AMERISERV FINANCIAL REPORTS INCREASED EARNINGS FOR THE FOURTH QUARTER AND FULL YEAR OF 2025 AND ANNOUNCES QUARTERLY COMMON STOCK CASH DIVIDEND

Jeffrey A. Stopko, President and Chief Executive Officer, commented on the 2025 financial results: "AmeriServ Financial's improved financial performance in 2025 was driven by increased revenue which caused us to achieve earnings growth while absorbing a higher provision for credit losses which was needed to bring final resolution to our largest non-performing loan.  The increase in total revenue was caused by meaningful improvement in our net interest income for both the fourth quarter and full year of 2025 because of effective balance sheet management. Specifically, our net interest margin increased by 34-basis points for the 2025 year leading to a $6.2 million increase in net interest income, which is important since this category represents approximately 70% of our total revenue. Additionally, our non-interest expense also favorably declined in 2025. We will continue to diligently focus on both revenue growth and expense control to further improve the Company's operating efficiency in 2026. Finally, both our book value per share and tangible book value⁽¹⁾ per share experienced growth in 2025 increasing by 11.2% to $7.22 and 12.9% to $6.39, respectively, during the past year."

All fourth quarter and full year 2025 financial performance metrics within this document are compared to the fourth quarter and full year 2024 unless otherwise noted.

Net interest income in the fourth quarter of 2025 increased by $1.4 million, or 14.6%, from the prior year's fourth quarter and, for the full year of 2025, increased by $6.2 million, or 17.2%, when compared to the full year of 2024.  The Company's net interest margin of 3.23% for the fourth quarter of 2025 and 3.15% for the full year of 2025 represents a 35-basis point improvement for the quarter and a 34-basis point increase for the full year.  Along with the significantly improved net interest margin performance, the increase also reflects controlled balance sheet growth, as both total earning assets and total deposits are at higher average levels due to our effective balance sheet management and business development strategies.  This, combined with effective pricing strategies, resulted in both the total earning asset yield and cost of interest-bearing funds improving between years.  The Federal Reserve's action to lower short-term interest rates during 2024 and 2025 favorably impacted total interest-bearing deposits and borrowings costs.  Also, while the U.S. Treasury yield curve remains modestly inverted on the short end, yields in the mid to long end of the curve are higher and demonstrate a steeper upward slope which favorably impacted earning asset yields.  Management believes the net interest margin will continue to improve throughout 2026 given the effective execution of our strategy. Non-interest expense increased for the fourth quarter but declined for the full year of 2025 compared to 2024 and favorably impacted full year earnings performance as management works to carefully control operating costs and gain efficiency improvements.  Non-interest income in 2025 is lower for the fourth quarter and full year of 2025 when compared to both time periods of last year.  The 2025 provision for credit losses compared favorably to last year for the quarter but compared unfavorably to 2024 for the full year.  Overall, the Company's earnings performance for the full year of 2025 exceeds earnings for the full year of 2024 by $2.0 million, or 55.8%, and results from increased net interest income and lower total non-interest expense which more than offset the higher provision for credit losses and lower level of non-interest income.

Total average loans for the full year of 2025 grew from the full year average of 2024 by $23.7 million, or 2.3%, due to consistent new loan funding opportunities.  However, in the second half of 2025, commercial real estate (CRE) loan payoff activity exceeded originations and resulted in a $35.4 million, or 3.3%, decrease in total loans since December 31, 2024. This heightened payoff activity also caused total average loans for the fourth quarter of 2025 to compare unfavorably to the 2024 fourth quarter average by $12.8 million, or 1.2%.  Overall, total loans continue to be well above the $1.0 billion threshold, averaging $1.045 billion for the fourth quarter of 2025.  Total loan interest income improved in both time periods of 2025 compared to 2024 due to the more favorable interest rate environment, and a portion of CRE loans, that were booked during the COVID pandemic when interest rates were low, repricing upward during 2025.  Also favorably impacting loan interest income was a higher level of loan fee income primarily due to prepayment fees collected on the increased early CRE payoff activity experienced during 2025.  Total 2025 full year loan fee income was $553,000, or 58.8%, higher when compared to the full year of 2024.  These favorable items resulted in 2025 full year total loan interest income improving by $3.4 million, or 6.0%, when compared to the full year of 2024.

Total investment securities averaged $246.4 million for the fourth quarter of 2025, which was $14.8 million, or 6.4%, higher than the $231.6 million average for the fourth quarter of 2024.  Additionally, overnight short-term investments were sharply higher by $34.6 million in the fourth quarter of 2025.  These increases reflect the higher level of loan prepayment activity, as well as our liquidity position strengthening during 2025 due to deposit growth.  Therefore, more funds were available to invest in the securities portfolio during a time when security yields improved, making purchases more attractive. As a result, the securities portfolio grew by $29.0 million, or 13.2%, since December 31, 2024.  New investment security purchases were also necessary to replace cash flow from maturing securities to maintain appropriate balances for pledging purposes related to public fund deposits. The higher balances and improved yields for new securities purchases caused interest income from investments to increase by $744,000, or 31.2%, for the fourth quarter and by $1.4 million, or 14.9%, for the full year of 2025 compared to last year. Overall, the full year average balance of total interest earning assets increased from last year's full year average by $46.4 million, or 3.6%, while total interest income increased by $4.8 million, or 7.3%, from the 2024 year.

On the liability side of the balance sheet, total average deposits for the full year of 2025 were $67.3 million, or 5.8%, higher when compared to the full year average of 2024 due to the Company's successful business development efforts.  Additionally, the Company's core deposit base continues to demonstrate the strength and stability that it has for many years due to customer loyalty and confidence in AmeriServ Financial Bank.  The Company does not utilize brokered deposits as a funding source.  The loan to deposit ratio averaged 83.8% in the fourth quarter of 2025, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support our customers and our community during times of economic volatility.

Total interest expense favorably decreased by $295,000, or 3.9%, for the fourth quarter of 2025 and decreased by $1.4 million, or 4.5%, for the full year when compared to both time periods of 2024.  Deposit interest expense increased slightly by $23,000, or 0.1%, for the full year of 2025 despite total average interest-bearing deposits growing significantly by $71.7 million, or 7.2%, compared to the full year of 2024.  The small increase in deposit interest expense reflects the benefit of the Federal Reserve easing monetary policy during the final four months of 2024 and the latter portion of 2025.  This reduction in interest-bearing deposit costs contributed to the previously mentioned improvement in the net interest margin.  The Federal Reserve's action to ease monetary policy by another 75-basis points at their final three Federal Open Market Committee meetings in 2025 is anticipated to continue to have a favorable impact on interest bearing deposit costs as we move into 2026.  Overall, total deposit cost (including the benefit of non-interest-bearing demand deposits) averaged 2.06% for the full year of 2025, which is a 12-basis point improvement from the full year of 2024. 

Total borrowings interest expense decreased by $340,000, or 28.8%, for the fourth quarter of 2025 and declined by $1.4 million, or 27.7%, for the full year when compared to both time periods of 2024.  The Company's utilization of overnight borrowed funds for the full year of 2025 was significantly lower than it was for the full year of 2024, resulting in the full year average decreasing by $22.4 million, or 80.1%, due to the higher level of total average deposits. The decrease in borrowings interest expense also reflects the Federal Reserve's 2024 action to ease monetary policy by 100-basis points as well as their 2025 action to ease monetary policy by an additional 75-basis points which had an immediate and favorable impact on the cost of overnight borrowed funds.

The Company recorded a $724,000 provision for credit losses in the fourth quarter of 2025 after recording a $1.1 million provision in the fourth quarter of 2024, resulting in a decrease in provision expense of $334,000, or 31.6%.  The provision for credit losses in the fourth quarter was needed due to charge-off and charge-down activity within both the commercial & industrial (C&I) and CRE loan portfolios. For the full year of 2025, the Company recognized a $4.1 million provision for credit losses after recognizing an $884,000 provision for credit losses for the full year of 2024, resulting in an unfavorable increase of $3.2 million.  The significant increase in the provision for credit losses for the full year primarily related to a $3.1 million charge-off in 2025 that was necessary to resolve the Company's largest problem CRE loan.

Non-performing assets decreased meaningfully since September 30, 2025, by $6.4 million, or 43.0%, and totaled $8.5 million.  The decrease reflects workout efforts and the charge-down of one C&I relationship as well as the payoff and final resolution of our largest problem loan.  Non-performing loans represented 0.80% of total loans at December 31, 2025, and decreased by 59-basis points from September 30, 2025.  The Company recognized net loan charge-offs of $1.9 million, or 0.74% of total average loans, in the fourth quarter of 2025 compared to net loan charge-offs of $1.5 million, or 0.58% of total average loans, in the fourth quarter of 2024.  For the full year, the Company recognized net loan charge-offs of $4.9 million, or 0.46% of total average loans, in 2025 compared to net loan charge-offs of $2.0 million, or 0.19% of total average loans, in 2024.  Overall, the Company's allowance for loan credit losses provided 158% coverage of non-performing loans and 1.27% of total loans at December 31, 2025.   

Total non-interest income in the fourth quarter of 2025 decreased by $82,000, or 1.8%, from the prior year's fourth quarter and declined by $986,000, or 5.5%, for the full year of 2025 when compared to the full year of 2024.  Wealth management fees improved by $122,000, or 4.1%, for the quarter but were lower for the full year by $758,000, or 6.2%.  The decrease in wealth management fees for the full year is attributed to the volatility and uncertainty that existed in the financial markets due to government fiscal policy, particularly earlier in 2025 and a net loss of accounts in the first half of the year. Additionally, the Financial Services division benefited from several large new business cases in 2024.  The quarter over quarter favorable variance is due to the rebound in equity markets after the first quarter of 2025 market decline and resulted in management fees improving as the year progressed.  Overall, the fair market value of wealth management assets totaled $2.7 billion at December 31, 2025 and increased by $122.5 million, or 4.8%, since December 31, 2024.  Also, contributing to the unfavorable comparison for total non-interest income in the full year was a lower level of other income by $400,000, or 12.9%, after the Company recognized a $250,000 signing bonus from the renewal of a contract with Visa in the first quarter of 2024 while there was no such bonus in 2025.  The remaining portion of the decrease to other income for the full year and the fourth quarter of 2025 was due to the Company recognizing a more favorable adjustment in 2024 to the fair market value of an interest rate swap related risk participation agreement as well as the credit valuation adjustment to the market value of the interest rate swap contracts.  Mortgage banking revenue was lower by $120,000, or 39.5%, for the full year and resulted from a decreased level of residential mortgage production in 2025.  Positively impacting non-interest income in 2025 was a higher level of BOLI revenue by $217,000, or 20.3%, for the full year due to the Company receiving three death claims during the year.  Finally, the Company recognized gains on trading securities of $28,000 for the quarter and $118,000 for the full year from a trading account established in the second quarter of 2025.

Total non-interest expense in the fourth quarter of 2025 increased by $1.0 million, or 8.8%, when compared to the fourth quarter of 2024 but decreased by $404,000, or 0.8%, for the full year of 2025 when compared to the full year of 2024.  Professional fees increased by $670,000, or 74.8%, for the quarter but were $1.0 million, or 21.5%, lower for the full year.  The unfavorable comparison in professional fees for the quarter was due to additional expense related to an amended and restated consulting agreement with SB Value Partners that expands the nature and scope of the consulting services provided to the Company.  Details of this revised agreement were provided in the Company's Current Report on Form 8-K filed on January 7, 2026.  The favorable full year comparison for professional fees occurred as legal and professional services costs were unfavorably impacted by litigation and responses to the actions of an activist investor in 2024.  This matter was resolved in June 2024 as a result of a Settlement Agreement.  Salaries & employee benefits increased by $283,000, or 4.0%, for the fourth quarter and $552,000, or 1.9%, compared to the full year of 2024.  Within this broad category for the full year, health care costs are $355,000, or 10.6%, higher as the Company did not have to recognize any premium costs in January 2024 due to the effective negotiations with our health care provider last year. Total salaries increased by $668,000, or 3.3%, due primarily to annual salary merit increases.  Additionally, helping to offset the higher costs within total salaries & employee benefits were reduced levels of incentive compensation by $405,000, or 27.6%, in the wealth management and commercial lending divisions.  Finally, data processing and IT expenses were $138,000, or 2.9%, higher for the full year of 2025 when compared to last year due to additional expenses related to monitoring our computing and network environment. 

The Company recorded income tax expense of $1.2 million in 2025, or an effective tax rate of 17.4%, which compares to income tax expense of $798,000, or an effective tax rate of 18.1%, in 2024.  The lower effective tax rate in 2025 was caused by additional tax-free income from BOLI.

The Company had total assets of $1.45 billion, shareholders' equity of $119.3 million, a book value of $7.22 per common share and a tangible book value⁽¹⁾ of $6.39 per common share on December 31, 2025.  Book value per common share increased by $0.73, or 11.2%, and tangible book value per common share also increased by $0.73, or 12.9%, since December 31, 2024, due to a favorable adjustment for both the unrealized loss on available for sale securities and the Company's defined benefit pension plan along with the Company's improved earnings. The Company continued to maintain strong capital ratios that exceed the regulatory defined well capitalized status as of December 31, 2025.

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 17, 2026 to shareholders of record on February 2, 2026. This cash dividend represents a 3.7% annualized yield using the January 16, 2026 closing stock price of $3.22 and a 35.3% payout ratio based upon 2025 full year earnings.

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, changes in the financial markets, the level of inflation, and the direction of interest rates; volatility in earnings due to certain financial assets and liabilities held at fair value; competition levels; loan and investment prepayments differing from our assumptions; insufficient allowance for credit losses; a higher level of loan charge-offs and delinquencies than anticipated; material adverse changes in our operations or earnings; a decline in the economy in our market areas; changes in relationships with major customers; changes in effective income tax rates; higher or lower cash flow levels than anticipated; inability to hire or retain qualified employees; a decline in the levels of deposits or loss of alternate funding sources; a decrease in loan origination volume or an inability to close loans currently in the pipeline; changes in laws and regulations; adoption, interpretation and implementation of accounting pronouncements; operational risks, including the risk of fraud by employees, customers or outsiders; unanticipated effects to our banking platform, including risks and unanticipated costs related to a core system migration; 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, 2024. 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.