[10-Q] AMERISERV FINANCIAL INC /PA/ Quarterly Earnings Report

Q: How did AmeriServ (ASRV) perform in Q3 2025?

Net income was $2.544 million (EPS $0.15 ), up from $1.183 million (EPS $0.07 ) in Q3 2024.

Q: What were ASRV’s key revenue and expense trends in Q3 2025?

Net interest income increased to $11.007 million , while total non-interest expense was $11.964 million .

Q: How did ASRV’s balance sheet change by September 30, 2025?

Assets were $1.461 billion ; deposits were $1.259 billion ; cash and equivalents rose to $53.764 million .

Q: What happened with ASRV’s securities and AOCI?

A $1.0 million non-performing AFS security was charged off against its allowance; AOCI loss improved to $10.440 million .

Q: What was ASRV’s loan and reserve position?

Net loans were $1.041 billion and the allowance for credit losses was $14.408 million .

Q: Did ASRV declare a dividend in Q3 2025?

Yes. A cash dividend of $0.03 per common share was declared.

Q: What were ASRV’s year-to-date results through Q3 2025?

Nine-month net income was $4.170 million (EPS $0.25 ), compared with $2.712 million (EPS $0.16 ) in 2024.

Filing Impact

(Moderate)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

AmeriServ Financial (ASRV) reported stronger Q3 results. Net income rose to $2.544 million (EPS $0.15) from $1.183 million (EPS $0.07) a year ago as net interest income improved to $11.007 million from $8.887 million. For the nine months, net income was $4.170 million (EPS $0.25) versus $2.712 million (EPS $0.16).

Total assets were $1.461 billion, up from $1.422 billion at year-end, with deposits increasing to $1.259 billion from $1.201 billion. Cash and cash equivalents climbed to $53.764 million from $17.746 million, while net loans edged down to $1.041 billion from $1.054 billion and the allowance for credit losses increased to $14.408 million from $13.912 million.

Non-interest income was $4.401 million versus $4.203 million; wealth management fees softened, but bank owned life insurance income increased. The company charged off a non-performing available-for-sale security of $1.0 million against a previously established allowance, resulting in no AFS allowance at quarter end and reducing accumulated other comprehensive loss to $10.440 million from $15.083 million. A quarterly cash dividend of $0.03 per share was declared.

Insights

Quarterly earnings improved on wider net interest income and higher liquidity.

Quarterly net income increased to $2.544M as net interest income reached $11.007M. Deposit balances rose to $1.259B, supporting a higher cash position of $53.764M. Loans were modestly lower at $1.041B, while the allowance for credit losses increased to $14.408M.

Non-interest income mixed: wealth management fees declined year over year, partly offset by higher bank owned life insurance income. Non-interest expense was broadly stable. The company charged off a non-performing AFS security of $1.0M against its allowance, and finished with no AFS allowance.

Balance sheet metrics show improved liquidity and narrower AOCI drag, with accumulated other comprehensive loss at $10.440M. Actual impact for investors depends on sustaining net interest margins and credit trends; subsequent filings may detail further loan quality movements.

11/13/2025 - 03:13 PM

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2025

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ____________ to_____________

Commission File Number 0-11204

AmeriServ Financial, Inc.

(Exact name of registrant as specified in its charter)


	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, PA		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	Trading Symbol	Name of Each Exchange On Which Registered
Common Stock	ASRV	The NASDAQ Stock Market LLC

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. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ◻	Accelerated Filer ◻	Non-accelerated Filer ⌧	Smaller Reporting Company ☒
			Emerging growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Outstanding at November 10, 2025
Common Stock, par value $0.01		16,522,267

Table of Contents

AmeriServ Financial, Inc.

INDEX


	Page No.

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	3
Consolidated Balance Sheets (Unaudited) – September 30, 2025 and December 31, 2024	3
Consolidated Statements of Operations (Unaudited) – Three and nine months ended September 30, 2025 and 2024	4
Consolidated Statements of Comprehensive Income (Unaudited) – Three and nine months ended September 30, 2025 and 2024	5
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) – Three and nine months ended September 30, 2025 and 2024	6
Consolidated Statements of Cash Flows (Unaudited) – Nine months ended September 30, 2025 and 2024	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3. Quantitative and Qualitative Disclosure About Market Risk	59
Item 4. Controls and Procedures	59
PART II. OTHER INFORMATION	59
Item 1. Legal Proceedings	59
Item 1A. Risk Factors	59
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3. Defaults Upon Senior Securities	59
Item 4. Mine Safety Disclosures	59
Item 5. Other Information	60
Item 6. Exhibits	60

Table of Contents

Item 1. Financial Statements

AmeriServ Financial, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)


	September 30, 2025		December 31, 2024
ASSETS
Cash and due from depository institutions	$	14,666	$	13,891
Interest bearing deposits and short-term investments		39,098		3,855
Cash and cash equivalents		53,764		17,746
Investment securities, net of allowance for credit losses:
Available for sale, at fair value (allowance for credit losses $360 on December 31, 2024)		169,561		155,620
Held to maturity (fair value $63,492 on September 30, 2025 and $58,471 on December 31, 2024; allowance for credit losses $94 on September 30, 2025 and $89 on December 31, 2024)		67,179		63,837
Trading securities		4,462		—
Loans held for sale		—		460
Loans (net of unearned income $532 on September 30, 2025 and $517 on December 31, 2024)		1,055,683		1,067,949
Less: Allowance for credit losses		14,408		13,912
Net loans		1,041,275		1,054,037
Premises and equipment:
Operating lease right-of-use asset		1,442		1,550
Financing lease right-of-use asset		2,163		2,331
Other premises and equipment, net		13,884		14,228
Accrued interest income receivable		6,021		5,486
Intangible assets:
Goodwill		13,611		13,611
Core deposit intangible		61		77
Bank owned life insurance		39,172		39,923
Net deferred tax asset		—		1,412
Federal Home Loan Bank stock		4,004		4,759
Federal Reserve Bank stock		2,161		2,125
Other real estate owned and repossessed assets		240		1,724
Other assets		42,494		43,436
TOTAL ASSETS	$	1,461,494	$	1,422,362
LIABILITIES
Non-interest bearing deposits	$	199,656	$	171,622
Interest bearing deposits		1,058,932		1,029,373
Total deposits		1,258,588		1,200,995
Short-term borrowings		—		14,642
Advances from Federal Home Loan Bank		48,023		56,058
Operating lease liabilities		1,471		1,572
Financing lease liabilities		2,549		2,689
Subordinated debt		26,757		26,726
Total borrowed funds		78,800		101,687
Net deferred tax liability		415		—
Other liabilities		9,116		12,432
TOTAL LIABILITIES		1,346,919		1,315,114
SHAREHOLDERS' EQUITY
Common stock, par value $0.01 per share; 30,000,000 shares authorized; 26,776,089 shares issued and 16,519,267 shares outstanding on September 30, 2025 and December 31, 2024		268		268
Treasury stock at cost, 10,256,822 shares on September 30, 2025 and December 31, 2024		(84,791)		(84,791)
Capital surplus		146,372		146,372
Retained earnings		63,166		60,482
Accumulated other comprehensive loss		(10,440)		(15,083)
TOTAL SHAREHOLDERS' EQUITY		114,575		107,248
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,461,494	$	1,422,362

See accompanying notes to unaudited consolidated financial statements.

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AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
INTEREST INCOME
Interest and fees on loans	$	15,688	$	14,301	$	45,128	$	42,080
Interest bearing deposits and short-term investments		144		55		433		183
Investment securities:
Available for sale		1,967		1,765		5,653		5,465
Held to maturity		640		587		1,895		1,714
Trading securities		44		—		85		—
Total Interest Income		18,483		16,708		53,194		49,442
INTEREST EXPENSE
Deposits		6,549		6,515		19,081		19,103
Short-term borrowings		111		417		230		1,308
Advances from Federal Home Loan Bank		528		600		1,685		1,652
Financing lease liabilities		25		26		76		81
Subordinated debt		263		263		790		789
Total Interest Expense		7,476		7,821		21,862		22,933
Net Interest Income		11,007		8,887		31,332		26,509
Provision (recovery) for credit losses		360		(51)		3,396		(174)
Net Interest Income after Provision (Recovery) for Credit Losses		10,647		8,938		27,936		26,683
NON-INTEREST INCOME
Wealth management fees		2,849		3,050		8,495		9,375
Service charges on deposit accounts		303		304		845		890
Mortgage banking revenue		39		85		125		231
Trading securities revenue		55		—		90		—
Bank owned life insurance		533		244		1,041		821
Other income		622		520		2,022		2,205
Total Non-Interest Income		4,401		4,203		12,618		13,522
NON-INTEREST EXPENSE
Salaries and employee benefits		7,317		7,122		21,616		21,347
Net occupancy expense		705		706		2,292		2,227
Equipment expense		376		371		1,170		1,148
Professional fees		601		792		2,189		3,888
Data processing and IT expense		1,247		1,287		3,652		3,588
Supplies, postage and freight		176		163		522		474
Miscellaneous taxes and insurance		366		339		1,078		999
Federal deposit insurance expense		260		255		740		760
Other expense		916		686		2,177		2,451
Total Non-Interest Expense		11,964		11,721		35,436		36,882

PRETAX INCOME		3,084		1,420		5,118		3,323
Provision for income taxes		540		237		948		611
NET INCOME	$	2,544	$	1,183	$	4,170	$	2,712
PER COMMON SHARE DATA:
Basic:
Net income	$	0.15	$	0.07	$	0.25	$	0.16
Average number of shares outstanding		16,519,267		16,519,267		16,519,267		16,897,444
Diluted:
Net income	$	0.15	$	0.07	$	0.25	$	0.16
Average number of shares outstanding		16,519,368		16,519,267		16,519,267		16,897,444

See accompanying notes to unaudited consolidated financial statements.

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AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
COMPREHENSIVE INCOME
Net income	$	2,544	$	1,183	$	4,170	$	2,712
Other comprehensive income
Pension obligation change for defined benefit plan		—		953		—		3,543
Income tax effect		—		(200)		—		(744)
Unrealized holding gains on available for sale securities arising during period		2,038		5,021		5,867		4,565
Income tax effect		(428)		(1,055)		(1,232)		(959)
Fair value change for interest rate hedge		29		(917)		89		369
Income tax effect		(6)		193		(19)		(77)
Reclassification adjustment for reduction of interest expense related to interest rate hedge		(35)		(205)		(79)		(604)
Income tax effect		7		43		17		127
Other comprehensive income		1,605		3,833		4,643		6,220
COMPREHENSIVE INCOME	$	4,149	$	5,016	$	8,813	$	8,932

See accompanying notes to unaudited consolidated financial statements.

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AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except share and per share data)

(Unaudited)

Three months ended September 30, 2025

Common Stock

Treasury Stock

Surplus

Retained Earnings

Accumulated Other Comprehensive Income (Loss)

Total

Balance at June 30, 2025

268

(84,791)

146,372

61,117

(12,045)

110,921

Net income

—

2,544

—

2,544

Other comprehensive income

—

1,605

Cash dividend declared on common stock ($0.03 per share)

—

(495)

—

(495)

Balance at September 30, 2025

268

(84,791)

146,372

63,166

(10,440)

114,575


	Three months ended September 30, 2024
	Common Stock		Treasury Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at June 30, 2024	$	268	$	(84,791)	$	146,372	$	59,401	$	(17,589)	$	103,661
Net income		—		—		—		1,183		—		1,183
Other comprehensive income		—		—		—		—		3,833		3,833
Cash dividend declared on common stock ($0.03 per share)		—		—		—		(495)		—		(495)
Balance at September 30, 2024	$	268	$	(84,791)	$	146,372	$	60,089	$	(13,756)	$	108,182

Nine months ended September 30, 2025

Common Stock

Treasury Stock

Surplus

Retained Earnings

Accumulated Other Comprehensive Income (Loss)

Total

Balance at December 31, 2024

268

(84,791)

146,372

60,482

(15,083)

107,248

Net income

—

4,170

—

4,170

Other comprehensive income

—

4,643

Cash dividend declared on common stock ($0.09 per share)

—

(1,486)

—

(1,486)

Balance at September 30, 2025

268

(84,791)

146,372

63,166

(10,440)

114,575


	Nine months ended September 30, 2024
	Common Stock		Treasury Stock		Surplus		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2023	$	268	$	(83,280)	$	146,364	$	58,901	$	(19,976)	$	102,277
Net income		—		—		—		2,712		—		2,712
Treasury stock purchased (628,003 shares)		—		(1,511)		—		—		—		(1,511)
Stock option expense		—		—		8		—		—		8
Other comprehensive income		—		—		—		—		6,220		6,220
Cash dividend declared on common stock ($0.09 per share)		—		—		—		(1,524)		—		(1,524)
Balance at September 30, 2024	$	268	$	(84,791)	$	146,372	$	60,089	$	(13,756)	$	108,182

See accompanying notes to unaudited consolidated financial statements.

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AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine months ended
	September 30,
	2025		2024
OPERATING ACTIVITIES
Net income	$	4,170	$	2,712
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision (recovery) for credit losses		3,396		(174)
Depreciation and amortization expense		1,553		1,506
Amortization expense of core deposit intangible		16		19
Amortization of fair value adjustment on acquired time deposits		(1)		(7)
Net (accretion) amortization of investment securities		(41)		53
Net amortization of deferred loan fees		(129)		(90)
Net gains on loans held for sale		(78)		(124)
Origination of mortgage loans held for sale		(4,327)		(8,672)
Sales of mortgage loans held for sale		4,865		8,143
Increase in accrued interest receivable		(535)		(298)
Increase (decrease) in accrued interest payable		39		(828)
Earnings on bank owned life insurance		(1,041)		(821)
Deferred income taxes		593		(177)
Stock compensation expense		—		8
Net change in trading securities		(4,462)		—
Net change in operating leases		(133)		(126)
Other, net		(1,944)		(1,809)
Net cash provided by (used in) operating activities		1,941		(685)
INVESTING ACTIVITIES
Purchase of investment securities — available for sale		(36,302)		(9,884)
Purchase of investment securities — held to maturity		(8,959)		(5,446)
Proceeds from maturities of investment securities — available for sale		27,572		14,695
Proceeds from maturities of investment securities — held to maturity		5,669		3,885
Proceeds from sale of investment securities — available for sale		—		935
Purchase of regulatory stock		(9,866)		(10,127)
Proceeds from redemption of regulatory stock		10,585		10,935
Net decrease (increase) in loans		9,399		(3,695)
Purchase of premises and equipment		(647)		(1,949)
Proceeds from sale of other real estate owned and repossessed assets		1,424		95
Proceeds from life insurance policies		1,911		711
Net cash provided by investing activities		786		155
FINANCING ACTIVITIES
Net increase in deposit balances		57,594		30,977
Net decrease in other short-term borrowings		(14,642)		(29,191)
Principal borrowings on advances from Federal Home Loan Bank		1,908		25,160
Principal repayments on advances from Federal Home Loan Bank		(9,943)		(15,170)
Principal payments on financing lease liabilities		(140)		(122)
Purchases of treasury stock		—		(1,511)
Common stock dividend paid		(1,486)		(1,524)
Net cash provided by financing activities		33,291		8,619
NET INCREASE IN CASH AND CASH EQUIVALENTS		36,018		8,089
CASH AND CASH EQUIVALENTS AT JANUARY 1		17,746		14,027
CASH AND CASH EQUIVALENTS AT SEPTEMBER 30	$	53,764	$	22,116

See accompanying notes to unaudited consolidated financial statements.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Principles of Consolidation

The accompanying consolidated financial statements include the accounts of AmeriServ Financial, Inc. (the Company) and its wholly owned subsidiary, AmeriServ Financial Bank (the Bank). The Bank is a Pennsylvania state-chartered full-service bank with 15 locations in Pennsylvania and 1 location in Maryland. Through its AmeriServ Wealth and Capital Management Division, the Bank offers a complete range of trust and financial services and administers assets valued at $2.7 billion and $2.6 billion that are not reported on the Company’s Consolidated Balance Sheets at September 30, 2025 and December 31, 2024, respectively. AmeriServ Wealth Advisors, Inc., an SEC-registered investment advisor, is a subsidiary of the Bank.

In addition, the Parent Company is an administrative group that provides support in such areas as audit, finance, investments, loan review, general services, and marketing. Intercompany accounts and transactions have been eliminated in preparing the Consolidated Financial Statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (generally accepted accounting principles, or GAAP) requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may differ from these estimates and the differences may be material to the Consolidated Financial Statements. The Company’s most significant estimates relate to the allowance for credit losses (related to investment securities, loans, and unfunded commitments), pension, and derivatives (interest rate swaps/hedges).

2. Basis of Preparation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. In the opinion of management, all adjustments consisting of normal recurring entries considered necessary for a fair presentation have been included. They are not, however, necessarily indicative of the results of consolidated operations for a full-year.

For further information, refer to the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

3. Revenue Recognition

Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers, requires the Company to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers at the time the transfer of goods or services takes place. Management determined that the primary sources of revenue associated with financial instruments, including interest and fee income on loans and interest on investments, along with certain non-interest revenue sources including net realized gains (losses) on investment securities, mortgage banking revenue, and bank owned life insurance are not within the scope of Topic 606. These sources of revenue cumulatively comprise 83.7% of the total gross revenue of the Company.

Non-interest income within the scope of Topic 606 is as follows:

●

Wealth management fees - Wealth management fee income is primarily comprised of fees earned from the management and administration of trusts and customer investment portfolios. The Company’s performance obligation is generally satisfied over a period of time and the resulting fees are billed monthly or quarterly, based upon the month end market value of the assets under management. Payment is generally received after month end through a direct charge to customers’ accounts. Due to this delay in payment, a receivable of $850,000 has been established as of September 30, 2025 and is included in other assets on the Consolidated Balance Sheets in order to properly recognize the revenue earned but not yet received. Other performance obligations (such as delivery of account statements to customers) are generally considered immaterial to the overall transactions’ price. Commissions on transactions are recognized on a trade-date basis as the performance obligation is satisfied at the point in time in which the trade is processed. Also included within wealth management fees are commissions from the sale of mutual funds, annuities, and life insurance products.

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Commissions on the sale of mutual funds, annuities, and life insurance products are recognized when sold, which is when the Company has satisfied its performance obligation.

●

Service charges on deposit accounts - The Company has contracts with its deposit account customers where fees are charged for certain items or services. Service charges include account analysis fees, monthly service fees, overdraft fees, and other deposit account related fees. Revenue related to account analysis fees and service fees is recognized on a monthly basis as the Company has an unconditional right to the fee consideration. Fees attributable to specific performance obligations of the Company (i.e. overdraft fees, etc.) are recognized at a defined point in time based on completion of the requested service or transaction.

●

Other non-interest income - Other non-interest income consists of other recurring revenue streams such as safe deposit box rental fees, gain (loss) on sale of other real estate owned, ATM and VISA debit card fees, and other miscellaneous revenue streams. Safe deposit box rental fees are charged to the customer on an annual basis and recognized when billed. However, if the safe deposit box rental fee is prepaid (i.e. paid prior to issuance of the annual bill), the revenue is recognized upon receipt of payment. The Company has determined that since rentals and renewals occur consistently over time, revenue is recognized on a basis consistent with the duration of the performance obligation. Gains and losses on the sale of other real estate owned are recognized at the completion of the property sale when the buyer obtains control of the real estate and all the performance obligations of the Company have been satisfied. The Company offers ATM and VISA debit cards to deposit account holders, which allows our customers to access their account electronically at ATMs and POS terminals. Fees related to ATM and VISA debit card transactions are recognized when the transactions are completed and the Company has satisfied its performance obligation.

The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the three- and nine-month periods ending September 30, 2025 and 2024 (in thousands).


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Non-interest income:
In-scope of Topic 606
Wealth management fees	$	2,849	$	3,050	$	8,495	$	9,375
Service charges on deposit accounts		303		304		845		890
Other		508		525		1,391		1,546
Non-interest income (in-scope of Topic 606)		3,660		3,879		10,731		11,811
Non-interest income (out-of-scope of Topic 606)		741		324		1,887		1,711
Total non-interest income	$	4,401	$	4,203	$	12,618	$	13,522

4. Earnings Per Common Share

Basic earnings per share include only the weighted average common shares outstanding. Diluted earnings per share include the weighted average common shares outstanding and any potentially dilutive common stock equivalent shares in the calculation. Treasury shares are excluded for earnings per share purposes. For the three-month periods ending September 30, 2025 and 2024, options to purchase 167,000 common shares, with an exercise price of $3.32 to $4.22, and options to purchase 204,000 common shares, with an exercise price of $2.96 to $4.22, respectively, were outstanding but were not included in the computation of diluted earnings per common share because to do so would be anti-dilutive. For the nine-month periods ending September 30, 2025 and 2024, options to purchase 179,000 common shares, with an exercise price of $2.96 to $4.22, and options to purchase 204,000 common shares, with an exercise price of $2.96 to $4.22, respectively, were outstanding but were not included in the computation of diluted earnings per common share because to do so would be anti-dilutive.

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	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024

	(In thousands, except share and per share data)
Numerator:
Net income	$	2,544	$	1,183	$	4,170	$	2,712
Denominator:
Weighted average common shares outstanding (basic)		16,519,267		16,519,267		16,519,267		16,897,444
Effect of stock options		101		—		—		—
Weighted average common shares outstanding (diluted)		16,519,368		16,519,267		16,519,267		16,897,444
Earnings per common share:
Basic	$	0.15	$	0.07	$	0.25	$	0.16
Diluted		0.15		0.07		0.25		0.16

5. Consolidated Statement of Cash Flows

On a consolidated basis, cash and cash equivalents include cash and due from depository institutions, interest bearing deposits and short-term investments in both money market funds and commercial paper. The Company made $325,000 in income tax payments in the first nine months of 2025 compared to receiving a $1.1 million income tax refund in the same 2024 period. The Company made total interest payments of $21.8 million in the first nine months of 2025 compared to $23.8 million in the same 2024 period. The Company had non-cash transfers to other real estate owned (OREO) and repossessed assets of $49,000 in the first nine months of 2025 compared to $1.9 million of non-cash transfers in the same 2024 period. During the first nine months of 2025, the Company entered into a new operating lease related to an office location and recorded a right-of-use asset and lease liability of $32,000. During the first nine months of 2024, the Company entered into a new operating lease related to an office location and recorded a right-of-use asset and lease liability of $1.1 million. Additionally, during the first nine months of 2024, the Company entered into two new financing leases related to an office location and equipment and recorded right-of-use assets and lease liabilities of $298,000. The execution of these new leases was partially offset by the termination of two financing leases related to an office location and equipment which led to the write-off of $141,000 of right-of-use assets and lease liabilities during the first nine months of 2024.

6. Investment Securities

Securities are classified at the time of purchase as investment securities held to maturity if it is management’s intent and the Company has the ability to hold the securities until maturity. These held to maturity securities are carried on the Company’s books at cost, adjusted for amortization of premium and accretion of discount which is computed using the level yield method which approximates the effective interest method. Alternatively, securities are classified as available for sale if it is management’s intent at the time of purchase to hold the securities for an indefinite period of time and/or to use the securities as part of the Company’s asset/liability management strategy. Securities classified as available for sale include securities which may be sold to effectively manage interest rate risk exposure, prepayment risk, and other factors (such as liquidity requirements). These available for sale securities are reported at fair value with unrealized aggregate appreciation/depreciation excluded from income and credited/charged to accumulated other comprehensive income (loss) within shareholders’ equity on a net of tax basis. Realized gains or losses on securities sold are computed upon the adjusted cost of the specific securities sold.

Securities classified as trading assets are purchased with the intent of selling them in the near term (less than 30 days) to generate profits from short-term changes in price. Trading securities are reported at fair value with unrealized gains and losses included in income. The Company participates in limited trading activity. Specifically, during 2025, the Company established a $5.0 million investment trading account which is managed by an outside third party. The trading account is invested in U.S. Treasury and municipal securities. As of September 30, 2025, there was $774,000 of cash held in the account available for future trading security purchases. This cash balance is included in cash and cash equivalents on the Consolidated Balance Sheets.

Additionally, the Company holds equity securities which are comprised of mutual funds held within a rabbi trust for the executive deferred compensation plan and ordinary shares issued by a borrower in satisfaction of debt previously

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contracted. The deferred compensation plan equity securities are reported at fair value within other assets on the Consolidated Balance Sheets and unrealized holding gains and losses are included in earnings. The ordinary shares issued in satisfaction of debt previously contracted do not have a readily determinable fair value. Therefore, they are reported at cost within other assets on the Consolidated Balance Sheets and are adjusted when observable price changes are identified, or an impairment charge is recognized.

Allowance for Credit Losses – Held to Maturity Securities

The Company measures expected credit losses on held to maturity debt securities, which are comprised of U.S. government agency and mortgage-backed securities as well as taxable municipal, corporate, and other bonds. The Company’s agency and mortgage-backed securities are issued by U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. As such, no allowance for credit losses has been established for these securities. The allowance for credit losses on the taxable municipal, corporate, and other bonds within the held to maturity securities portfolio is calculated using the probability of default/loss given default (PD/LGD) method. The calculation is completed on a quarterly basis using the default studies provided by an industry leading source. At September 30, 2025 and December 31, 2024, the allowance for credit losses on the held to maturity securities portfolio totaled $94,000 and $89,000, respectively.

The allowance for credit losses on held to maturity debt securities is included within investment securities held to maturity on the Consolidated Balance Sheets. Changes in the allowance for credit losses are recorded within provision (recovery) for credit losses on the Consolidated Statements of Operations.

Accrued interest receivable on held to maturity debt securities totaled $427,000 and $403,000 at September 30, 2025 and December 31, 2024, respectively, and is included within accrued interest income receivable on the Consolidated Balance Sheets. This amount is excluded from the estimate of expected credit losses. Held to maturity debt securities are typically classified as non-accrual when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about the further collectability of principal or interest. When held to maturity debt securities are placed on non-accrual status, unpaid interest credited to income is reversed. The Company had no held to maturity debt securities in non-accrual status or past due over 90 days still accruing interest at September 30, 2025 and December 31, 2024. The underlying issuers continue to make timely principal and interest payments on the securities.

Allowance for Credit Losses – Available for Sale Securities

The Company measures expected credit losses on available for sale debt securities when the Company does not intend to sell, or when it is not more likely than not that it will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this evaluation indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost, a credit loss exists and an allowance for credit losses is recorded for the credit loss, equal to the amount that the fair value is less than the amortized cost basis. At times, based on management judgment, the Company may establish an allowance for credit losses in excess of the amount that the fair value is less than the amortized cost basis based on the specific circumstances surrounding the security. At September 30, 2025, the Company had no allowance for credit losses on the available for sale securities portfolio compared to an allowance totaling $360,000 at December 31, 2024.

The allowance for credit losses on available for sale debt securities is included within investment securities available for sale on the Consolidated Balance Sheets. Changes in the allowance for credit losses are recorded within provision (recovery) for credit losses on the Consolidated Statements of Operations. Losses are charged against the allowance when the Company believes the collectability of an available for sale security is in jeopardy or when either of the criteria

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regarding intent or requirement to sell is met.

Accrued interest receivable on available for sale debt securities totaled $1.1 million and $833,000 at September 30, 2025 and December 31, 2024, respectively, and is included within accrued interest income receivable on the Consolidated Balance Sheets. This amount is excluded from the estimate of expected credit losses. Available for sale debt securities are typically classified as non-accrual when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about the further collectability of principal or interest. When available for sale debt securities are placed on non-accrual status, unpaid interest credited to income is reversed. It should be noted that the Company had no available for sale debt securities in non-accrual status at September 30, 2025 due to the third quarter 2025 charge-off of a non-performing security totaling $1.0 million against a previously established allowance for credit losses. This is compared to one available for sale debt security in non-accrual status at December 31, 2024 totaling $1.0 million with an associated allowance for credit losses of $360,000.

The cost basis and fair values of available for sale and held to maturity investment securities are summarized as follows:

Investment securities available for sale (AFS):

September 30, 2025

Gross

Allowance

Unrealized

For Credit

Fair

Cost Basis

Gains

Losses

Value

(In Thousands)

U.S. Agency

5,207

—

(416)

—

4,791

U.S. Agency mortgage-backed securities

115,335

590

(9,748)

—

106,177

Municipal

11,261

(417)

—

10,938

Corporate bonds

48,768

358

(1,471)

—

47,655

Total

180,571

1,042

(12,052)

—

169,561

Investment securities held to maturity (HTM):

September 30, 2025

Allowance

Gross

For Credit

Carrying

Unrealized

Fair

Cost Basis

Losses

Value

Gains

Losses

Value

(In Thousands)

U.S. Agency

2,500

—

2,500

—

(246)

2,254

U.S. Agency mortgage-backed securities

33,769

—

33,769

157

(1,885)

32,041

Municipal

28,505

(1)

28,504

(1,588)

26,920

Corporate bonds and other securities

2,499

(93)

2,406

—

(129)

2,277

Total

67,273

(94)

67,179

161

(3,848)

63,492

Investment securities available for sale (AFS):


	December 31, 2024
			Gross		Gross		Allowance
			Unrealized		Unrealized		For Credit		Fair
	Cost Basis		Gains		Losses		Losses		Value

	(In Thousands)
U.S. Agency	$	5,345	$	—	$	(679)	$	—	$	4,666
U.S. Agency mortgage-backed securities		104,227		90		(12,783)		—		91,534
Municipal		9,031		2		(670)		—		8,363
Corporate bonds		54,254		94		(2,931)		(360)		51,057
Total	$	172,857	$	186	$	(17,063)	$	(360)	$	155,620

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Investment securities held to maturity (HTM):


	December 31, 2024
			Allowance				Gross		Gross
			For Credit		Carrying		Unrealized		Unrealized		Fair
	Cost Basis		Losses		Value		Gains		Losses		Value

	(In Thousands)
U.S. Agency	$	2,500	$	—	$	2,500	$	—	$	(365)	$	2,135
U.S. Agency mortgage-backed securities		26,966		—		26,966		28		(2,403)		24,591
Municipal		30,961		(2)		30,959		—		(2,553)		28,406
Corporate bonds and other securities		3,499		(87)		3,412		—		(73)		3,339
Total	$	63,926	$	(89)	$	63,837	$	28	$	(5,394)	$	58,471

The Company sold no AFS securities during the third quarter or first nine months of 2025. The Company sold no AFS securities during the third quarter of 2024 while the proceeds from the sale of AFS securities totaled $935,000 during the first nine months of 2024, resulting in the recognition of no gross investment security gains or losses. The Company had established an allowance for credit losses on one of the AFS securities sold during the first nine months of 2024. In accordance with ASC 326, Financial Instruments – Credit Losses, once the Company decided to sell the security (i.e. intent to sell), the security was charged down, against the allowance, to fair value therefore resulting in the recognition of no gain or loss.

The carrying value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $142.3 million at September 30, 2025 and $125.8 million at December 31, 2024. In addition, the Company has pledged $3.8 million of available for sale securities as collateral for a revolving line of credit from an unrelated financial institution.

The interest rate environment and market yields can have a significant impact on the yield earned on mortgage-backed securities (MBS). Prepayment speed assumptions are an important factor to consider when evaluating the returns on an MBS. Generally, as interest rates decline, borrowers have more incentive to refinance into a lower rate, so prepayments will rise. Conversely, as interest rates increase, prepayments will decline. When an MBS is purchased at a premium, the yield will decrease as prepayments increase and the yield will increase as prepayments decrease. As of September 30, 2025, the Company had low premium risk as the book value of our mortgage-backed securities purchased at a premium was only 100.7% of the par value.

Contractual maturities of securities at September 30, 2025 are shown below (in thousands). Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without prepayment penalties. The weighted average duration of the total investment securities portfolio at September 30, 2025 was 44.6 months and was shorter than the duration at December 31, 2024 which was 50.3 months. The duration remains within our internally established guideline to not exceed 60 months which we believe was appropriate to maintain proper levels of liquidity, interest rate risk, market valuation sensitivity and profitability.

Total investment securities:

September 30, 2025

Available for sale

Held to maturity

Cost Basis

Fair Value

Cost Basis

Fair Value

Within 1 year

9,482

9,424

1,900

1,869

After 1 year but within 5 years

23,759

23,282

14,287

14,086

After 5 years but within 10 years

34,511

33,098

17,975

16,258

Over 10 years

112,819

103,757

33,017

31,279

Total

180,571

169,561

67,179

63,492

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The following tables summarize the available for sale debt securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of September 30, 2025 and December 31, 2024, aggregated by security type and length of time in a continuous loss position (in thousands):

September 30, 2025

Less Than 12 Months

12 Months or Longer

Total

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

Value

Losses

Value

Losses

Value

Losses

U.S. Agency

—

4,791

(416)

4,791

(416)

U.S. Agency mortgage-backed securities

3,210

(6)

62,898

(9,742)

66,108

(9,748)

Municipal

—

7,700

(417)

7,700

(417)

Corporate bonds

2,499

(449)

22,545

(1,022)

25,044

(1,471)

Total

5,709

(455)

97,934

(11,597)

103,643

(12,052)


	December 31, 2024
	Less Than 12 Months				12 Months or Longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
U.S. Agency	$	—	$	—	$	4,666	$	(679)	$	4,666	$	(679)
U.S. Agency mortgage-backed securities		16,104		(275)		63,323		(12,508)		79,427		(12,783)
Municipal		—		—		8,121		(670)		8,121		(670)
Corporate bonds		9,500		(675)		34,612		(2,256)		44,112		(2,931)
Total	$	25,604	$	(950)	$	110,722	$	(16,113)	$	136,326	$	(17,063)

At September 30, 2025 within the available for sale debt securities portfolio, the Company had three U.S. Agency mortgage-backed securities and five corporate bonds that have been in a gross unrealized loss position for less than 12 months with depreciation of 7.4% from its amortized cost basis. Additionally, at September 30, 2025, within the available for sale debt securities portfolio, the Company had six U.S. Agency, 129 U.S. Agency mortgage-backed securities, 22 municipal, and 44 corporate bonds that have been in a gross unrealized loss position for greater than 12 months with depreciation of 10.6% from its amortized cost basis.

These unrealized losses are primarily a result of increases in market yields from the time of purchase. In general, as market yields rise, the value of securities will decrease; as market yields decrease, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, no allowance for credit losses has been recorded for these securities. Management has also concluded that based on current information we expect to continue to receive scheduled interest payments as well as the entire principal balance. Furthermore, management does not intend to sell these securities and does not believe it will be required to sell these securities before they recover in value or mature.

The following tables present the activity in the allowance for credit losses on available for sale debt securities by major security type for the three and nine months ended September 30, 2025 and 2024 (in thousands).

Three months ended September 30, 2025

Balance at June 30, 2025

Charge-Offs

Recoveries

Provision (Recovery)

Balance at September 30, 2025

Corporate bonds

1,000

(1,000)

—

Total

1,000

(1,000)

—


	Three months ended September 30, 2024
	Balance at June 30, 2024		Charge-Offs		Recoveries		Provision (Recovery)		Balance at September 30, 2024
Corporate bonds	$	360	$	—	$	—	$	—	$	360
Total	$	360	$	—	$	—	$	—	$	360

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Nine months ended September 30, 2025

Balance at December 31, 2024

Charge-Offs

Recoveries

Provision (Recovery)

Balance at September 30, 2025

Corporate bonds

360

(1,000)

—

640

—

Total

360

(1,000)

—

640

—


	Nine months ended September 30, 2024
	Balance at December 31, 2023		Charge-Offs		Recoveries		Provision (Recovery)		Balance at September 30, 2024
Corporate bonds	$	926	$	(491)	$	—	$	(75)	$	360
Total	$	926	$	(491)	$	—	$	(75)	$	360

During the third quarter of 2025, the Company recognized the charge-off of a $1.0 million corporate bond within the available for sale debt securities portfolio. The security was charged off against a previously established allowance for credit losses due to further credit deterioration and heightened doubts surrounding the issuer’s ability to meet its payment obligations as well as substantial legal issues. For the first nine months of 2025, the Company recognized a $640,000 provision for credit losses on available for sale debt securities as a result of the establishment of a full reserve on the corporate bond discussed above after a partial reserve was established for the security last year. This compares to the recognition of a $75,000 provision for credit losses recovery in the first nine months of 2024. During 2024, the recognition of the provision recovery was due to the sale of the impaired Signature Bank subordinated debt investment which was partially offset by the establishment of an allowance for credit losses on a corporate AFS security deemed to be credit impaired.

The following tables present the activity in the allowance for credit losses on held to maturity debt securities by major security type for the three and nine months ended September 30, 2025 and 2024 (in thousands).


	Three months ended September 30, 2025
	Balance at June 30, 2025		Charge-Offs		Recoveries		Provision (Recovery)		Balance at September 30, 2025
Municipal	$	2	$	—	$	—	$	(1)	$	1
Corporate bonds and other securities		83		—		—		10		93
Total	$	85	$	—	$	—	$	9	$	94


	Three months ended September 30, 2024
	Balance at June 30, 2024		Charge-Offs		Recoveries		Provision (Recovery)		Balance at September 30, 2024
Municipal	$	2	$	—	$	—	$	—	$	2
Corporate bonds and other securities		98		—		—		(12)		86
Total	$	100	$	—	$	—	$	(12)	$	88


	Nine months ended September 30, 2025
	Balance at December 31, 2024		Charge-Offs		Recoveries		Provision (Recovery)		Balance at September 30, 2025
Municipal	$	2	$	—	$	—	$	(1)	$	1
Corporate bonds and other securities		87		—		—		6		93
Total	$	89	$	—	$	—	$	5	$	94

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	Nine months ended September 30, 2024
	Balance at December 31, 2023		Charge-Offs		Recoveries		Provision (Recovery)		Balance at September 30, 2024
Municipal	$	2	$	—	$	—	$	—	$	2
Corporate bonds and other securities		35		—		—		51		86
Total	$	37	$	—	$	—	$	51	$	88

As stated previously, the Company’s agency and mortgage-backed securities are issued by U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. As such, no allowance for credit losses has been established for these securities. The allowance for credit losses on the taxable municipal, corporate, and other bonds within the held to maturity securities portfolio is calculated using the PD/LGD method. The calculation is completed on a quarterly basis using the default studies provided by an industry leading source.

Maintaining investment quality is a primary objective of the Company’s Investment Policy which, subject to certain limited exceptions, prohibits the purchase of any investment security below a Moody’s or Standard & Poor’s rating of A. The Company monitors the credit ratings of its debt securities on a quarterly basis. At September 30, 2025, 1.0% of the total investment securities portfolio was rated AAA as compared to 59.2% at December 31, 2024. The steep decline in securities rated AAA resulted from the Moody’s downgrade of the United States rating to Aa1 during 2025 which impacted the Company’s U.S. Agency and U.S. Agency mortgage-backed securities. At September 30, 2025, 76.1% of the total investment securities portfolio was rated AA or higher compared to 72.8% at December 31, 2024. Approximately 12.6% of the total investment securities portfolio was either rated below A or unrated at September 30, 2025 as compared to 14.7% at December 31, 2024.

Specifically, the following table summarizes the amortized cost of held to maturity debt securities at September 30, 2025, aggregated by credit quality indicator (in thousands).

September 30, 2025

Credit Rating

AAA/AA/A

BBB/BB/B

Unrated

Total

U.S. Agency

2,500

—

2,500

U.S. Agency mortgage-backed securities

33,769

—

33,769

Municipal

28,504

—

28,504

Corporate bonds and other securities

1,000

—

1,406

2,406

Total

65,773

—

1,406

67,179

Trading Securities

The following table presents the Company’s trading securities, at estimated fair value (in thousands).


	September 30, 2025		December 31, 2024
U.S. Treasury	$	1,995	$	—
Municipal		2,467		—
Total	$	4,462	$	—

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The following table presents the net gain on trading securities included in trading securities revenue for the three- and nine-month periods ended September 30, 2025 and 2024 (in thousands).


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
Net realized gain on sales	$	128	$	—	$	166	$	—
Net unrealized (loss) gain		(28)		—		7		—
Net gain on trading securities		100		—		173		—
Less: Portfolio expenses and management fees		45		—		83		—
Trading securities revenue	$	55	$	—	$	90	$	—

7. Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of any deferred fees or costs and an allowance for credit losses. Interest income is accrued on the unpaid principal balance. As of September 30, 2025 and December 31, 2024, accrued interest receivable on loans totaled $4.5 million and $4.2 million, respectively, which is reported in accrued interest income receivable on the Consolidated Balance Sheets and is excluded from the estimate of credit losses. Loan origination and commitment fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) over the contractual life of the loan.

The segments of the Company’s loan portfolio are disaggregated into classes that allow management to monitor risk and performance. The loan classes used are consistent with the internal reports evaluated by the Company’s management and Board of Directors to monitor risk and performance within various segments of its loan portfolio. The commercial loan segment includes both the owner occupied commercial real estate loan and the commercial and industrial loan classes. The commercial real estate loan segment includes the non-owner occupied commercial real estate loan classes of retail, multi-family, and other. The residential mortgage loan segment is comprised of first lien amortizing residential mortgage loans while the consumer loan segment consists primarily of home equity loans secured by residential real estate, installment loans, and overdraft lines of credit associated with customer deposit accounts.

The loan portfolio of the Company consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Commercial:
Commercial real estate (owner occupied) ⁽¹⁾	$	88,481	$	86,953
Commercial and industrial		140,361		147,251
Commercial real estate (non-owner occupied):
Retail ⁽¹⁾		180,549		181,778
Multi-family ⁽¹⁾		125,754		132,364
Other ⁽¹⁾		236,352		233,882
Residential mortgages ⁽¹⁾		172,612		177,110
Consumer		111,574		108,611
Loans, net of unearned income	$	1,055,683	$	1,067,949

(1)	Real estate construction loans constituted 4.6% and 3.6% of the Company’s total loans, net of unearned income as of September 30, 2025 and December 31, 2024, respectively.

Loan balances at September 30, 2025 and December 31, 2024 are net of unearned income of $532,000 and $517,000, respectively.

8. Allowance for Credit Losses – Loans

The allowance for credit losses (ACL) is a valuation reserve established and maintained by charges against income and is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans.

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Loans, or portions thereof, are charged-off against the ACL when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, that considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period. The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. The Company has aligned our segmentation to the quarterly Call Report. This allows the Company to use not only our data but also peer institutions’ data to supplement loss observations in determining our qualitative adjustments. Some further sub-segmenting was performed on the commercial and industrial (C&I) and commercial real estate (CRE) portfolios based on collateral type. The Company has identified the following portfolio segments:

●

Commercial Real Estate Owner Occupied

●

Commercial and Industrial

●

Commercial Real Estate Non-Owner Occupied – Retail

●

Commercial Real Estate Non-Owner Occupied – Multi-Family

●

Commercial Real Estate Non-Owner Occupied – Other

●

Residential Mortgages

●

Consumer

The Company is utilizing the static pool analysis (cohort) method for our current expected credit losses (CECL) model. The static pool analysis methodology captures loans that qualify for a segment (i.e. balance of a pool of loans with similar risk characteristics) as of a point in time to form a cohort then tracks that cohort over their remaining lives to determine their loss behavior. The remaining lifetime loss rate is then applied to current loans that qualify for the same segmentation criteria to form a remaining life expectation on current loans. Once historical cohorts are established, the loans in each individual cohort are tracked over their remaining lives for loss and recovery events. Each cohort is evaluated individually and as a result, a loss may be counted in several different quarterly cohort periods, as long as the specific loan existed in the population of each of those cohort periods.

The following tables summarize the rollforward of the allowance for credit losses by loan portfolio segment for the three- and nine-month periods ended September 30, 2025 and 2024 (in thousands).

Three months ended September 30, 2025

Balance at

Charge-

Provision

Balance at

June 30, 2025

Offs

Recoveries

(Recovery)

September 30, 2025

Commercial real estate (owner occupied)

319

—

(7)

318

Commercial and industrial

3,012

—

688

3,707

Commercial real estate (non-owner occupied) - retail

3,516

—

(23)

3,493

Commercial real estate (non-owner occupied) - multi-family

1,446

—

(68)

1,378

Other commercial real estate (non-owner occupied)

4,317

—

(257)

4,063

Residential mortgages

310

—

(8)

303

Consumer

1,140

(7)

(2)

1,146

Total

14,060

(7)

323

14,408

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	Three months ended September 30, 2024
	Balance at		Charge-				Provision		Balance at
	June 30, 2024		Offs		Recoveries		(Recovery)		September 30, 2024
Commercial real estate (owner occupied)	$	371	$	—	$	6	$	55	$	432
Commercial and industrial		2,678		(132)		12		(120)		2,438
Commercial real estate (non-owner occupied) - retail		3,519		—		—		(68)		3,451
Commercial real estate (non-owner occupied) - multi-family		1,370		—		—		53		1,423
Other commercial real estate (non-owner occupied)		4,665		—		3		(27)		4,641
Residential mortgages		852		—		2		(2)		852
Consumer		1,156		(72)		25		74		1,183
Total	$	14,611	$	(204)	$	48	$	(35)	$	14,420

Nine months ended September 30, 2025

Balance at

Charge-

Provision

Balance at

December 31, 2024

Offs

Recoveries

(Recovery)

September 30, 2025

Commercial real estate (owner occupied)

398

—

(98)

318

Commercial and industrial

2,860

(200)

997

3,707

Commercial real estate (non-owner occupied) - retail

3,695

—

(202)

3,493

Commercial real estate (non-owner occupied) - multi-family

1,478

—

(100)

1,378

Other commercial real estate (non-owner occupied)

3,451

(2,762)

3,365

4,063

Residential mortgages

839

—

(539)

303

Consumer

1,191

(126)

1,146

Total

13,912

(3,088)

141

3,443

14,408


	Nine months ended September 30, 2024
	Balance at		Charge-				Provision		Balance at
	December 31, 2023		Offs		Recoveries		(Recovery)		September 30, 2024
Commercial real estate (owner occupied)	$	1,529	$	—	$	18	$	(1,115)	$	432
Commercial and industrial		3,030		(424)		33		(201)		2,438
Commercial real estate (non-owner occupied) - retail		3,488		—		—		(37)		3,451
Commercial real estate (non-owner occupied) - multi-family		1,430		—		3		(10)		1,423
Other commercial real estate (non-owner occupied)		3,428		—		8		1,205		4,641
Residential mortgages		1,021		—		5		(174)		852
Consumer		1,127		(196)		65		187		1,183
Total	$	15,053	$	(620)	$	132	$	(145)	$	14,420

The Company recorded a $323,000 provision for credit losses for loans in the third quarter of 2025 as compared to a $35,000 provision for credit losses recovery in the third quarter of 2024. For the nine months of 2025, the Company recognized a $3.4 million provision for credit losses for loans after recognizing a $145,000 provision for credit losses recovery in the first nine months of 2024, representing a $3.6 million unfavorable shift between years. The increased provision for credit losses expense in 2025 primarily reflects the resolution of the Company’s largest problem asset, a loan secured by a mixed use commercial real estate retail/office property in the Pittsburgh market. The provision covers an additional $2.8 million charge-down that was necessary to write this loan down to a court approved sales price at a hearing that was held in late June 2025. Additionally, the 2025 provision for credit losses reflects an increase in specific reserves related to a C&I/owner-occupied CRE loan relationship.

Non-performing assets from the loan portfolio, which are discussed in detail below, increased from $12.7 million at December 31, 2024 to $15.0 million at September 30, 2025. The increase reflects the net impact of the charge-down of

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the mixed use CRE loan, mentioned in the previous paragraph, as well as the sale of a $1.5 million other real estate owned (OREO) property and the payoff of a CRE loan that was previously classified as non-performing which were more than offset by the transfer of five loans from one borrower relationship totaling $6.7 million and one additional CRE loan into non-accrual status. Non-performing assets from the loan portfolio were at 1.42% of total loans as of September 30, 2025. During the first nine months of 2025, the Company experienced net loan charge-offs of $2.9 million, or 0.37% of total average loans, compared to net charge-offs of $488,000, or 0.06% of total average loans, in the first nine months of 2024. In summary, the allowance for credit losses on the loan portfolio provided 98% coverage of non-performing loans and 1.36% of total loans at September 30, 2025 compared to 127% coverage of non-performing loans and 1.30% of total loans at December 31, 2024.

Historical credit loss experience is the basis for the estimation of expected credit losses. The Company applies historical loss rates to pools of loans with similar risk characteristics. After consideration of the historic loss calculation, management applies qualitative adjustments to reflect the current conditions and reasonable and supportable forecasts not already captured in the historical loss information at the balance sheet date. Our reasonable and supportable forecast adjustment is based on a blend of peer and Company data as well as management judgment. Including peer data addresses the Company’s lack of loss history in some pools of loans. For periods beyond our reasonable and supportable forecast period of two years, loss expectations revert to the long-run historical mean. The qualitative adjustments for current conditions are based upon the following factors:

●

changes in lending policies and procedures;

●

changes in economic conditions;

●

changes in the nature and volume of the portfolio;

●

staff experience;

●

changes in volume and severity of delinquency, non-performing loans, and classified loans;

●

changes in the quality of the Company’s loan review system;

●

trends in underlying collateral value;

●

concentration risk; and

●

external factors: competition, legal, regulatory.

These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve. Ultimately, 41% of the third quarter of 2025 general reserve represented qualitative adjustment with 59% representing quantitative reserve.

In accordance with ASC 326, Financial Instruments - Credit Losses, the Company will evaluate individual loans for expected credit losses when those loans do not share similar risk characteristics with loans evaluated using a collective (pooled) basis. In contrast to legacy accounting standards, this criterion is broader than the impairment concept and management may evaluate loans individually even when no specific expectation of collectability is in place. Loans will not be included in both collective and individual analysis. The individual analysis will establish a specific reserve for loans in scope. It should be noted that there is a review threshold of $150,000 or more for loans being subject to individual evaluation within the consumer and residential mortgage segments.

Specific reserves are established based on the following three acceptable methods for measuring the ACL: 1) the present value of expected future cash flows discounted at the loan’s original effective interest rate; 2) the loan’s observable market price; or 3) the fair value of the collateral when the loan is collateral dependent. The method is selected on a loan-by-loan basis, with management primarily utilizing either the discounted cash flows or the fair value of collateral method. The evaluation of the need and amount of a specific allocation of the allowance is made on a quarterly basis.

The need for an updated appraisal on collateral dependent loans is determined on a case-by-case basis. The useful life of an appraisal or evaluation will vary depending upon the circumstances of the property and the economic conditions in the marketplace. A new appraisal is not required if there is an existing appraisal which, along with other information, is sufficient to determine a reasonable value for the property and to support an appropriate and adequate allowance for credit losses. At a minimum, annual documented reevaluation of the property is completed by the Bank’s internal Collections and Assigned Risk Department to support the value of the property.

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When reviewing an appraisal associated with an existing real estate collateral dependent transaction, the Bank’s Chief Credit Officer must determine if there have been material changes to the underlying assumptions in the appraisal which affect the original estimate of value. Some of the factors that could cause material changes to reported values include:

●

the passage of time;

●

the volatility of the local market;

●

the availability of financing;

●

natural disasters;

●

the inventory of competing properties;

●

new improvements to, or lack of maintenance of, the subject property or competing properties upon physical inspection by the Bank;

●

changes in underlying economic and market assumptions, such as material changes in current and projected vacancy, absorption rates, capitalization rates, lease terms, rental rates, sales prices, concessions, construction overruns and delays, zoning changes, etc.; and/or

●

environmental contamination.

The value of the property is adjusted to appropriately reflect the above listed factors and the value is discounted to reflect the value impact of a forced or distressed sale, any outstanding senior liens, any outstanding unpaid real estate taxes, transfer taxes and closing costs that would occur with sale of the real estate. If the Chief Credit Officer determines that a reasonable value cannot be derived based on available information, a new appraisal is ordered. The determination of the need for a new appraisal, versus completion of a property valuation by the Bank’s Collections and Assigned Risk Department personnel, rests with the Chief Credit Officer and not the originating account officer.

The following tables summarize the loan portfolio and allowance for credit losses (in thousands).

At September 30, 2025

Commercial real estate (owner occupied)

Commercial and industrial

Commercial real estate (non-owner occupied) - retail

Commercial real estate (non-owner occupied) - multi-family

Other commercial real estate (non-owner occupied)

Residential mortgages

Consumer

Total

Loans:

Individually evaluated

3,818

3,607

1,126

—

7,972

161

—

16,684

Collectively evaluated

84,663

136,754

179,423

125,754

228,380

172,451

111,574

1,038,999

Total loans

88,481

140,361

180,549

125,754

236,352

172,612

111,574

1,055,683

Allowance for credit losses:

Specific reserve allocation

—

1,609

—

185

—

1,794

General reserve allocation

318

2,098

3,493

1,378

3,878

303

1,146

12,614

Total allowance for credit losses

318

3,707

3,493

1,378

4,063

303

1,146

14,408


	At December 31, 2024
	Commercial real estate (owner occupied)		Commercial and industrial		Commercial real estate (non-owner occupied) - retail			Commercial real estate (non-owner occupied) - multi-family	Other commercial real estate (non-owner occupied)		Residential mortgages		Consumer		Total
Loans:
Individually evaluated	$	3,429	$	1,675	$	—	$	—	$	8,773	$	379	$	10	$	14,266
Collectively evaluated		83,524		145,576		181,778		132,364		225,109		176,731		108,601		1,053,683
Total loans	$	86,953	$	147,251	$	181,778	$	132,364	$	233,882	$	177,110	$	108,611	$	1,067,949
Allowance for credit losses:
Specific reserve allocation	$	—	$	541	$	—	$	—	$	—	$	—	$	—	$	541
General reserve allocation		398		2,319		3,695		1,478		3,451		839		1,191		13,371
Total allowance for credit losses	$	398	$	2,860	$	3,695	$	1,478	$	3,451	$	839	$	1,191	$	13,912

Table of Contents

The following tables present the amortized cost basis of collateral-dependent loans which were individually evaluated for a specific reserve allocation in the allowance for credit losses by class of loans (in thousands).


	Collateral Type
September 30, 2025	Real Estate
Commercial:
Commercial real estate (owner occupied)	$	3,818
Commercial and industrial		1,000
Commercial real estate (non-owner occupied):
Retail		1,126
Other		7,972
Residential mortgages		161
Total	$	14,077


	Collateral Type
December 31, 2024	Real Estate
Commercial:
Commercial real estate (owner occupied)	$	3,429
Commercial and industrial		1,000
Commercial real estate (non-owner occupied):
Other		8,773
Residential mortgages		378
Consumer		10
Total	$	13,590

Non-Performing Assets from the Loan Portfolio

Non-performing assets from the loan portfolio are comprised of (i) loans which are on a non-accrual basis, (ii) loans which are contractually past due 90 days or more as to interest or principal payments, and (iii) other real estate owned (OREO – real estate acquired through foreclosure and in-substance foreclosures) and repossessed assets.

Loans will be transferred to non-accrual status when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in evaluating the loan include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. The following table presents non-accrual loans, loans past due 90 days or more still accruing interest, and OREO and repossessed assets by portfolio class (in thousands).

At September 30, 2025

Non-accrual with no ACL

Non-accrual with ACL

Total non-accrual

Loans past due 90 days or more still accruing

OREO and repossessed assets

Total non-performing assets

Commercial real estate (owner occupied)

3,818

—

3,818

—

3,818

Commercial and industrial

1,003

2,607

3,610

216

3,870

Commercial real estate (non-owner occupied) - retail

606

—

606

—

606

Other commercial real estate (non-owner occupied)

2,077

3,462

5,539

—

5,539

Residential mortgages

161

213

243

—

456

Consumer

—

635

664

Total

7,665

6,756

14,421

292

240

14,953

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	At December 31, 2024
	Non-accrual with no ACL		Non-accrual with ACL		Total non-accrual		Loans past due 90 days or more still accruing		OREO and repossessed assets		Total non-performing assets
Commercial real estate (owner occupied)	$	152	$	—	$	152	$	—	$	—	$	152
Commercial and industrial		—		675		675		97		234		1,006
Other commercial real estate (non-owner occupied)		8,773		—		8,773		—		1,476		10,249
Residential mortgages		379		—		379		26		14		419
Consumer		10		821		831		—		—		831
Total	$	9,314	$	1,496	$	10,810	$	123	$	1,724	$	12,657

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk.

Management uses a nine-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized. The first five pass categories are aggregated, while the pass-6, special mention, substandard and doubtful categories are disaggregated to separate pools. The criticized rating categories utilized by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans in the doubtful category have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. All loans greater than 90 days past due, or for which any portion of the loan represents a specific allocation of the allowance for credit losses, are typically placed in substandard or doubtful.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process, which dictates that, at a minimum, credit reviews are mandatory for all commercial and commercial mortgage loan relationships with aggregate balances in excess of $1,000,000 within a 12-month period. Generally, consumer and residential mortgage loans are included in the pass categories unless a specific action, such as bankruptcy, delinquency, or death occurs to raise awareness of a possible credit event. The Company’s commercial relationship managers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. Risk ratings are assigned by the account officer, but require independent review and rating concurrence from the Company’s internal Loan Review Department. The Loan Review Department is an experienced, independent function which reports directly to the Board’s Audit Committee. The scope of commercial portfolio coverage by the Loan Review Department is defined and presented to the Audit Committee for approval on an annual basis. The approved scope of coverage for the year ending December 31, 2025 requires review of approximately 36% of the commercial loan portfolio.

In addition to loan monitoring by the account officer and Loan Review Department, the Company also requires presentation of all credits rated pass-6 with aggregate balances greater than $2,000,000, all credits rated special mention or substandard with aggregate balances greater than $250,000, and all credits rated doubtful with aggregate balances greater than $100,000 on an individual basis to the Company’s Loan Loss Reserve Committee on a quarterly basis. Additionally, the Asset Quality Task Force, which is a group comprised of senior level personnel, meets monthly to monitor the status of problem loans.

Table of Contents

The following tables present the classes of the commercial and commercial real estate loan portfolios summarized by the aggregate pass and the criticized categories of special mention, substandard and doubtful within the internal risk rating system.


	At September 30, 2025
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	Term Loans Amortized Cost Basis by Origination Year												Cost		to
	2025		2024		2023		2022		2021		Prior		Basis		Term		Total

	(In Thousands)
Commercial real estate (owner occupied)
Pass	$	7,082	$	10,387	$	16,677	$	6,275	$	9,648	$	33,063	$	457	$	—	$	83,589
Special Mention		—		—		—		—		—		534		149		—		683
Substandard		—		—		—		—		3,678		531		—		—		4,209
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	7,082	$	10,387	$	16,677	$	6,275	$	13,326	$	34,128	$	606	$	—	$	88,481
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial
Pass	$	13,466	$	11,049	$	15,373	$	13,878	$	5,744	$	19,369	$	48,116	$	8,110	$	135,105
Special Mention		—		—		—		—		—		—		1,183		—		1,183
Substandard		—		—		—		257		1,763		491		1,139		25		3,675
Doubtful		—		—		—		—		—		398		—		—		398
Total	$	13,466	$	11,049	$	15,373	$	14,135	$	7,507	$	20,258	$	50,438	$	8,135	$	140,361
Current period gross charge-offs	$	—	$	—	$	—	$	200	$	—	$	—	$	—	$	—	$	200
Commercial real estate (non-owner occupied) - retail
Pass	$	17,126	$	24,593	$	36,867	$	19,518	$	31,017	$	50,791	$	31	$	—	$	179,943
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		606		—		—		—		—		—		606
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	17,126	$	24,593	$	37,473	$	19,518	$	31,017	$	50,791	$	31	$	—	$	180,549
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate (non-owner occupied) - multi-family
Pass	$	136	$	28,047	$	31,859	$	11,636	$	16,396	$	34,987	$	475	$	—	$	123,536
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		2,218		—		—		2,218
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	136	$	28,047	$	31,859	$	11,636	$	16,396	$	37,205	$	475	$	—	$	125,754
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Other commercial real estate (non-owner occupied)
Pass	$	21,346	$	27,421	$	30,487	$	31,950	$	41,174	$	60,881	$	6,925	$	—	$	220,184
Special Mention		—		—		—		1,857		—		6,339		—		—		8,196
Substandard		—		—		—		187		199		7,586		—		—		7,972
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	21,346	$	27,421	$	30,487	$	33,994	$	41,373	$	74,806	$	6,925	$	—	$	236,352
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	2,762	$	—	$	—	$	2,762
Total by risk rating
Pass	$	59,156	$	101,497	$	131,263	$	83,257	$	103,979	$	199,091	$	56,004	$	8,110	$	742,357
Special Mention		—		—		—		1,857		—		6,873		1,332		—		10,062
Substandard		—		—		606		444		5,640		10,826		1,139		25		18,680
Doubtful		—		—		—		—		—		398		—		—		398
Total	$	59,156	$	101,497	$	131,869	$	85,558	$	109,619	$	217,188	$	58,475	$	8,135	$	771,497
Current period gross charge-offs	$	—	$	—	$	—	$	200	$	—	$	2,762	$	—	$	—	$	2,962

Table of Contents


	At December 31, 2024
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	Term Loans Amortized Cost Basis by Origination Year												Cost		to
	2024		2023		2022		2021		2020		Prior		Basis		Term		Total

	(In Thousands)
Commercial real estate (owner occupied)
Pass	$	10,294	$	17,016	$	6,648	$	10,675	$	10,476	$	26,393	$	324	$	856	$	82,682
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		3,680		—		591		—		—		4,271
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	10,294	$	17,016	$	6,648	$	14,355	$	10,476	$	26,984	$	324	$	856	$	86,953
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial
Pass	$	16,714	$	19,357	$	20,977	$	7,397	$	4,568	$	19,280	$	54,455	$	—	$	142,748
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		480		409		1,753		—		689		1,172		—		4,503
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	16,714	$	19,837	$	21,386	$	9,150	$	4,568	$	19,969	$	55,627	$	—	$	147,251
Current period gross charge-offs	$	—	$	—	$	427	$	—	$	—	$	—	$	—	$	—	$	427
Commercial real estate (non-owner occupied) - retail
Pass	$	29,349	$	38,912	$	20,935	$	31,934	$	21,322	$	38,047	$	32	$	942	$	181,473
Special Mention		—		—		305		—		—		—		—		—		305
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	29,349	$	38,912	$	21,240	$	31,934	$	21,322	$	38,047	$	32	$	942	$	181,778
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate (non-owner occupied) - multi-family
Pass	$	25,984	$	28,807	$	16,423	$	16,816	$	11,513	$	30,066	$	475	$	—	$	130,084
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		915		1,365		—		—		2,280
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	25,984	$	28,807	$	16,423	$	16,816	$	12,428	$	31,431	$	475	$	—	$	132,364
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Other commercial real estate (non-owner occupied)
Pass	$	27,801	$	32,514	$	35,365	$	40,876	$	16,226	$	61,619	$	4,537	$	194	$	219,132
Special Mention		—		—		—		—		—		3,488		—		—		3,488
Substandard		—		—		569		199		—		10,494		—		—		11,262
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	27,801	$	32,514	$	35,934	$	41,075	$	16,226	$	75,601	$	4,537	$	194	$	233,882
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	1,571	$	—	$	—	$	1,571
Total by risk rating
Pass	$	110,142	$	136,606	$	100,348	$	107,698	$	64,105	$	175,405	$	59,823	$	1,992	$	756,119
Special Mention		—		—		305		—		—		3,488		—		—		3,793
Substandard		—		480		978		5,632		915		13,139		1,172		—		22,316
Doubtful		—		—		—		—		—		—		—		—		—
Total	$	110,142	$	137,086	$	101,631	$	113,330	$	65,020	$	192,032	$	60,995	$	1,992	$	782,228
Current period gross charge-offs	$	—	$	—	$	427	$	—	$	—	$	1,571	$	—	$	—	$	1,998

It is generally the policy of the Bank that the outstanding balance of any residential mortgage or home equity loan that exceeds 90-days past due as to principal and/or interest is transferred to non-accrual status and an evaluation is completed to determine the fair value of the collateral less selling costs, unless the balance is minor. A charge-down is recorded for any deficiency balance determined from the collateral evaluation. It is generally the policy of the Bank that the outstanding balance of any unsecured consumer loan that exceeds 90-days past due as to principal and/or interest is charged-off. Loans past due 90 days or more and loans in non-accrual status are considered non-performing. The

Table of Contents

following tables present the performing and non-performing outstanding balances of the residential mortgage and consumer loan portfolio classes.


	At September 30, 2025
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	Term Loans Amortized Cost Basis by Origination Year												Cost		to
	2025		2024		2023		2022		2021		Prior		Basis		Term		Total

	(In Thousands)
Residential mortgages
Performing	$	3,492	$	13,941	$	15,317	$	10,184	$	54,195	$	75,027	$	—	$	—	$	172,156
Non-performing		—		—		—		—		156		300		—		—		456
Total	$	3,492	$	13,941	$	15,317	$	10,184	$	54,351	$	75,327	$	—	$	—	$	172,612
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer
Performing	$	9,585	$	9,260	$	8,677	$	13,637	$	6,294	$	5,712	$	57,737	$	32	$	110,934
Non-performing		—		6		76		18		—		338		197		5		640
Total	$	9,585	$	9,266	$	8,753	$	13,655	$	6,294	$	6,050	$	57,934	$	37	$	111,574
Current period gross charge-offs	$	1	$	28	$	32	$	4	$	—	$	61	$	—	$	—	$	126
Total by payment performance
Performing	$	13,077	$	23,201	$	23,994	$	23,821	$	60,489	$	80,739	$	57,737	$	32	$	283,090
Non-performing		—		6		76		18		156		638		197		5		1,096
Total	$	13,077	$	23,207	$	24,070	$	23,839	$	60,645	$	81,377	$	57,934	$	37	$	284,186
Current period gross charge-offs	$	1	$	28	$	32	$	4	$	—	$	61	$	—	$	—	$	126


	At December 31, 2024
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	Term Loans Amortized Cost Basis by Origination Year												Cost		to
	2024		2023		2022		2021		2020		Prior		Basis		Term		Total

	(In Thousands)
Residential mortgages
Performing	$	12,877	$	15,602	$	10,400	$	57,540	$	41,868	$	38,418	$	—	$	—	$	176,705
Non-performing		—		—		—		—		—		405		—		—		405
Total	$	12,877	$	15,602	$	10,400	$	57,540	$	41,868	$	38,823	$	—	$	—	$	177,110
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer
Performing	$	11,476	$	10,988	$	16,397	$	7,605	$	2,475	$	4,299	$	53,876	$	664	$	107,780
Non-performing		—		110		46		—		59		344		272		—		831
Total	$	11,476	$	11,098	$	16,443	$	7,605	$	2,534	$	4,643	$	54,148	$	664	$	108,611
Current period gross charge-offs	$	5	$	6	$	21	$	19	$	13	$	143	$	—	$	—	$	207
Total by payment performance
Performing	$	24,353	$	26,590	$	26,797	$	65,145	$	44,343	$	42,717	$	53,876	$	664	$	284,485
Non-performing		—		110		46		—		59		749		272		—		1,236
Total	$	24,353	$	26,700	$	26,843	$	65,145	$	44,402	$	43,466	$	54,148	$	664	$	285,721
Current period gross charge-offs	$	5	$	6	$	21	$	19	$	13	$	143	$	—	$	—	$	207

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Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans.

At September 30, 2025

30 – 59

60 – 89

90 or More

Days

Total

Non-

Total

Current

Past Due

Accrual

Loans

(In Thousands)

Commercial real estate (owner occupied)

84,663

—

3,818

88,481

Commercial and industrial

136,618

—

133

3,610

140,361

Commercial real estate (non-owner occupied) - retail

178,442

981

520

—

1,501

606

180,549

Commercial real estate (non-owner occupied) - multi-family

125,754

—

125,754

Other commercial real estate (non-owner occupied)

230,625

188

—

188

5,539

236,352

Residential mortgages

172,036

243

363

213

172,612

Consumer

110,456

461

483

635

111,574

Total

1,038,594

1,669

707

292

2,668

14,421

1,055,683


	At December 31, 2024

			30 – 59		60 – 89		90 or More
			Days		Days		Days		Total		Non-		Total
	Current		Past Due		Past Due		Past Due		Past Due		Accrual		Loans

	(In Thousands)
Commercial real estate (owner occupied)	$	86,368	$	433	$	—	$	—	$	433	$	152	$	86,953
Commercial and industrial		144,627		1,852		—		97		1,949		675		147,251
Commercial real estate (non-owner occupied) - retail		181,778		—		—		—		—		—		181,778
Commercial real estate (non-owner occupied) - multi-family		132,364		—		—		—		—		—		132,364
Other commercial real estate (non-owner occupied)		224,914		195		—		—		195		8,773		233,882
Residential mortgages		175,817		852		36		26		914		379		177,110
Consumer		106,796		948		36		—		984		831		108,611
Total	$	1,052,664	$	4,280	$	72	$	123	$	4,475	$	10,810	$	1,067,949

Loan Modifications to Borrowers Experiencing Financial Difficulty

Occasionally, the Company modifies loans to borrowers experiencing financial difficulty as a result of our loss mitigation activities. A variety of solutions are offered to borrowers, including loan modifications that may result in principal forgiveness, interest rate reductions, term extensions, payment delays, or combinations thereof.

●

Principal forgiveness includes principal and accrued interest forgiveness. When principal forgiveness is provided, the amount of forgiveness is charged off against the ACL.

●

Interest rate reductions include modifications where the interest rate is reduced and interest is deferred.

●

Term extensions extend the original contractual maturity date of the loan.

●

Payment delays consist of modifications where we expect to collect the contractual amounts due but result in a delay in the receipt of payments specified under the original loan terms. We generally consider payment delays to be insignificant when the delay is three months or less.

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The following tables summarize the amortized cost basis of loans modified to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025 and 2024 (in thousands).


	Three months ended September 30, 2025
	Term Extension
	Amortized Cost Basis		% of Total Class of Loans
Other commercial real estate (non-owner occupied)	$	2,442		1.03	%
Total	$	2,442


	Nine months ended September 30, 2025
	Term Extension
	Amortized Cost Basis		% of Total Class of Loans
Other commercial real estate (non-owner occupied)	$	2,442		1.03	%
Residential mortgages		191		0.11
Total	$	2,633

As of September 30, 2025, the modified loans described in the tables above were current as to payments.


	Three and nine months ended September 30, 2024
	Payment Delay
	Amortized Cost Basis		% of Total Class of Loans
Commercial real estate (owner occupied)	$	158		0.20	%
Total	$	158

	Combination - Term Extension and Payment Delay
	Amortized Cost Basis		% of Total Class of Loans
Commercial and industrial	$	154		0.11	%
Total	$	154

At September 30, 2025 and 2024, the Company had no unfunded loan commitments associated with the loan modifications to borrowers experiencing financial difficulty.

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty during the three and nine months ended September 30, 2025 and 2024.


Three months ended September 30, 2025
Term Extension
Loan Type		Financial Effect
Other commercial real estate (non-owner occupied)		Provided a maturity date extension of 15 months. In connection with the modification, the borrower pledged a $1.0 million Bank deposit as additional collateral.


Nine months ended September 30, 2025
Term Extension
Loan Type		Financial Effect
Other commercial real estate (non-owner occupied)		Provided a maturity date extension of 15 months. In connection with the modification, the borrower pledged a $1.0 million Bank deposit as additional collateral.
Residential mortgages		Provided a maturity date extension of 230 months (approximately 19 years).

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Three and nine months ended September 30, 2024
Payment Delay
Loan Type		Financial Effect
Commercial real estate (owner occupied)		Provided 60 months of additional amortization period to lower borrower's monthly payment.

Combination - Term Extension and Payment Delay
Loan Type		Financial Effect
Commercial and industrial		During the first and second quarters of 2024, provided a maturity date extension of 90 days and modified seasonal principal and interest payments to interest only until maturity. During the third quarter of 2024, provided the same borrower an additional maturity date extension of 90 days with continued interest only payments.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The Company had no loans which were modified to borrowers experiencing financial difficulty which subsequently defaulted during the three or nine months ended September 30, 2025. An other commercial real estate (non-owner occupied) loan modified during the second quarter of 2023 was in non-accrual status and significantly past due as of September 30, 2024. The loan is secured by a mixed use (retail/office) property located within the City of Pittsburgh, but not in the downtown central business district. The loan was considered in default and the Company initiated formal foreclosure procedures on the property during the second quarter of 2024 which have been delayed by legal proceedings.

9. Short-Term Borrowings and Advances from Federal Home Loan Bank

Total short-term and Federal Home Loan Bank (FHLB) borrowings and advances consist of the following (in thousands, except percentages):


	At September 30, 2025
				Weighted
Type	Maturing	Amount		Average Rate
FHLB Advances	2025	$	3,408	4.35	%
	2026		17,770	4.26
	2027		15,100	4.23
	2028		11,745	4.46
Total FHLB advances			48,023	4.30
Total short-term and FHLB borrowings		$	48,023	4.30	%


	At December 31, 2024
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	14,642	4.71	%
FHLB Advances	2025		11,943	4.76
	2026		17,270	4.27
	2027		15,100	4.23
	2028		11,745	4.46
Total FHLB advances			56,058	4.40
Total short-term and FHLB borrowings		$	70,700	4.47	%

The rate on Open Repo Plus advances can change daily, while the rates on the FHLB advances are fixed until the maturity of the advance. All FHLB stock along with an interest in certain residential mortgage, commercial real estate,

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and commercial and industrial loans with an aggregate statutory value equal to the amount of the advances are pledged as collateral to the FHLB of Pittsburgh to support these borrowings.

During 2025, the Parent Company established a $3 million revolving line of credit with an unrelated financial institution which can be used for general corporate purposes. Amounts outstanding under the line of credit bear interest at a rate of the daily secured overnight financing rate (SOFR) plus an unadjusted spread of 250-basis points (2.50%) plus a SOFR adjustment of 10-basis points (0.10%). The line of credit expires in February 2026 and is secured by investment securities. There were no borrowings under the line at September 30, 2025.

10. Accumulated Other Comprehensive Loss

The following tables present the changes in each component of accumulated other comprehensive loss, net of tax, for the three and nine months ended September 30, 2025 and 2024 (in thousands):


	Three months ended September 30, 2025								Three months ended September 30, 2024
	Net								Net
	Unrealized								Unrealized
	Gains and								Gains and
	Losses on				Defined				Losses on				Defined
	Investment		Interest		Benefit				Investment		Interest		Benefit
	Securities		Rate		Pension				Securities		Rate		Pension
	AFS⁽¹⁾		Hedge⁽¹⁾		Items⁽¹⁾		Total⁽¹⁾		AFS⁽¹⁾		Hedge⁽¹⁾		Items⁽¹⁾		Total⁽¹⁾
Beginning balance	$	(10,307)	$	(122)	$	(1,616)	$	(12,045)	$	(14,090)	$	349	$	(3,848)	$	(17,589)
Other comprehensive income (loss) before reclassifications		1,610		23		—		1,633		3,966		(724)		726		3,968
Amounts reclassified from accumulated other comprehensive loss		—		(28)		—		(28)		—		(162)		27		(135)
Net current period other comprehensive income (loss)		1,610		(5)		—		1,605		3,966		(886)		753		3,833
Ending balance	$	(8,697)	$	(127)	$	(1,616)	$	(10,440)	$	(10,124)	$	(537)	$	(3,095)	$	(13,756)


	Nine months ended September 30, 2025								Nine months ended September 30, 2024
	Net								Net
	Unrealized								Unrealized
	Gains and								Gains and
	Losses on				Defined				Losses on				Defined
	Investment		Interest		Benefit				Investment		Interest		Benefit
	Securities		Rate		Pension				Securities		Rate		Pension
	AFS⁽¹⁾		Hedge⁽¹⁾		Items⁽¹⁾		Total⁽¹⁾		AFS⁽¹⁾		Hedge⁽¹⁾		Items⁽¹⁾		Total⁽¹⁾
Beginning balance	$	(13,332)	$	(135)	$	(1,616)	$	(15,083)	$	(13,730)	$	(352)	$	(5,894)	$	(19,976)
Other comprehensive income before reclassifications		4,635		70		—		4,705		3,606		292		2,475		6,373
Amounts reclassified from accumulated other comprehensive loss		—		(62)		—		(62)		—		(477)		324		(153)
Net current period other comprehensive income (loss)		4,635		8		—		4,643		3,606		(185)		2,799		6,220
Ending balance	$	(8,697)	$	(127)	$	(1,616)	$	(10,440)	$	(10,124)	$	(537)	$	(3,095)	$	(13,756)

(1) Amounts in parentheses indicate debits on the Consolidated Balance Sheets.

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The following tables present the amounts reclassified out of each component of accumulated other comprehensive loss for the three and nine months ended September 30, 2025 and 2024 (in thousands):


	Amount reclassified from accumulated
	other comprehensive loss⁽¹⁾
	For the three		For the three
Details about accumulated other	months ended		months ended		Affected line item in the
comprehensive loss components	September 30, 2025		September 30, 2024		statement of operations
Interest rate hedge
	$	(35)	$	(205)	Interest expense - Deposits
		7		43	Provision for income taxes
	$	(28)	$	(162)
Amortization of estimated defined benefit pension plan loss⁽²⁾
	$	—	$	34	Other expense
		—		(7)	Provision for income taxes
	$	—	$	27
Total reclassifications for the period	$	(28)	$	(135)


	Amount reclassified from accumulated
	other comprehensive loss⁽¹⁾
	For the nine		For the nine
Details about accumulated other	months ended		months ended		Affected line item in the
comprehensive loss components	September 30, 2025		September 30, 2024		statement of operations
Interest rate hedge
	$	(79)	$	(604)	Interest expense - Deposits
		17		127	Provision for income taxes
	$	(62)	$	(477)
Amortization of estimated defined benefit pension plan loss⁽²⁾
	$	—	$	410	Other expense
		—		(86)	Provision for income taxes
	$	—	$	324
Total reclassifications for the period	$	(62)	$	(153)

(1) Amounts in parentheses indicate credits.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (see Note 15 for additional details).

11. Regulatory Capital

The Company is subject to various capital requirements administered by the federal banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. For a more detailed discussion, see the Capital Resources section of Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A).

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total, common equity tier 1, and tier 1 capital to risk-weighted assets (as defined) and tier 1 capital to average assets. Additionally, under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. As of September 30, 2025, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action promulgated by the Federal Reserve. The Company believes that no conditions or events have occurred that would change this conclusion as of such date. To be categorized as well capitalized, the Bank must maintain minimum total capital, common equity tier 1 capital, tier 1 capital, and tier 1 leverage ratios as set forth in the table.

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At September 30, 2025

To Be Well

Minimum

Capitalized

Required

Under

For

Prompt

Capital

Corrective

Adequacy

Action

Company

Bank

Purposes

Regulations*

Amount

Ratio

Amount

Ratio

(In Thousands, Except Ratios)

Total Capital (To Risk Weighted Assets)

152,826

12.97

148,252

12.60

8.00

10.00

Common Equity Tier 1 Capital (To Risk Weighted Assets)

111,343

9.45

133,539

11.35

4.50

6.50

Tier 1 Capital (To Risk Weighted Assets)

111,343

9.45

133,539

11.35

6.00

8.00

Tier 1 Capital (To Average Assets)

111,343

7.70

133,539

9.26

4.00

5.00


	At December 31, 2024
											To Be Well
									Minimum		Capitalized
									Required		Under
									For		Prompt
									Capital		Corrective
									Adequacy		Action
	Company				Bank				Purposes		Regulations*
	Amount		Ratio		Amount		Ratio		Ratio		Ratio

	(In Thousands, Except Ratios)
Total Capital (To Risk Weighted Assets)	$	150,147	12.70	%	$	143,619	12.16	%	8.00	%	10.00	%
Common Equity Tier 1 Capital (To Risk Weighted Assets)		108,643	9.19			128,854	10.91		4.50		6.50
Tier 1 Capital (To Risk Weighted Assets)		108,643	9.19			128,854	10.91		6.00		8.00
Tier 1 Capital (To Average Assets)		108,643	7.68			128,854	9.15		4.00		5.00

*Applies to the Bank only.

12. Derivative Hedging Instruments

The Company can use various interest rate contracts, such as interest rate swaps, caps, and floors to help manage interest rate and market valuation risk exposure, which is incurred in normal recurrent banking activities.

The Company uses derivative instruments, primarily interest rate swaps, to manage interest rate risk and match the rates on certain assets by hedging the fair value of certain fixed rate liabilities, which converts the liabilities to variable rates and by hedging the cash flow variability associated with certain variable rate liabilities by converting the liabilities to fixed rates.

Interest Rate Swap Agreements

To accommodate the needs of our customers and support the Company’s asset/liability positioning, we may enter into interest rate swap agreements with customers and a large financial institution that specializes in these types of transactions. These arrangements involve the exchange of interest payments based on the notional amounts. The Company entered into floating rate loans and fixed rate swaps with our customers. Simultaneously, the Company entered into offsetting fixed rate swaps with this large financial institution. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay the large financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These transactions allow the Company’s customers to effectively convert a variable rate loan to a fixed rate. Because the Company acts as an intermediary for its customers, changes in the fair value of the underlying derivative contracts offset each other and do not significantly impact the Company’s results of operations.

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These swaps are considered free-standing derivatives and are reported at fair value within other assets and other liabilities on the Consolidated Balance Sheets. Disclosures related to the fair value of the swap transactions can be found in Note 16.

The following table summarizes the interest rate swap transactions that impacted the Company’s first nine months of 2025 and 2024 performance (in thousands, except percentages).

At September 30, 2025

Increase

Aggregate

Weighted

(Decrease)

Notional

Average Rate

Repricing

In Interest

Hedge Type

Amount

Received/(Paid)

Frequency

Income

Swap assets

N/A

61,401

6.66

Monthly

945

Swap liabilities

N/A

(61,401)

(6.66)

Monthly

(945)

Net exposure

—


	At September 30, 2024
							Increase
		Aggregate		Weighted			(Decrease)
		Notional		Average Rate		Repricing	In Interest
	Hedge Type	Amount		Received/(Paid)		Frequency	Income
Swap assets	N/A	$	67,135	7.67	%	Monthly	$	1,573
Swap liabilities	N/A		(67,135)	(7.67)		Monthly		(1,573)
Net exposure		$	—	—	%		$	—

Risk Participation Agreements

The Company will enter into risk participation agreements (RPAs) with the lead bank of certain commercial real estate loan arrangements. As a participating bank, the Company guarantees the performance on borrower-related interest rate swap contracts. The Company has no obligations under the RPAs unless the borrower defaults on their swap transaction with the lead bank and the swap is a liability to the borrower. In that instance, the Company agrees to pay the lead bank a pre-determined percentage of the swap’s value at the time of default. In exchange for providing the guarantee, the Company receives an upfront fee from the lead bank.

RPAs are derivative financial instruments and are recorded at fair value. These derivatives are not designated as hedges and therefore, changes in fair value are recognized in earnings with a corresponding offset within other liabilities. Disclosures related to the fair value of the RPAs can be found in Note 16. The notional amount of the risk participation agreements outstanding at September 30, 2025 and December 31, 2024 was $4.9 million.

Interest Rate Hedges

The Company has entered into interest rate swaps with a total notional value of $70 million as of September 30, 2025 and 2024 in order to hedge the interest rate risk associated with certain floating-rate time deposit accounts. The hedge transactions allow the Company to add stability to interest expense and manage its exposure to interest rate movements. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed payments.

For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is reported in accumulated other comprehensive loss (within Shareholders’ Equity), net of tax, with a corresponding offset within other assets or other liabilities. Disclosures related to the fair value of the interest rate hedges can be found in Note 16. Amounts recorded in accumulated other comprehensive loss for the effective portion of changes in the fair value are subsequently reclassified to earnings when the hedged transaction affects earnings. The ineffective portion of changes in the fair value of the derivative is recognized directly in earnings. The Company assesses the effectiveness of the hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. The Company did not recognize any hedge ineffectiveness in earnings during the periods ended September 30, 2025 and 2024.

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Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on certain of the Company’s variable rate time deposit accounts. During the three months ended September 30, 2025 and 2024, the Company had $35,000 and $205,000 of gains, respectively, which resulted in a decrease in interest expense. During the nine months ended September 30, 2025 and 2024, the Company had $79,000 and $604,000 of gains, respectively, which resulted in a decrease in interest expense. In the twelve months that follow September 30, 2025, the Company estimates that approximately $5,000 will be reclassified as a decrease to interest expense. This reclassified amount could differ from amounts actually recognized due to changes in interest rates. As of September 30, 2025, the maximum remaining length of time over which forecasted transactions are hedged is approximately one and a quarter years with all hedge transactions terminating by December 2026.

The following table summarizes the effect of the effective portion of the Company’s cash flow hedge accounting on accumulated other comprehensive loss for the three and nine months ended September 30, 2025 and 2024 (in thousands).


	Three months ended September 30, 2025
Derivatives in Cash Flow Hedging Relationships	Amount Recognized in Other Comprehensive Income (Loss) on Derivatives		Location on Consolidated Statements of Operations of Reclassification from Accumulated Other Comprehensive Loss	Amount Reclassified from Accumulated Other Comprehensive Loss
Interest rate hedge	$	(6)	Interest expense - Deposits	$	(35)
Total	$	(6)		$	(35)


	Three months ended September 30, 2024
Derivatives in Cash Flow Hedging Relationships	Amount Recognized in Other Comprehensive Income (Loss) on Derivatives		Location on Consolidated Statements of Operations of Reclassification from Accumulated Other Comprehensive Loss	Amount Reclassified from Accumulated Other Comprehensive Loss
Interest rate hedge	$	(1,122)	Interest expense - Deposits	$	(205)
Total	$	(1,122)		$	(205)


	Nine months ended September 30, 2025
Derivatives in Cash Flow Hedging Relationships	Amount Recognized in Other Comprehensive Income (Loss) on Derivatives		Location on Consolidated Statements of Operations of Reclassification from Accumulated Other Comprehensive Loss	Amount Reclassified from Accumulated Other Comprehensive Loss
Interest rate hedge	$	10	Interest expense - Deposits	$	(79)
Total	$	10		$	(79)


	Nine months ended September 30, 2024
Derivatives in Cash Flow Hedging Relationships	Amount Recognized in Other Comprehensive Income (Loss) on Derivatives		Location on Consolidated Statements of Operations of Reclassification from Accumulated Other Comprehensive Loss	Amount Reclassified from Accumulated Other Comprehensive Loss
Interest rate hedge	$	(235)	Interest expense - Deposits	$	(604)
Total	$	(235)		$	(604)

The Company monitors and controls all derivative products with a comprehensive Board of Directors approved Hedging Policy. This policy permits a total maximum notional amount outstanding of $500 million for interest rate swaps, caps, and floors. All hedge transactions must be approved in advance by the Investment Asset/Liability Committee (ALCO) of the Board of Directors, unless otherwise approved, as per the terms, within the Board of Directors approved Hedging Policy. The Company had no caps or floors outstanding at September 30, 2025 and 2024.

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13. Segment Reporting

ASC Topic 280, Segment Reporting, identifies operating segments as components of a company which are evaluated regularly by the chief operating decision maker in deciding how to develop strategy, allocate resources, and assess performance. The chief operating decision maker of the Company is our President and Chief Executive Officer (CEO). The CEO has authority over all divisions within the Company. The senior manager of each division reports directly to the CEO and all operating activities of the divisions, including financial results, budgets, and forecasts, are discussed with the CEO. While the CEO’s direct reports manage the day-to-day functions of each division, all strategic and major decision making actions must be approved by the CEO for all product lines and geographic areas where the Company has a presence.

While the Company monitors the revenue streams of the various products and services, operations are managed, and financial performance is evaluated on a Company-wide basis. The Company provides a variety of consumer and commercial banking and wealth management services within southwestern Pennsylvania and Hagerstown, Maryland through its branch network. Its retail and commercial banking activities include the deposit-gathering branch franchise and lending activities such as residential mortgage loans, direct consumer loans, small business loans, commercial loans, business services, and CRE loans. Its wealth management activities include personal trust products and services such as personal portfolio investment management, estate planning and administration, custodial services and pre-need trusts, as well as the sale of mutual funds, annuities, and insurance products. Additionally, institutional trust products and services such as 401(k) plans, defined benefit and defined contribution employee benefit plans, and individual retirement accounts are offered. Wealth management activities also include the union collective investment funds (ERECT funds) which are designed to use union pension dollars in construction projects that utilize union labor.

Management has determined that the Company has one reportable segment consisting of Community Banking. While senior management within each division evaluates detailed financial data to monitor revenues and expenses, there are certain support cost centers, such as information technology, human resources, internal audit, and finance, that are not directly charged to each operating profit center making it difficult to determine a thorough and accurate measure of profitability. Further, the revenue generating divisions do not operate as separate silos but work cooperatively and together, providing referrals and cross-selling opportunities to one another. It is not feasible to split the benefit of these efforts between or among the referral division and the product/service division. Finally, the Company’s Board of Directors evaluates performance on a macro level basis and reviews financial reports that describe the consolidated operating performance of all the divisions of the Company.

The accounting policies for the Community Banking segment are the same as those of our consolidated entity. The chief operating decision maker assesses performance and decides how to allocate resources based on net income as reported on the Consolidated Statements of Operations. The measure of segment assets is reported on the Consolidated Balance Sheets.

Consolidated net income is used to monitor budget versus actual results in assessing performance. The chief operating decision maker uses two primary measures to gauge performance: earnings per share (EPS) and return on average assets (ROA). EPS measures the Company’s profitability in relation to the number of common shares outstanding. ROA measures how efficiently the Company generates income based on its total assets. The chief operating decision maker also uses consolidated net income in competitive analysis by benchmarking to the Company’s peers.

14. Commitments and Contingent Liabilities

The Company had various outstanding commitments to extend credit approximating $243.9 million and $233.2 million along with standby letters of credit of $7.8 million and $8.7 million as of September 30, 2025 and December 31, 2024, respectively. The Company’s exposure to credit loss in the event of nonperformance by the other party to these commitments to extend credit and standby letters of credit is represented by their contractual amounts. The Company uses the same credit and collateral policies in making commitments and conditional obligations as for all other lending.

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losses on off-balance sheet credit exposures is adjusted through the provision (recovery) for credit losses line on the Consolidated Statements of Operations. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The Company recorded a provision for credit losses on unfunded commitments for the three months ended September 30, 2025 of $28,000 while a provision for credit losses recovery of $4,000 was recognized for the same 2024 period. For the nine months ended September 30, 2025 and 2024, the Company recorded a provision for credit losses recovery of $692,000 and $4,000, respectively. The carrying amount of the allowance for credit losses for the Company’s obligations related to unfunded commitments and standby letters of credit, which is reported in other liabilities on the Consolidated Balance Sheets, was $274,000 at September 30, 2025 compared to $966,000 at December 31, 2024.

Additionally, the Company is subject to a number of asserted and unasserted potential claims encountered in the normal course of business. In the opinion of the Company, neither the resolution of these claims nor the funding of these credit commitments is expected to have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

15. Pension Benefits

The Company has a noncontributory defined benefit pension plan covering certain employees who work at least 1,000 hours per year. The participants have a vested interest in their accrued benefit after five full years of service. The benefits of the plan are based upon the employee’s years of service and average annual earnings for the highest five consecutive calendar years during the final ten-year period of employment. Plan assets are primarily debt securities (including U.S. Treasury and Agency securities and corporate bonds), listed common stocks (including shares of AmeriServ Financial, Inc. common stock which is limited to 4% of the plan’s assets), mutual funds, and short-term cash equivalent instruments. The net periodic pension benefit for the three and nine months ended September 30, 2025 and 2024 was as follows (in thousands):


	Three months ended				Nine months ended
	September 30,				September 30,
	2025		2024		2025		2024
COMPONENTS OF NET PERIODIC PENSION BENEFIT:
Service cost	$	162	$	211	$	536	$	628
Interest cost		413		369		1,145		1,173
Expected return on plan assets		(1,032)		(1,051)		(3,112)		(3,119)
Settlement charge		—		34		—		410
Net periodic pension benefit	$	(457)	$	(437)	$	(1,431)	$	(908)

The service cost component of net periodic pension benefit is included in salaries and employee benefits and all other components of net periodic pension benefit are included in other expense on the Consolidated Statements of Operations.

The Company did not recognize a settlement charge in connection with its defined benefit pension plan in the third quarter and first nine months of 2025 while a settlement charge of $34,000 and $410,000 was recognized in the same periods of 2024, respectively. 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. It is important to note that since the retired employees elected to take lump sum payments, these individuals are no longer included in the pension plan. Therefore, the Company’s basic annual pension expense is expected to be lower in the future. This was evident in 2024 and so far in 2025 as the Company has recognized a net periodic pension benefit in both years.

The accrued pension obligation, which had a positive (debit) balance of $32.8 million and $31.4 million, was reclassified to other assets on the Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, respectively. The balance of the accrued pension obligation continues to be a positive value as a result of Company contributions to the plan and the revaluation of the obligation.

The Company implemented a soft freeze of its defined benefit pension plan to provide that non-union employees hired on or after January 1, 2013 and union employees hired on or after January 1, 2014 are not eligible to participate in

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the pension plan. Instead, such employees are eligible to participate in a qualified 401(k) plan. This change was made to help reduce pension costs in future periods.

16. Disclosures about Fair Value Measurements and Financial Instruments

The following disclosures establish a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The three broad levels defined within this hierarchy are as follows:

Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date.

Level II: Pricing inputs are other than the quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities includes items for which quoted prices are available but traded less frequently and items that are fair valued using other financial instruments, the parameters of which can be directly observed.

Level III: Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

Equity Securities Without Readily Determinable Fair Values

The Company has entered into a Registration Rights Agreement with a borrower who, upon emergence from bankruptcy, issued ordinary shares in satisfaction of debt previously contracted. The shares are not listed on any stock exchange. Since the shares do not have a readily determinable fair value, they are carried at cost and evaluated for impairment by management. In addition, if management identifies an observable price change in an orderly transaction for an identical or similar investment of the same issuer, the fair value of the equity securities will be measured and adjusted.

At September 30, 2025 and December 31, 2024, the carrying value of these equity securities was $600,000 which is included in other assets on the Consolidated Balance Sheets. There were no adjustments to the carrying value of equity securities without readily determinable fair values during the three and nine months ended September 30, 2025 and 2024.

Assets and Liabilities Measured and Recorded on a Recurring Basis

Equity securities are reported at fair value utilizing Level 1 inputs. These securities are mutual funds held within a rabbi trust for the Company's executive deferred compensation plan. The mutual funds held are open-end funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value and to transact at that price.

Securities classified as available for sale and trading are reported at fair value based on measurements obtained from an independent pricing service. The fair value measurements consider observable data that may include dealer quoted market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things. It should be noted that available for sale securities are reported at fair value, net of any related allowance for credit losses.

The fair values of the simultaneous interest rate swaps, the interest rate hedges used for interest rate risk management, and the risk participation agreements associated with certain commercial real estate loans are based on an external derivative valuation model using data inputs from similar transactions as of the valuation date and classified Level 2.

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The following tables present the assets and liabilities measured and reported on the Consolidated Balance Sheets on a recurring basis at their fair value as of September 30, 2025 and December 31, 2024, by level within the fair value hierarchy (in thousands).

Fair Value Measurements at September 30, 2025

Total

Level 1

Level 2

Level 3

Equity securities ⁽¹⁾

181

—

Available for sale securities:

U.S. Agency

4,791

—

4,791

—

U.S. Agency mortgage-backed securities

106,177

—

106,177

—

Municipal

10,938

—

10,938

—

Corporate bonds

47,655

—

47,655

—

Trading securities:

U.S. Treasury

1,995

—

1,995

—

Municipal

2,467

—

2,467

—

Interest rate swap asset ⁽¹⁾

2,605

—

2,605

—

Interest rate swap liability ⁽²⁾

(2,639)

—

(2,639)

—

Interest rate hedge ⁽²⁾

(160)

—

(160)

—

Risk participation agreement ⁽²⁾

(329)

—

(329)

—


	Fair Value Measurements at December 31, 2024
	Total		Level 1		Level 2		Level 3
Equity securities ⁽¹⁾	$	350	$	350	$	—	$	—
Available for sale securities:
U.S. Agency		4,666		—		4,666		—
U.S. Agency mortgage-backed securities		91,534		—		91,534		—
Municipal		8,363		—		8,363		—
Corporate bonds		51,057		363		50,021		673
Interest rate swap asset ⁽¹⁾		4,657		—		4,657		—
Interest rate swap liability ⁽²⁾		(4,691)		—		(4,691)		—
Interest rate hedge ⁽²⁾		(169)		—		(169)		—
Risk participation agreement ⁽²⁾		(207)		—		(207)		—

(1)	Included within other assets on the Consolidated Balance Sheets.

(2)	Included within other liabilities on the Consolidated Balance Sheets.

Assets Measured and Recorded on a Non-Recurring Basis

The Company evaluates individual loans for expected credit losses when those loans do not share similar risk characteristics with loans evaluated using a collective (pooled) basis. Individually evaluated loans are reported at the fair value of the underlying collateral if the repayment is expected solely from the collateral. Collateral values are estimated using Level 3 inputs based on observable market data which at times are discounted using unobservable inputs. At September 30, 2025, an individually evaluated loan using the collateral method with a carrying value of $3.5 million was reduced by a specific valuation allowance totaling $185,000 resulting in a net fair value of $3.3 million. At December 31, 2024, the Company had no individually evaluated loans using the collateral method which were carried at fair value.

Other real estate owned is measured at fair value based on appraisals or Company prepared property evaluations, less estimated costs to sell at the date of foreclosure. The Bank’s internal Collections and Assigned Risk Department estimates the fair value of repossessed assets, such as vehicles and equipment, using a formula driven analysis based on automobile or other industry data, less estimated costs to sell at the time of repossession. Valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value, less costs to sell. Income and expenses from operations and changes in valuation allowance are included in the net expenses from OREO and repossessed assets.

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Assets measured and recorded at fair value on a non-recurring basis are summarized below (in thousands, except range data):

Fair Value Measurements

September 30, 2025

Total

Level 1

Level 2

Level 3

Individually evaluated loans

3,278

—

3,278

Other real estate owned and repossessed assets

240

—

240


	Fair Value Measurements
December 31, 2024	Total		Level 1		Level 2		Level 3
Other real estate owned and repossessed assets	$	1,724	$	—	$	—	$	1,724


	Quantitative Information About Level 3 Fair Value Measurements
			Valuation	Unobservable
September 30, 2025	Fair Value		Techniques	Input	Range (Wgtd Avg)
Individually evaluated loans	$	3,278	Appraisal of collateral ⁽¹⁾	Appraisal adjustments ⁽²⁾	13% (13%)
Other real estate owned and repossessed assets	$	240	Appraisal of collateral ⁽¹⁾	Appraisal adjustments ⁽²⁾	15% to 59% (43%)
				Liquidation expenses	0% to 30% (11%)


	Quantitative Information About Level 3 Fair Value Measurements
			Valuation	Unobservable
December 31, 2024	Fair Value		Techniques	Input	Range (Wgtd Avg)
Other real estate owned and repossessed assets	$	1,724	Appraisal of collateral ⁽¹⁾	Appraisal adjustments ⁽²⁾	18% to 63% (24%)
				Liquidation expenses	0% to 33% (4%)

(1)	Fair Value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable. Also includes qualitative adjustments by management and estimated liquidation expenses.

(2)	Appraisals may be adjusted by management for qualitative factors such as economic conditions.

Fair Value of Financial Instruments

For the Company, as for most financial institutions, the majority of its assets and liabilities are considered financial instruments. Many of the Company’s financial instruments, however, lack an available trading market characterized by a willing buyer and willing seller engaging in an exchange transaction. Therefore, significant estimates and present value calculations were used by the Company for the purpose of this disclosure.

Fair values have been determined by the Company using independent third-party valuations that use the best available data (Level 2) and an estimation methodology (Level 3) the Company believes is suitable for each category of financial instruments. Management believes that cash and cash equivalents, bank owned life insurance, regulatory stock, accrued interest receivable and payable, deposits with no stated maturities, and short-term borrowings have fair values which approximate the recorded carrying values. The fair value measurements for all of these financial instruments are Level 1 measurements.

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The estimated fair values based on US GAAP measurements and recorded carrying values at September 30, 2025 and December 31, 2024 for the remaining financial instruments not required to be reported at fair value were as follows:

September 30, 2025

Carrying

Value

Fair Value

Level 1

Level 2

Level 3

(In Thousands)

FINANCIAL ASSETS:

Investment securities – HTM

67,179

63,492

—

62,522

970

Loans, net of allowance for credit losses and unearned income

1,041,275

1,031,384

—

1,031,384

FINANCIAL LIABILITIES:

Deposits with stated maturities

381,639

381,508

—

381,508

All other borrowings ⁽¹⁾

74,780

74,894

—

74,894


	December 31, 2024
	Carrying
	Value			Fair Value		Level 1		Level 2		Level 3

		(In Thousands)
FINANCIAL ASSETS:
Investment securities – HTM	$	63,837	$	58,471	$	—	$	57,535	$	936
Loans held for sale		460		470		470		—		—
Loans, net of allowance for credit losses and unearned income		1,054,037		990,745		—		—		990,745
FINANCIAL LIABILITIES:
Deposits with stated maturities		336,312		336,167		—		—		336,167
All other borrowings ⁽¹⁾		82,784		81,476		—		—		81,476

(1)	All other borrowings include advances from Federal Home Loan Bank and subordinated debt.

Changes in assumptions or estimation methodologies may have a material effect on these estimated fair values. The Company’s remaining assets and liabilities which are not considered financial instruments have not been valued differently than has been customary under historical cost accounting.

Item 2.

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

THREE MONTHS ENDED SEPTEMBER 30, 2025 VS. THREE MONTHS ENDED SEPTEMBER 30, 2024

…..PERFORMANCE OVERVIEW…..The following table summarizes some of the Company’s key performance indicators (in thousands, except per share and ratios).


	Three months ended			Three months ended
	September 30, 2025			September 30, 2024
Net income	$	2,544		$	1,183
Diluted earnings per share		0.15			0.07
Return on average assets (annualized)		0.70	%		0.34	%
Return on average equity (annualized)		9.06	%		4.51	%

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

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…..NET INTEREST INCOME AND 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, and 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 compares the Company’s net interest income performance for the third quarter of 2025 to the third quarter of 2024 (in thousands, except percentages):


	Three			Three
	months ended			months ended
	September 30, 2025			September 30, 2024			Change			% Change
Interest income	$	18,483		$	16,708		$	1,775		10.6	%
Interest expense		7,476			7,821			(345)		(4.4)
Net interest income	$	11,007		$	8,887		$	2,120		23.9
Net interest margin		3.27	%		2.71	%		0.56	%	20.7

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

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

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

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

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2025, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support its customers and community during times of economic volatility.

Total interest expense in the third quarter of 2025 favorably decreased by $345,000, or 4.4%, when compared to the third quarter of 2024. Deposit interest expense increased by $34,000, or 0.5%, as total average interest-bearing deposits grew by $77.9 million, or 7.9%, compared to the third quarter of last year. Overall, total deposit cost (including the benefit of non-interest-bearing demand deposits which decreased slightly between years) averaged 2.10% in the third quarter of 2025, which is a 12-basis point improvement from the third quarter of 2024.

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

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

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Three months ended September 30 (In thousands, except percentages)


	2025						2024
			Interest						Interest
	Average		Income/		Yield/		Average		Income/		Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
Interest earning assets:
Loans and loans held for sale, net of unearned income	$	1,066,511	$	15,699	5.79	%	$	1,033,159	$	14,308	5.45	%
Short-term investments and bank deposits		13,347		144	4.23			3,935		55	5.37
Investment securities – AFS		176,540		1,967	4.46			172,033		1,765	4.10
Investment securities – HTM		66,360		640	3.86			66,459		587	3.53
Total investment securities		242,900		2,607	4.29			238,492		2,352	3.94
Trading securities		4,655		52	4.44			—		—	—
Total interest earning assets/interest income		1,327,413		18,502	5.50			1,275,586		16,715	5.14
Non-interest earning assets:
Cash and due from banks		15,502						13,606
Premises and equipment		17,543						18,828
Other assets		102,459						101,796
Allowance for credit losses		(15,309)						(15,182)
TOTAL ASSETS	$	1,447,608					$	1,394,634
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand	$	250,169	$	1,131	1.79	%	$	223,835	$	1,081	1.92	%
Savings		122,321		30	0.10			120,910		30	0.10
Money markets		314,665		1,917	2.42			314,436		2,249	2.85
Time deposits		379,299		3,471	3.63			329,330		3,155	3.81
Total interest bearing deposits		1,066,454		6,549	2.44			988,511		6,515	2.62
Short-term borrowings		9,163		111	4.81			28,670		417	5.70
Advances from Federal Home Loan Bank		47,702		528	4.39			53,418		600	4.47
Subordinated debt		27,000		263	3.90			27,000		263	3.90
Lease liabilities		4,061		25	2.45			4,383		26	2.44
Total interest bearing liabilities/interest expense		1,154,380		7,476	2.57			1,101,982		7,821	2.82
Non-interest bearing liabilities:
Demand deposits		171,161						176,286
Other liabilities		10,597						11,950
Shareholders’ equity		111,470						104,416
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,447,608					$	1,394,634
Interest rate spread					2.93						2.32
Net interest income/ Net interest margin (non-GAAP)				11,026	3.27	%				8,894	2.71	%
Tax-equivalent adjustment				(19)						(7)
Net Interest Income (GAAP)			$	11,007					$	8,887

…..PROVISION FOR CREDIT LOSSES…..The Company recorded a $360,000 provision for credit losses in the third quarter of 2025 after recording a provision recovery of $51,000 in the third quarter of 2024, resulting in an increase in expense of $411,000. The provision for credit losses in the third quarter of 2025 primarily reflected an increase in the specific reserves related to a commercial/owner-occupied CRE loan relationship.

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

●

a $289,000, or 118.4%, increase in BOLI revenue due to the Company receiving two death claims during the third quarter of 2025;

●

wealth management fees decreased by $201,000, or 6.6%, due to the volatility and uncertainty that existed in the financial markets as a result of government fiscal policy;

●

a $102,000, or 19.6%, increase in other income due primarily to the adjustment to the fair value of a risk participation agreement as well as the 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 its interest rate risk position. Specifically, these adjustments favorably impacted other income by $197,000 during the third quarter of 2025;

●

the Company recognized trading securities revenue of $55,000 during the third quarter of 2025 from the $5 million trading account established earlier in the year; and

●

a $46,000, or 54.1%, decrease in mortgage banking revenue resulting from a decreased level of residential mortgage production in 2025.

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

●

a $230,000, or 33.5%, increase in other expense due primarily to the recognition of workout expenses related to a loan relationship secured by an owner-occupied CRE property;

●

a $195,000, or 2.7%, increase in salaries and employee benefits due to the net impact of certain items within this broad category. Total salaries cost increased $233,000, or 4.6%, due to a higher level of full-time equivalent employees. Partially offsetting the higher salaries cost was a reduced level of incentive compensation by $52,000, or 17.0%, in the wealth management as well as the commercial and residential lending divisions; and

●

a $191,000, or 24.1%, decrease in professional fees as 2024 legal and professional services costs were unfavorably impacted by litigation and responses to the actions of an activist investor.

…..INCOME TAX EXPENSE…..The Company recorded income tax expense of $540,000, or an effective tax rate of 17.5%, in the third quarter of 2025. This compares to income tax expense of $237,000, or an effective tax rate of 16.7%, for the third quarter of 2024.

NINE MONTHS ENDED SEPTEMBER 30, 2025 VS. NINE MONTHS ENDED SEPTEMBER 30, 2024

…..PERFORMANCE OVERVIEW…..The following table summarizes some of the Company’s key performance indicators (in thousands, except per share and ratios).


	Nine months ended			Nine months ended
	September 30, 2025			September 30, 2024
Net income	$	4,170		$	2,712
Diluted earnings per share		0.25			0.16
Return on average assets		0.39	%		0.26	%
Return on average equity		5.05			3.52

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

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

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


	Nine months ended			Nine months ended
	September 30, 2025			September 30, 2024			Change			% Change
Interest income	$	53,194		$	49,442		$	3,752		7.6	%
Interest expense		21,862			22,933			(1,071)		(4.7)
Net interest income	$	31,332		$	26,509		$	4,823		18.2
Net interest margin		3.13	%		2.72	%		0.41	%	15.1

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

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

Total investment securities averaged $238.9 million for the first nine months of 2025, which was $494,000, or 0.2%, higher than the $238.4 million average for the first nine months of 2024. The increase reflects the higher level of loan prepayment activity, as well as the strengthening of the Company’s liquidity position during the first nine months of

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

During the second quarter of 2025, the Company established an investment trading account which holds primarily U.S. Treasury and municipal (taxable and tax-exempt) securities. Interest income recognized on the trading securities totaled $85,000 for the first nine months of 2025. Overall, through nine months, the average balance of total interest earning assets increased from last year’s average by $47.7 million, or 3.7%, while total interest income increased by $3.8 million, or 7.6%, from the first nine months of 2024.

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

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

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

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

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Nine months ended September 30 (In thousands, except percentages)


	2025						2024
			Interest						Interest
	Average		Income/		Yield/		Average		Income/		Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
Interest earning assets:
Loans and loans held for sale, net of unearned income	$	1,066,789	$	45,155	5.60	%	$	1,030,887	$	42,099	5.39	%
Short-term investments and bank deposits		11,847		433	4.83			3,835		183	6.25
Investment securities – AFS		172,698		5,653	4.36			172,740		5,465	4.22
Investment securities – HTM		66,160		1,895	3.82			65,624		1,714	3.48
Total investment securities		238,858		7,548	3.98			238,364		7,179	4.02
Trading securities		3,249		103	4.11			—		—	—
Total interest earning assets/interest income		1,320,743		53,239	5.34			1,273,086		49,461	5.11
Non-interest earning assets:
Cash and due from banks		15,566						14,212
Premises and equipment		17,728						18,604
Other assets		103,245						100,593
Allowance for credit losses		(14,935)						(15,406)
TOTAL ASSETS	$	1,442,347					$	1,391,089
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand	$	252,634	$	3,417	1.81	%	$	223,163	$	3,164	1.89	%
Savings		122,179		89	0.10			120,528		88	0.10
Money markets		318,083		5,663	2.38			312,379		6,629	2.83
Time deposits		362,690		9,912	3.65			327,659		9,222	3.75
Total interest bearing deposits		1,055,586		19,081	2.42			983,729		19,103	2.59
Short-term borrowings		6,406		230	4.80			30,214		1,308	5.69
Advances from Federal Home Loan Bank		51,142		1,685	4.41			50,671		1,652	4.34
Subordinated debt		27,000		790	3.90			27,000		789	3.90
Lease liabilities		4,134		76	2.45			4,351		81	2.49
Total interest bearing liabilities/interest expense		1,144,268		21,862	2.55			1,095,965		22,933	2.79
Non-interest bearing liabilities:
Demand deposits		176,393						178,762
Other liabilities		11,304						13,332
Shareholders’ equity		110,382						103,030
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,442,347					$	1,391,089
Interest rate spread					2.79						2.32
Net interest income/ Net interest margin (non-GAAP)				31,377	3.13	%				26,528	2.72	%
Tax-equivalent adjustment				(45)						(19)
Net Interest Income (GAAP)			$	31,332					$	26,509

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

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

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

●

wealth management fees decreased by $880,000, or 9.4%, which is attributed to the volatility and uncertainty that existed in the financial markets due to government fiscal policy, particularly earlier in 2025. While equity markets rebounded during the second and third quarters of 2025, the first quarter 2025 decline in major market indexes unfavorably impacted equity securities resulting in management fees declining. Additionally, the Financial Services division benefited from several large new business relationships in 2024. Overall, the fair market value of wealth management assets totaled $2.7 billion at September 30, 2025 and increased by $102.1 million, or 4.0%, since December 31, 2024;

●

a $220,000, or 26.8%, increase in BOLI revenue resulting from the Company receiving two death claims during the third quarter of 2025;

●

a $183,000, or 8.3%, decrease in other income due to the Company recognizing a $250,000 signing bonus from the renewal of a contract with Visa during the first quarter of 2024 while there was no such bonus in 2025;

●

a $106,000, or 45.9%, decrease in mortgage banking revenue due to a lower level of residential mortgage loan production in 2025; and

●

the Company recognized trading securities revenue of $90,000 during the first nine months of 2025 from the $5 million trading account established in the second quarter of 2025.

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

●

a $1.7 million, or 43.7%, decrease in professional fees as 2024 legal and professional services costs were unfavorably impacted by litigation and responses to the actions of an activist investor. This matter was resolved in June 2024 as a result of a Settlement Agreement;

●

a $274,000, or 11.2%, decrease in other expense driven primarily by the Company having to recognize a $410,000 pension settlement charge in 2024 while no such charge was required so far in 2025. Partially offsetting this decrease was the recognition of additional workout expenses related to a loan relationship secured by an owner-occupied CRE property; and

●

a $269,000, or 1.3%, increase in salaries and employee benefits due to the net impact of certain items within this broad category. Health care costs were $364,000, or 15.1%, higher as the Company did not have to recognize any premium costs in January 2024 due to the effective negotiations with its health care provider last year. Total salaries cost increased by $411,000, or 2.7%, due to annual salary merit increases. Partially offsetting these higher costs within total salaries and employee benefits was a reduced level of incentive compensation by $444,000, or 37.8%, in the wealth management as well as the commercial and residential lending divisions.

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

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of $611,000, or an effective tax rate of 18.4%. The higher level of income tax expense this year was due to the increased level of pre-tax income.

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

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

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

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

⁽¹⁾ Non-GAAP financial information, see “Reconciliation of Non-GAAP Financial Measures” later in this MD&A.

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…..LOAN QUALITY…..The following table sets forth information concerning the Company’s loan delinquency, non-performing loans, and classified loans (in thousands, except percentages):


	September 30,			December 31,			September 30,
	2025			2024			2024
Total accruing loan delinquency	$	2,668		$	4,475		$	5,421
Total non-accrual loans		14,421			10,810			9,807
Total non-performing loans⁽¹⁾		14,713			10,933			9,819
Accruing loan delinquency, as a percentage of total loans, net of unearned income		0.25	%		0.42	%		0.52	%
Non-accrual loans, as a percentage of total loans, net of unearned income		1.37			1.01			0.94
Non-performing loans, as a percentage of total loans, net of unearned income⁽¹⁾		1.39			1.02			0.94
Non-performing loans as a percentage of total assets⁽¹⁾		1.01			0.77			0.70
As a percent of average loans, net of unearned income:
Annualized net charge-offs		0.37			0.19			0.06
Annualized provision (recovery) for credit losses - loans		0.43			0.08			(0.02)
Total classified loans (loans rated substandard or doubtful)⁽²⁾	$	20,174		$	23,552		$	19,244

⁽¹⁾	Non-performing loans are comprised of loans that are on a non-accrual basis and loans that are contractually past due 90 days or more as to interest and principal payments.

⁽²⁾	Total classified loans include non-performing residential mortgage and consumer loans.

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

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

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

Commercial Real Estate Loan Exposure

A significant portion of the Company's loan portfolio consists of commercial real estate loans, including owner occupied properties, non-owner-occupied properties, and other commercial properties. These types of loans are generally viewed as having more risk of default than residential real estate loans and depend on cash flows from the owner’s business or the property’s tenants to service the debt. The borrower’s cash flows may be affected significantly by general economic conditions, a downturn in the local economy or in occupancy rates in the market where the property is located, any of which could increase the likelihood of default. Commercial real estate loans also typically have larger loan balances, and therefore, the deterioration of one or a few of these loans could cause a significant increase in the percentage of the Company's non-performing loans. An increase in non-performing loans could result in a loss of earnings from these loans, an increase in the provision for credit losses for loans, and an increase in charge-offs, all of which could have a material adverse effect on the Company's business, financial condition, and results of operations.

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The banking regulatory agencies have recently expressed concerns about weaknesses in the current commercial real estate market. Banking regulators generally give commercial real estate lending greater scrutiny and may require banks with higher levels of commercial real estate loans to implement enhanced risk management practices, including stricter underwriting, internal controls, risk management policies, more granular reporting, and portfolio stress testing, as well as possibly higher levels of allowances for credit losses and capital levels as a result of commercial real estate lending growth and exposures. If the Company's banking regulators determine that our commercial real estate lending activities are particularly risky and are subject to such heightened scrutiny, the Company may incur significant additional costs or be required to restrict certain of our commercial real estate lending activities. Furthermore, failures in the Company's risk management policies, procedures and controls could adversely affect our ability to manage this portfolio going forward and could result in an increased rate of delinquencies in, and increased losses from, this portfolio, which could have a material adverse effect on the Company's business, financial condition, and results of operations.

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

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

September 30, 2025

Commercial

Real Estate

Other Commercial

(Non-Owner Occupied) -

Real Estate

Retail

Multi-Family

(Non-Owner Occupied)

Total

(In thousands)

1-4 unit residential

—

26,014

Multi-family

—

108,737

—

108,737

Mixed use - apartments & retail/office

—

17,017

—

17,017

Retail strip plaza

61,498

—

61,498

Mall

3,328

—

3,328

Major shopping center with anchor tenants

29,214

—

29,214

Commercial office - urban

—

18,859

Commercial office - suburban

—

20,133

Hotel/motel

—

37,347

Retail/service shops

86,509

—

86,509

Personal care/hospital/medical office

—

23,094

Manufacturing/warehouse

—

95,413

Other

—

1,040

Land acquisition and development

—

14,452

Total

180,549

125,754

236,352

542,655

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…..ALLOWANCE FOR CREDIT LOSSES…..The following table sets forth the allowance for credit losses and certain ratios for the periods ended (in thousands, except percentages):


	September 30,			December 31,			September 30,
	2025			2024			2024
Allowance for credit losses - loans	$	14,408		$	13,912		$	14,420
Allowance for credit losses - loans as a percentage of each of the following:
total loans, net of unearned income		1.36	%		1.30	%		1.39	%
total non-accrual loans		99.91			128.70			147.04
total non-performing loans		97.93			127.25			146.86
Allowance for credit losses - securities	$	94		$	449		$	448
Allowance for credit losses - unfunded loan commitments		274			966			936

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

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

…..LIQUIDITY…..The Company’s liquidity position strengthened during the first nine months of 2025 due to a higher level of loan prepayment activity as well as deposit growth. Specifically, total average deposits were $69.5 million, or 6.0%, higher when compared to the 2024 first nine-month average. The increase reflects the Company’s successful business development efforts. The Company’s core deposit base continued to demonstrate the strength and stability that it has had for many years. As of September 30, 2025, total deposits grew by $57.6 million, or 4.8%, since December 31, 2024, demonstrating customer loyalty and confidence in AmeriServ Financial Bank. In addition to its loyal core deposit base, the Company has several other sources of liquidity, including a significant unused borrowing capacity at the Federal Home Loan Bank (FHLB), overnight lines of credit at correspondent banks and access to the Federal Reserve Discount Window. The Company does not utilize brokered deposits as a funding source. Overall, deposit volumes continue to remain at a high level. The core deposit base is adequate to fund the Company’s operations. Cash flow from maturities, prepayments and amortization of securities can also be used to help fund loan growth.

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

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

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

The holding company had $4.6 million of cash, short-term investments, and investment securities at September 30, 2025, which represented a $2.3 million decrease from the holding company’s cash position since December 31, 2024. Dividend payments from our subsidiary provide ongoing cash to the holding company. At September 30, 2025, our subsidiary Bank had $3.0 million of cash available for immediate dividends to the holding company under applicable regulatory formulas. Additionally, during the first quarter of 2025, the holding company established a $3 million line of credit with an unrelated financial institution which can be used for general corporate purposes. There were no borrowings under the line at September 30, 2025. Overall, we believe that the holding company has sufficient liquidity to meet its subordinated debt interest payments and its dividend payments on its common stock.

Financial institutions must maintain liquidity to meet day-to-day requirements of depositors and borrowers, take advantage of market opportunities, and provide a cushion against unforeseen needs. Liquidity needs can be met by either reducing assets or increasing liabilities. Sources of asset liquidity are provided by short-term investments, interest bearing deposits with banks, and federal funds sold. These assets totaled $53.8 million and $17.7 million at September 30, 2025 and December 31, 2024, respectively. Maturing and repaying loans, as well as the monthly cash flow associated with mortgage-backed securities and security maturities are other significant sources of asset liquidity for the Company.

Liability liquidity can be met by attracting deposits with competitive rates, using repurchase agreements, buying federal funds, or utilizing the facilities of the Federal Reserve or the FHLB systems. The Company utilizes a variety of these methods of liability liquidity. Additionally, the Company’s subsidiary bank is a member of the FHLB, which provides the opportunity to obtain short-term to longer-term advances based upon the Company’s investment in certain residential mortgage, commercial real estate, and commercial and industrial loans. At September 30, 2025, the Company had $299 million of overnight borrowing availability at the FHLB, $43 million of short-term borrowing availability at the Federal Reserve Bank and $35 million of unsecured federal funds lines with correspondent banks. The Company believes it has ample liquidity available to fund outstanding loan commitments if they were fully drawn upon.

…..CAPITAL RESOURCES…..The Bank exceeds all regulatory capital ratios for each of the periods presented and is considered well capitalized. The Bank’s common equity tier 1 capital ratio was 11.35%, the tier 1 capital ratio was 11.35%, and the total capital ratio was 12.60% at September 30, 2025. The Bank’s tier 1 leverage ratio was 9.26% at September 30, 2025. We anticipate that we will maintain our strong capital ratios throughout the remainder of 2025.

The Basel III capital standards establish the minimum capital levels in addition to the well capitalized requirements under the federal banking regulations prompt corrective action. The capital rules also impose a 2.5% capital conservation buffer (CCB) on top of the three minimum risk-weighted asset ratios. Banking institutions that fail to meet the effective minimum ratios once the CCB is taken into account will be subject to constraints on capital distributions, including dividends and share repurchases, and certain discretionary executive compensation. The severity of the constraints depends on the amount of the shortfall and the institution’s “eligible retained income” (four quarter trailing net income, net of distributions and tax effects not reflected in net income). The Company and the Bank meet all capital

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requirements, including the CCB, and continue to be committed to maintaining strong capital levels that exceed regulatory requirements while also supporting balance sheet growth and providing a return to our shareholders.

Under the Basel III capital standards, the minimum capital ratios are:


			MINIMUM CAPITAL RATIO
	MINIMUM		PLUS CAPITAL
	CAPITAL RATIO		CONSERVATION BUFFER
Common equity tier 1 capital to risk-weighted assets	4.5	%	7.0	%
Tier 1 capital to risk-weighted assets	6.0		8.5
Total capital to risk-weighted assets	8.0		10.5
Tier 1 capital to total average consolidated assets	4.0		N/A

Our focus is on preserving capital to support customer lending and allow the Company to take advantage of business opportunities as they arise. We currently believe that we have sufficient capital and earnings power to continue to pay our common stock cash dividend at its current rate of $0.03 per quarter. The Company had a book value of $6.94 per common share and a tangible book value of $6.11⁽¹⁾ per common share on September 30, 2025. In addition, our common equity ratio was 7.84% and our tangible common equity ratio was 6.97%⁽¹⁾. At September 30, 2025, the Company had approximately 16.5 million common shares outstanding.

⁽¹⁾ Non-GAAP financial information, see “Reconciliation of Non-GAAP Financial Measures” later in this MD&A.

…..INTEREST RATE SENSITIVITY…..The following table presents an analysis of the sensitivity inherent in the Company’s net interest income and market value of portfolio equity. The interest rate scenarios in the table compare the Company’s base forecast, which was prepared using a flat interest rate scenario, to scenarios that reflect immediate interest rate changes of 100 and 200 basis points. Each rate scenario contains unique prepayment and repricing assumptions that are applied to the Company’s existing balance sheet that was developed under the flat interest rate scenario.


Interest Rate Scenario	Variability of Net Interest Income		Change in Market Value of Portfolio Equity
200 bp increase	(0.9)	%	11.1	%
100 bp increase	(0.3)		6.4
100 bp decrease	(0.6)		(9.9)
200 bp decrease	(2.5)		(23.4)

The Company believes that its overall interest rate risk position is well controlled. The execution of $70 million of interest rate hedges during 2023, in order to fix the cost of certain deposits that are indexed and move with short-term interest rates, reduced the Company’s negative variability of net interest income in a rising interest rate environment and helped slow net interest margin compression while interest rates were rising. As of September 30, 2025, the fed funds rate was at a targeted range of 4.00% to 4.25%. The Federal Reserve took action in September 2025 to ease monetary policy and decreased the target fed funds rate by 25-basis points.

The variability of net interest income was slightly negative in the upward rate scenarios as the Company was marginally more exposed to liabilities repricing upward to a greater extent than assets. Specifically, the cost of funds was immediately impacted when short-term national interest rates increase because certain deposit products and overnight borrowed funds move with the market. This was partially offset by the Company’s investment securities portfolio and the scheduled repricing of loans tied to an index, such as SOFR or prime. In addition to the interest rate hedges discussed above, the Company has effectively utilized interest rate swaps for interest rate risk management purposes. The interest rate swaps allow our customers to lock in fixed interest rates while the Company retains the benefit of interest rates moving with the market. Regarding interest bearing liabilities, the Company will continue its disciplined approach to price its core deposit accounts in a controlled but competitive manner and control the amount of overnight borrowed funds. The variability of net interest income is negative in the downward rate scenarios as the Company has more exposure to assets repricing downward to a greater extent than liabilities. The market value of portfolio equity increases

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in the upward rate shocks due to the improved value of the Company’s core deposit base. Negative variability of market value of portfolio equity occurs in the downward rate shocks due to a reduced value for core deposits.

…..OFF BALANCE SHEET ARRANGEMENTS…..The Company incurs off-balance sheet risks in the normal course of business in order to meet the financing needs of its customers. These risks derive from commitments to extend credit and standby letters of credit. Such commitments and standby letters of credit involve, to varying degrees, elements of credit risk. The Company had various outstanding commitments to extend credit approximating $243.9 million and standby letters of credit of $7.8 million as of September 30, 2025. The Company’s exposure to credit loss in the event of nonperformance by the other party to these commitments to extend credit and standby letters of credit is represented by their contractual amounts. The Company uses the same credit and collateral policies in making commitments and conditional obligations as for all other lending.

…..RECONCILIATION OF NON-GAAP FINANCIAL MEASURES…..This document contains certain financial information determined by methods other than in accordance with generally accepted accounting principles in the United States (GAAP). The tangible common equity ratio and tangible book value per share are considered to be non-GAAP measures and are calculated by dividing tangible common equity by tangible assets or shares outstanding. The Company believes that these non-GAAP financial measures provide information to investors that is useful in understanding its financial condition. This non-GAAP data should be considered in addition to results prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results. Limitations associated with non-GAAP financial measures include the risks that persons might disagree as to the appropriateness of items included in these measures, and, because not all companies use the same calculation of tangible common equity and tangible assets, this presentation may not be comparable to other similarly titled measures calculated by other companies.

The following table sets forth the calculation of the Company’s tangible common equity ratio and tangible book value per share at September 30, 2025 and December 31, 2024 (in thousands, except share and ratio data):


	September 30,			December 31,
	2025			2024
Total shareholders’ equity	$	114,575		$	107,248
Less: Intangible assets		13,672			13,688
Tangible common equity		100,903			93,560
Total assets		1,461,494			1,422,362
Less: Intangible assets		13,672			13,688
Tangible assets		1,447,822			1,408,674
Tangible common equity ratio (non-GAAP)		6.97	%		6.64	%
Total shares outstanding		16,519,267			16,519,267
Tangible book value per share (non-GAAP)	$	6.11		$	5.66

…..CRITICAL ACCOUNTING POLICIES AND ESTIMATES…..The accounting and reporting policies of the Company are in accordance with Generally Accepted Accounting Principles (GAAP) and conform to general practices within the banking industry. Accounting and reporting policies for the pension liability, allowance for credit losses (related to investment securities, loans, and unfunded commitments), and derivatives (interest rate swaps/hedges) are deemed critical because they involve the use of estimates and require significant management judgments. Application of assumptions different than those used by the Company could result in material changes in the Company’s financial position or results of operation.

ACCOUNT — Pension liability

BALANCE SHEET REFERENCE — Other assets

INCOME STATEMENT REFERENCE — Salaries and employee benefits and Other expense

DESCRIPTION

Pension costs and liabilities are dependent on assumptions used in calculating such amounts. These assumptions include discount rates, benefits earned, interest costs, expected return on plan assets, mortality rates, and other factors. In accordance with GAAP, actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect recognized expense and the recorded obligation of future periods. While

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management believes that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect the Company’s pension obligations and future expense. Additionally, pension expense can also be impacted by settlement accounting charges if the amount of employee selected lump sum distributions exceed the total amount of service and interest component costs of the net periodic pension cost in a particular year. Our pension benefits are described further in Note 15 of the Notes to Unaudited Consolidated Financial Statements.

ACCOUNT — Allowance for Credit Losses

BALANCE SHEET REFERENCE — Investment securities, net of allowance for credit losses, Allowance for credit losses – loans, Other liabilities

INCOME STATEMENT REFERENCE — Provision (recovery) for credit losses

DESCRIPTION

The Company measures the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans and held to maturity (HTM) securities, and off-balance sheet credit exposures such as unfunded commitments. In addition, ASC 326 requires credit losses on available for sale (AFS) debt securities to be presented as an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not, they will be required to sell the security.

The Company measures expected credit losses on held to maturity debt securities, which are comprised of U.S. government agency and mortgage-backed securities as well as taxable municipal, corporate, and other bonds. The Company’s agency and mortgage-backed securities are issued by U.S. government entities and agencies and are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. As such, no allowance for credit losses has been established for these securities. The allowance for credit losses on the taxable municipal, corporate, and other bonds within the held to maturity securities portfolio is calculated using the PD/LGD method. The calculation is completed on a quarterly basis using the default studies provided by an industry leading source.

The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, which considers our historical loss experience, current conditions and forecasts of future economic conditions. Determination of an appropriate ACL is inherently subjective and may have significant changes from period to period. The methodology for determining the ACL has two main components: evaluation of expected credit losses for certain groups of homogeneous loans that share similar risk characteristics and evaluation of loans that do not share risk characteristics with other loans.

The allowance for credit losses is calculated with the objective of maintaining reserve levels believed by management to be sufficient to absorb current expected credit losses. Management’s determination of the adequacy of the allowance is based on periodic evaluations of the credit portfolio and other relevant factors. However, this quarterly evaluation is inherently subjective as it requires material estimates. This process also considers economic conditions, for

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a reasonable and supportable forecast period of two years. All of these factors may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provision for credit losses may be required that would adversely impact earnings in future periods.

The Company estimates expected credit losses over the contractual period in which it is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.

ACCOUNT — Derivatives (interest rate swaps/hedges)

BALANCE SHEET REFERENCE — Other assets and Other liabilities

INCOME STATEMENT REFERENCE — Other income

DESCRIPTION

The Company periodically enters into derivative instruments to meet the financing, interest rate and equity risk management needs of its customers or the Bank.

The Company recognizes all derivatives as either assets or liabilities on the Consolidated Balance Sheets and measures those instruments at fair value. For derivatives designated as fair value hedges, changes in the fair value of the derivative and hedged item related to the hedged risk are recognized in earnings. Changes in fair value of derivatives designated and accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in other comprehensive loss, net of deferred taxes and are subsequently reclassified to earnings when the hedged transaction affects earnings. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item.

…..FORWARD LOOKING STATEMENT…..

THE STRATEGIC FOCUS:

AmeriServ Financial is committed to improving shareholder value by striving for consistently improving financial performance; providing our customers with products and exceptional service for every step in their lifetime financial journey; cultivating an employee atmosphere rooted in trust, empowerment and growth; and serving our communities through employee involvement and a philanthropic spirit. We will strive to provide our shareholders with consistently improved financial performance; the products, services and know-how needed to forge lasting banking for life customer relationships; a work environment that challenges and rewards staff; and the manpower and financial resources needed to make a difference in the communities we serve. Our strategic initiatives will focus on these four key constituencies:

●

Shareholders — We strive to increase earnings per share; identifying and managing revenue growth and expense control; and managing risk. Our goal is to increase value for AmeriServ shareholders by growing earnings per share and narrowing the financial performance gap between AmeriServ and its peer banks. We try to return earnings to shareholders through a combination of dividends and share repurchases (though none are currently authorized) subject to maintaining sufficient capital to support balance sheet growth and economic uncertainty. We strive to educate our employee base as to the meaning/importance of earnings per share as a performance measure. Our goal is to develop a value added combination for increasing revenue and controlling expenses that is rooted in developing and offering high-quality financial products and services; an existing branch network; electronic banking capabilities with 24/7 convenience; and providing truly exceptional customer service. We explore branch consolidation opportunities and further leverage union affiliated revenue streams, prudently manage the Company’s risk profile to improve asset yields and increase profitability and

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continue to identify and implement technological opportunities and advancements to drive efficiency for the holding company and its affiliates.

●

Customers — The Company expects to provide exceptional customer service, identifying opportunities to enhance the Banking for Life philosophy by providing products and services to meet the financial needs in every step through a customer’s life cycle, and further defining the role technology plays in anticipating and satisfying customer needs. We anticipate providing leading banking systems and solutions to improve and enhance customers’ Banking for Life experience. We will provide customers with a comprehensive offering of financial solutions including retail and business banking, home mortgages and wealth management at one location. We have upgraded and modernized select branches to be more inviting and technologically savvy to meet the needs of the next generation of AmeriServ customers without abandoning the needs of our existing demographic.

●

Staff — We are committed to developing high-performing employees, establishing and maintaining a culture of trust and effectively and efficiently managing staff attrition. We will employ a work force succession plan to manage anticipated staff attrition while identifying and grooming high performing staff members to assume positions with greater responsibility within the organization. We will employ technological systems and solutions to provide staff with the tools they need to perform more efficiently and effectively.

●

Communities — We will continue to promote and encourage employee community involvement and leadership while fostering a positive corporate image. This will be accomplished by demonstrating our commitment to the communities we serve through assistance in providing affordable housing programs for low-to-moderate-income families; donations to qualified charities; and the time and talent contributions of AmeriServ staff to a wide-range of charitable and civic organizations.

This Form 10-Q contains various forward-looking statements and includes assumptions concerning the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates, intentions, operations, future results, and prospects, including statements that include the words “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,” “plan” or similar expressions. These forward-looking statements are based upon current expectations, are subject to risk and uncertainties and are applicable only as of the dates of such statements. Forward-looking statements involve risks, uncertainties and assumptions. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. You should not put undue reliance on any forward-looking statements. These statements speak only as of the date of this Form 10-Q, even if subsequently made available on our website or otherwise, and we undertake no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this Form 10-Q. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary statement identifying important factors (some of which are beyond the Company’s control) which could cause the actual results or events to differ materially from those set forth in or implied by the forward-looking statements and related assumptions.

Such factors include the following: (i) the effect of changing regional and national economic conditions; (ii) the effects of trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve; (iii) significant changes in interest rates and prepayment speeds; (iv) inflation, stock and bond market, and monetary fluctuations; (v) credit risks of commercial, real estate, consumer, and other lending activities; (vi) changes in federal and state banking and financial services laws and regulations and supervisory actions by such regulators, including bank failures; (vii) the presence in the Company’s market area of competitors with greater financial resources than the Company; (viii) the timely development of competitive new products and services by the Company and the acceptance of those products and services by customers and regulators (when required); (ix) the willingness of customers to substitute competitors’ products and services for those of the Company and vice versa; (x) changes in consumer spending and savings habits; (xi) unanticipated regulatory or judicial proceedings; (xii) the ability to attract new or retain existing deposits or to retain or grow loans, including growth from unfunded closed loans; (xiii) the ability to generate future revenue growth or to control future growth in non-interest expense, including, but not limited to, those related to technological changes, including changes regarding artificial intelligence and cybersecurity, changes affecting oversight

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of the financial services industry, and changes intended to manage or mitigate climate and related environmental risks; (xiv) the impact of failure in, or breach of, our operational or security systems or those of third parties with whom we do business, including as a result of cyberattacks or an increase in the incidence of fraud, illegal payments, security breaches or other illegal acts impacting us or our customers; and (xv) other external developments which could materially impact the Company’s operational and financial performance.

The foregoing list of important factors is not exclusive, and neither such list nor any forward-looking statement takes into account the impact that any future acquisition may have on the Company and on any such forward-looking statement.

Item 3…..QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK…..

The Company manages market risk, which for the Company is primarily interest rate risk, through its asset liability management process and committee, see further discussion in the Interest Rate Sensitivity section of the MD&A.

Item 4…..CONTROLS AND PROCEDURES…..

(a) Evaluation of Disclosure Controls and Procedures. The Company’s management carried out an evaluation, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and the operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2025, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer along with the Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of September 30, 2025 are effective.

(b) Changes in Internal Controls. There have been no changes in AmeriServ Financial, Inc.’s internal controls over financial reporting (as defined in Rule 13a-15(f)) that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II Other Information

Item 1. Legal Proceedings

The Company is subject to various types of lawsuits and claims arising in the ordinary course of business. In the opinion of management, after review and consultation with counsel, there are no material legal proceedings currently pending to which the Company or any of its subsidiaries is a party or of which any of their property is the subject.

Item 1A. Risk Factors

Not applicable

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

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Item 5. Other Information

Rule 10b5-1 Trading Plans

During the quarter ended September 30, 2025, no officer or director of the Company adopted or terminated any contract, instruction, or written plan for the purchase or sale of securities of the Company’s common stock that is intended to satisfy the affirmative defense conditions of Securities Exchange Act Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement as defined in 17 CFR § 229.408(c).

Item 6. Exhibits


3.1	Amended and Restated Articles of Incorporation as amended through August 22, 2024 (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on August 26, 2024).
3.2	Bylaws, as amended and restated on September 19, 2024 (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on September 23, 2024).
15.1	Report of S.R. Snodgrass, P.C. regarding unaudited interim financial statement information.
15.2	Awareness Letter of S.R. Snodgrass, P.C.
31.1	Certification pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
101	Includes the following financial and related information from AMERISERV FINANCIAL, INC.’s Quarterly Report on Form 10-Q as of and for the quarter ended September 30, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statements of Changes in Shareholders’ Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited), and (vi) Notes to the Unaudited Consolidated Financial Statements.
104	The cover page from this Quarterly Report on Form 10-Q formatted in Inline XBRL.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	AmeriServ Financial, Inc.
	Registrant

Date: November 13, 2025	/s/ Jeffrey A. Stopko
	Jeffrey A. Stopko
	President and Chief Executive Officer

Date: November 13, 2025	/s/ Michael D. Lynch
	Michael D. Lynch
	Executive Vice President and Chief Financial Officer

Source: View Original Filing on SEC EDGAR

FAQ

How did AmeriServ (ASRV) perform in Q3 2025?

Net income was $2.544 million (EPS $0.15), up from $1.183 million (EPS $0.07) in Q3 2024.

What were ASRV’s key revenue and expense trends in Q3 2025?

Net interest income increased to $11.007 million, while total non-interest expense was $11.964 million.

How did ASRV’s balance sheet change by September 30, 2025?

Assets were $1.461 billion; deposits were $1.259 billion; cash and equivalents rose to $53.764 million.

What happened with ASRV’s securities and AOCI?

A $1.0 million non-performing AFS security was charged off against its allowance; AOCI loss improved to $10.440 million.

What was ASRV’s loan and reserve position?

Net loans were $1.041 billion and the allowance for credit losses was $14.408 million.

Did ASRV declare a dividend in Q3 2025?

Yes. A cash dividend of $0.03 per common share was declared.

What were ASRV’s year-to-date results through Q3 2025?

Nine-month net income was $4.170 million (EPS $0.25), compared with $2.712 million (EPS $0.16) in 2024.

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