UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

(MARK ONE)
þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 20102012

OR

¨
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROMTO

COMMISSION FILE NUMBER 0-11204

AMERISERV FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

PENNSYLVANIA		25-1424278
PENNSYLVANIA		25-1424278
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

MAIN & FRANKLIN STREETS, P.O. BOX 430, JOHNSTOWN, PENNSYLVANIA		15907-0430
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (814) 533-5300

Securities registered pursuant to Section 12(b) of the Act:

Title Of Each Class		Name Of Each Exchange On Which Registered
NoneCommon Stock, Par Value $0.01 Per Share		NASDAQ

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.¨o Yesþ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.¨o Yesþ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.þ Yes¨o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).¨þ Yes¨o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.þ

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, non-accelerated filer or a smaller reporting company. See definition of “accelerated filer, large accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨             Accelerated filer  ¨             Non-accelerated filer  ¨             Smaller reporting company  þ

Large accelerated filero		Accelerated filero		Non-accelerated filero		Smaller reporting companyþ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).¨o Yesþ No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked prices of such common equity, as of the business day of the registrant’s most recently completed second fiscal quarter. The aggregate market value was $34,170,547$54,382,349 as of June 30, 2010.2012.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. There were 21,207,67019,168,188 shares outstanding as of January 31, 2011.2013.

DOCUMENTS INCORPORATED BY REFERENCE.

Portions of the proxy statement for the annual shareholders’ meeting are incorporated by reference in Parts II and III.

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FORM 10-K INDEX

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PART I

ITEM 1.

BUSINESS

ITEM 1. BUSINESS

GENERAL

AmeriServ Financial, Inc. (the Company) is a bank holding company organized under the Pennsylvania Business Corporation Law. The Company became a holding company upon acquiring all of the outstanding shares of AmeriServ Financial Bank (the Bank) onin January 5, 1983. The Company’s other wholly owned subsidiaries include AmeriServ Trust and Financial Services Company (the Trust Company), formed in October 1992, and AmeriServ Life Insurance Company (AmeriServ Life), formed in October 1987.

The Company’s principal activities consist of owning and operating its three wholly owned subsidiary entities. At December 31, 2010,2012, the Company had, on a consolidated basis, total assets, deposits, and shareholders’ equity of $949 million, $801$1.0 billion, $836 million, and $107$110 million, respectively. The Company and its subsidiaries derive substantially all of their income from banking and bank-related services. The Company functions primarily as a coordinating and servicing unit for its subsidiary entities in general management, accounting and taxes, loan review, auditing, investment accounting, marketing and insurance risk management.

As a bank holding company, the Company is subject to supervision and regular examination by the Federal Reserve Bank of Philadelphia and the Pennsylvania Department of Banking. The Company is also under the jurisdiction of the Securities and Exchange Commission (SEC) for matters relating to offeringregistered offerings and salesales of its securities. The Company is subject to the disclosure and regulatory requirements ofsecurities under the Securities Act of 1933, as amended, and the disclosure and regulatory requirements of the Securities Exchange Act of 1934, as amended, as administered by the SEC.amended. The CompanyCompany’s common stock is listed on the NASDAQ Stock Market under the trading symbol “ASRV,” and the Company is subject to the NASDAQ rules applicable to listed companies.

AMERISERV FINANCIAL BANKING SUBSIDIARY

AMERISERV FINANCIAL BANK

The Bank is a state bank chartered under the Pennsylvania Banking Code of 1965, as amended. Through 18 locations in Allegheny, Cambria, Centre, Somerset, and Westmoreland Counties,counties, Pennsylvania, AmeriServ Financialthe Bank conducts a general banking business. It is a full-service Bankbank offering (i) retail banking services, such as demand, savings and time deposits, checking accounts, money market accounts, secured and unsecured consumer loans, mortgage loans, safe deposit boxes, holiday club accounts, money orders, and traveler’s checks; and (ii) lending, depository and related financial services to commercial, industrial, financial, and governmental customers, such as commercial real estate-mortgage loans, short and medium-term loans, revolving credit arrangements, lines of credit, inventory and accounts receivable financing, real estate-construction loans, business savings accounts, certificates of deposit, wire transfers, night depository, and lock box services. The Bank also operates 2220 automated bank teller machines (ATMs) through its 24-Hour Banking Network that is linked with NYCE, a regional ATM network, and CIRRUS, a national ATM network. On March 7, 2007, the Bank completed the acquisition of West Chester Capital Advisors (WCCA). WCCA is, a registered investment advisor, and asis also a subsidiary of December 31, 2010 had $106 million in assets under management.the Bank.

TheWe believe that the Bank’s deposit base is such that loss of one depositor or a related group of depositors would not have a materially adverse effect on its business. In addition, the loan portfolio is also diversified so that one industry or group of related industries does not comprise a material portion of the loan portfolio. The Bank’s business is not seasonal, nor does it have any risks attendant to foreign sources. The majority of the Bank’s customer base is located within a 100150 mile radius of Johnstown, Pennsylvania.

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The Bank is subject to supervision and regular examination by the Federal Reserve Bank of Philadelphia and the Pennsylvania Department of Banking. Various federal and state laws and regulations govern many aspects of its banking operations. The following is a summary of key data (dollars in thousands) and ratios at December 31, 2010:2012:

Headquarters		Johnstown, PA
Total Assets		$	975,223
Total Investment Securities			152,456
Total Loans and Loans Held for Sale (net of unearned income)			731,741
Total Deposits			835,934
Total Net Income			5,804
Asset Leverage Ratio			9.55%
Return on Average Assets			0.60
Return on Average Equity			5.66
Total Full-time Equivalent Employees			278

RISK MANAGEMENT OVERVIEW:

Risk identification and management are essential elements for the successful management of the Company. In the normal course of business, the Company is subject to various types of risk, which includes credit, interest rate credit, and market, liquidity, operational, legal/compliance, and strategic risk. The Company controls and monitors these risks with policies, procedures, and various levels of managerial and Board oversight. The Company has both a Management Enterprise Risk Committee and in 2012 also formed a Board Enterprise Risk Committee to help manage and monitor the Company’s risk position.

Interest rate risk is the sensitivity of net interest income and the market value of financial instruments to the magnitude, direction, and frequency of changes in interest rates. Interest rate risk results from various repricing frequencies and the maturity structure of assets and liabilities. The Company uses its asset liability management policy to control and manage interest rate risk.

Liquidity risk represents the inability to generate cash or otherwise obtain funds at reasonable rates to satisfy commitments to borrowers, as well as the obligations to depositors, debtholders and the funding of operating costs. The Company uses its asset liability management policy and contingency funding plan to control and manage liquidity risk.

Credit risk represents the possibility that a customer may not perform in accordance with contractual terms. Credit risk results from extending credit to customers, purchasing securities, and entering into certain off-balance sheet loan funding commitments. The Company’s primary credit risk occurs in the loan portfolio. The Company uses its credit policy and disciplined approach to evaluating the adequacy of the allowance for loan losses to control and manage credit risk. The Company’s investment policy and hedging policy strictly limit the amount of credit risk that may be assumed in the investment portfolio and through hedging activities. The following summarizes and describes the Company’s various loan categories and the underwriting standards applied to each:

Commercial

Loans

This category includes credit extensions to commercial and industrial borrowers. Business assets, including accounts receivable, inventory and/or equipment, typically secure these credits. In appropriate instances, extensions of credit in this category are subject to collateral advance formulas. Balance sheet strength and profitability are considered when analyzing these credits, with special attention given to historical, current and prospective sources of cash flow, and the ability of the customer to sustain cash flow at acceptable levels. Our policy permits flexibility in determining acceptable debt service coverage ratios, with a minimum level of 1.1 to 1 desired. Personal guarantees are frequently required; however, as the financial strength of the borrower increases, the Company’sBank’s ability to obtain personal guarantees decreases. In addition to economic risk, this

category is impacted by the strength of the borrower’s management, industry risk and industryportfolio concentration risk which are also monitored and considered during the underwriting process.

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Commercial Loans Secured by Real Estate

This category includes various types of loans, including acquisition and construction of investment property, owner-occupied property and operating property. Maximum term, minimum cash flow coverage, leasing requirements, maximum amortization and maximum loan to value ratios are controlled by the Company’sBank’s credit policy and follow industry guidelines and norms, and regulatory limitations. Personal guarantees are normally required during the construction phase on construction credits, and are frequently obtained on mid to smaller commercial real estate loans. In addition to economic risk, this category is subject to geographic and portfolio concentration risk, which are monitored and considered in underwriting.

Residential Real Estate — Mortgage

Mortgages

This category includes mortgages that are secured by residential property. Underwriting of loans within this category is pursuant to Freddie Mac/Fannie Mae underwriting guidelines, with the exception of Community Reinvestment Act (CRA) loans, which exhibit more liberal standards. The major risk in this category is that a significant downward economic trend would increase unemployment and cause payment default. The CompanyBank does not and has never engaged in subprime residential mortgage lending.

Consumer

Loans

This category includes consumer installment loans and revolving credit plans. Underwriting is pursuant to industry norms and guidelines. The major risk in this category is a significant economic downturn.

INVESTMENTS

The investment securities portfolio of the Company and its subsidiaries is managed to provide ample liquidity in a manner that is consistent with proper bank asset/liability management and current banking practices. The objectives of portfolio management include consideration of proper liquidity levels, interest rate and market valuation sensitivity, and profitability. The investment portfolios of the Company and its subsidiaries are proactively managed in accordance with federal and state laws and regulations in accordance with generally accepted accounting principles.

The investment portfolio is primarily made up of AAA rated agency mortgage-backed securities and short maturity agency securities. During 2012, the Company did add high quality corporate securities to the portfolio. The purpose of this type of portfolio is to generate adequate cash flow to fund potential loan growth, as the market allows. Management strives to maintain a relatively short duration in the portfolio. All holdings must meet standards documented in the AmeriServ Financial Investment Policy.

Investment securities classified as held to maturity are carried at amortized cost while investment securities classified as available for sale are reported at fair market value. The following table sets forth the cost basis and fair market value of the Company’s investment portfolio as of the periods indicated:

Investment securities available for sale at:

		AT DECEMBER 31,												AT DECEMBER 31,
		2010				2009				2008				2012				2011				2010
		(IN THOUSANDS)												(IN THOUSANDS)
U.S. Agency		$	15,956			$	12,342			$	10,387			$	5,848			$	10,689			$	15,956
Corporate bonds															7,992				—				—
U.S. Agency mortgage-backed securities			145,727				116,088				114,380				131,425				165,484				145,727
Other securities			—				—				24
Total cost basis of investment securities available for sale		$	161,683			$	128,430			$	124,791			$	145,265			$	176,173			$	161,683
Total fair value of investment securities available for sale		$	164,811			$	131,272			$	126,781			$	151,538			$	182,923			$	164,811

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Investment securities held to maturity at:

		AT DECEMBER 31,
		2012				2011				2010
		(IN THOUSANDS)
Taxable municipal		$	410			$	—			$	—
U.S. Agency mortgage-backed securities			9,318				9,280				6,824
Corporate bonds and other securities			3,995				3,000				1,000
Total cost basis of investment securities held to maturity		$	13,723			$	12,280			$	7,824
Total fair value of investment securities held to maturity		$	14,266			$	12,914			$	8,267

DEPOSITS AND OTHER SOURCES OF FUNDS

Deposits

The CompanyBank has a loyal core deposit base made up of traditional commercial bank products that exhibits little fluctuation, other than jumbo CDs,certificates of deposits (CDs), which demonstrate some seasonality. The Company also utilizes certain Trust Company specialty deposits related to the ERECT Fund as a funding source which serve as an alternative to wholesale borrowings and can exhibit some degree of volatility.

The following table sets forth the average balance of the Company’s deposits and average rates paid thereon for the past three calendar years:

Interest expense on deposits consisted of the following:

Additionally, the following table provides more detailed maturity information regarding certificates of deposit issued in denominations of $100,000 or more as of December 31, 2010:

MATURING IN:

Borrowings

The Company, when needed, uses both overnight borrowings and term advances from the Federal Home Loan Bank of Pittsburgh for liquidity management purposes. During the past several years the Company has significantly deleveraged its balance sheet and reduced its level of borrowings through investment portfolio cash flow.

The outstanding balances and related information for federal funds purchased and other short-term borrowings are summarized as follows:

		AT DECEMBER 31, 2009
		FEDERAL FUNDS PURCHASED				SHORT-TERM BORROWINGS
		(IN THOUSANDS, EXCEPT RATES)
Balance		$	—			$	25,775
Maximum indebtedness at any month end			5,968				54,649
Average balance during year			1,358				19,670
Average rate paid for the year			0.50	%			0.67	%
Interest rate on year-end balance			—				0.62
		AT DECEMBER 31, 2008
		FEDERAL FUNDS PURCHASED				OTHER SHORT-TERM BORROWINGS
		(IN THOUSANDS, EXCEPT RATES)
Balance		$	—			$	119,920
Maximum indebtedness at any month end			5,685				138,855
Average balance during year			20				71,617
Average rate paid for the year			3.16	%			1.96	%
Interest rate on year-end balance			—				0.60

Average amounts outstanding during the year represent daily averages. Average interest rates represent interest expense divided by the related average balances.

These borrowing transactions can range from overnight to one year in maturity. The average maturity was three days at the end of 2010, and two days at the end of 2009 and 2008.

		AT DECEMBER 31,
		2012								2011								2010
		(IN THOUSANDS, EXCEPT PERCENTAGES)
Demand:
Non-interest bearing		$	147,887				—%			$	135,298				—	%		$	122,963				—	%
Interest bearing			60,810				0.19				57,784				0.22				58,118				0.30
Savings			85,112				0.21				81,490				0.31				77,381				0.51
Money market			211,744				0.42				193,536				0.56				186,560				0.87
Other time			327,557				1.62				348,915				1.97				358,472				2.44
Total deposits		$	833,110				0.78			$	817,023				1.02			$	803,494				1.36

Loans

The loan portfolio of the Company consisted of the following:

		AT DECEMBER 31,																				AT DECEMBER 31,
		2010				2009				2008				2007				2006				2012				2011				2010				2009				2008
		(IN THOUSANDS)																				(IN THOUSANDS)
Commercial		$	78,322			$	96,158			$	110,197			$	118,936			$	91,746			$	102,864			$	83,124			$	78,322			$	96,158			$	110,197
Commercial loans secured by real estate(1)			370,375				396,787				353,870				285,115				269,781
Real estate-mortgage(1)			203,323				207,221				218,928				214,839				209,728
Commercial loans secured by real estate(1)																							383,934				350,224				370,375				396,787				353,870
Real estate-mortgage(1)																							217,584				212,669				203,323				207,221				218,928
Consumer			19,233				19,619				23,804				16,676				18,336				17,420				18,172				19,233				19,619				23,804
Loans			671,253				719,785				706,799				635,566				589,591
Total loans																							721,802				664,189				671,253				719,785				706,799
Less: Unearned income			477				671				691				471				514				637				452				477				671				691
Loans, net of unearned income		$	670,776			$	719,114			$	706,108			$	635,095			$	589,077
Total loans, net of unearned income																						$	721,165			$	663,737			$	670,776			$	719,114			$	706,108

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Non-performing Assets

The following table presents information concerning non-performing assets:

		AT DECEMBER 31,																				AT DECEMBER 31,
		2010				2009				2008				2007				2006				2012				2011				2010				2009				2008
		(IN THOUSANDS, EXCEPT PERCENTAGES)																				(IN THOUSANDS, EXCEPT PERCENTAGES)
Non-accrual loans
Non-accrual loans:
Commercial		$	3,679			$	3,375			$	1,128			$	3,553			$	494			$	—			$	—			$	3,679			$	3,375			$	1,128
Commercial loans secured by real estate			6,731				11,716				484				225				195				4,623				3,870				6,731				11,716				484
Real estate-mortgage			1,879				2,025				1,765				1,460				1,597				1,191				1,205				1,879				2,025				1,765
Total			12,289				17,116				3,377				5,238				2,286				5,814				5,075				12,289				17,116				3,377
Past due 90 days or more and still accruing
Consumer			—				—				—				—				3
Total			—				—				—				—				3
Other real estate owned
Other real estate owned:
Commercial loans secured by real estate			436				871				701				—				—				1,101				20				436				871				701
Real estate-mortgage			302				350				494				42				3				127				104				302				350				494
Total			738				1,221				1,195				42				3				1,228				124				738				1,221				1,195
Total restructured loans not in non-accrual (TDR)			1,337				—				—				—				1,302				182				—				1,337				—				—
Total non-performing assets including TDR		$	14,364			$	18,337			$	4,572			$	5,280			$	3,594			$	7,224			$	5,199			$	14,364			$	18,337			$	4,572
Total non-performing assets as a percent of loans and loans held for sale, net of unearned income, and other real estate owned			2.12	%			2.53	%			0.65	%			0.83	%			0.61	%
Total non-performing assets as a percent of loans, net of unearned income, and other real estate owned																							1.00%				0.78	%			2.14	%			2.55	%			0.65	%

The Company is unaware of any additional loans which are required to either be charged-off or added to the non-performing asset totals disclosed above. Other real estate ownedOREO is recordedmeasured at fair value based on appraisals, less cost to sell at the lowerdate of (1) fair value minus estimated costs to sell,foreclosure. The Company had no loans past due 90 days or (2) carrying cost.more, still accruing, for the periods presented.

The following table sets forth, for the periods indicated, (1) the gross interest income that would have been recorded if non-accrual loans had been current in accordance with their original terms and had been outstanding throughout the period or since origination if held for part of the period, (2) the amount of interest income actually recorded on such loans, and (3) the net reduction in interest income attributable to such loans.

		YEAR ENDED DECEMBER 31,
		2012				2011				2010				2009				2008
		(IN THOUSANDS)
Interest income due in accordance with original terms		$	231			$	376			$	1,086			$	553			$	198
Interest income recorded			—				(167	)			(458	)			(75	)			—
Net reduction in interest income		$	231			$	209			$	628			$	478			$	198

Secondary Market Activities

The Residential Lending department of the Company continues to originate one-to-four family mortgage loans for customers, somethe majority of which are sold to outside investors in the secondary market and some of which are retained for the Bank’s portfolio. Mortgages sold on the secondary market are sold to investors on a “flow” basis: Mortgagesbasis; mortgages are priced and delivered on a “best efforts” pricing basis, with servicing released to the investor. Fannie Mae/Freddie Mac guidelines are used in underwriting all mortgages with the exception of a limited amount of CRA loans. Mortgages with longer terms, such as 20-year, 30-year, FHA, and VA loans, are usually sold. The remaining

production of the department includes construction, adjustable rate mortgages, 10-year, 15-year, and bi-weekly mortgages. These loans are usually kept in the Bank’s portfolios, although during periods of low interest rates 15-year loans are typically sold into the secondary market.market as they have been over the last several years.

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AMERISERV FINANCIAL NON-BANKING SUBSIDIARIES

AMERISERV TRUST AND FINANCIAL SERVICES COMPANY

AmeriServ Trust and Financial Services Company is a trust company organized under Pennsylvania law in October 1992. As one of the larger providers of trust and investment management products and services between Pittsburgh and Harrisburg, AmeriServ Trust and Financial Services Company is committed to delivering personalized, professional service to its clients. Its staff of approximately 4447 professionals administeradministers assets valued at approximately $1.4$1.5 billion that are not recognized on the Company’s balance sheet at December 31, 2010.2012. The Trust Company focuses on wealth management. Wealth management includes personal trust products and services such as personal portfolio investment management, estate planning and administration, custodial services and pre-need trusts. Also, institutional trust products and services such as 401(k) plans, defined benefit and defined contribution employee benefit plans, and individual retirement accounts are included in this segment. This segment also includes financial services which include the sale of mutual funds, annuities, and insurance products. The Wealthwealth management business also includes the union collective investment funds, namely the ERECT and BUILD funds which are designed to use union pension dollars in construction projects that utilize union labor. The BUILD fund isfunds are in the process of liquidation. At December 31, 2010, AmeriServ2012, the Trust and Financial ServicesCompany had total assets of $3.5$4.0 million and total shareholder’sstockholder’s equity of $3.1$3.5 million. In 2010,2012, the Trust Company contributed earnings to the corporation as its gross revenue amounted to $5.6$7.1 million and the net income contribution was $208,000.$843,000. The Trust Company is subject to regulation and supervision by the Federal Reserve Bank of Philadelphia and the Pennsylvania Department of Banking.

AMERISERV LIFE

AmeriServ Life is a captive insurance company organized under the laws of the State of Arizona. AmeriServ Life engages in underwriting as reinsurer of credit life and disability insurance within the Company’s market area. Operations of AmeriServ Life are conducted in each office of the Company’s banking subsidiary. AmeriServ Life is subject to supervision and regulation by the Arizona Department of Insurance, the Pennsylvania Insurance Department, and the Board of Governors of the Federal Reserve System.System (the Federal Reserve). At December 31, 2010,2012, AmeriServ Life had total assets of $705,000 and total stockholders’ equity of $666,000.$411,000.

MONETARY POLICIES

Commercial banks are affected by policies of various regulatory authorities including the Federal Reserve System.Reserve. An important function of the Federal Reserve System is to regulate the national supply of bank credit. Among the instruments of monetary policy used by the Board of GovernorsFederal Reserve are: open market operations in U.S. Government securities, changes in the federal funds rate and discount rate on member bank borrowings, and changes in reserve requirements on bank deposits. These means are used in varying combinations to influence overall growth of bank loans, investments, and deposits, and may also affect interest rate charges on loans or interest paid for deposits. The monetary policies of the Board of GovernorsFederal Reserve have had, and will continue to have, a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future.

COMPETITION

Our subsidiaries face strong competition from other commercial banks, savings banks, credit unions, savings and loan associations, and several other financial or investment service institutions for business in the communities they serve. Several of these institutions are affiliated with major banking and financial institutions which are substantially larger and have greater financial resources than the Bank and the Trust Company. As the financial services industry continues to consolidate, the scope of potential competition affecting our subsidiaries

will also increase. Brokerage houses, consumer finance companies, insurance companies, and pension trusts are important competitors for various types of financial services. In addition, personal and corporate trust investment counseling services are offered by insurance companies, other firms, and individuals.

MARKET AREA & ECONOMY

Much of the uncertainty about the economic climate, plus tax and federal spending policies that plagued employers in 2012 continues in 2013. A March 2013 deadline for automatic spending cuts totaling about $1.2 trillion as well as the unresolved debt ceiling debate will result in continued caution by businesses

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Nationally,pondering investment. A payroll tax hike included in the fiscal cliff deal will take up to one percentage point from GDP this year. This combined with federal spending cuts will likely result in GDP growth of about 2%, roughly the same pace as last year. Modest growth is expected in the second half of the year with consumer confidence, already the highest in five years, likely to continue to improve as home prices and employment rise.

Job growth is anticipated to hold steady in 2013. Job gains in the private sector are being spread widely, including the health care, manufacturing and construction industries. Moreover, growth in housing, exports and business spending are all positives for jobs. The unemployment rate, currently at 7.8% nationally, is expected to improve modestly to approximately 7.5% by the end of 2013. Current and anticipated job growth, however, is too low to give the economy is improving gradually, although it may take years to fully emerge frommuch-needed impetus. Until the negative effectscurrent pace of job creation picks up considerably, there will be no reduction in the number of long-term unemployed. Odds are that growth will pick up in the second half of the recent economic downturn.year. Two major obstacles will cause companies to remain cautious this year and may derail improvement: a Washington showdown over the federal debt ceiling and uncertainty over whether automatic spending cuts will be allowed to take effect.

Most interest rates, but short-term rates in particular, are expected to change little over 2013. The recovery has gathered more momentum, andFederal Reserve indicated it will get an extra push in 2011 from a further injection of fiscal stimulus including the extension of the Bush tax cutsstand pat on it’s near-zero federal funds rate. The Fed Open Market Committee announced for the next two years,first time ever the two percentage point cutexact conditions under which it will hold interest rates low. As long as unemployment remains above 6.5% and inflation remains less than 0.5% above the committee’s long-run goal of 2% the fed funds rate will remain at its current near-zero levels. There is likely to be some increase in long-term rates, though not a lot, as the economy posts more growth in the employee payroll tax rate for 2011, and a two-year extensionsecond half of depreciation incentives for business investment. Business and consumer confidence are improving. The recent good news is suggesting 2011 GDP growth should come in near 3.2%. The Fed2013. That will continue to be accommodative. Overall, the economy is getting better, but is still not out-of-the-woods. The economy isn’t improving fast enough to make a noticeable reduction in unemployment. Risks, however, still loom, particularly from a weak housing market and spending cuts and layoffs from state and local governments.

There are many mixed factors that will affect future economic growth. Positively impacting economic conditions will be 1.) The extension of the Bush tax cuts for another 2-years and extending jobless benefits and cutting payroll taxes in 2011; 2.) The Federal Reserve’s monetary policy continuing to be accommodative as short-term rates will be near 0.0%; 3.) The lower value of the dollar in the world financial markets should increase exports while the flow of goods from overseas will slow; 4.) Consumers are simultaneously savingfocus more and paying down debt. As a result, there should be pent-up demand stemming from the severity of the recession which could result in an increase in spending; 5.) Businesses also should have pent-up demand from a need to incorporate the latest technology to be competitive and cut costs.

Negatively impacting future economic conditions will be: 1.) Anemic employment gains while the few jobs that have been created have tended to be temporary or part time. 2.) Consumers and businesses will most likely not be willing to acquire debt; 3.) The sharp rise in prices of oil and food commodities should continue to reduce peoples buying power; as will the jump in mortgage rates, which has already significantly slowed re-financing; 4.) Capital constrained banks are not as eager to lend as they should be at this stage of a recovery; 5.) Our trading partners around the world have equally poor economies and offset the positive impact of the lower value of the dollar which will constrain exports; 6.) The actions of Washingtonattention on the budget deficit could cause peoplepotential for rising inflation, nudging long-term rates up a bit. With GDP likely to assume future tax hikes and spending cuts which could cause consumers and businessesincrease only around 2% for the year, a surge isn’t likely.

Inflation is poised to be less willing to spend.

tick a bit higher than expected this year. The Consumer Price Index rose 0.5% in December, leaving inflation overis anticipated to increase about 2.3% for the past 12 months at 1.5%.through December. That’s up from about 1.7% for 2012. The main culprits are food and gasoline. Core inflation, which strips outdoes not include prices of food and energy, isn’t likely to increase much.

Housing is expected to improve in 2013. With builder optimism growing, mortgage rates near all-time lows and foodrising prices lifting more homes above water, housing should riseadd about half a bit in 2011. The core CPI increased 0.1% in December and just 0.8% over the past 12 months. That’s the slowest pace since this data set began in 1958, and the chief reasonpercentage point to GDP next year. Historically low mortgage rates will help. With the Federal Reserve remains unconcerned about the prospectcontinuing to buy mortgage-backed securities and pledging to hold rates down for a prolonged period, there’s little reason to expect much of higher inflation. Confidence in the economic expansion remains fragile, but conditions should improve. It is expected that net job growth should be approximately 2.5 million in 2011, following an increase of 1.1 million in 2010. Still, the unemployment rate will remain high. Now at 9.0%, it’s likely to decline a bit further over the course of 2011. GDP growth will need to continue to be 3.2% or higher into 2012 to bring the rate significantly lower.through 2013.

The economy in Cambria and Somerset Countiescounties, Pennsylvania at the end of 20102012 produced seasonally adjusted unemployment rates of 9.5%8.9% and 9.3%9.7%, respectively, as compared to national and state rates of 9.4%7.8% and 8.6%7.9%. Local markets have beencontinue to be negatively impacted by the recessionaryslow economic conditions that exist in the national economy, causingeconomy. December 2012 marks five years after the unemployment rate to increase from last year’s averagestart of 9.3%. The increasesthe Great Recession. Since that time, total nonfarm jobs in unemploymentJohnstown MSA have fallen by 2600, split evenly between government and the difficulties being experienced by small and medium sized businesses nationally are also being experienced locally.private sector. Johnstown, PA, where AmeriServ Financial, Inc.Inc is headquartered is a leader in technology and continues to have a cost of living that is lower than the national average. The local labor force fluctuated in a very narrow range comparing closely to recent year levels. As of December 31, 2010,November 30, 2012, total nonfarm jobs in the

Johnstown MSA were 800 below1,000 above the December 2009November 2011 level with lossesgains coming primarily from the service-providing industryeducation and health services while the goods producing industries have shownall other categories demonstrated little change in their job levels.change. The unemployment rate fluctuated between 7.6% and 9.3% during 2012. In the recent past, work on defense projects has contributed to economic growth in the region. However, a change in leadership due to the passingloss of a long time influentiallocal Congressman createddue to congressional redistricting creates cause for concern about the continued positive impact from the defense industry, although current activity in this sector remains good.industry.

Economic conditions are stronger in the State College market butand have also been negatively impacted bydemonstrated the strugglingsame modest improvement experienced in the national economy. The unemployment rate for the State College MSA reached 5.5%5.0% late in 2010,2012, which represents a 0.8%0.7% improvement since last yearover the 2011 average and remains the lowest of all regions in the Commonwealth. Seasonally adjusted total nonfarm jobs for the MSA increased by 2,1002,900 since December 2009. The Company opened a new branch office in the State College market during 2010 as this area presents the Company with a more vibrant economic market and a much different demographic.2011. A large percentage of the population in State College falls into the 18 to 34 year old age group, while potential customers in the Cambria/Somerset markets tend to be over 50 years of age. Overall, opportunities in the State College market are quite different and challenging, providing a promising source of business to profitably grow the Company.

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The expansionCompany entered new markets in 2012 with the opening of Marcellus Shale gas drilling could provideloan production offices in Harrisburg in Dauphin county, Pennsylvania and Altoona in Blair county, Pennsylvania. The Company also moved outside of Pennsylvania and opened a meaningful economicthird loan production office in Hagerstown, Maryland. Harrisburg is the metropolitan center for some 400 communities. Its economy and more than 6,900 businesses are diversified with a large representation of service-related industries (especially health) and growing technological industry to accompany the dominant government field inherent to being the state’s capital. The largest employer, state government, provides stability to the economy and attracts attendant services. Excellent roads and rail transportation contribute to the city’s prominence as a center for trade, warehousing, and distribution. The unemployment rate decreased from a 2011 average of 7.2% to 7.1% late in 2012 in the Harrisburg-Carlisle MSA region.

Hagerstown and Washington county, Maryland, offers a rare combination of business advantages providing a major crossroads location that is convenient to the entire East Coast at the intersection of I-81 and I-70. It has a ready workforce of over 400,000 with strengths in manufacturing and technology. It also offers an affordable cost of doing business and living located an hour from the Washington, D.C./Baltimore regions, but with much lower costs. There is also plenty of facilities and land slated for development of available industrial/commercial space. Hagerstown has become a choice location for manufacturers, financial services, and distribution companies. While exhibiting a higher unemployment rate, the Hagerstown, MD-Martinsburg, WV area also improved from a 9.0% average in 2011 to a 7.9% average in 2012.

Altoona is the business center of Blair county, Pennsylvania with a strong retail, government and manufacturing base. The top field of employment in Altoona and the metro area is healthcare. Altoona is the linchpin of the Tri-City Region. Its location along I-99 draws from a large trade area over a wide geographic area that extends to State College and Johnstown. It serves as the headquarters for Sheetz Corporation which ranks on Forbes list of the top privately owned companies. In addition to being located adjacent to interstate 99 and a major highway system, Altoona also has easy access to rail and air transportation. It is also ranked high in Inc. Magazine’s best small markets to do business. The unemployment rate in the Altoona MSA decreased from a 7.6% average in 2010 to a 7.0% average in 2011 and was at 6.6% at the end of 2012.

In the near future, the Pennsylvania economy has the opportunity for west-central Pennsylvania.to continue to benefit from the production of shale gas. The Marcellus Shale, which underlies a vast majority of the state, is the largest unconventional natural gas reserve in the world. There is enormous economic potential for Pennsylvania to take advantage of this reserve as new drilling techniques have unlocked vast resources previously impossible to reach. Technology developed recently at Penn State now allows drilling companies to reach the gas tucked inside a shale bed as much as two miles beneath the surface. The industry will create jobs in drilling and extraction, trucking and water treatment, gas line construction and maintenance, and in producing the materials for all of these needs. The projectionsuccessful development of natural gas represents one of our best opportunities to reignite Pennsylvania as a center for jobsinnovation and economic growth generated by the industry is a point of contention between industrialists and environmentalists. The environmental risks and potential regulation on drilling are key factors that could limit the potential growth and positive impact on the state.growth.

EMPLOYEES

The Company employed 374 people as of December 31, 2010,2012, in full- and part-time positions. Approximately 199188 non-supervisory employees of the Company are represented by the United Steelworkers, AFL-CIO-CLC, Local Union 2635-06. In 2009, the Company successfully negotiated a new four year labor contract with the United Steelworkers Local that will expire on October 15, 2013. The contract calls for annual wage increases of 1.5% in the first year, 2.0% in each of the second and third years, and 3.0% in the fourth year. The Company has not experienced a work stoppage since 1979. The Company is one of 13an estimated 10 union-represented banks nationwide.

INDUSTRY REGULATION

FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACTThe banking and trust industry, and the operation of bank holding companies, is highly regulated by federal and state law, and by numerous regulations adopted by the federal banking agencies and state banking agencies. Bank regulation affects all aspects of conducting business as a bank, including such major items as minimum capital requirements, limits on types and amounts of investments, loans and other assets, as well as borrowings and other liabilities, and numerous restrictions or requirements on the loan terms and other products made available to customers, particularly consumers. Federal deposit insurance (from the FDIC) is required for all banks in the United States, and maintaining FDIC insurance requires observation of the various rules of the FDIC, as well as payment of deposit premiums. New branches, or acquisitions or mergers,

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are required to be pre-approved by the responsible agency, which in the case of the Company and the Bank is the Federal Reserve and the Pennsylvania Department of Banking. The Bank provides detailed financial information to its regulators, including a quarterly call report that is filed pursuant to detailed prescribed instructions to ensure that all U.S. banks report the same way. The U.S. banking laws and regulations are frequently updated and amended, especially in response to crises in the financial industry, such as the global financial crisis of 2008, which resulted in the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in 2010, a massive statute over 1,000 pages in length affecting many facets of the financial industry.

While it is impractical to discuss all laws and regulations that regularly affect the business of the Company and its subsidiaries, set forth below is an overview of some of the major provisions and statutes that apply.

CAPITAL REQUIREMENTS

One of the most significant regulatory requirements for banking institutions is minimal capital, imposed as a ratio of capital to assets. The Federal Deposit Insurance Corporation Improvement Act, of 1991 (the “FDICIA”), among other things,as amended, identifies five capital categories for insured depository institutions: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. It requires U.S. federal bank regulatory agencies to implement systems for “prompt corrective action” for insured depository institutions that do not meet minimum capital requirements based on these categories. The FDICIA imposes progressively more restrictive constraints on operations, management and capital distributions, depending on the category in which an institution is classified. Unless a bank is well capitalized, it is subject to restrictions on its ability to utilize brokered deposits and on other aspects of its operations. The FDICIA generally prohibitsGenerally, a bank is prohibited from paying any dividend or making any capital distribution or paying any management fee to its holding company if the bank would thereafter be undercapitalized. An undercapitalized bank must develop a capital restoration plan, and its parent holding company must guarantee the bank’s compliance with the plan up to the lesser of 5% of the bank’s assets at the time it became undercapitalized and the amount needed to comply with the plan.

As of December 31, 2010,2012, the Company believes that its Bankbank subsidiary was well capitalized, based on the prompt corrective action guidelines described above. As discussed below, however, the capital requirements for all banks are being increased under the Dodd-Frank Act. As required by that Act, the banking agencies have proposed new capital regulations, but have not yet issued final rules. The Company believes that new capital requirements, significantly increasing the amount of capital required over today’s requirements, will be imposed over the next couple of years. A bank’s capital category is determined solely for the purpose of applying the prompt corrective action regulations, and the capital category may not constitute an accurate representation of the bank’s overall financial condition or prospects for other purposes.

TEMPORARY LIQUIDITY GUARANTEE PROGRAM

On November 21, 2008, the Board of Directors of the FDIC adopted a final rule relating to the Temporary Liquidity Guarantee Program (TLGP). The TLGP was announced by the FDIC on October 14, 2008, preceded by the determination of systemic risk by the Secretary of the Department of Treasury, as an initiative to counter the system-wide crisis in the nation’s financial sector. Under the TLGP the FDIC will (1) guarantee, through the earlier of maturity or June 30, 2012, certain newly issued senior unsecured debt issued by participating institutions on or after October 14, 2008, and before June 30, 2009 and (2) provide full FDIC deposit insurance coverage for non-interest bearing transaction deposit accounts, Negotiable Order of Withdraw (NOW) accounts paying less than 0.5% interest per annum and Interest on Lawyers Trust Accounts held at participating FDIC-insured institutions through December 31, 2010. Coverage under the TLGP was available for the first 30 days without charge. The fee assessment for coverage of senior unsecured debt ranges from 50 basis points to 100 basis points per annum, depending on the initial maturity of the debt. The fee assessment for deposit insurance coverage is 10 basis points per quarter on amounts in covered accounts exceeding $250,000. The Company elected to participate in the program that provided full FDIC deposit insurance coverage for all non-interest bearing accounts that became effective on December 31, 2010 and will last until December 31, 2012.

SARBANES-OXLEY ACT OF 2002

The Sarbanes-Oxley Act of 2002 is not a banking law, but contains important requirements for public companies in the area of financial disclosure and corporate governance. In accordance with Section 302(a) of the Sarbanes-Oxley Act, written certifications by the Company’s Chief Executive Officer and Chief Financial Officer are required. These certifications attest, among other things, that the Company’s quarterly and annual reports filed with the SEC do not contain any untrue statement of a material fact. In response to the Sarbanes-Oxley Act of 2002, the Company adopted a series of procedures to further strengthen its corporate governance practices. The Company also requires signed certifications from managers who are responsible for internal controls throughout the Company as to the integrity of the information they prepare. These procedures supplement the Company’s Code of Conduct Policy and other procedures that were previously in place. In 2005, the Company implemented and has since maintained a program designed to comply with Section 404 of the Sarbanes-Oxley Act. This program included the identification of key processes and accounts, documentation of the design of control effectiveness over process and entity level controls, and testing of the effectiveness of key controls.

PRIVACY PROVISIONS OF GRAMM-LEACH-BLILEY ACT

Under the Gramm-Leach-Bliley Act (GLB Act), federalFederal banking regulators adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about customers to non-affiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to non-affiliated third parties. The privacy provision of the GLB Actprovisions affects how consumer

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information is transmitted through diversified financial companies and conveyed to outside vendors. The Company believes it is in compliance with the various provisions of the GLB Act.provisions.

USA PATRIOT ACT OF 2001

A major focus of governmental policy on financial institutions in recent years has been aimed at combating money laundering and terrorist financing. The USA Patriot Act substantially broadened the scope of United States anti-money laundering laws and regulations by imposing significant new compliance and due diligence

obligations, creating new crimes and penalties and expanding the extra-territorial jurisdiction of the United States. The United States Treasury Department has issued and, in some cases, proposed a number of regulations that apply various requirements of the USA Patriot Act to financial institutions. These regulations impose obligations on financial institutions to maintain appropriate policies, procedures and controls to detect, prevent and report money laundering and terrorist financing and to verify the identity of their customers. Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the Company.

DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT

On July 21, 2010, the President signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). This new law will significantly changechanged the currentprevious bank regulatory structure and affectaffects the lending, deposit, investment, trading and operating activities of financial institutions and their holding companies.

The Dodd-Frank Act requires various federal agencies to adopt a broad range of new rules and regulations, and to prepare various studies and reports for Congress. The federal agencies are given significant discretion in drafting such rules and regulations. The due date for many of such regulations andis still in the future; consequently, many of the details and much of the impact of the Dodd-Frank Act may not be known for months or years.

CertainMany provisions of the Dodd-Frank Act are expected to have a near term impact on the Company.already in effect. For example, effective July 21, 2011, a provision of the Dodd-Frank Act eliminates the federal prohibitions on paying interest on demand deposits, thus allowing businesses to have interest bearing checking accounts. Depending on competitive responses, this significant change to existingprior law could have an adverse impact on the Company’s interest expense.

The Dodd-Frank Act also broadensbroadened the base for Federal Deposit Insurance Corporation insurance assessments. Assessments will now be based on the average consolidated total assets less tangible equity capital of a financial institution. The Dodd-Frank Act also permanently increasesincreased the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor, retroactive to January 1, 2008, and non-interest bearing transaction accounts havehad unlimited deposit insurance through December 31, 2013.2012.

Bank and thrift holding companies with assets of less than $15 billion as of December 31, 2009, such as the Company, will be permitted to include trust preferred securities that were issued before May 19, 2010, as Tier 1 capital; however, trust preferred securities issued by a bank or thrift holding company (other than those with assets of less than $500 million) after May 19, 2010, will no longer count as Tier 1 capital. Trust preferred securities still will be entitled to be treated as Tier 2 capital.

The Dodd-Frank Act will requirealso requires publicly traded companies to give stockholders a non-binding vote on executive compensation and so-called “golden parachute” payments, and allow greater access by shareholders to the company’s proxy material by authorizing the SEC to promulgate rules that would allow stockholders to nominate their own candidates using a company’s proxy materials.payments. The legislation also directs the Federal Reserve Board to promulgate rules prohibiting excessive compensation paid to bank holding company executives, regardless of whether the company is publicly traded.

The Dodd-Frank Act createscreated a new Consumer Financial Protection Bureau with broad powers to supervise and enforce consumer protection laws. The Consumer Financial Protection Bureau has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The Consumer Financial Protection Bureau has examination and enforcement authority over all banks and savings institutions with more than

$10 $10 billion in assets. Banks and savings institutions with $10 billion or less in assets such as the Company will continue to be examined for compliance with the consumer laws by their

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primary bank regulators. The Dodd-Frank Act also weakens the federal preemption rules that have been applicable for national banks and federal savings associations and gives state attorneys generalattorney generals the ability to enforce federal consumer protection laws.

It is difficult to predict at this time what specificthe total impact the Dodd-Frank Act and the yet to be written implementing rules and regulations will have on community banks. However, it is expected that, at a minimum, theyit will increase our capital requirements, our operating and compliance costs, and could increase our interest expense.

AVAILABLE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC. These filings are available to the public on the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file with the SEC at the SEC’s public reference room, located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.

Our Internet address is http://www.ameriserv.com. We make available free of charge onhttp://www.ameriserv.com our annual, quarterly and current reports, and amendments to those reports, as soon as reasonably practical after we electronically file such material with, or furnish it to, the SEC.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 1B. UNRESOLVED STAFF COMMENTS

The Company has no unresolved staff comments from the SEC for the reporting periods presented.

ITEM 2. PROPERTIES

The principal offices of the Company and the Bank occupy the five-story AmeriServ Financial building at the corner of Main and Franklin Streets in Johnstown plus twelve floors of the building adjacent thereto. The Company occupies the main office and its subsidiary entities have 14 other locations which are owned. EightNine additional locations are leased with terms expiring from January 1, 20102013 to August 31, 2030.

ITEM 3. LEGAL PROCEEDINGS

The Company is subject to a number of asserted and unasserted potential legal claims encountered in the normal course of business. In the opinion of both management and legal counsel, there is no present basis to conclude that the resolution of these claims will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

COMMON STOCK

As of January 31, 2011,2013, the Company had 4,0693,906 shareholders of record for its common stock. AmeriServ Financial, Inc.’sThe Company’s common stock is traded on the NASDAQ Global Market System under the symbol “ASRV.” The following table sets forth the actual high and low closing prices and the cash dividends declared per share for the periods indicated:

Information regarding restrictions on the Company’s ability to pay dividends is included in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Capital Resources.” Information required by this section is presented in the “Equity

		PRICES								CASH DIVIDENDS DECLARED
		HIGH				LOW
Year ended December 31, 2012:
First Quarter		$	2.80			$	1.85			$	0.00
Second Quarter			3.07				2.55				0.00
Third Quarter			2.99				2.70				0.00
Fourth Quarter			3.05				2.76				0.00
Year ended December 31, 2011
First Quarter		$	2.37			$	1.59			$	0.00
Second Quarter			2.47				1.81				0.00
Third Quarter			2.27				1.57				0.00
Fourth Quarter			2.12				1.78				0.00

Equity Compensation Plan Information Table” section

The following table summarizes the number of shares remaining for issuance under ASRV’s outstanding stock incentive plans as of December 31, 2012.

Equity Compensation Plan Information
Plan category		Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)				Weighted-average exercise price of outstanding options, warrants and rights (b)				Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders			398,371			$	2.43				632,491
Equity compensation plans not approved by security holders			0				0				0
Total			398,371			$	2.43				632,491

In November 2011, the Proxy StatementBoard of Directors authorized a new program to repurchase 1.1 million common shares. The following table summarizes common share repurchase activity for the Annual Meeting of Shareholders.

ITEM 6.

SELECTED CONSOLIDATED FINANCIAL DATA

		Total Number of Shares				Average Price Paid Per Share				Number of Shares that may yet be Purchased
October			5,600			$	3.03				106,700
November			84,900			$	2.99				0

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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

SELECTED FIVE-YEAR CONSOLIDATED FINANCIAL DATA

		AT OR FOR THE YEAR ENDED DECEMBER 31,																				AT OR FOR THE YEAR ENDED DECEMBER 31,
		2010				2009				2008				2007				2006				2012				2011				2010				2009				2008
		(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)																				(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
SUMMARY OF INCOME STATEMENT DATA:
Total interest income		$	44,831			$	47,455			$	47,819			$	49,379			$	46,565			$	39,917			$	41,964			$	44,831			$	47,455			$	47,819
Total interest expense			12,489				15,021				18,702				25,156				22,087				7,714				9,681				12,489				15,021				18,702
Net interest income			32,342				32,434				29,117				24,223				24,478				32,203				32,283				32,342				32,434				29,117
Provision for loan losses			5,250				15,150				2,925				300				(125	)
Net interest income after provision for loan losses			27,092				17,284				26,192				23,923				24,603
Provision (credit) for loan losses																							(775)				(3,575	)			5,250				15,150				2,925
Net interest income after provision (credit) for loan losses																							32,978				35,858				27,092				17,284				26,192
Total non-interest income			13,967				13,928				16,424				14,707				12,841				14,943				13,569				13,967				13,928				16,424
Total non-interest expense			39,697				39,157				35,637				34,672				34,692				40,641				40,037				39,697				39,157				35,637
Income (loss) before income taxes			1,362				(7,945	)			6,979				3,958				2,752				7,280				9,390				1,362				(7,945	)			6,979
Provision (benefit) for income taxes			80				(3,050	)			1,470				924				420				2,241				2,853				80				(3,050	)			1,470
Net income (loss)		$	1,282			$	(4,895	)		$	5,509			$	3,034			$	2,332			$	5,039			$	6,537			$	1,282			$	(4,895	)		$	5,509
Net income (loss) available to common shareholders																						$	4,211			$	5,152			$	121			$	(6,053	)		$	5,474
PER COMMON SHARE DATA:
Basic earnings (loss) per share		$	0.01			$	(0.29	)		$	0.25			$	0.14			$	0.11			$	0.21			$	0.24			$	0.01			$	(0.29	)		$	0.25
Diluted earnings (loss) per share			0.01				(0.29	)			0.25				0.14				0.11				0.21				0.24				0.01				(0.29	)			0.25
Cash dividends declared			0.00				0.00				0.025				0.00				0.00				0.00				0.00				0.00				0.00				0.025
Book value at period end			4.07				4.09				4.39				4.07				3.82				4.67				4.37				4.07				4.09				4.39
BALANCE SHEET AND OTHER DATA:
Total assets		$	948,974			$	970,026			$	966,929			$	904,878			$	895,992			$	1,000,991			$	979,076			$	948,974			$	970,026			$	966,929
Loans and loans held for sale, net of unearned income			678,181				722,904				707,108				636,155				589,435				731,741				670,847				678,181				722,904				707,108
Allowance for loan losses			19,765				19,685				8,910				7,252				8,092				12,571				14,623				19,765				19,685				8,910
Investment securities available for sale			164,811				131,272				126,781				140,582				172,223				151,538				182,923				164,811				131,272				126,781
Investment securities held to maturity			7,824				11,611				15,894				18,533				20,657				13,723				12,280				7,824				11,611				15,894
Deposits			801,216				786,011				694,956				710,439				741,755				835,734				816,420				801,216				786,011				694,956
Total borrowings			27,385				64,664				146,863				95,200				63,122
Total borrowed funds																							41,745				34,850				27,385				64,664				146,863
Stockholders’ equity			107,058				107,254				113,252				90,294				84,684				110,468				112,352				107,058				107,254				113,252
Full-time equivalent employees			348				345				353				351				369				350				347				348				345				353
SELECTED FINANCIAL RATIOS:
Return on average assets																							0.51%				0.68	%			0.13	%			(0.51	)%			0.62	%
Return on average total equity			1.19	%			(4.33	)%			5.93	%			3.51	%			2.74	%			4.51				5.90				1.19				(4.33	)			5.93
Return on average assets			0.13				(0.51	)			0.62				0.34				0.27
Loans and loans held for sale, net of unearned income, as a percent of deposits, at period end			84.64				91.97				101.75				89.54				79.46				87.56				82.17				84.64				91.97				101.75
Ratio of average total equity to average assets			11.25				11.72				10.40				9.79				9.73				11.36				11.49				11.25				11.72				10.40
Common stock cash dividends as a percent of net income available to common shareholders			—				—				9.92				—				—				—				—				—				—				9.92
Interest rate spread			3.51				3.37				3.21				2.54				2.67				3.43				3.47				3.51				3.37				3.21
Net interest margin			3.79				3.72				3.64				3.06				3.12				3.65				3.72				3.79				3.72				3.64
Allowance for loan losses as a percentage of loans and loans held for sale, net of unearned income, at period end			2.91				2.72				1.26				1.14				1.37
Non-performing assets as a percentage of loans, loans held for sale and other real estate owned, at period end			2.12				2.53				0.65				0.83				0.39
Allowance for loan losses as a percentage of loans, net of unearned income, at period end																							1.74				2.20				2.95				2.74				1.26
Non-performing assets as a percentage of loans and other real estate owned, at period end																							1.00				0.78				2.14				2.55				0.65
Net charge-offs as a percentage of average loans and loans held for sale			0.74				0.60				0.20				0.19				0.16				0.19				0.24				0.74				0.60				0.20
Ratio of earnings to fixed charges and preferred dividends:(1)
Ratio of earnings to fixed charges and preferred dividends:(1)
Excluding interest on deposits			1.49	X			(1.12	)X			3.17	X			2.60	X			1.93	X			3.80X				4.11X				1.49X				(1.12)X				3.17X
Including interest on deposits			1.10				0.53				1.37				1.16				1.12				1.80				1.83				1.10				0.53				1.37
Cumulative one year interest rate sensitivity gap ratio, at period end			1.13				1.08				1.10				0.90				0.85				1.30				1.29				1.13				1.08				1.10

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ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

The following discussion and analysis of financial condition and results of operations of AmeriServ Financial, Inc. (AmeriServ) should be read in conjunction with the consolidated financial statements of AmeriServ Financial, Inc. including the related notes thereto, included elsewhere herein.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2010, 2009,2012, 2011, AND 20082010

2010

2012 SUMMARY OVERVIEW:

On January 25, 2011,22, 2013, AmeriServ Financial, Inc. (ASRV) releasedreported its 2012 fourth quarter and full year financial resultsresults. Regarding the fourth quarter 2012, net income available to common shareholders was $683,000 or $0.04 per diluted share. This represents a decline from $1,505,000 or $0.07 per diluted share reported for the fourth quarter 2011. The quarter itself was quite positive in the basic “blocking and tackling” common to today’s community banking. For example, lending is now the strongest it has been since 2009, with a growth in net loans of 2010 and for the full year of 2010. Net income for$25.1 million during the fourth quarter was reported at $1,114,000 or $0.04 per share. This representsquarter. Non-interest income reached a recent high, as the fifth consecutive quarter of improved financial performance for ASRVTrust Company and is an 83% increase over the third quarter of 2010 and a $2,793,000 increase in absolute dollarsresidential mortgage originations continued their growth. Operating expenses increased by $254,000 over the fourth quarter of 2009. These2011. This was a result of the necessary expenses needed to develop the new Loan Production Offices in Altoona and Harrisburg, PA and Hagerstown, MD. However, there was another dynamic at work which relates to our decision to make a provision to the allowance for losses during the fourth quarter improved results enabled AmeriServ to record net income for the full year of 2010 of $1,282,000 or $0.01 per share. This performance produced a net income improvement of $6,177,000 over 2009, as each of the last three quarters of 2010 surpassed the same quarters of 2009 by a wide margin.2012.

This improvement cannot be attributed to a strong recovery ofWe believe it is broadly apparent that the national or regional economy as regional loan demand remains weakcontinues to struggle. And, the length of this struggle is having an impact on AmeriServ’s markets. Small businesses, often family-owned, form a significant segment of AmeriServ’s borrowers. These are excellent people, our friends and regional unemployment remained well above 9% duringneighbors, and the entire year. Rather, wesource of countless jobs throughout the region. But the length of this economic weakness is taking its toll. Unemployment rates continue to rise, and newspaper headlines are discouraging. We believe that the improvement at ASRV is$1.9 million increase in non-performing assets in the resultfourth quarter was an indication of this economic pressure. Therefore, the Board and management actions recognizing that in a troubled economy it is important to introduce special monitoring activities to protect the franchise. The Asset Quality Task Force continues to meet weekly so as to recognize any weakness in specific loans. This vigilance provides an opportunity to both assist the borrower where possible and also to take the necessary steps to keep ASRV strong. The Asset Liability Management Committee also convenes regularly to measure the strength of capital and the necessary depth of liquidity. But perhaps most important of all is that those ASRV community bankers, who meet with customers regularly, continue to provide competitive banking products as well as helpful counsel. We understand that it is our responsibility to always provide our customers with a strong company, but side-by-side with friendly personal service. This has been the formula that has produced our improved performance in 2010.

A few years ago we promised that ASRV was going to return to its old fashioned community banking roots. That promise lies behind many of our activities in 2010. Specifically,

the new executives we hired. Each of these executives has a strong record of achievement in previous assignments and is already focusing on a productive and profitable future for both of these key activities.

It is especially important that we call to your attention our continuing plan to provide resources to AmeriServ’s Trust Company in support of its new strategic direction. The size and scope of this wholly owned subsidiary provides the corporation with more customer service wealth management opportunities than many of our peers enjoy.

We do want you to know that we are quite aware of the economic challenges faced by our region and by America itself. It is this realistic view of conditions that has caused us to emphasize the needchose to make ASRV strong and safe. The capital levels at ASRV have been, and continuethe first positive contribution to be, well above any requirement of the Pennsylvania Department of Banking or the Federal Reserve Bank of Philadelphia. Additionally, ASRV has been careful to build and maintain a high level of liquidity during these volatile times when even the safety of the debt instruments of sovereign nations has been called into question. We have also consistently maintained a strong loan loss reserve to provide a buffer against the recession driven problems which have beset many struggling individuals and commercial enterprises. As of December 31, 2010, our allowance for loan losses since the third quarter of 2010. We have learned over the years to carefully react to such trends. AmeriServ has maintained strong asset quality by recognizing weakened borrowers early so we can help them meet their obligations. This was 138%our strategy during the Great Recession of 2008 and 2009. Therefore, this action simply recognizes the realities of the struggling economy, and is the necessary insurance policy needed to protect the franchise and the investment of our totalshareholders. A bit of non-performing assets irrespectiveresearch will substantiate that AmeriServ is well reserved for difficult times, and has a long history of any collateral pledgedhelping borrowers help themselves.

For the full year 2012, AmeriServ produced net income available to secure suchcommon shareholders of $4,211,000 or $0.21 per diluted share. The result was $942,000 or $0.03 per share less than 2011.

Once again this performance was aided by strong results in several business lines. Net loans increased by $61 million. Deposits increased by $19 million. Non interest income increased by $1.37 million, and non-interest expenses were held to a 1.51% increase over 2011. However, the ultimate bottom line was impacted by fewer reductions in the allowance for loan losses during the first three quarters of 2012, and the decision to further strengthen that reserve by adding $550,000 in the fourth quarter due to an increase in non-performing loans.

We were especially pleased by a few specific areas of strong performance:

In normal times, this story of strong loans and deposits, higher levels of non-interest income and careful expense management should be the right recipe for earnings growth. But there is a well-recognized limiting factor at work.

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We are aware that following the Lehman Brothers bankruptcy in September 2008, financial markets were in a free fall. Understandingly, at that time, the Federal Reserve adopted a low interest rate policy in an attempt to keep credit markets functioning. But now, here in 2013, we begin the fifth year of this low interest rate program. This period of “easy money” has reduced the interest payments on the Federal debt. But this low interest rate policy punishes savers, pension funds, and community banks. Rates on loans are at the lowest level since the 1930s and World War II. This means community bank revenue has shrunk precipitously during this period. But here is the essential paradox. Unfortunately the four plus years of “easy money” has not reduced unemployment or increased economic activity as expected.

The AmeriServ Board and its management team constantly monitor these trends. We’ve learned that weakening economic conditions require action. During 2008 and 2009, AmeriServ created “Fortress Johnstown” with strong capital, deep liquidity, and realistic loan loss reserves. These actions resulted in a quick recovery in 2010 and 2011. Therefore, we have again taken the necessary actions to continue AmeriServ’s position as a strong and disciplined community bank. We believe this is the correct course and we are pleased to maintain the balance sheet strength needed to take swift action.

We are very aware that this is a challenging time for investors. The financial sector has been severely criticized for unwise practices and programs. But AmeriServ’s Board and management pledged that this company would return to its community banking roots and not participate in financial gimmicks and fads. The result has been three consecutive profitable years since the Great Recession. On December 31, 2010, AmeriServ common stock closed at $1.58; on December 31, 2011, it closed at $1.95, a gain of 23%; and, on December 31, 2012, our stock closed at $3.01, an additional gain of 54%. In just 24 months our stock price has increased by 91%. These gains, along with the $5 million buyback of common shares from the fourth quarter of 2011 through the end of 2012, has been part of a continuing program to reward the people and companies who are our valued investors.

The United States is involved in a long-term effort to reduce the level of debt at the individual level, the company level and the government level. It is whenessential for the long term health of our nation. But it has and will continue to produce challenges we consider the nature of the challenges of the economy that we are determined to not relax our vigilance.all must face. AmeriServ will tackle these times with a continued strong capital base, deep liquidity, and careful expense management. We believe that the steady improvement inthis will create a sound and rewarding investment for our financial performance over the last year is proof positive that vigilance is important but must also be supported by strong capitalshareholders, a good employer for our staff, and strong liquidity. We are also taking the time to position AmeriServ to have the talent and the energy to be a force in this region as the economy improves. Our motto has becomesource of economic strength for today with a deep reservoir of energy for tomorrow as we work to assist the communities we serve.our communities.

PERFORMANCE OVERVIEW …OVERVIEW... The following table summarizes some of the Company’s key profitability performance indicators for each of the past three years.

		YEAR ENDED DECEMBER 31,												YEAR ENDED DECEMBER 31,
		2010				2009				2008				2012				2011				2010
		(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)												(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
Net income (loss)		$	1,282			$	(4,895	)		$	5,509
Diluted earnings (loss) per share			0.01				(0.29	)			0.25
Net income														$	5,039			$	6,537			$	1,282
Net income available to common shareholders															4,211				5,152				121
Diluted earnings per share															0.21				0.24				0.01
Return on average assets			0.13	%			(0.51	)%			0.62	%			0.51%				0.68	%			0.13	%
Return on average equity			1.19				(4.33	)			5.93				4.51				5.90				1.19

The Company reported net income available to common shareholders of $4.2 million or $0.21 per diluted common share for 2012. This represented a 12.5% decline in earnings per share from 2011 where net income available to common shareholders totalled $5.2 million or $0.24 per diluted share. The largest factor causing the reduction in net income available to common shareholders was the provision for loan losses. The Company recorded a negative provision of $775,000 but this was at a lesser level than the $3,575,000 negative provision for 2011. The Company’s net interest income performance has been relatively stable throughout 2012. It decreased for the full year of 2012 by only $80,000, or 0.2%, when compared to the entire year of 2011. The Company’s strong growth in non-interest income has been a financial performance highlight in 2012. Non-interest income increased by $1.4 million or 10.1% largely due to increased revenue from residential mortgage banking activities and our Trust Company’s wealth management businesses. Continued focus on expense control helped contain the increase in non-interest expense to $604,000 or 1.5%.

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Finally, diluted earnings per share were impacted by the $828,000 dividend requirement on the US Treasury SBLF preferred stock which reduced the amount of net income available to common shareholders. This amount, however, was less than the preferred stock dividend and accelerated preferred stock discount accretion related to the former TARP CPP preferred stock that totalled $1,385,000 in 2011. The Company has been successful in growing commercial loans in categories that qualify for the SBLF. As such, the dividend rate that AmeriServ pays on the SBLF preferred stock dropped in the fourth quarter of 2012 from 5% to 1%-the lowest rate available under the SBLF program. This 1% rate, which is now locked in for the first half of 2013, saves the Company approximately $200,000 on a quarterly basis.

The Company reported net income of $6.5 million or $0.24 per diluted common share for 2011. This represents an increase of $5.3 million from the 2010 net income of $1.3 million or $0.01 per diluted common share. A significant and sustained improvement in asset quality was an important factor contributing to our financial success in 2011. Specifically, non-performing assets and classified loans again declined as a result of our successful problem credit resolution efforts allowing the Company to reverse a portion of the allowance for loan loss into earnings in 2011 while still increasing the non-performing assets coverage ratio. The Company’s net interest income performance was relatively stable throughout 2011. It decreased for the full year of 2011 by only $59,000, or 0.2%, when compared to the entire year of 2010. Non-interest income decreased by $398,000 or 2.8% largely due to an investment security loss of $358,000 realized in the first quarter of 2011 that resulted from a portfolio repositioning strategy. Continued focus on expense control helped contain the increase in non-interest expense to $340,000 or 0.9%. Income tax expense increased sharply by $2.8 million in 2011 due to the Company’s improved profitability. Finally, diluted earnings per share were again impacted by the $1.1 million dividend requirement on preferred stock and the $267,000 accelerated preferred stock discount accretion related to the repayment of the TARP CPP preferred stock which reduced the amount of net income available to common shareholders.

The Company reported net income of $1.3 million or $0.01 per diluted common share for 2010. This representsrepresented an increase of $6.2 million from the 2009 net loss of $4.9 million or $0.29 per diluted common share. Improvements in asset quality were a key factor causing our increased earnings in 2010. Proactive monitoring of our loan portfolio and problem credits allowed us to carefully adjust downward the provision for loan losses in each quarter of 2010 while still maintaining good loan loss reserve coverage ratios. Also, there was little change in total revenue in 2010 as both net interest income and non-interest income were comparable with the prior year. Non-interest expenses increased moderately in 2010 as they grew by 1.4%. Diluted earnings per share were again impacted by the preferred dividend requirement on the TARP-CPP preferred stock and accretion of discount on preferred stock, which amounted to $1.3 million and reduced the amount of net income available to common shareholders.

The Company reported a net loss of $4.9 million or $0.29 loss per diluted common share for 2009. This represented a decrease of $10.4 million from the 2008 net income of $5.5 million or $0.25 per diluted common share. An increased provision for loan losses, reduced non-interest income, and higher non-interest expenses were the main factors causing the decrease in net income in 2009. These negative items more than offset good

growth in net interest income that resulted from solid loan and deposit growth within our retail Bank in 2009 and effective balance sheet management in a declining interest rate environment.

NET INTEREST INCOME AND MARGIN …MARGIN...The Company’s net interest income represents the amount by which interest income on earning assets exceeds interest paid on interest bearing liabilities. Net interest income is a primary source of the Company’s earnings; it is affected by interest rate fluctuations as well as changes in the amount and mix of earning assets and interest bearing liabilities. The following table summarizes the Company’s net interest income performance for each of the past three years:

		YEAR ENDED DECEMBER 31,												YEAR ENDED DECEMBER 31,
		2010				2009				2008				2012				2011				2010
		(IN THOUSANDS, EXCEPT RATIOS)												(IN THOUSANDS, EXCEPT RATIOS)
Interest income		$	44,831			$	47,455			$	47,819			$	39,917			$	41,964			$	44,831
Interest expense			12,489				15,021				18,702				7,714				9,681				12,489
Net interest income			32,342				32,434				29,117				32,203				32,283				32,342
Net interest margin			3.79	%			3.72	%			3.64	%			3.65%				3.72	%			3.79	%