JOHNSTOWN, Pa., Oct. 17, 2023 /PRNewswire/ -- AmeriServ Financial, Inc. (NASDAQ: ASRV) reported third quarter 2023 net income of $647,000, or $0.04 per diluted common share. This earnings performance was a $1,455,000, or 69.2%, decrease from the third quarter of 2022 when net income totaled $2,102,000, or $0.12 per diluted common share. For the nine-month period ended September 30, 2023, the Company reported net income of $1,975,000, or $0.12 per diluted common share. This represents a 68.4% decrease in earnings per share from the nine-month period of 2022 when net income totaled $6,501,000, or $0.38 per diluted common share. The following table details the Company's financial performance for both the three- and nine-month periods ended September 30, 2023, and 2022:















Third
Quarter 
2023


Third
Quarter 
2022


Nine Months Ended
September 30, 2023


Nine Months Ended
September 30, 2022










Net income


$

647,000


$

2,102,000


$

1,975,000


$

6,501,000

Diluted earnings per share


$

0.04


$

0.12


$

0.12


$

0.38

Jeffrey A. Stopko, President and Chief Executive Officer, commented on the 2023 third quarter financial results: "While our net income is down year-over-year, we have continued to effectively operate our customer relationship focused community bank in a conservative manner amid a challenging period for the industry. Importantly, we have seen several encouraging new business development results in key areas so far this year. For the first time in AmeriServ Financial's history, our total loans now exceed $1 billion. The loyalty of our deposit customers has shown excellent resilience, with an increase of $20.8 million, or 1.9%, in total deposits since the end of 2022. Additionally, wealth management revenues have now shown modest growth for the past three consecutive quarters. We will work to build on this positive momentum in the fourth quarter of 2023."

All third quarter and nine months of 2023 financial performance metrics within this document are compared to the third quarter and nine months of 2022 unless otherwise noted.

The Company's net interest income in the third quarter of 2023 decreased by $1.7 million, or 16.4%, from the prior year's third quarter and, for the first nine months of 2023, decreased by $3.0 million, or 9.8%, when compared to the first nine months of 2022. The Company's net interest margin of 2.76% for the third quarter of 2023 and 2.89% for the nine-month timeframe represents a 59-basis point decrease for the quarter and a 35-basis point decline for the nine-months. The Company's quarterly net interest margin performance peaked in the third quarter of 2022. The decrease in net interest income reflects total interest expense increasing to a higher level than the increase in total interest income. The Company continues to benefit from increased yields on total loans and investment securities due to a higher U.S. Treasury yield curve and the Federal Reserve's action to tighten monetary policy in their effort to tame decades high inflation. But, similar to what is occurring across the banking industry, increased national interest rates have caused total deposit and borrowing costs to increase to a higher degree, resulting in net interest margin compression and lower net interest income. The provision for credit losses expense was lower for the third quarter of 2023 versus last year's third quarter, but increased for the nine months of 2023 compared to the same time period in 2022 as a result of a provision benefit recognized during the nine months in 2022. Total non-interest income is lower for the third quarter of 2023 but improved for the nine-month time period. Total non-interest expense is higher for both periods in 2023 compared to 2022, due to additional legal and professional services costs related to litigation and responses to the actions of an activist investor. Overall, the decrease to net interest income, along with increased non-interest expense were the primary reasons for the lower level of earnings in both the third quarter and first nine months of 2023.

Total average loans in the third quarter of 2023 are higher than the 2022 third quarter average by $18.6 million, or 1.9%, while total average loans for the first nine months of 2023 were $11.6 million, or 1.2%, higher than the 2022 nine-month average. Excluding PPP loans, which still existed on the balance sheet in 2022, the favorable comparisons for total average loans in both time periods of 2023 would increase to $20.0 million, or 2.0%, for the third quarter, and increase to $17.6 million, or 1.8%, for the nine months. More significantly, on an end of period basis, total loans at September 30, 2023, increased by $22.9 million since the end of the third quarter of 2022 and surpassed the $1.0 billion threshold for the first time in Company history. Loan pipelines continue to be strong, and the loan portfolio has demonstrated consistent growth in 2023 despite some customers delaying fundings given the uncertainty that exists in the economy and expectations regarding interest rates. Growth in commercial & industrial (C&I), commercial real estate (CRE), and home equity loans more than offset decreased residential mortgage and consumer loans. Overall, the higher interest rate environment along with the higher average volumes of C&I, CRE and home equity loans, resulted in total loan interest income improving by $2.5 million, or 23.0%, for the third quarter of 2023, and by $8.1 million, or 27.2%, for the nine months of 2023 when compared to both time periods of last year. This increase occurred despite a $433,000 total reduction in PPP loan related income in 2023.

Total investment securities averaged $262.7 million for the first nine months of 2023 which is $24.2 million, or 10.1%, higher than the $238.5 million average for the first nine months of last year. The increase reflects additional securities purchased primarily during 2022 as the U.S. Treasury yield curve increased resulting in a more favorable market for securities purchasing activity causing the Company to redeploy some of its short-term excess liquidity. Overall, the higher rates resulted in yields for new federal agency mortgage-backed securities and federal agency bonds improving and exceeding the overall average yield of the existing securities portfolio causing interest income from investments to increase by $1.5 million, or 28.3%, through nine months of this year. So far in 2023, purchases of securities have slowed significantly as more funds have been allocated to the loan portfolio and the Company has been controlling the amount of overnight borrowed funds. While yields on new security purchases exceed the overall average yield of the existing securities portfolio, the spread between overnight borrowings and the yield on new securities ranged from negative to only marginally positive causing the slowdown in purchasing activity. Thus, the new investment security purchases have primarily been used to replace cash flow from maturing securities to maintain appropriate balances for pledging purposes related to deposits of public funds. This is an example of how the inverted treasury yield curve impacts the Company's balance sheet management strategies. Overall, the 2023 first nine-month average balance of total interest earning assets increased over last year's nine-month average by $10.1 million, or 0.8%, while total interest income increased by $9.6 million, or 27.3%, since the first nine months of 2022.

On the liability side of the balance sheet, through nine months, total average deposits are $8.3 million, or 0.7%, lower compared to the first nine months of 2022. The modest decrease since last year is reflective of 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 increasing national interest rates. The Company's core deposit base continued to demonstrate the strength and stability that it has for many years, even during times of turmoil when three large bank failures occurred earlier in 2023 and customer fear of contagion within the industry caused deposit flight. Total deposits grew during the first nine months of 2023 by $20.8 million, or 1.9%, on an end of period basis since December 31, 2022, demonstrating customer confidence in AmeriServ Financial Bank. The Company does not utilize brokered deposits as a funding source. In addition to its strong, 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 loan to deposit ratio averaged 86.5% in the third quarter of 2023, 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 $4.5 million, or 205.8%, for the third quarter of 2023, and by $12.6 million, or 261.1%, for the nine months of 2023 when compared to both time periods of last year, due to higher deposit and short-term borrowings interest expense. Deposit interest expense was higher by $11.4 million, or 328.0%, while the nine-month 2023 average volume of total interest-bearing deposits grew from the 2022 nine-month average by $13.2 million, or 1.4%. The rising national interest rates resulted in certain deposit products, particularly public funds, which are tied to a market index, repricing upward with the move in short-term national interest rates causing interest expense to increase. Additionally, increased market competition resulted in the Company increasing 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 nine-month average of non-interest bearing demand deposits declined by $21.5 million, or 9.9%, while, as mentioned above, total interest-bearing deposits increased by $13.2 million, or 1.4%. 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 a $50 million interest rate hedge in February 2023 and another $10 million interest rate hedge in April 2023 to fix the cost of certain deposits that are indexed and move with short-term interest rates. These hedging transactions reduced the Company's negative variability of net interest income in a rising interest rate environment and helped slow net interest margin compression. Overall, total deposit cost averaged 1.72% in the first nine-months of 2023, which is 132 basis points higher than total deposit cost of 0.40% in the first nine-months of 2022.

Total borrowings interest expense increased by $536,000 in the third quarter of 2023 and by $1.2 million, or 90.8%, in the first nine-months of 2023 when compared to 2022. The increases result from the impact that the higher national interest rates had on overnight borrowings cost as well as the Company utilizing more overnight borrowed funds so far in 2023. Total fed funds purchases and other short-term borrowings averaged $33.9 million in the first nine months of 2023 after only averaging $2.2 million in the first nine-months of 2022. As mentioned previously, given the high cost of overnight borrowed funds, management has been effectively controlling the usage of this funding source. Borrowings interest expense was favorably impacted by reduced interest expense from FHLB term borrowings greater than one year, which declined by $95,000, or 20.9%, during the nine months of 2023 compared to 2022. The average balance of advances from FHLB was lower in the first nine months of 2023 by $17.4 million, or 48.1%, as the Company's strong liquidity position allowed management to let FHLB term advances mature during 2022 and not be replaced. However, given the inversion in the yield curve, rates for FHLB term advances are lower than the cost of overnight borrowed funds. Therefore, management is replacing matured FHLB term advances in 2023 as part of our overall balance sheet management strategy.

The Company adopted ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL), as of January 1, 2023. Details of the day one accounting adjustments were described in both the first and second quarter press releases.

The Company recorded a $189,000 provision for credit losses in the third quarter of 2023 after recognizing $500,000 provision expense in the third quarter of 2022. For the first nine months of 2023, the Company recorded a $1.4 million provision for credit losses after recognizing a $225,000 benefit in the first nine-months of 2022 resulting in a net unfavorable change of $1.6 million. Included in the nine-month 2023 provision expense was the recognition of a $926,000 loss from a subordinated debt investment with Signature Bank which was closed by banking regulators on March 12, 2023. This was described in the Company's first quarter 2023 press release. The 2023 provision for credit losses for the loan portfolio in both time periods was necessary due to risk rating and non-accrual activity. Total classified loan levels exhibited a net increase during the first nine months of 2023 due to the downgrade of several commercial real estate loan relationships earlier this year. Overall non-performing assets remain well controlled, totaling $5.9 million, or 0.59% of total loans, at September 30, 2023. Through nine months of 2023, the Company experienced net loan charge-offs of $187,000, or 0.03% of total average loans, which is lower than net charge-offs of $1.5 million, or 0.21% of total average loans, in the first nine months of 2022. In summary, the allowance for credit losses on the loan portfolio provided 207% coverage of non-performing assets, and 1.23% of total loans, at September 30, 2023, compared to 207% coverage of non-performing assets, and 1.08% of total loans, at December 31, 2022. 

Total non-interest income in the third quarter of 2023 decreased by $70,000, or 1.6%, from the prior year's third quarter, but improved by $826,000, or 6.5%, for the first nine-months of 2023 when compared to the first nine-months of 2022. Wealth management fees demonstrated a slight improvement by $32,000, or 1.1%, for the third quarter of 2023, but are $582,000, or 6.5%, lower for the nine months compared to 2022. The market value of wealth management assets increased since the third quarter of 2022 and contributed to a favorable quarter versus quarter comparison for wealth management fee income. However, nine-month results for wealth management fees continue to reflect the unfavorable market conditions for both equity securities and particularly bonds which more than offset the positive impact of new customer business growth in the first half of 2023. Overall, the fair market value of wealth management assets declined since December 31, 2021, by $327.1 million, or 12.1%, and totaled $2.4 billion at September 30, 2023. Other income is $136,000, or 16.7%, lower for the third quarter of 2023 and $362,000, or 18.3%, lower for the nine months due to the recognition of a 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. The improvement to total non-interest income for the 2023 nine-month period was due to AmeriServ Financial Bank selling all 7,859 shares of the Class B common stock of Visa Inc. that the bank owned, resulting in a $1.7 million gain. The Company elected to capture this gain in 2023 due to volatility and uncertainty in the financial markets. Finally, net realized gains on loans held for sale decreased by $60,000, or 32.8%, for the first nine-months of 2023, as the limited housing supply along with sharply higher interest rates continues to unfavorably impact residential mortgage loan production.

Total non-interest expense in the third quarter of 2023 increased by $368,000, or 3.1%, when compared to the third quarter of 2022 and increased by $1.9 million, or 5.4%, during the first nine-months of 2023 when compared to the first nine-months of 2022. The rise in total non-interest expense for both time periods is primarily due to increased legal and professional fees related to the defense against an activist investor and a proxy contest at our 2023 annual meeting. These costs amounted to $308,000 in the third quarter of 2023 and $2.0 million for the nine-month period. As expected, costs related to the activist shareholder issue declined meaningfully between the second and third quarters of 2023 by $828,000. However, given a recent increase in activity by the activist investor, the Company cannot determine at this time whether these costs will remain at a lower level in the fourth quarter of 2023. Salaries & employee benefits increased by $287,000, or 4.1%, in the third quarter of 2023 and $822,000, or 3.8%, for the first nine months of 2023. The increase is attributable to the annual employee merit increases, a greater level of full-time equivalent employees (FTE) as the Company filled certain open positions that were vacant last year, and the impact that inflationary pressures are having on the cost of new hires. Partially offsetting the higher level of salaries were lower incentive compensation and pension expense as there are fewer employees in the defined benefit pension plan due to numerous retirements over the past few years. Data processing and IT expenses increased by $103,000 in the third quarter of 2023 and $371,000, or 12.7%, in the nine months of 2023 due to increased software costs from our core data provider and additional expenses related to monitoring our computing and network environment. These negative items were partially offset by a $1.4 million, or 29.0%, reduction in other expense for the nine months of 2023 as the Company did not have to recognize a pension settlement charge in 2023. The Company recorded income tax expense of $124,000, or an effective tax rate of 16.1%, in the third quarter of 2023, which compares to income tax expense of $526,000, or an effective tax rate of 20.0%, for the third quarter of 2022. For the nine-month period in 2023, the Company's effective tax rate of 18.0% is lower than the 20.0% effective tax rate in 2022 due to the reduced level of pre-tax income this year.

The Company had total assets of $1.362 billion, shareholders' equity of $101.3 million, a book value of $5.91 per common share and a tangible book value(1) of $5.11 per common share on September 30, 2023. The decline in the Company's book value and tangible book value per share at September 30, 2023 compared to December 31, 2022 reflects a decrease in the fair value of the Company's available for sale investment securities by $6.1 million due to higher interest rates. Note that this caused a greater accumulated other comprehensive loss within total equity since December 31, 2022, as the decline in market value of the Company's available for sale investment securities portfolio more than offset a positive market value adjustment for the interest rate hedges. There was no required revaluation of the net pension liability during the first nine months of 2023. The Company continued to maintain strong capital ratios that exceed the regulatory defined well capitalized status as of September 30, 2023.

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; operational risks, including the risk of fraud by employees, customers or outsiders; unanticipated effects to our banking platform; risks and uncertainties relating to the duration of the COVID-19 pandemic, and actions that may be taken by governmental authorities to contain the pandemic or to treat its impact; expense and reputational impact on the Company as a result of litigation and other expenses related to the continuing activities of an activist shareholder; 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, 2022. 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.

___________________________________

(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

September 30, 2023

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

(Unaudited)

 

2023




















1QTR


2QTR


3QTR


YEAR TO
DATE

PERFORMANCE DATA FOR THE PERIOD:

















Net income (loss)


$

1,515



$

(187)



$

647



$

1,975



















PERFORMANCE PERCENTAGES (annualized):

















Return on average assets



0.45

%



(0.06)

%



0.19

%



0.20

%

Return on average equity



5.85




(0.72)




2.49




2.53


Return on average tangible common equity (1)



6.73




(0.82)




2.88




2.91


Net interest margin



3.03




2.89




2.76




2.89


Net charge-offs (recoveries) as a percentage of average loans



0.05




(0.02)




0.05




0.03


Efficiency ratio (3)



79.58




101.55




92.60




90.67



















EARNINGS PER COMMON SHARE:

















Basic


$

0.09



$

(0.01)



$

0.04



$

0.12


Average number of common shares outstanding



17,131




17,147




17,147




17,142


Diluted



0.09




(0.01)




0.04




0.12


Average number of common shares outstanding



17,155




17,147




17,147




17,146


Cash dividends paid per share


$

0.030



$

0.030



$

0.030



$

0.090



2022

























1QTR



2QTR


3QTR


YEAR TO
DATE

PERFORMANCE DATA FOR THE PERIOD:




















Net income (loss)





$

2,418



$

1,981



$

2,102



$

6,501






















PERFORMANCE PERCENTAGES (annualized):




















Return on average assets






0.73

%



0.59

%



0.62

%



0.65

%

Return on average equity






8.48




7.10




7.81




7.80


Return on average tangible common equity (1)






9.62




8.10




8.97




8.90


Net interest margin






3.14




3.23




3.35




3.24


Net charge-offs (recoveries) as a percentage of average loans






0.03




0.01




0.57




0.21


Efficiency ratio (3)






81.38




84.89




78.93




81.70






















EARNINGS PER COMMON SHARE:




















Basic





$

0.14



$

0.12



$

0.12



$

0.38


Average number of common shares outstanding






17,094




17,109




17,111




17,105


Diluted






0.14




0.12




0.12




0.38


Average number of common shares outstanding






17,146




17,149




17,145




17,146


Cash dividends paid per share





$

0.025



$

0.030



$

0.030



$

0.085


 

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

--CONTINUED--

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

(Unaudited)


2023



















1QTR


2QTR


3QTR



FINANCIAL CONDITION DATA AT PERIOD END:















Assets





$

1,345,957


$

1,345,721


$

1,361,789



Short-term investments/overnight funds






4,116



3,366



3,598



Investment securities, net of allowance for credit losses -
     securities






238,613



232,259



229,335



Total loans and loans held for sale, net of unearned income






980,877



988,221



1,002,306



Paycheck Protection Program (PPP) loans (4)






19



18



15



Allowance for credit losses - loans






12,132



12,221



12,313



Intangible assets






13,731



13,724



13,718



Deposits






1,131,789



1,127,569



1,129,290



Short-term and FHLB borrowings






69,124



72,793



85,568



Subordinated debt, net






26,654



26,665



26,675



Shareholders' equity






105,899



103,565



101,326



Non-performing assets






4,599



5,650



5,939



Tangible common equity ratio (1)






6.92

%


6.74

%


6.50

%


Total capital (to risk weighted assets) ratio






14.17



14.00



13.72



PER COMMON SHARE:















Book value





$

6.18


$

6.04


$

5.91



Tangible book value (1)






5.38



5.24



5.11



Market value (2)






3.05



2.54



2.65



Wealth management assets – fair market value (5)





$

2,354,498


$

2,446,639


$

2,385,590


















STATISTICAL DATA AT PERIOD END:















Full-time equivalent employees






308



315



308



Branch locations






17



17



17



Common shares outstanding






17,147,270



17,147,270



17,147,270

































2022

















1QTR



2QTR



3QTR



4QTR



FINANCIAL CONDITION DATA AT PERIOD END:















Assets


$

1,331,265


$

1,321,402


$

1,350,048


$

1,363,874



Short-term investments/overnight funds



13,588



10,714



4,133



4,132



Investment securities, net of allowance for credit losses -
     securities



223,286



231,255



236,867



241,386



Total loans and loans held for sale, net of unearned income



978,692



965,587



979,450



990,825



Paycheck Protection Program (PPP) loans (4)



7,835



2,242



24



22



Allowance for credit losses - loans



11,922



11,568



10,672



10,743



Intangible assets



13,761



13,753



13,746



13,739



Deposits



1,140,889



1,142,756



1,152,813



1,108,537



Short-term and FHLB borrowings



37,863



34,028



54,796



108,406



Subordinated debt, net



26,613



26,624



26,634



26,644



Shareholders' equity



113,692



106,392



101,587



106,178



Non-performing assets



3,401



3,240



4,596



5,200



Tangible common equity ratio (1)



7.58

%


7.08

%


6.57

%


6.85

%


Total capital (to risk weighted assets) ratio



14.01



14.33



13.92



13.87



PER COMMON SHARE:















Book value


$

6.65


$

6.22


$

5.94


$

6.20



Tangible book value (1)



5.84



5.41



5.13



5.40



Market value (2)



4.04



3.94



3.80



3.94



Wealth management assets – fair market value (5)


$

2,633,096


$

2,372,772


$

2,290,678


$

2,314,414


















STATISTICAL DATA AT PERIOD END:















Full-time equivalent employees



301



310



306



315



Branch locations



17



17



17



17



Common shares outstanding



17,109,084



17,109,097



17,112,617



17,117,617

































___________________________

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) Paycheck Protection Program (PPP) loans are included in total loans and loans held for sale, net of unearned income.

     (5) Not recognized on the consolidated balance sheets.

 

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

CONSOLIDATED STATEMENT OF INCOME

(Dollars in thousands)

(Unaudited)

 

2023






1QTR



2QTR


3QTR


YEAR TO
DATE

INTEREST INCOME


















Interest and fees on loans





$

12,276



$


12,609


$

13,154


$

38,039

Interest on investments






2,298





2,270



2,285



6,853

Total Interest Income






14,574





14,879



15,439



44,892



















INTEREST EXPENSE


















Deposits






4,189





5,019



5,653



14,861

All borrowings






863





750



987



2,600

Total Interest Expense






5,052





5,769



6,640



17,461



















NET INTEREST INCOME






9,522





9,110



8,799



27,431

Provision (credit) for credit losses






1,179





43



189



1,411

NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR
     CREDIT LOSSES






8,343





9,067



8,610



26,020



















NON-INTEREST INCOME


















Wealth management fees






2,738





2,789



2,845



8,372

Service charges on deposit accounts






266





280



311



857

Net realized gains on loans held for sale






26





38



59



123

Mortgage related fees






33





34



41



108

Gain on sale of Visa Class B shares






1,748





0



0



1,748

Bank owned life insurance






239





242



321



802

Other income






457





479



679



1,615

Total Non-Interest Income






5,507





3,862



4,256



13,625



















NON-INTEREST EXPENSE


















Salaries and employee benefits






7,175





7,728



7,358



22,261

Net occupancy expense






772





713



719



2,204

Equipment expense






415





422



376



1,213

Professional fees






1,308





1,907



1,146



4,361

Data processing and IT expense






1,078





1,080



1,139



3,297

FDIC deposit insurance expense






125





175



195



495

Other expenses






1,090





1,152



1,162



3,404

Total Non-Interest Expense






11,963





13,177



12,095



37,235



















PRETAX INCOME (LOSS)






1,887





(248)



771



2,410

Income tax expense (benefit)






372





(61)



124



435

NET INCOME (LOSS)





$

1,515



$


(187)


$

647


$

1,975


2022






1QTR



2QTR


3QTR


YEAR TO
DATE

INTEREST INCOME


















Interest and fees on loans





$

9,496



$


9,725


$

10,691


$

29,912

Interest on investments






1,532





1,802



2,009



5,343

Total Interest Income






11,028





11,527



12,700



35,255



















INTEREST EXPENSE


















Deposits






796





956



1,720



3,472

All borrowings






465





447



451



1,363

Total Interest Expense






1,261





1,403



2,171



4,835



















NET INTEREST INCOME






9,767





10,124



10,529



30,420

Provision (credit) for credit losses






(400)





(325)



500



(225)

NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR
     CREDIT LOSSES






10,167





10,449



10,029



30,645



















NON-INTEREST INCOME


















Wealth management fees






3,165





2,976



2,813



8,954

Service charges on deposit accounts






272





263



289



824

Net realized gains on loans held for sale






95





35



53



183

Mortgage related fees






33





32



27



92

Gain on sale of Visa Class B shares






0





0



0



0

Bank owned life insurance






209





231



329



769

Other income






561





601



815



1,977

Total Non-Interest Income






4,335





4,138



4,326



12,799



















NON-INTEREST EXPENSE


















Salaries and employee benefits






7,405





6,963



7,071



21,439

Net occupancy expense






741





697



698



2,136

Equipment expense






397





415



393



1,205

Professional fees






630





838



948



2,416

Data processing and IT expense






953





937



1,036



2,926

FDIC deposit insurance expense






145





130



125



400

Other expenses






1,208





2,130



1,456



4,794

Total Non-Interest Expense






11,479





12,110



11,727



35,316



















PRETAX INCOME (LOSS)






3,023





2,477



2,628



8,128

Income tax expense (benefit)






605





496



526



1,627

NET INCOME (LOSS)





$

2,418



$


1,981


$

2,102


$

6,501

 

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

AVERAGE BALANCE SHEET DATA

(Dollars in thousands)

(Unaudited)




2023


2022








3QTR


NINE
MONTHS


3QTR


NINE
MONTHS






Interest earning assets:


















Loans and loans held for sale, net of unearned income


$

994,263


$

988,955


$

975,615


$

977,386






Short-term investments and bank deposits



3,196



3,766



13,009



29,409






Total investment securities



260,198



262,654



253,398



238,491






Total interest earning assets



1,257,657



1,255,375



1,242,022



1,245,286
























Non-interest earning assets:


















Cash and due from banks



14,673



15,899



17,814



17,820






Premises and equipment



17,028



17,272



17,575



17,449






Other assets



75,372



75,027



74,758



79,016






Allowance for credit losses



(13,387)



(12,955)



(11,757)



(12,113)






Total assets


$

1,351,343


$

1,350,618


$

1,340,412


$

1,347,458
























Interest bearing liabilities:


















Interest bearing deposits:


















Interest bearing demand


$

225,395


$

225,793


$

226,606


$

228,425






Savings



126,589



129,594



139,724



138,524






Money market



299,694



300,415



289,701



290,946






Other time



309,719



301,384



283,504



286,061






Total interest bearing deposits



961,397



957,186



939,535



943,956






Borrowings:


















Federal funds purchased and other short-term borrowings



35,970



33,885



5,142



2,214






Advances from Federal Home Loan Bank



20,455



18,784



31,109



36,164






Subordinated debt



27,000



27,000



27,000



27,000






Lease liabilities



3,138



3,207



3,424



3,477






Total interest bearing liabilities



1,047,960



1,040,062



1,006,210



1,012,811
























Non-interest bearing liabilities:


















Demand deposits



187,480



194,781



219,307



216,266






Other liabilities



12,927



11,448



8,146



6,946






Shareholders' equity



102,976



104,327



106,749



111,435






Total liabilities and shareholders' equity


$

1,351,343


$

1,350,618


$

1,340,412


$

1,347,458






 

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

CHANGES IN SHAREHOLDERS' EQUITY

(Dollars in thousands)

(Unaudited)

 

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


2022

 



Common
Stock


Treasury
Stock


Surplus


RETAINED
EARNINGS


ACCUMULATED
OTHER
COMPREHENSIVE
(LOSS) INCOME


TOTAL

Balance at December 31, 2021


$

267


$

(83,280)


$

146,069


$

60,005


$

(6,512)


$

116,549

Net income



0



0



0



2,418



0



2,418

Exercise of stock options and stock
     option expense



0



0



93



0



0



93

Adjustment for defined benefit pension
     plan



0



0



0



0



919



919

Adjustment for unrealized loss on
     available for sale securities



0



0



0



0



(5,860)



(5,860)

Common stock cash dividend



0



0



0



(427)



0



(427)

Balance at March 31, 2022


$

267


$

(83,280)


$

146,162


$

61,996


$

(11,453)


$

113,692

Net income



0



0



0



1,981



0



1,981

Exercise of stock options and stock
     option expense



0



0



13



0



0



13

Adjustment for defined benefit pension
     plan



0



0



0



0



(4,488)



(4,488)

Adjustment for unrealized loss on
     available for sale securities



0



0



0



0



(4,292)



(4,292)

Common stock cash dividend



0



0



0



(514)



0



(514)

Balance at June 30, 2022


$

267


$

(83,280)


$

146,175


$

63,463


$

(20,233)


$

106,392

Net income



0



0



0



2,102



0



2,102

Exercise of stock options and stock
     option expense



0



0



23



0



0



23

Adjustment for defined benefit pension
     plan



0



0



0



0



(47)



(47)

Adjustment for unrealized loss on
     available for sale securities



0



0



0



0



(6,370)



(6,370)

Common stock cash dividend



0



0



0



(513)



0



(513)

Balance at September 30, 2022


$

267


$

(83,280)


$

146,198


$

65,052


$

(26,650)


$

101,587

Net income



0



0



0



947



0



947

Exercise of stock options and stock
     option expense



0



0



27



0



0



27

Adjustment for defined benefit pension
     plan



0



0



0



0



3,932



3,932

Adjustment for unrealized gain on
     available for sale securities



0



0



0



0



198



198

Common stock cash dividend



0



0



0



(513)



0



(513)

Balance at December 31, 2022


$

267


$

(83,280)


$

146,225


$

65,486


$

(22,520)


$

106,178




















 

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 policies
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. 

2023






1QTR


2QTR




3QTR


YEAR TO
DATE


RETURN ON AVERAGE TANGIBLE
COMMON EQUITY



















Net income (loss)





$

1,515


$

(187)




$

647


$

1,975





















Average shareholders' equity






105,092



104,913





102,976



104,327


Less: Average intangible assets






13,734



13,727





13,720



13,727


Average tangible common equity






91,358



91,186





89,256



90,600





















Return on average tangible common equity
(annualized)






6.73

%


(0.82)

%




2.88

%


2.91

%










































1QTR


2QTR




3QTR


TANGIBLE COMMON EQUITY
















Total shareholders' equity





$

105,899


$

103,565




$

101,326


Less: Intangible assets






13,731



13,724





13,718


Tangible common equity






92,168



89,841





87,608


















TANGIBLE ASSETS
















Total assets






1,345,957



1,345,721





1,361,789


Less: Intangible assets






13,731



13,724





13,718


Tangible assets






1,332,226



1,331,997





1,348,071


















Tangible common equity ratio






6.92

%


6.74

%




6.50

%

















Total shares outstanding






17,147,270



17,147,270





17,147,270


















Tangible book value per share





$

5.38


$

5.24




$

5.11





































2022





















1QTR


2QTR




3QTR


YEAR
TO
DATE


RETURN ON AVERAGE TANGIBLE
COMMON EQUITY



















Net income (loss)





$

2,418


$

1,981




$

2,102


$

6,501





















Average shareholders' equity






115,658



111,898





106,749



111,435


Less: Average intangible assets






13,766



13,757





13,749



13,757


Average tangible common equity






101,892



98,141





93,000



97,678





















Return on average tangible common equity
(annualized)






9.62

%


8.10

%




8.97

%


8.90

%
























1QTR


2QTR



3QTR





4QTR


TANGIBLE COMMON EQUITY
















Total shareholders' equity


$

113,692


$

106,392


$

101,587




$

106,178


Less: Intangible assets



13,761



13,753



13,746





13,739


Tangible common equity



99,931



92,639



87,841





92,439


















TANGIBLE ASSETS
















Total assets



1,331,265



1,321,402



1,350,048





1,363,874


Less: Intangible assets



13,761



13,753



13,746





13,739


Tangible assets



1,317,504



1,307,649



1,336,302





1,350,135


















Tangible common equity ratio



7.58

%


7.08

%


6.57

%




6.85

%

















Total shares outstanding



17,109,084



17,109,097



17,112,617





17,117,617


















Tangible book value per share


$

5.84


$

5.41


$

5.13




$

5.40






































 

AmeriServ Financial, Inc. logo

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SOURCE AmeriServ Financial, Inc.

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