AmeriServ Financial (ASRV) 8-K Ameriserv Financial Reports Increased Earnings for the Full Year of 2022 and Announces Quarterly Common Stock Cash Dividend

Exhibit 99.1

AMERISERV FINANCIAL REPORTS INCREASED EARNINGS FOR THE FULL YEAR OF 2022 AND ANNOUNCES QUARTERLY COMMON STOCK CASH DIVIDEND

JOHNSTOWN,PA-AmeriServFinancial,Inc.(NASDAQ:ASRV)reportedfourth quarter2022netincomeof $947,000,or $0.06perdilutedcommonshare. Thisearningsperformance wasa $905,000,or 48.9%,decrease from the fourthquarter of2021whennet income totaled$1,852,000,or $0.11per dilutedcommonshare. For the year ended December 31, 2022, the Company reported net income of $7,448,000, or $0.43 per diluted common share.  This represents a 4.9% increase in earnings per share from the full year of 2021 when net income totaled $7,072,000, or $0.41 per diluted common share.  On an adjusted basis, eliminating the impact of a pension settlement charge, diluted earnings per share for the 2022 year increased by 12% to $0.55⁽¹⁾⁽²⁾. Thefollowingtablehighlightsthe Company’sfinancialperformancefor both the three- and twelve-month periods endedDecember 31,2022and2021:

	Fourth Quarter  2022		Fourth Quarter  2021		Year Ended December 31, 2022			Year Ended December 31, 2021
Net income	$	947,000	$	1,852,000	$	7,448,000	$	7,072,000
Diluted earnings per share	$	0.06	$	0.11	$	0.43	$	0.41
Net income, adjusted(1)(2)	$	1,962,000	$	2,348,000	$	9,470,000	$	8,471,000
Diluted earnings per share, adjusted(1)(2)	$	0.11	$	0.14	$	0.55	$	0.49

Jeffrey A. Stopko, President and Chief Executive Officer, commented on the 2022 financial results: “During a period of extreme economic volatility in 2022 characterized by the highest inflation in almost 40 years and an over 4% increase in short-term interest rates by the Federal Reserve, the AmeriServ Financial team worked together to produce the highest EPS performance in over 20 years and a 15% increase in dividend payments to our shareholders. This improved earnings performance for the 2022 year, on both an actual and adjusted basis, reflects the full benefit of several important strategic actions that our company executed in 2021 to reduce our cost of funding, the successful management of our asset quality throughout the pandemic, and effective balance sheet management. I was particularly pleased that we were able to grow our net interest income by $1.5 million despite a $1.8 million reduction in PPP loan related fee income in 2022.  Our Company will continue to diligently focus on further improving earnings in 2023 to benefit all of our key stakeholder groups.”

All fourth quarter and full year of 2022 financial performance metrics within this document are compared to the fourth quarter and full year of 2021 unless otherwise noted.

The Company's net interest income in the fourth quarter of 2022 decreased by $155,000, or 1.5%, from the prior year's fourth quarter but, for the full year of 2022, increased by $1.5 million, or 3.8%, when compared to the full year of 2021.  The Company’s net interest margin of 3.21% for the fourth quarter of 2022 and 3.27% for the full year represents a five basis point decrease for the quarter but a 12 basis point improvement for the full year.  Net interest income demonstrated an increasing trend through the first three quarters of 2022 as interest income increased to a higher level than the increase in interest expense.  However, this positive trend reversed in the fourth quarter as interest expense increased to a higher level than the increase in interest income.  In comparison to 2021, interest income increased for both the fourth quarter and the full year.  The Company benefitted from the higher U.S. Treasury yield curve as interest rates increased due to the Federal Reserve’s action to tighten monetary policy in their effort to tame decades high inflation.  The higher interest rate environment along with increased investment in the securities portfolio more than offset a reduced level of Paycheck Protection Program (PPP) loan fee income and caused total interest income to increase for both the fourth quarter and full year of 2022 when compared to the same time periods from last year.  The increased national interest rates resulted in total deposit and borrowing costs increasing in the fourth quarter and full year of 2022.  However, the annual increase to interest expense was significantly lower when compared to the quarterly increase.  This resulted from the annual increase in deposit interest expense being partially offset by a 26% reduction in total borrowings interest expense, as the strategic actions taken by management in 2021 to lower funding costs favorably impacted financial performance.  Financial results also reflect the impact of continued diligent management of our asset quality, as the Company’s loan loss provision expense increased by only $25,000 in the 2022 fourth quarter but is $1,050,000 lower when compared to the 2021 full year.  Overall, the full year 2022 increase to net interest income, along with a reduced loan loss provision, more than offset a lower level of non-interest income and higher non-interest expense resulting in an improved earnings performance in 2022.

Total average loans in the fourth quarter of 2022 are lower than the 2021 fourth quarter average by $14.5 million, or 1.5%, while total average loans for the full year of 2022 were $11.2 million, or 1.1%, lower than the 2021 full year average.  Strong loan pipelines resulted in 2022 production more than offsetting a higher than typical level of payoff activity during the year.  Excluding PPP loans, total average loans for the full year of 2022 exceeded the 2021 full year average by $30.1 million, or 3.2%, as growth of commercial real estate (CRE) and home equity loans along with a higher volume of residential mortgage loans more than offset a decrease in the

level of commercial & industrial loans.  Of the $100 million of PPP loans originated from the government stimulus programs, only one very small PPP loan remains on the balance sheet, reflecting the Company’s successful efforts working with our customers through the Small Business Administration (SBA) to complete the forgiveness process.  Overall, the higher interest rate environment along with the higher average volumes of CRE, residential mortgages and home equity loans, resulted in total loan interest income improving by $1.4 million, or 14.1%, for the fourth quarter of 2022 when compared to the fourth quarter of last year.  On a year-to-date basis, however, the increase in loan interest and fee income is not as significant, increasing by $899,000, or 2.2%.  This results from the favorable impact of the higher volume of traditional loans and the higher interest rate environment being partially offset by a $1.8 million, or 80.9%, reduction in PPP loan fee related income.  Finally, on an end of period basis at December 31, 2022 and excluding total PPP loans, the total loan portfolio is approximately $22.1 million, or 2.3%, higher than the December 31, 2021 level.  

Total investment securities averaged $245.2 million for full year of 2022 which is $35.3 million, or 16.8%, higher than the $209.9 million average for the twelve months of last year.  The increase in the U.S. Treasury yield curve resulted in a more favorable market for securities purchasing activity in 2022.  The two-year to ten-year portion of the yield curve increased by approximately 225 to 363 basis points since the beginning of the year, with shorter yields in that range increasing to a higher degree than the longer yields, resulting in yield curve inversion.  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.  Management purchased more of these investments by redeploying the cash flow from the excess payoff activity from the loan portfolio and profitably utilizing the increased short-term liquidity on our balance sheet.  This redeployment of funds contributed to total securities growing between years.  Management also continued to purchase taxable municipals and corporate securities to maintain a well-diversified portfolio.  Overall, in 2022, the average balance of total interest earning assets was consistent with the full year 2021 average while total interest income increased by $2.4 million, or 5.1%, between years.

Due to a combination of increased investment in securities, loan growth and total deposits modestly declining, short-term investments decreased throughout the year and are now at pre-pandemic levels before government stimulus impacted the economy.  Total short-term investments averaged $4.6 million in the fourth quarter of 2022, which is $32.0 million, or 87.4%, lower than the 2021 fourth quarter average.  Despite this decline, the Company’s liquidity position remains strong.  We will continue to carefully monitor our liquidity position and short-term investments as we expect deposits related to government stimulus programs to continue to decline in 2023.    

On the liability side of the balance sheet, total average deposits for 2022 are relatively consistent with the 2021 full year average, exceeding by $1.9 million, or 0.2%.  Total deposits continue to demonstrate stability over the past year despite a $16.3 million, or 1.4%, decrease in total average deposits when comparing the 2022 fourth quarter to last year’s fourth quarter.  Deposit volumes continue to reflect the favorable impact of government stimulus which provided support to many Americans and financial assistance to municipalities and school districts during the pandemic.  However, the quarterly decrease reflects a portion of the funds from the government stimulus programs leaving the balance sheet and also reflects greater pricing competition in the market to retain deposits because of the increasing national interest rates. Overall, the loan to deposit ratio averaged 85.4% in the fourth quarter of 2022, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is strongly positioned to support our customers and our community during times of economic volatility.  

Total interest expense for the full year of 2022 increased by $909,000, or 12.0%, when compared to the full year of 2021, due to higher deposit and short-term borrowings interest expense.  Deposit interest expense was higher by $1.6 million, or 33.7%, despite the full year average volume of total deposits remaining relatively consistent with the 2021 full year average.  The impact that the higher national interest rates had on deposit costs combined with increased market competition to retain and attract deposits became more evident during the fourth quarter of 2022.  Total deposit interest expense in the fourth quarter of 2022 increased by $2.0 million, or 225%, when compared to the fourth quarter of 2021, while deposit interest expense increased by $1.6 million, or 33.7%, on an annual basis.  The disproportionate increase that exists in the quarterly and annual comparisons is due to the lag that occurred from the time national interest rates rose and when the higher rates impacted deposit pricing.  In 2022, the Company benefitted from management’s decision to allow a high-cost institutional deposit to mature during the third quarter of 2021 which proved to be beneficial since the interest rate on this particular deposit was indexed to the market and would have become more expensive with the rising national interest rates experienced this year.  This large institutional deposit was replaced by the additional low cost, fixed rate deposits from the Somerset County branch acquisition and resulted in significant interest expense savings.  The rising national interest rates this year did result in certain deposit products, particularly public funds, that are tied to a market index, repricing upward with the move in national interest rates and causing interest expense to increase.  Specifically, total deposit cost averaged 1.02% in the fourth quarter of 2022, which is 71 basis points higher than total deposit cost of 0.31% in the fourth quarter of 2021.  For the full year of 2022, total deposit cost of 56 basis points was 14 basis points higher than full year deposit cost in 2021.  

Total borrowings interest expense increased by $225,000, or 46.6%, between the fourth quarter of 2022 and the fourth quarter of 2021 but decreased by $709,000, or 25.5%, when comparing the full year of 2022 to the full year of 2021. The quarterly increase results from the impact that the higher national interest rates had on short-term borrowings cost as well as the Company utilizing more short-term borrowed funds during the fourth quarter. The decrease to borrowings interest expense for the full year results from the favorable impact of the August 2021 subordinated debt offering which was used to replace higher cost debt. This transaction effectively lowered debt cost on these long-term funds by nearly 4.0%. This savings is recognized even though the size of the new

subordinated debt is $7.0 million higher than the debt instruments it replaced.  Note that included in 2021 borrowings interest expense is $202,000 of additional interest expense that the Company had to recognize from the write-off of the unamortized issuance costs from the original debt instruments that the new sub-debt replaced.  Borrowings interest expense, in both the quarterly and full year time periods, was favorably impacted by reduced interest expense from Federal Home Loan Bank (FHLB) term borrowings, which declined by $100,000, or 51.5%, for the quarter and by $322,000, or 37.1%, for the full year.  The full year average balance of FHLB term borrowings was lower in 2022 by $16.1 million, or 32.6%, as strength of the Company’s liquidity position allowed management to let FHLB term advances mature and not be replaced.  

The Company recorded a $275,000 loan loss provision in the fourth quarter of 2022 as compared to a $250,000 provision recorded in the fourth quarter of 2021.  For the full year 2022, the Company recorded a $50,000 provision compared to a $1.1 million provision recorded for the full year of 2021.  The increased fourth quarter 2022 provision expense primarily reflects loan portfolio growth and an increase in classified loans.  The $1,050,000 favorable comparison for total provision expense for the full year of 2022 reflects improved credit quality for the overall portfolio due to several loan upgrades and increased payoff and paydown activity of criticized loans. As demonstrated historically, the Company continues its strategic conviction that a strong allowance for loan losses is needed, which has proven to be essential given the support provided to certain borrowers as they fully recover from the COVID-19 pandemic.  Overall non-performing assets remain well controlled totaling $5.2 million, or 0.52% of total loans, on December 31, 2022.  The Company experienced net loan charge-offs of $1.7 million, or 0.17% of total average loans, for the 2022 year and is higher than net loan charge-offs of $47,000, which equates to 0.00% of total average loans, for the full year of 2021. The higher level of net charge-offs in 2022 is primarily related to the partial charge-down and transfer of one non-owner occupied commercial real estate loan relationship into non-accrual status while the borrower pursues the sale of the property.  In summary, the allowance for loan losses provided 207% coverage of non-performing assets, and 1.08% of total loans, on December 31, 2022, compared to 373% coverage of non-performing assets, and 1.26% of total loans, on December 31, 2021.    

Total non-interest income in the fourth quarter of 2022 decreased by $439,000, or 10.1%, from the prior year's fourth quarter and for the full year of 2022 decreased by $1.1 million, or 6.0%, from the full year of 2021.  Net realized gains on loans held for sale decreased by $456,000, or 68.7%, for the full year, due to the lower level of residential mortgage loan production which reflects a reduced level of mortgage loan refinance activity because of the rapid escalation of interest rates since the beginning of 2022.  Residential mortgage loan production through twelve months in 2022 totaled $24.8 million representing a $65.8 million, or 72.6%, reduction from the 2021 production level. The reduced level of mortgage loan production also caused mortgage related fees to decline by $243,000, or 67.9%, for the full year.  Wealth management fees decreased by $289,000, or 9.8%, for the fourth quarter of 2022 and also declined by $366,000, or 3.1%, for the full year compared to 2021.  The decrease in both time periods reflects the unfavorable impact of the declining equity markets on wealth management fee income as well as the unfavorable impact that the move in the bond market had on wealth management asset values.  Both unfavorable items were partially offset by new customer business growth.  The fair market value of wealth management assets declined since the fourth quarter of 2021 by $398.3 million, or 14.7%, and totaled $2.3 billion at December 31, 2022.  Service charges on deposit accounts increased by $143,000, or 14.8%, in 2022 compared to the full year of 2021, as consumers are more active this year, increasing their spending habits.  Other income is $96,000, or 14.3%, lower for the quarter and $35,000, or 1.4%, lower for the full year 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.  Finally, the Company recognized an $84,000 gain from the sale of investment securities in 2021 while no gain or loss was recognized in 2022.

Total non-interest expense in the fourth quarter of 2022 increased by $581,000, or 4.8%, when compared to the fourth quarter of 2021 and increased for the full year of 2022 by $1.0 million, or 2.2%, when compared to 2021.  Salaries & employee benefits declined by $76,000, or 1.1%, for the quarter but are $645,000, or 2.3%, higher for the full year of 2022.  Within total salaries & benefits expense, salaries costs are higher by $1.4 million, or 7.8%, for the full year due to merit increases and a higher level of full-time equivalent employees (FTEs) as the Company has been able to fill certain open positions this year.  Also, contributing to the higher salaries & employee benefits costs were additional increases to health care, payroll taxes and other employee benefits.  Partially offsetting these higher costs within salaries & benefits was lower incentive compensation by $808,000, or 38.2%, due to the reduced level of loan production and no performance related executive incentive payments in 2022.  Similar to what occurred in 2021, the Company was required to recognize a settlement charge in connection with its defined benefit pension plan in the second through fourth quarters of 2022 within other expense. The amount of the charge in the fourth quarter was $1.3 million, bringing the total settlement charge recognized in 2022 to $2.5 million.  The 2022 full year settlement charge was $762,000, or 43.9%, higher than the settlement charge of $1.7 million recognized for the 2021 year while the fourth quarter 2022 settlement charge was $638,000 higher than the fourth quarter 2021 charge. A settlement charge must be recognized when the total dollar amount of lump sum distributions paid from the pension plan to retired employees exceeds a threshold of expected annual service and interest costs in the current year.  The value of the lump sums continued to be elevated this year due to the lower interest rate levels late in 2021 when these lump sums were calculated.  However, since the retired employees have chosen to take the lump sum payments, these individuals are no longer included in the pension plan.  Therefore, the Company’s basic pension expense is expected to be lower in the future.  This was evident in 2022 as the basic amount of pension expense required to be recognized, excluding the impact of settlement charges, was $997,000, or 98.2%, lower for the full year of 2022 compared to basic pension expense for the full year of 2021.  Professional fees were $521,000, or 9.5%, higher for the full year of 2022 due to higher legal costs, outsourced professional services and other professional fees.  Net occupancy expenses were $263,000, or 10.0%, higher in 2022 due to increased utilities cost along with

maintenance and repair expense which was primarily related to the new branch office.  Partially offsetting these higher costs were other expenses decreasing by $309,000, or 3.5%, for the full year of 2022 when compared to last year.  Contributing to the lower level of other expense was no additional costs related to a branch acquisition in 2022 after $389,000 of expense was recognized for this purpose in 2021.  Other expenses were also favorably impacted by a $243,000 credit for the unfunded commitment reserve after $117,000 of expense was recognized last year, resulting in a $360,000 favorable shift.  Finally, FDIC insurance expense was $140,000, or 21.4%, lower in 2022.

Note that pension settlement charges are dependent upon the level of national interest rates from the previous year and the impact that interest rates have on lump sum distributions to those employees eligible to retire.  Pension settlement charges are also dependent upon the choice of retiring employees to either take a lump sum distribution or receive future monthly annuity payments.  As stated above, non-interest expense includes $2.5 million of pension settlement charges in 2022 and $1.7 million of pension settlement charges in 2021.  These settlement charges do not impact and are not reflective of the operations of the Company.  As such, deducting the full year pension settlement charges from total non-interest expense in both years would result in the increase in total non-interest expense between 2021 and 2022 being reduced to $272,000, or only 0.6%.  This is a clear indication of the Company demonstrating good expense control in this inflationary environment.  Further, adjusting earnings to reflect the lower level of non-interest expense as well as the corresponding necessary adjustment to income tax expense would result in increased earnings in both years.  In 2022, net income would improve from $7,448,000, or $0.43 per diluted common share, to adjusted net income of $9,470,000⁽¹⁾⁽²⁾, or $0.55 per diluted common share⁽¹⁾⁽²⁾.  In 2021, net income would improve from $7,072,000, or $0.41 per diluted common share, to adjusted net income of $8,471,000⁽¹⁾⁽²⁾, or $0.49 per diluted common share⁽¹⁾⁽²⁾.  Return on assets (ROA) in 2022 would improve from 0.55% to an adjusted ROA of 0.70%⁽¹⁾⁽²⁾ and improve in 2021 from 0.52% to an adjusted ROA of 0.63%⁽¹⁾⁽²⁾.      

The Company recorded income tax expense of $126,000, or an effective tax rate of 11.7%, in the fourth quarter of 2022, which compares to income tax expense of $421,000, or an effective tax rate of 18.5%, for the fourth quarter of 2021.  The lower income tax rate in the fourth quarter 2022 reflects an adjustment made to correct an over accrual for income tax expense through the first three quarters of 2022.  For the full year of 2022, the Company recorded income tax expense of $1.8 million, or an effective tax rate of 19.1%, compared to income tax expense of $1.7 million in 2021, or an effective tax rate of 19.4%.    

The Company had total assets of $1.4 billion, shareholders' equity of $104.0 million, a book value of $6.08 per common share and a tangible book value⁽¹⁾ of $5.28 per common share on December 31, 2022.  The decline in the Company’s book value and tangible book value per share in 2022 reflects a decrease in the fair value of the Company’s available for sale investment securities due to higher interest rates and the negative impact of a revaluation of the net pension liability resulting from a drop in the fair value of the pension plan assets. Both of these metrics demonstrated improvement between the third and fourth quarter of 2022. The Company continued to maintain strong capital ratios that exceed the regulatory defined well capitalized status.

QUARTERLY COMMON STOCK DIVIDEND

The Company’s Board of Directors declared a $0.03 per share quarterly common stock cash dividend. The cash dividend is payable February 21, 2023 to shareholders of record on February 6, 2023. This cash dividend represents a 3.03% annualized yield using the January 18, 2023 closing stock price of $3.96. For the full year of 2022, the Company’s dividend payout ratio amounted to 26.7%.

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 of 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; 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, 2021. 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.

(2) Adjusted for pension settlement charge.

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

SUPPLEMENTAL FINANCIAL PERFORMANCE DATA

December 31, 2022

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

(Unaudited)

2022

	1QTR			2QTR				3QTR		4QTR				YEAR TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income	$	2,418		$	1,981		$	2,102		$	947		$	7,448
Net income, adjusted (1)(2)		2,418			2,802			2,288			1,962			9,470
PERFORMANCE PERCENTAGES (annualized):
Return on average assets		0.73	%		0.59	%		0.62	%		0.28	%		0.55	%
Return on average assets, adjusted (1)(2)		0.73			0.83			0.68			0.58			0.70
Return on average equity		8.48			7.10			7.81			3.70			6.83
Return on average equity, adjusted (1)(2)		8.48			10.04			8.50			7.66			8.69
Return on average tangible common equity (1)		9.62			8.10			8.97			4.27			7.82
Return on average tangible common equity, adjusted (1)(2)		9.62			11.45			9.76			8.86			9.94
Net interest margin		3.14			3.23			3.35			3.21			3.27
Net charge-offs (recoveries) as a percentage of average loans		0.03			0.01			0.57			0.08			0.17
Loan loss provision (credit) as a percentage of average loans		(0.17)			(0.13)			0.20			0.11			0.01
Efficiency ratio (4)		81.38			84.89			78.93			90.37			83.82
Efficiency ratio, adjusted (1)(2)(4)		81.38			77.78			77.37			81.44			79.46
EARNINGS PER COMMON SHARE:
Basic	$	0.14		$	0.12		$	0.12		$	0.06		$	0.44
Basic, adjusted (1)(2)		0.14			0.16			0.13			0.11			0.55
Average number of common shares outstanding		17,094			17,109			17,111			17,115			17,107
Diluted		0.14			0.12			0.12			0.06			0.43
Diluted, adjusted (1)(2)		0.14			0.16			0.13			0.11			0.55
Average number of common shares outstanding		17,146			17,149			17,145			17,150			17,146
Cash dividends paid per share	$	0.025		$	0.030		$	0.030		$	0.030		$	0.115

2021

	1QTR			2QTR				3QTR		4QTR				YEAR TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income	$	2,081		$	1,708		$	1,431		$	1,852		$	7,072
Net income, adjusted (1)(2)		2,081			2,394			1,648			2,348			8,471
PERFORMANCE PERCENTAGES (annualized):
Return on average assets		0.65	%		0.51	%		0.41	%		0.54	%		0.52	%
Return on average assets, adjusted (1)(2)		0.65			0.71			0.47			0.69			0.63
Return on average equity		8.04			6.46			5.07			6.46			6.48
Return on average equity, adjusted (1)(2)		8.04			9.06			5.84			8.19			7.76
Return on average tangible common equity (1)		9.08			7.30			5.78			7.35			7.35
Return on average tangible common equity, adjusted (1)(2)		9.08			10.24			6.65			9.32			8.80
Net interest margin		3.23			3.13			2.85			3.26			3.15
Net charge-offs (recoveries) as a percentage of average loans		0.05			(0.01)			(0.01)			(0.01)			0.00
Loan loss provision (credit) as a percentage of average loans		0.17			0.04			0.14			0.10			0.11
Efficiency ratio (4)		79.00			84.35			84.42			82.73			82.60
Efficiency ratio, adjusted (1)(2)(4)		79.00			78.39			82.45			78.53			79.55
EARNINGS PER COMMON SHARE:
Basic	$	0.12		$	0.10		$	0.08		$	0.11		$	0.41
Basic, adjusted (1)(2)		0.12			0.14			0.10			0.14			0.50
Average number of common shares outstanding		17,064			17,073			17,075			17,080			17,073
Diluted		0.12			0.10			0.08			0.11			0.41
Diluted, adjusted (1)(2)		0.12			0.14			0.10			0.14			0.49
Average number of common shares outstanding		17,101			17,131			17,114			17,119			17,114
Cash dividends paid per share	$	0.025		$	0.025		$	0.025		$	0.025		$	0.100

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

--CONTINUED--

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

(Unaudited)

2022

	1QTR				2QTR			3QTR			4QTR
FINANCIAL CONDITION DATA AT PERIOD END:
Assets	$	1,331,265		$	1,321,402		$	1,350,048		$	1,361,736
Short-term investments/overnight funds		13,588			10,714			4,133			4,132
Investment 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 (5)		7,835			2,242			24			22
Allowance for loan losses		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
Guaranteed junior subordinated deferrable interest debentures		0			0			0			0
Subordinated debt, net		26,613			26,624			26,634			26,644
Shareholders’ equity		113,692			106,392			101,587			104,040
Non-performing assets		3,401			3,240			4,596			5,200
Tangible common equity ratio (1)		7.58	%		7.08	%		6.57	%		6.70	%
Total capital (to risk weighted assets) ratio		14.01			14.33			13.92			13.89
PER COMMON SHARE:
Book value	$	6.65		$	6.22		$	5.94		$	6.08
Tangible book value (1)		5.84			5.41			5.13			5.28
Market value (3)		4.04			3.94			3.80			3.94
Wealth management assets – fair market value (6)	$	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

2021
	1QTR			2QTR			3QTR			4QTR
FINANCIAL CONDITION DATA AT PERIOD END:
Assets	$	1,311,412		$	1,360,583		$	1,338,886		$	1,335,560
Short-term investments/overnight funds		18,025			45,459			10,080			16,353
Investment securities		204,193			219,395			214,295			216,922
Total loans and loans held for sale, net of unearned income		986,557			992,865			996,029			986,037
Paycheck Protection Program (PPP) loans (5)		67,253			48,098			29,260			17,311
Allowance for loan losses		11,631			11,752			12,124			12,398
Intangible assets		11,944			13,785			13,777			13,769
Deposits		1,117,091			1,168,742			1,144,391			1,139,378
Short-term and FHLB borrowings		55,149			48,149			43,653			42,653
Guaranteed junior subordinated deferrable interest debentures		12,974			12,978			0			0
Subordinated debt, net		7,540			7,546			26,600			26,603
Shareholders’ equity		105,331			111,272			113,736			116,549
Non-performing assets		4,245			3,727			3,119			3,323
Tangible common equity ratio (1)		7.19	%		7.24	%		7.54	%		7.78	%
Total capital (to risk weighted assets) ratio		13.03			12.79			13.61			14.04
PER COMMON SHARE:
Book value	$	6.17		$	6.52		$	6.66		$	6.82
Tangible book value (1)		5.47			5.71			5.85			6.02
Market value (3)		4.06			3.93			3.88			3.86
Wealth management assets – fair market value (6)	$	2,517,810		$	2,614,898		$	2,596,672		$	2,712,695
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees		301			300			297			304
Branch locations		16			17			17			17
Common shares outstanding		17,069,000			17,075,000			17,075,000			17,081,500

NOTES:

(1) Non-GAAP Financial Information. See “Reconciliation of Non-GAAP Financial Measures” at end of release.

(2) Adjusted for pension settlement charge.

(3) 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.

(4) Ratio calculated by dividing total non-interest expense by tax equivalent net interest income plus total non-interest income.

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

(6) Not recognized on the consolidated balance sheets.

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

CONSOLIDATED STATEMENT OF INCOME

(Dollars in thousands)

(Unaudited)

2022

	1QTR		2QTR			3QTR	4QTR			YEAR TO DATE
INTEREST INCOME
Interest and fees on loans	$	9,496	$	9,725	$	10,691	$	11,572	$	41,484
Interest on investments		1,532		1,802		2,009		2,231		7,574
Total Interest Income		11,028		11,527		12,700		13,803		49,058
INTEREST EXPENSE
Deposits		796		956		1,720		2,952		6,424
All borrowings		465		447		451		708		2,071
Total Interest Expense		1,261		1,403		2,171		3,660		8,495
NET INTEREST INCOME		9,767		10,124		10,529		10,143		40,563
Provision (credit) for loan losses		(400)		(325)		500		275		50
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES		10,167		10,449		10,029		9,868		40,513
NON-INTEREST INCOME
Wealth management fees		3,165		2,976		2,813		2,666		11,620
Service charges on deposit accounts		272		263		289		284		1,108
Net realized gains on loans held for sale		95		35		53		25		208
Mortgage related fees		33		32		27		23		115
Net realized gains on investment securities		0		0		0		0		0
Bank owned life insurance		209		231		329		320		1,089
Other income		561		601		815		575		2,552
Total Non-Interest Income		4,335		4,138		4,326		3,893		16,692
NON-INTEREST EXPENSE
Salaries and employee benefits		7,405		6,963		7,071		7,053		28,492
Net occupancy expense		741		697		698		747		2,883
Equipment expense		397		415		393		431		1,636
Professional fees		1,324		1,510		1,656		1,487		5,977
FDIC deposit insurance expense		145		130		125		115		515
Other expenses		1,467		2,395		1,784		2,855		8,501
Total Non-Interest Expense		11,479		12,110		11,727		12,688		48,004
PRETAX INCOME		3,023		2,477		2,628		1,073		9,201
Income tax expense		605		496		526		126		1,753
NET INCOME	$	2,418	$	1,981	$	2,102	$	947	$	7,448

2021

	1QTR		2QTR			3QTR	4QTR			YEAR TO DATE
INTEREST INCOME
Interest and fees on loans	$	10,327	$	10,283	$	9,830	$	10,145	$	40,585
Interest on investments		1,442		1,555		1,542		1,545		6,084
Total Interest Income		11,769		11,838		11,372		11,690		46,669
INTEREST EXPENSE
Deposits		1,402		1,306		1,189		909		4,806
All borrowings		675		665		957		483		2,780
Total Interest Expense		2,077		1,971		2,146		1,392		7,586
NET INTEREST INCOME		9,692		9,867		9,226		10,298		39,083
Provision (credit) for loan losses		400		100		350		250		1,100
NET INTEREST INCOME AFTER PROVISION (CREDIT) FOR LOAN LOSSES		9,292		9,767		8,876		10,048		37,983
NON-INTEREST INCOME
Wealth management fees		2,872		3,022		3,137		2,955		11,986
Service charges on deposit accounts		201		224		260		280		965
Net realized gains on loans held for sale		495		122		15		32		664
Mortgage related fees		130		99		81		48		358
Net realized gains on investment securities		0		84		0		0		84
Bank owned life insurance		332		218		221		346		1,117
Other income		584		630		702		671		2,587
Total Non-Interest Income		4,614		4,399		4,416		4,332		17,761
NON-INTEREST EXPENSE
Salaries and employee benefits		6,941		6,867		6,910		7,129		27,847
Net occupancy expense		680		649		651		640		2,620
Equipment expense		390		403		390		399		1,582
Professional fees		1,314		1,396		1,379		1,367		5,456
FDIC deposit insurance expense		155		155		170		175		655
Other expenses		1,825		2,568		2,020		2,397		8,810
Total Non-Interest Expense		11,305		12,038		11,520		12,107		46,970
PRETAX INCOME		2,601		2,128		1,772		2,273		8,774
Income tax expense		520		420		341		421		1,702
NET INCOME	$	2,081	$	1,708	$	1,431	$	1,852	$	7,072

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

AVERAGE BALANCE SHEET DATA

(Dollars in thousands)

(Unaudited)

	2022				2021
	4QTR			TWELVE MONTHS	4QTR			TWELVE MONTHS
Interest earning assets:
Loans and loans held for sale, net of unearned income	$	978,005	$	977,541	$	992,475	$	988,761
Short-term investments and bank deposits		4,628		23,213		36,651		47,306
Total investment securities		265,433		245,226		218,855		209,892
Total interest earning assets		1,248,066		1,245,980		1,247,981		1,245,959
Non-interest earning assets:
Cash and due from banks		16,947		17,602		18,296		18,736
Premises and equipment		17,646		17,498		17,529		17,749
Other assets		71,726		77,194		82,784		77,806
Allowance for loan losses		(11,242)		(11,895)		(12,310)		(11,919)
Total assets	$	1,343,143	$	1,346,379	$	1,354,280	$	1,348,331
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand	$	226,078	$	227,838	$	224,412	$	213,736
Savings		135,809		137,845		131,843		126,050
Money market		285,860		289,674		288,931		297,844
Other time		284,853		285,760		301,736		305,251
Total interest bearing deposits		932,600		941,117		946,922		942,881
Borrowings:
Federal funds purchased and other short-term borrowings		30,431		9,268		244		389
Advances from Federal Home Loan Bank		24,518		33,253		42,161		49,328
Guaranteed junior subordinated deferrable interest debentures		0		0		0		9,741
Subordinated debt		27,000		27,000		27,000		15,079
Lease liabilities		3,351		3,446		3,613		3,729
Total interest bearing liabilities		1,017,900		1,014,084		1,019,940		1,021,147
Non-interest bearing liabilities:
Demand deposits		211,987		215,196		213,954		211,557
Other liabilities		11,616		8,113		6,631		6,446
Shareholders’ equity		101,640		108,986		113,755		109,181
Total liabilities and shareholders’ equity	$	1,343,143	$	1,346,379	$	1,354,280	$	1,348,331

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

RETURN ON AVERAGE TANGIBLE COMMON EQUITY, TANGIBLE COMMON EQUITY RATIO, TANGIBLE BOOK VALUE PER SHARE, AND ADJUSTED NET INCOME & ASSOCIATED RATIOS FROM THE PENSION SETTLEMENT CHARGE

(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", "tangible book value per share", "net income, adjusted", "diluted earnings per share, adjusted", "basic earnings per share, adjusted", "non-interest expense, adjusted", "return on average assets, adjusted", "return on average equity, adjusted", "return on average tangible common equity, adjusted", and "efficiency ratio, adjusted".  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.  Currently, the only adjustment included is for non-cash settlement charges in connection with our pension plan distributions.

2022

														YEAR TO
	1QTR			2QTR				3QTR		4QTR				DATE
RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income	$	2,418		$	1,981		$	2,102		$	947		$	7,448
Average shareholders’ equity		115,658			111,898			106,749			101,640			108,986
Less: Average intangible assets		13,766			13,757			13,749			13,742			13,753
Average tangible common equity		101,892			98,141			93,000			87,898			95,233
Return on average tangible common equity (annualized)		9.62	%		8.10	%		8.97	%		4.27	%		7.82	%

	1QTR			2QTR				3QTR			4QTR
TANGIBLE COMMON EQUITY
Total shareholders’ equity	$	113,692		$	106,392		$	101,587		$		104,040
Less: Intangible assets		13,761			13,753			13,746				13,739
Tangible common equity		99,931			92,639			87,841				90,301
TANGIBLE ASSETS		���
Total assets		1,331,265			1,321,402			1,350,048				1,361,736
Less: Intangible assets		13,761			13,753			13,746				13,739
Tangible assets		1,317,504			1,307,649			1,336,302				1,347,997
Tangible common equity ratio		7.58	%		7.08	%		6.57	%			6.70	%
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		$		5.28

2021

	1QTR			2QTR				3QTR		4QTR				YEAR TO DATE
RETURN ON AVERAGE TANGIBLE COMMON EQUITY
Net income	$	2,081		$	1,708		$	1,431		$	1,852		$	7,072
Average shareholders’ equity		104,931			106,009			112,028			113,755			109,181
Less: Average intangible assets		11,944			12,194			13,780			13,773			12,923
Average tangible common equity		92,987			93,815			98,248			99,982			96,258
Return on average tangible common equity (annualized)		9.08	%		7.30	%		5.78	%		7.35	%		7.35	%

	1QTR			2QTR			3QTR				4QTR
TANGIBLE COMMON EQUITY
Total shareholders’ equity	$	105,331		$	111,272		$	113,736		$	116,549
Less: Intangible assets		11,944			13,785			13,777			13,769
Tangible common equity		93,387			97,487			99,959			102,780
TANGIBLE ASSETS
Total assets		1,311,412			1,360,583			1,338,886			1,335,560
Less: Intangible assets		11,944			13,785			13,777			13,769
Tangible assets		1,299,468			1,346,798			1,325,109			1,321,791
Tangible common equity ratio		7.19	%		7.24	%		7.54	%		7.78	%
Total shares outstanding		17,069,000			17,075,000			17,075,000			17,081,500
Tangible book value per share	$	5.47		$	5.71		$	5.85		$	6.02

AMERISERV FINANCIAL, INC.

NASDAQ: ASRV

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

RETURN ON AVERAGE TANGIBLE COMMON EQUITY, TANGIBLE COMMON EQUITY RATIO, TANGIBLE BOOK VALUE PER SHARE, AND ADJUSTED NET INCOME & ASSOCIATED RATIOS FROM THE PENSION SETTLEMENT CHARGE

(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", "tangible book value per share", "net income, adjusted", "diluted earnings per share, adjusted", "basic earnings per share, adjusted", "non-interest expense, adjusted", "return on average assets, adjusted", "return on average equity, adjusted", "return on average tangible common equity, adjusted", and "efficiency ratio, adjusted".  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.  Currently, the only adjustment included is for non-cash settlement charges in connection with our pension plan distributions.

2022
				2022
	1QTR			2QTR				3QTR		4QTR				YEAR TO DATE
ADJUSTED NET INCOME AND RATIOS FOR PENSION SETTLEMENT CHARGE
Net income (A)	$	2,418		$	1,981		$	2,102		$	947		$	7,448
Plus: Pension settlement charge (B)		0			1,014			230			1,254			2,498
Less: Related tax effect (C)		0			193			44			239			476
Net income, adjusted (D = A + B – C)		2,418			2,802			2,288			1,962			9,470
RETURN ON AVERAGE ASSETS, ANNUALIZED
Average assets (E)	$	1,351,731		$	1,350,230		$	1,340,412		$	1,343,143		$	1,346,379
Return on average assets (= A / E)		0.73	%		0.59	%		0.62	%		0.28	%		0.55	%
Return on average assets, adjusted (= D / E)		0.73	%		0.83	%		0.68	%		0.58	%		0.70	%
RETURN ON AVERAGE EQUITY, ANNUALIZED					��
Average equity (F)	$	115,658		$	111,898		$	106,749		$	101,640		$	108,986
Return on average equity (= A / F)		8.48	%		7.10	%		7.81	%		3.70	%		6.83	%
Return on average equity, adjusted (= D / F)		8.48	%		10.04	%		8.50	%		7.66	%		8.69	%
RETURN ON AVERAGE TANGIBLE COMMON EQUITY, ANNUALIZED
Average tangible common equity (G)	$	101,892		$	98,141		$	93,000		$	87,898		$	95,233
Return on average tangible common equity (= A / G)		9.62	%		8.10	%		8.97	%		4.27	%		7.82	%
Return on average tangible common equity, adjusted (= D / G)		9.62	%		11.45	%		9.76	%		8.86	%		9.94	%
EFFICIENCY RATIO
Non-interest expense (H)	$	11,479		$	12,110		$	11,727		$	12,688		$	48,004
Less: Pension settlement charge (B)		0			1,014			230			1,254			2,498
Non-interest expense, adjusted (I = H – B)		11,479			11,096			11,497			11,434			45,506
Tax equivalized net interest income (J)	$	9,771		$	10,128		$	10,532		$	10,147		$	40,578
Total non-interest income (K)		4,335			4,138			4,326			3,893			16,692
Total operating income (L = J + K)		14,106			14,266			14,858			14,040			57,270
Efficiency ratio (= H / L)		81.38	%		84.89	%		78.93	%		90.37	%		83.82	%
Efficiency ratio, adjusted (= I / L)		81.38	%		77.78	%		77.37	%		81.44	%		79.46	%
EARNINGS PER COMMON SHARE (EPS)
Basic average number of common shares outstanding (M)		17,094			17,109			17,111			17,115			17,107
Basic EPS (= A / M)	$	0.14		$	0.12		$	0.12		$	0.06		$	0.44
Basic EPS, adjusted (= D / M)	$	0.14		$	0.16		$	0.13		$	0.11		$	0.55
Diluted average number of common shares outstanding (N)		17,146			17,149			17,145			17,150			17,146
Diluted EPS (= A / N)	$	0.14		$	0.12		$	0.12		$	0.06		$	0.43
Diluted EPS, adjusted (= D / N)	$	0.14		$	0.16		$	0.13		$	0.11		$	0.55

2022
				2021
	1QTR			2QTR				3QTR		4QTR				YEAR TO DATE
ADJUSTED NET INCOME AND RATIOS FOR PENSION SETTLEMENT CHARGE
Net income (A)	$	2,081		$	1,708		$	1,431		$	1,852		$	7,072
Plus: Pension settlement charge (B)		0			851			269			616			1,736
Less: Related tax effect (C)		0			165			52			120			337
Net income, adjusted (D = A + B – C)		2,081			2,394			1,648			2,348			8,471
RETURN ON AVERAGE ASSETS, ANNUALIZED
Average assets (E)	$	1,297,907		$	1,353,182		$	1,387,956		$	1,354,280		$	1,348,331
Return on average assets (= A / E)		0.65	%		0.51	%		0.41	%		0.54	%		0.52	%
Return on average assets, adjusted (= D / E)		0.65	%		0.71	%		0.47	%		0.69	%		0.63	%
RETURN ON AVERAGE EQUITY, ANNUALIZED
Average equity (F)	$	104,931		$	106,009		$	112,028		$	113,755		$	109,181
Return on average equity (= A / F)		8.04	%		6.46	%		5.07	%		6.46	%		6.48	%
Return on average equity, adjusted (= D / F)		8.04	%		9.06	%		5.84	%		8.19	%		7.76	%
RETURN ON AVERAGE TANGIBLE COMMON EQUITY, ANNUALIZED
Average tangible common equity (G)	$	92,987		$	93,815		$	98,248		$	99,982		$	96,258
Return on average tangible common equity (= A / G)		9.08	%		7.30	%		5.78	%		7.35	%		7.35	%
Return on average tangible common equity, adjusted (= D / G)		9.08	%		10.24	%		6.65	%		9.32	%		8.80	%
EFFICIENCY RATIO
Non-interest expense (H)	$	11,305		$	12,038		$	11,520		$	12,107		$	46,970
Less: Pension settlement charge (B)		0			851			269			616			1,736
Non-interest expense, adjusted (I = H – B)		11,305			11,187			11,251			11,491			45,234
Tax equivalized net interest income (J)	$	9,698		$	9,872		$	9,231		$	10,301		$	39,102
Total non-interest income (K)		4,614			4,399			4,416			4,332			17,761
Total operating income (L = J + K)		14,312			14,271			13,647			14,633			56,863
Efficiency ratio (= H / L)		79.00	%		84.35	%		84.42	%		82.73	%		82.60	%
Efficiency ratio, adjusted (= I / L)		79.00	%		78.39	%		82.45	%		78.53	%		79.55	%
EARNINGS PER COMMON SHARE (EPS)
Basic average number of common shares outstanding (M)		17,064			17,073			17,075			17,080			17,073
Basic EPS (= A / M)	$	0.12		$	0.10		$	0.08		$	0.11		$	0.41
Basic EPS, adjusted (= D / M)	$	0.12		$	0.14		$	0.10		$	0.14		$	0.50
Diluted average number of common shares outstanding (N)		17,101			17,131			17,114			17,119			17,114
Diluted EPS (= A / N)	$	0.12		$	0.10		$	0.08		$	0.11		$	0.41
Diluted EPS, adjusted (= D / N)	$	0.12		$	0.14		$	0.10		$	0.14		$	0.49