2025. The increase in capital was the result of the Company’s earnings performance during the first half of 2025 more than offsetting its common stock dividend payments to shareholders. In addition, the improved market value of the available for sale investment securities portfolio had a positive impact on accumulated other comprehensive loss.

Current wording

The Company’s total shareholders’ equity increased by $7.3 million, or 6.8%, during the first nine months of 2025. The increase in capital was the result of the Company’s earnings performance during the first nine months of 2025 more than offsetting its common stock dividend payments to shareholders. In addition, the improved market value of the available for sale investment securities portfolio had a positive impact on accumulated other comprehensive loss.

Previous wording

The Bank continues to be considered well capitalized for regulatory purposes with a total capital ratio of 12.14% and a common equity tier 1 capital ratio of 10.94% at June 30, 2025. See the discussion of the Basel III capital requirements under the Capital Resources section below. As of June 30, 2025, the Company’s book value per common share was $6.71 and its tangible book value per common share was $5.89(1). Book value per common share increased by $0.43, or 6.8%, and tangible book value per common share increased by $0.44, or 8.1%, since June 30, 2024, due to a favorable adjustment for both the unrealized loss on available for sale securities and the Company’s defined benefit pension plan. In addition, the Company’s equity to asset ratio was 7.66% and its tangible common equity to tangible assets ratio was 6.78%(1) at June 30, 2025. The tangible common equity ratio increased by 14-basis points when compared to December 31, 2024.

Current wording

The Bank continues to be considered well capitalized for regulatory purposes with a total capital ratio of 12.60% and a common equity tier 1 capital ratio of 11.35% at September 30, 2025. See the discussion of the Basel III capital requirements under the Capital Resources section below. As of September 30, 2025, the Company’s book value per common share was $6.94 and its tangible book value per common share was $6.11(1). Book value per common share increased by $0.39, or 6.0%, and tangible book value per common share increased by $0.39, or 6.8%, since September 30, 2024, due to a favorable adjustment for both the unrealized loss on available for sale securities and the Company’s defined benefit pension plan along with the Company’s improved earnings. In addition, the Company’s equity to asset ratio was 7.84% and its tangible common equity to tangible assets ratio was 6.97%(1) at September 30, 2025. The tangible common equity ratio increased by 33-basis points when compared to December 31, 2024.

Previous wording

The decrease in accruing loan delinquency since year-end 2024 was attributable to a lower level of delinquency within all segments of the loan portfolio. Specifically, two commercial loans from one borrower relationship were transferred to non-accrual during the first half of 2025 which significantly contributed to the decrease in accruing loan delinquency. Non-performing loans increased from $10.9 million at December 31, 2024 to $15.2 million at June 30, 2025 due to the transfer of one CRE loan and three C&I loans from one borrower relationship and one additional CRE loan into non-accrual status which more than offset the charge-down of a CRE loan secured by a mixed use commercial real estate property. The aforementioned charge-down of a CRE loan contributed to a decrease in classified loans. Specifically, classified loans decreased $2.4 million, or 10.1%, from December 31, 2024 and totaled $21.2 million at June 30, 2025.

Current wording

The decrease in accruing loan delinquency since year-end 2024 was attributable to a lower level of delinquency within all segments of the loan portfolio. Specifically, two delinquent commercial loans from one borrower relationship were transferred to non-accrual status during 2025 which significantly contributed to the decrease in accruing loan delinquency. Non-performing loans increased from $10.9 million at December 31, 2024 to $14.7 million at September 30, 2025 due to the transfer of two CRE loans and three C&I loans from one borrower relationship and one additional CRE loan into non-accrual status which more than offset the charge-down of a CRE loan secured by a mixed use commercial real estate property. The aforementioned charge-down of a CRE loan contributed to the decrease in classified loans. Specifically, classified loans decreased $3.4 million, or 14.3%, from December 31, 2024 and totaled $20.2 million at September 30, 2025.

Previous wording

Non-performing loans represented 1.42% of total loans as of June 30, 2025. The Company recognized net loan charge-offs of $3.0 million, or 0.56% of total average loans, in the first six months of 2025 compared to net loan charge-offs of $332,000, or 0.06% of total average loans, in the first six months of 2024.

Current wording

Non-performing loans represented 1.39% of total loans as of September 30, 2025. The Company recognized net loan charge-offs of $2.9 million, or 0.37% of total average loans, in the first nine months of 2025 compared to net loan charge-offs of $488,000, or 0.06% of total average loans, in the first nine months of 2024.

Previous wording

We also continue to closely monitor the loan portfolio given the number of relatively large-sized commercial and commercial real estate loans within the portfolio. As of June 30, 2025, the 25 largest credits represented 23.9% of total loans outstanding, which is relatively consistent with December 31, 2024 when it was 24.0%.

Current wording

We also continue to closely monitor the loan portfolio given the number of relatively large-sized commercial and commercial real estate loans within the portfolio. As of September 30, 2025, the 25 largest credits represented 24.2% of total loans outstanding, which is relatively consistent with December 31, 2024 when it was 24.0%.

Previous wording

There is a particular regulatory emphasis on ensuring that a subsidiary bank has appropriate levels of capital to support its non-owner occupied commercial real estate loan concentration, which for the Bank stood at 378% as of June 30, 2025. It should be noted that this ratio improved slightly from 379% at December 31, 2024 due to the growth of total regulatory capital in the first six months of 2025. Further, non-owner occupied commercial real estate loans represented 51.7% and 51.3% of total loans as of June 30, 2025 and December 31, 2024, respectively.

Current wording

There is a particular regulatory emphasis on ensuring that a subsidiary bank has appropriate levels of capital to support its non-owner occupied commercial real estate loan concentration, which for the Bank stood at 366% as of September 30, 2025. It should be noted that this ratio improved from 379% at December 31, 2024 due to the growth of total regulatory capital in the first nine months of 2025 combined with a decrease in the outstanding balance of non-owner occupied commercial real estate loans. Further, non-owner occupied commercial real estate loans represented 51.4% and 51.3% of total loans as of September 30, 2025 and December 31, 2024, respectively.

Previous wording

The commercial real estate loan segment includes the non-owner occupied commercial real estate loan classes of retail, multi-family, and other. The following table presents our non-owner occupied commercial real estate loan portfolio by property type.

Current wording

The commercial real estate loan segment includes the non-owner occupied commercial real estate loan classes of retail, multi-family, and other. The following table presents the Company’s non-owner occupied commercial real estate loan portfolio by property type.

Previous wording

The allowance for loan credit losses increased since December 31, 2024 by $148,000, or 1.1%, to $14.1 million at June 30, 2025. The allowance balance grew as a result of increased historical loss rates caused by charge-off activity coupled with increased outstanding loan balances since year-end 2024. Overall, the Company continues to maintain solid coverage of both total loans and non-performing loans as the allowance for loan credit losses provided 93% coverage of non-performing loans and 1.32% of total loans at June 30, 2025.

Current wording

The allowance for loan credit losses increased since December 31, 2024 by $496,000, or 3.6%, to $14.4 million at September 30, 2025. The allowance balance grew as a result of increased specific reserve allocations on certain individually evaluated loans which were tempered by a decrease in outstanding loan balances since year-end 2024. Overall, the Company continues to maintain solid coverage of total loans as the allowance for loan credit losses provided 1.36% coverage of total loans at September 30, 2025. Additionally, the allowance for loan credit losses provided 98% coverage of non-performing loans at September 30, 2025.

Previous wording

The allowance for credit losses on the investment securities portfolio was comprised of $1.0 million on available for sale securities and $85,000 on held to maturity securities as of June 30, 2025. This compares to $360,000 on available for sale securities and $89,000 on held to maturity securities as of December 31, 2024. The allowance for credit losses on available for sale securities increased $640,000 since year-end 2024 as a result of the establishment of a full reserve for a corporate security due to further credit deterioration after a partial reserve for this particular security was established last year.

Current wording

The allowance for credit losses on the investment securities portfolio was comprised of no reserve on AFS securities and $94,000 on held to maturity securities as of September 30, 2025. This compares to $360,000 on available for sale securities and $89,000 on held to maturity securities as of December 31, 2024. The decrease reflects the charge-off of an impaired corporate security within the available for sale portfolio during the third quarter of 2025 for which a reserve was previously established. The decrease in the allowance for credit losses on unfunded commitments since year-end 2024 resulted primarily from an independent third-party validation recommendation to adjust the utilization rates used to calculate the allowance.

Previous wording

**…..LIQUIDITY…..**The Company’s liquidity position strengthened during the first half of 2025 due to deposit growth. Total average deposits were $67.8 million, or 5.8%, higher when compared to the 2024 first six-month average. The increase reflects the Company’s successful business development efforts. The Company’s core deposit base continued to demonstrate the strength and stability that it has had for many years. On June 30, 2025, total deposits grew by $43.5 million, or 3.6%, since December 31, 2024, 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. Overall, deposit volumes continue to remain at a high level. The core deposit base is adequate to fund the Company’s operations. Cash flow from maturities, prepayments and amortization of securities can also be used to help fund loan growth.

Current wording

**…..LIQUIDITY…..**The Company’s liquidity position strengthened during the first nine months of 2025 due to a higher level of loan prepayment activity as well as deposit growth. Specifically, total average deposits were $69.5 million, or 6.0%, higher when compared to the 2024 first nine-month average. The increase reflects the Company’s successful business development efforts. The Company’s core deposit base continued to demonstrate the strength and stability that it has had for many years. As of September 30, 2025, total deposits grew by $57.6 million, or 4.8%, since December 31, 2024, 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. Overall, deposit volumes continue to remain at a high level. The core deposit base is adequate to fund the Company’s operations. Cash flow from maturities, prepayments and amortization of securities can also be used to help fund loan growth.

Previous wording

Further demonstrating the strength of the Company’s liquidity position, average short-term investments grew in the first six months of 2025 compared to the first six months of last year by $7.3 million, or 192.8%. Advances from the FHLB averaged $52.9 million in the first half of 2025 which is $3.6 million, or 7.3%, higher than the $49.3 million average in the first half of 2024. Management’s strategy to increase term advances to lock in lower rates than overnight borrowings due to the inversion in the short end of the yield curve has favorably impacted net interest income. Management continues to monitor the changing economic conditions and adjust pricing strategies accordingly which largely determines customer behavior and the level of total deposits as well as shifts within the total deposit mix. Also, diligent monitoring and management of our short-term investment position and our level of overnight borrowed funds remains a priority. Given the high cost of overnight borrowed funds, management has been effectively controlling the usage of this funding source. The Company’s utilization of overnight borrowed funds so far in 2025 has been lower than the 2024 level. Total short-term borrowings averaged $5.0 million for the first six months of 2025 after averaging $31.0 million for the first six months of 2024. Continued loan growth and prudent investment in securities are critical to achieve the best return on the normal level of earning asset cash flow that occurs each month. Due to the Company’s strengthened liquidity position, more funds were available to invest in the securities portfolio during a time when security yields improved, making purchases so far in 2025 more attractive. In addition, loan pipelines are currently at a typical level. Total average loans in the first six months of 2025 were higher than the 2024 first six-month average by

Current wording

Further demonstrating the strength of the Company’s liquidity position, average short-term investments grew in the first nine months of 2025 compared to the first nine months of last year by $8.0 million, or 208.9%. Advances from the FHLB averaged $51.1 million in the first nine months of 2025 which was $471,000, or 0.9%, higher than the $50.7 million average in the first nine months of 2024. Management’s strategy to increase term advances to lock in lower rates than overnight borrowings due to the inversion in the short end of the yield curve has favorably impacted net interest income. Management continues to monitor the changing economic conditions and adjust pricing strategies accordingly which largely determines customer behavior and the level of total deposits as well as shifts within the total deposit mix. Also, diligent monitoring and management of our short-term investment position and our level of overnight borrowed funds remains a priority. Given the high cost of overnight borrowed funds, management has been effectively controlling the usage of this funding source. The Company’s utilization of overnight borrowed funds so far in 2025 has been lower than the 2024 level. Total short-term borrowings averaged $6.4 million for the first nine months of 2025 after averaging $30.2 million for the first nine months of 2024. Continued loan growth and prudent investment in securities are critical to achieve the best return on the normal level of earning asset cash flow that occurs each month. Due to the Company’s strengthened liquidity position, more funds were available to invest in the securities portfolio during a time when

Previous wording

$37.2 million, or 3.6%. We strive to operate our loan to deposit ratio in a range of 80% to 100%. The Company’s loan to deposit ratio averaged 86.2% in the second quarter of 2025, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support its customers and community during times of economic volatility. We are also strongly positioned to service the existing loan pipeline and grow the loan to deposit ratio while remaining within the guideline parameters.

Current wording

security yields improved, making purchases so far in 2025 more attractive. In addition, loan pipelines are currently at a typical level. Total average loans in the first nine months of 2025 were higher than the 2024 first nine-month average by $35.9 million, or 3.5%. We strive to operate our loan to deposit ratio in a range of 80% to 100%. The Company’s loan to deposit ratio averaged 86.2% in the third quarter of 2025, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support its customers and community during times of economic volatility. We are also strongly positioned to service the existing loan pipeline and grow the loan to deposit ratio while remaining within the guideline parameters.

Previous wording

Liquidity can also be analyzed by utilizing the Consolidated Statements of Cash Flows. Cash and cash equivalents increased by $7.3 million from December 31, 2024, to $25.0 million at June 30, 2025, due to $23.4 million of net cash provided by financing activities and $537,000 of net cash provided by operating activities more than offsetting $16.6 million of net cash used in investing activities. Within investing activities, cash advanced for new loans originated totaled $73.8 million while cash received from loan principal payments was $69.7 million leading to a net increase in loans of $4.0 million. Within financing activities, total short-term borrowings decreased by $12.0 million, total borrowings on advances from FHLB decreased by $7.1 million while total deposits increased by $43.5 million.

Current wording

Liquidity can also be analyzed by utilizing the Consolidated Statements of Cash Flows. Cash and cash equivalents increased by $36.0 million from December 31, 2024, to $53.8 million at September 30, 2025, due to $33.3 million of net cash provided by financing activities, $1.9 million of net cash provided by operating activities, and $786,000 of net cash provided by investing activities. Within investing activities, cash advanced for new loans originated totaled $103.4 million while cash received from loan principal payments was $112.8 million leading to a net decrease in loans of $9.4 million. Within financing activities, total short-term borrowings decreased by $14.6 million, total borrowings on advances from FHLB decreased by $8.0 million while total deposits increased by $57.6 million.