AmeriServ Financial (ASRV) triples year-to-date profit on lower credit costs

Rhea-AI Filing Summary

AmeriServ Financial, Inc. reported solid results for the six months ended June 30, 2026. Net income was $4.5 million, up from $1.6 million a year earlier, with second-quarter net income of $2.7 million versus a small loss in 2025. Net interest income rose to $22.2 million from $20.3 million as funding costs eased and securities income increased. The credit profile improved: loans recorded a small net recovery provision, non-performing assets from the loan portfolio declined to $7.9 million, and net charge-offs fell to 0.05% of average loans.

Total assets were $1.46 billion and deposits $1.26 billion at June 30, 2026. The allowance for credit losses on loans was $12.9 million, covering 167% of non-performing loans and 1.27% of total loans. Shareholders’ equity increased to $123.1 million, supported by earnings and modest common stock issuance, partially offset by cash dividends of $0.06 per share and small other comprehensive losses.

Positive

• Net income rose to $4.5 million for the first half of 2026 from $1.6 million in 2025, driven by higher net interest income and a swing from a large prior-year credit loss provision to a small recovery.
• Credit quality improved, with non-performing assets from the loan portfolio down to $7.9 million (0.78% of total loans) and net charge-offs reduced to 0.05% of average loans versus 0.56% a year earlier.

Negative

• None.

Filing Explained

At June 30, 2026, cash and equivalents were $28,045 thousand, down from $50,891 thousand at year-end, while one $500 thousand AFS security was non-accrual.

Form 10-Q is the unaudited quarterly report for interim financial statements and updates to risks and liquidity. For the six months ended June 30, 2026, AmeriServ Financial reports a lower cash position, so the filing adds a liquidity change beyond its earnings and balance-sheet results.

Cash and cash equivalents were $28,045 thousand at June 30, 2026, compared with $50,891 thousand at December 31, 2025. Operating activities used cash, while investing activities used $25,777 thousand; financing activities provided $3,690 thousand.

The filing also identifies one available-for-sale corporate debt security with a $500 thousand balance in non-accrual status and a related $30 thousand allowance for credit losses. The company reports that most available-for-sale unrealized losses arose from higher market yields and says it does not intend, or expect to be required, to sell those securities before recovery or maturity.

The specific corporate security and the June 30, 2026 cash balance are the principal line items that determine how this liquidity and investment disclosure develops in later reports.

Key Figures

Total Assets: $1,462,143 thousand Total Deposits: $1,261,327 thousand Net Income H1 2026: $4,532 thousand +5 more

8 metrics

Total Assets $1,462,143 thousand Balance sheet at June 30, 2026

Total Deposits $1,261,327 thousand Customer deposits at June 30, 2026

Net Income H1 2026 $4,532 thousand Six months ended June 30, 2026 vs $1,626 thousand in 2025

Net Interest Income H1 2026 $22,164 thousand Six months ended June 30, 2026 vs $20,325 thousand in 2025

Allowance for Credit Losses on Loans $12,896 thousand 1.27% of total loans; 167% coverage of non-performing loans at June 30, 2026

Non-performing Assets from Loan Portfolio $7,880 thousand 0.78% of total loans at June 30, 2026

Cash and Cash Equivalents $28,045 thousand June 30, 2026 balance after a $22,846 thousand decrease year to date

Common Shares Outstanding 16,979,267 Common stock outstanding at August 10, 2026

Key Terms

allowance for credit losses, non-performing assets, available for sale securities, held to maturity securities, +2 more

6 terms

allowance for credit losses financial

"The allowance for credit losses (ACL) is a valuation reserve established and maintained"

Allowance for credit losses is a reserve set aside by a financial institution to cover potential losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution prepare for loans that might turn sour. For investors, it signals how cautious the institution is about the quality of its loans and potential risks to its financial health.

non-performing assets financial

"Non-performing assets from the loan portfolio were at 0.78% of total loans"

Loans or other credit exposures that are not producing expected income because borrowers have stopped making scheduled payments for a significant period (commonly around 90 days). Think of it like a business lending money that has gone quiet — the cash flow stops while the lender still carries the debt on its books. High levels of non-performing assets matter to investors because they reduce a lender’s earnings, tie up capital that could be used for growth, and signal higher risk of future losses.

available for sale securities financial

"Securities classified as available for sale are reported at fair value with unrealized gains"

Available-for-sale securities are bonds or stocks a company owns that it does not plan to trade frequently or hold until they mature, but might sell before maturity; their market value is tracked over time and changes are recorded separately from regular profits until they are sold. Investors watch these holdings because swings in their market value affect a company’s reported assets and equity and can signal future cash from sales, much like items in a household that are kept for occasional sale and can change in resale value.

held to maturity securities financial

"Securities are classified at the time of purchase as investment securities held to maturity"

Debt instruments that an investor intends and is able to keep until they mature, meaning they will hold them until the borrower repays the principal. Like lending money and planning to wait for the full repayment instead of selling early, these securities are reported at their purchase value and generate predictable interest income, so they matter to investors because they reduce reported volatility and affect expected cash flow and balance-sheet risk.

other comprehensive income financial

"Other comprehensive income (loss) includes pension changes and unrealized holding gains"

Other comprehensive income is a section of a company’s financial statements that records gains and losses not shown in the regular profit-and-loss line, such as paper gains or losses on certain investments, pension plan adjustments, and changes from converting foreign operations. These items don’t represent cash earned or spent today but change a company’s reported net worth, like value swings in things stored in a closet rather than money in your wallet, and help investors spot hidden strengths or risks to long-term financial health.

net charge-offs financial

"During the first six months of 2026, the Company experienced net loan charge-offs of $230,000"

Net charge-offs are the amount of loans or credit a lender removes from its books as uncollectible after subtracting any money later recovered from previously written-off accounts. Think of it like a store writing off unpaid tabs but getting back a few dollars later — the net figure shows the real loss. Investors watch this to judge a lender’s loan quality, future profits and how much capital may be needed to cover bad debts.

Earnings Snapshot

Net income: $4,532 thousand

six months ended June 30, 2026

Net income $4,532 thousand higher than $1,626 thousand in the prior-year period

Net interest income $22,164 thousand increased versus $20,325 thousand a year earlier

Provision for credit losses on loans ($2 thousand) recovery year to date improved from $3,036 thousand expense in 2025

Non-performing assets from loan portfolio $7,880 thousand down from $8,518 thousand at December 31, 2025

FAQ

How did AmeriServ Financial (ASRV) perform in the first half of 2026?

AmeriServ reported net income of $4.5 million for the six months ended June 30, 2026, compared with $1.6 million in the prior-year period, supported by higher net interest income and improved credit costs.

What were AmeriServ Financial’s (ASRV) second-quarter 2026 earnings per share?

For the quarter ended June 30, 2026, AmeriServ earned $0.16 per basic and diluted share, versus a loss of $0.02 per share in the same 2025 quarter, reflecting stronger profitability and lower credit loss provisioning.

What is AmeriServ Financial’s (ASRV) asset and deposit base as of June 30, 2026?

As of June 30, 2026, AmeriServ reported total assets of $1.46 billion and total deposits of $1.26 billion, with interest-bearing deposits of $1.10 billion and non-interest-bearing deposits of $165.5 million.

How strong are AmeriServ Financial’s (ASRV) loan loss reserves and asset quality?

At June 30, 2026, the allowance for credit losses on loans was $12.9 million, covering 167% of non-performing loans and 1.27% of total loans, while non-performing assets from the loan portfolio were 0.78% of total loans.

What dividends did AmeriServ Financial (ASRV) pay in the first half of 2026?

AmeriServ declared common stock dividends totaling $0.06 per share in the first six months of 2026, resulting in total cash dividend payments of $1.0 million, funded alongside earnings growth and modest equity issuance.

How did AmeriServ Financial’s (ASRV) net interest income change year over year?

Net interest income for the six months ended June 30, 2026 was $22.2 million, up from $20.3 million in the same 2025 period, as higher yields on securities and lower borrowing costs more than offset slightly lower loan income.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Available on EDGAR 08/14/2026 - 02:57 PM Accepted by SEC EDGAR 08/14/2026 - 02:57 PM Learn about SEC filing dates

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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 June 30, 2026

​

☐   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 August 10, 2026	​
Common Stock, par value $0.01		16,979,267	​

​

​

​

​

​

​

Table of Contents

AmeriServ Financial, Inc.

INDEX

​
​	Page No.
​	​
PART I. FINANCIAL INFORMATION	​
Item 1. Financial Statements	3
Consolidated Balance Sheets (Unaudited) – June 30, 2026 and December 31, 2025	3
Consolidated Statements of Operations (Unaudited) – Three and six months ended June 30, 2026 and 2025	4
Consolidated Statements of Comprehensive Income (Unaudited) – Three and six months ended June 30, 2026 and 2025	5
Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) – Three and six months ended June 30, 2026 and 2025	6
Consolidated Statements of Cash Flows (Unaudited) – Six months ended June 30, 2026 and 2025	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3. Quantitative and Qualitative Disclosure About Market Risk	56
Item 4. Controls and Procedures	56
PART II. OTHER INFORMATION	56
Item 1. Legal Proceedings	56
Item 1A. Risk Factors	56
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3. Defaults Upon Senior Securities	56
Item 4. Mine Safety Disclosures	57
Item 5. Other Information	57
Item 6. Exhibits	57

​

​

​

2

Table of Contents

Item 1. Financial Statements

AmeriServ Financial, Inc.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

​

​	​	​	​	​	​	​
​	​	June 30, 2026		​	December 31, 2025
ASSETS		​	​		​	​
Cash and due from depository institutions	​	$	13,857	​	$	11,473
Interest bearing deposits and short-term investments	​		14,188	​		39,418
Cash and cash equivalents	​		28,045	​		50,891
Investment securities, net of allowance for credit losses:	​		​	​		​
Available for sale, at fair value (allowance for credit losses $30 on June 30, 2026)	​		204,900	​		176,228
Held to maturity (fair value $81,712 on June 30, 2026 and $68,916 on December 31, 2025; allowance for credit losses $67 on June 30, 2026 and $90 on December 31, 2025)	​		85,736	​		72,256
Trading securities	​	​	8,588	​	​	7,253
Loans held for sale	​		760	​		241
Loans (net of unearned income $404 on June 30, 2026 and $466 on December 31, 2025)	​		1,015,014	​		1,032,727
Less: Allowance for credit losses	​		12,896	​		13,128
Net loans	​		1,002,118	​		1,019,599
Premises and equipment:	​		​	​		​
Operating lease right-of-use asset	​	​	1,299	​	​	1,395
Financing lease right-of-use asset	​	​	1,994	​	​	2,106
Other premises and equipment, net	​	​	13,877	​	​	13,929
Accrued interest income receivable	​		5,981	​		5,557
Intangible assets:	​		​	​		​
Goodwill	​		13,611	​		13,611
Core deposit intangible	​		47	​		56
Bank owned life insurance	​		39,680	​		39,308
Federal Home Loan Bank stock	​		3,642	​		3,785
Federal Reserve Bank stock	​		2,161	​		2,161
Other real estate owned and repossessed assets	​		142	​		216
Other assets	​		49,562	​		45,221
TOTAL ASSETS	​	$	1,462,143	​	$	1,453,813
LIABILITIES	​	​	​	​	​	​
Non-interest bearing deposits	​	$	165,484	​	$	159,198
Interest bearing deposits	​		1,095,843	​		1,088,930
Total deposits	​		1,261,327	​		1,248,128
Advances from Federal Home Loan Bank	​		36,195	​		44,615
Operating lease liabilities	​	​	1,332	​	​	1,426
Financing lease liabilities	​	​	2,403	​	​	2,501
Subordinated debt	​		26,788	​		26,767
Total borrowed funds	​		66,718	​		75,309
Net deferred tax liability	​		2,127	​		1,636
Other liabilities	​		8,887	​		9,428
TOTAL LIABILITIES	​		1,339,059	​		1,334,501
SHAREHOLDERS' EQUITY	​		​	​		​
Common stock, par value $0.01 per share; 30,000,000 shares authorized; 27,221,089 shares issued and 16,964,267 shares outstanding on June 30, 2026 and 26,779,089 shares issued, 216,500 shares issuable, and 16,522,267 shares outstanding on December 31, 2025	​		272	​		270
Treasury stock at cost, 10,256,822 shares on June 30, 2026 and December 31, 2025	​		(84,791)	​		(84,791)
Capital surplus	​		147,802	​		147,070
Retained earnings	​		67,626	​		64,112
Accumulated other comprehensive loss	​		(7,825)	​		(7,349)
TOTAL SHAREHOLDERS' EQUITY	​		123,084	​		119,312
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	​	$	1,462,143	​	$	1,453,813

​

See accompanying notes to unaudited consolidated financial statements.

​

3

Table of Contents

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended

​

Six months ended

​

​ ​ ​

June 30,

​

June 30,

​

​

2026

​ ​ ​

2025

​ ​ ​

2026

​ ​ ​

2025

INTEREST INCOME

​

​

​

​

​

​

​

​

Interest and fees on loans

$

14,601

$

14,932

$

29,007

$

29,440

Interest bearing deposits and short-term investments

​

292

​

175

​

550

​

289

Investment securities:

​

​

​

​

​

​

​

​

Available for sale

​

2,270

​

1,876

​

4,283

​

3,686

Held to maturity

​

876

​

665

​

1,639

​

1,255

Trading securities

​

​

60

​

​

41

​

​

122

​

​

41

Total Interest Income

​

18,099

​

17,689

​

35,601

​

34,711

INTEREST EXPENSE

​

​

​

​

​

​

​

​

Deposits

​

6,064

​

6,408

​

11,983

​

12,532

Short-term borrowings

​

3

​

43

​

12

​

119

Advances from Federal Home Loan Bank

​

409

​

555

​

868

​

1,157

Financing lease liabilities

​

​

23

​

​

25

​

​

47

​

​

51

Subordinated debt

​

264

​

264

​

527

​

527

Total Interest Expense

​

6,763

​

7,295

​

13,437

​

14,386

Net Interest Income

​

11,336

​

10,394

​

22,164

​

20,325

(Recovery) provision for credit losses

​

(294)

​

3,133

​

(77)

​

3,036

Net Interest Income after (Recovery) Provision for Credit Losses

​

11,630

​

7,261

​

22,241

​

17,289

NON-INTEREST INCOME

​

​

​

​

​

​

​

​

Wealth management fees

​

3,094

​

2,782

​

5,954

​

5,646

Service charges on deposit accounts

​

275

​

301

​

577

​

607

Mortgage banking revenue

​

59

​

58

​

109

​

86

Trading securities revenue (loss)

​

​

60

​

​

35

​

​

(3)

​

​

35

Bank owned life insurance

​

362

​

244

​

600

​

508

Other income

​

717

​

676

​

1,297

​

1,335

Total Non-Interest Income

​

4,567

​

4,096

​

8,534

​

8,217

NON-INTEREST EXPENSE

​

​

​

​

​

​

​

​

Salaries and employee benefits

​

7,412

​

7,076

​

14,637

​

14,299

Net occupancy expense

​

789

​

746

​

1,632

​

1,587

Equipment expense

​

435

​

404

​

843

​

794

Professional fees

​

1,423

​

903

​

2,588

​

1,588

Data processing and IT expense

​

​

1,230

​

​

1,153

​

​

2,497

​

​

2,405

Supplies, postage and freight

​

184

​

172

​

376

​

346

Miscellaneous taxes and insurance

​

397

​

364

​

761

​

712

Federal deposit insurance expense

​

196

​

240

​

406

​

480

Other expense

​

732

​

651

​

1,416

​

1,261

Total Non-Interest Expense

​

12,798

​

11,709

​

25,156

​

23,472

​

​

​

​

​

​

​

​

​

​

​

​

​

PRETAX INCOME (LOSS)

​

​

3,399

​

​

(352)

​

​

5,619

​

​

2,034

Provision (credit) for income taxes

​

​

661

​

​

(70)

​

​

1,087

​

​

408

NET INCOME (LOSS)

​

$

2,738

​

$

(282)

​

$

4,532

​

$

1,626

PER COMMON SHARE DATA:

​

​

​

​

​

​

​

​

​

​

​

​

Basic:

​

​

​

​

​

​

​

​

​

​

​

​

Net income (loss)

​

$

0.16

​

$

(0.02)

​

$

0.27

​

$

0.10

Average number of shares outstanding

​

​

16,964,267

​

​

16,519,267

​

​

16,945,963

​

​

16,519,267

Diluted:

​

​

​

​

​

​

​

​

​

​

​

​

Net income (loss)

​

$

0.16

​

$

(0.02)

​

$

0.27

​

$

0.10

Average number of shares outstanding

​

​

16,965,554

​

​

16,519,267

​

​

16,946,940

​

​

16,519,267

​

See accompanying notes to unaudited consolidated financial statements.

4

Table of Contents

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended

​

Six months ended

​

​ ​ ​

June 30,

​

June 30,

​

​

2026

​ ​ ​

2025

​ ​ ​

2026

​ ​ ​

2025

COMPREHENSIVE INCOME

​

​

​

​

​

​

​

​

Net income (loss)

​

$

2,738

​

$

(282)

​

$

4,532

​

$

1,626

Other comprehensive income (loss)

​

​

​

​

​

​

​

​

Pension obligation change for defined benefit plan

​

—

​

—

​

438

​

—

Income tax effect

​

—

​

—

​

(92)

​

—

Unrealized holding gains (losses) on available for sale securities arising during period

​

174

​

1,141

​

(1,141)

​

3,829

Income tax effect

​

(37)

​

(240)

​

239

​

(804)

Fair value change for interest rate hedge

​

5

​

72

​

30

​

61

Income tax effect

​

(1)

​

(15)

​

(6)

​

(13)

Reclassification adjustment for increase (reduction) of interest expense related to interest rate hedge

​

​

15

​

​

(24)

​

​

71

​

​

(44)

Income tax effect

​

​

(3)

​

​

5

​

​

(15)

​

​

9

Other comprehensive income (loss)

​

153

​

939

​

(476)

​

3,038

COMPREHENSIVE INCOME

​

$

2,891

​

$

657

​

$

4,056

​

$

4,664

​

See accompanying notes to unaudited consolidated financial statements.

​

5

Table of Contents

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except share and per share data)

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended June 30, 2026

​

​ ​ ​

Common Stock

​ ​ ​

Treasury Stock

​ ​ ​

Surplus

​

Retained Earnings

​ ​ ​

Accumulated Other Comprehensive Loss

​ ​ ​

Total

Balance at March 31, 2026

​

$

272

​

$

(84,791)

​

$

147,802

​

$

65,398

​

$

(7,978)

​

$

120,703

Net income

​

—

​

—

​

—

​

​

2,738

​

—

​

2,738

Other comprehensive income

​

—

​

—

​

—

​

​

—

​

153

​

153

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

​

—

​

—

​

—

​

​

(510)

​

—

​

(510)

Balance at June 30, 2026

​

$

272

​

$

(84,791)

​

$

147,802

​

$

67,626

​

$

(7,825)

​

$

123,084

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended June 30, 2025

​

​ ​ ​

Common Stock

​ ​ ​

Treasury Stock

​ ​ ​

Surplus

​

Retained Earnings

​ ​ ​

Accumulated Other Comprehensive Loss

​ ​ ​

Total

Balance at March 31, 2025

​

$

268

​

$

(84,791)

​

$

146,372

​

$

61,894

​

$

(12,984)

​

$

110,759

Net loss

​

—

​

—

​

—

​

​

(282)

​

—

​

(282)

Other comprehensive income

​

—

​

—

​

—

​

​

—

​

939

​

939

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

​

—

​

—

​

—

​

​

(495)

​

—

​

(495)

Balance at June 30, 2025

​

$

268

​

$

(84,791)

​

$

146,372

​

$

61,117

​

$

(12,045)

​

$

110,921

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six months ended June 30, 2026

​

​ ​ ​

Common Stock

​ ​ ​

Treasury Stock

​ ​ ​

Surplus

​

Retained Earnings

​ ​ ​

Accumulated Other Comprehensive Loss

​ ​ ​

Total

Balance at December 31, 2025

​

$

270

​

$

(84,791)

​

$

147,070

​

$

64,112

​

$

(7,349)

​

$

119,312

Net income

​

—

​

—

​

—

​

​

4,532

​

—

​

4,532

Common stock issued for exercise of stock options (9,000 shares)

​

—

​

—

​

27

​

​

—

​

—

​

27

Common stock issued (433,000 shares)

​

2

​

—

​

705

​

​

—

​

—

​

707

Other comprehensive loss

​

—

​

—

​

—

​

​

—

​

(476)

​

(476)

Cash dividend declared on common stock ($0.06 per share)

​

—

​

—

​

—

​

​

(1,018)

​

—

​

(1,018)

Balance at June 30, 2026

​

$

272

​

$

(84,791)

​

$

147,802

​

$

67,626

​

$

(7,825)

​

$

123,084

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six months ended June 30, 2025

​

​ ​ ​

Common Stock

​ ​ ​

Treasury Stock

​ ​ ​

Surplus

​

Retained Earnings

​ ​ ​

Accumulated Other Comprehensive Loss

​ ​ ​

Total

Balance at December 31, 2024

​

$

268

​

$

(84,791)

​

$

146,372

​

$

60,482

​

$

(15,083)

​

$

107,248

Net income

​

—

​

—

​

—

​

​

1,626

​

—

​

1,626

Other comprehensive income

​

—

​

—

​

—

​

​

—

​

3,038

​

3,038

Cash dividend declared on common stock ($0.06 per share)

​

—

​

—

​

—

​

​

(991)

​

—

​

(991)

Balance at June 30, 2025

​

$

268

​

$

(84,791)

​

$

146,372

​

$

61,117

​

$

(12,045)

​

$

110,921

​

See accompanying notes to unaudited consolidated financial statements.

6

Table of Contents

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

​	​	​	​	​	​	​
​	​	Six months ended
​	​ ​ ​	June 30,
​		2026		​ ​ ​	2025
OPERATING ACTIVITIES	​	​	​	​	​	​
Net income	​	$	4,532	​	$	1,626
Adjustments to reconcile net income to net cash (used in) provided by operating activities:	​		​	​		​
(Recovery) provision for credit losses	​		(77)	​		3,036
Depreciation and amortization expense	​		1,118	​		1,053
Amortization expense of core deposit intangible	​		9	​		11
Amortization of fair value adjustment on acquired time deposits	​		—	​		(1)
Net accretion of investment securities	​		(172)	​		(25)
Net accretion of deferred loan fees	​		(123)	​		(84)
Net gains on loans held for sale	​		(49)	​		(56)
Origination of mortgage loans held for sale	​		(4,393)	​		(3,201)
Sales of mortgage loans held for sale	​		3,923	​		3,557
Increase in accrued interest receivable	​		(424)	​		(252)
(Decrease) increase in accrued interest payable	​		(929)	​		669
Earnings on bank owned life insurance	​		(600)	​		(508)
Deferred income taxes	​		618	​		234
Common stock issued	​		707	​		—
Net change in trading securities	​	​	(1,335)	​	​	(4,205)
Net change in operating leases	​	​	(94)	​	​	(88)
Other, net	​		(3,470)	​		(1,229)
Net cash (used in) provided by operating activities	​		(759)	​		537
INVESTING ACTIVITIES	​		​	​		​
Purchase of investment securities — available for sale	​		(49,243)	​		(25,856)
Purchase of investment securities — held to maturity	​		(17,701)	​		(5,958)
Proceeds from maturities of investment securities — available for sale	​		19,444	​		14,885
Proceeds from maturities of investment securities — held to maturity	​		4,373	​		2,283
Purchase of regulatory stock	​		(1,111)	​		(5,631)
Proceeds from redemption of regulatory stock	​		1,254	​		6,084
Net decrease (increase) in loans	​		17,599	​		(4,047)
Purchase of premises and equipment	​		(867)	​		(141)
Proceeds from sale of other real estate owned and repossessed assets	​		33	​		1,414
Proceeds from life insurance policies	​		442	​		351
Net cash used in investing activities	​		(25,777)	​		(16,616)
FINANCING ACTIVITIES	​		​	​		​
Net increase in deposit balances	​		13,199	​		43,539
Net decrease in other short-term borrowings	​		—	​		(11,954)
Principal borrowings on advances from Federal Home Loan Bank	​		—	​		1,408
Principal repayments on advances from Federal Home Loan Bank	​		(8,420)	​		(8,543)
Principal payments on financing lease liabilities	​	​	(98)	​	​	(93)
Stock options exercised	​		27	​		—
Common stock dividend paid	​		(1,018)	​		(991)
Net cash provided by financing activities	​		3,690	​		23,366
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	​		(22,846)	​		7,287
CASH AND CASH EQUIVALENTS AT JANUARY 1	​		50,891	​		17,746
CASH AND CASH EQUIVALENTS AT JUNE 30	​	$	28,045	​	$	25,033

​

See accompanying notes to unaudited consolidated financial statements.

​

7

Table of Contents

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 $2.8 billion and $2.7 billion that are not reported on the Company’s Consolidated Balance Sheets at June 30, 2026 and December 31, 2025, 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, 2025.

​

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, trading securities revenue, and bank owned life insurance are not within the scope of Topic 606. These sources of revenue cumulatively comprise 83.0% 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 was established as of June 30, 2026 and 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. Commissions on the sale of

8

Table of Contents

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, 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 VISA debit cards to deposit account holders, which allows our customers to access their account electronically at POS terminals. Fees related to 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 six-month periods ending June 30, 2026 and 2025 (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​ ​ ​

Three months ended

​ ​ ​

Six months ended

​

June 30,

​

June 30,

​

​

2026

​ ​ ​

2025

2026

​ ​ ​

2025

Non-interest income:

​

​

​

​

​

​

​

​

​

​

​

​

In-scope of Topic 606

​

​

​

​

​

​

​

​

Wealth management fees

​

$

3,094

​

$

2,782

​

$

5,954

​

$

5,646

Service charges on deposit accounts

​

275

​

301

​

577

​

607

Other

​

502

​

518

​

950

​

818

Non-interest income (in-scope of Topic 606)

​

3,871

​

3,601

​

7,481

​

7,071

Non-interest income (out-of-scope of Topic 606)

​

696

​

495

​

1,053

​

1,146

Total non-interest income

​

$

4,567

​

$

4,096

​

$

8,534

​

$

8,217

​

​

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- and six-month periods ending June 30, 2026 and 2025, options to purchase 147,000 common shares, with an exercise price of $3.83 to $4.22, and options to purchase 179,000 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.

​

9

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended

​

Six months ended

​

​

June 30,

​

June 30,

​

​ ​ ​

2026

​ ​ ​

2025

​ ​ ​

2026

​ ​ ​

2025

​

​

(In thousands, except share and per share data)

Numerator:

​

​

​

​

​

​

​

​

​

Net income (loss)

​

$

2,738

​

$

(282)

​

$

4,532

​

$

1,626

Denominator:

​

​

​

​

​

​

​

​

Weighted average common shares outstanding (basic)

​

16,964,267

​

16,519,267

​

16,945,963

​

16,519,267

Effect of stock options

​

1,287

​

—

​

977

​

—

Weighted average common shares outstanding (diluted)

​

16,965,554

​

16,519,267

​

16,946,940

​

16,519,267

Earnings per common share:

​

​

​

​

​

​

​

​

Basic

​

$

0.16

​

$

(0.02)

​

$

0.27

​

$

0.10

Diluted

​

0.16

​

(0.02)

​

0.27

​

0.10

​

​

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 money market funds. The Company made no income tax payments in the first six months of 2026 compared to $325,000 in the same 2025 period. The Company made total interest payments of $14.4 million in the first six months of 2026 compared to $13.7 million in the same 2025 period. The Company had non-cash transfers to other real estate owned (OREO) and repossessed assets of $7,000 in the first six months of 2026 compared to $49,000 of non-cash transfers in the same 2025 period. During the first six months of 2026, the Company did not enter into any new lease agreements. During the first six 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.

​

​

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 90 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 trading account, which is managed by an outside third party, is invested in U.S. Treasury and municipal securities. As of June 30, 2026, there was a temporary $164,000 cash deficit within the trading account compared to $99,000 of cash held in the account available for future trading security purchases as of December 31, 2025. The cash balances are included in cash and cash equivalents on the Consolidated Balance Sheets.

Additionally, the Company holds equity securities which are comprised of ordinary shares issued by a borrower in satisfaction of debt previously contracted. The shares 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.

10

Table of Contents

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 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 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 June 30, 2026 and December 31, 2025, the allowance for credit losses on the held to maturity securities portfolio totaled $67,000 and $90,000, 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 (recovery) provision for credit losses on the Consolidated Statements of Operations.

Accrued interest receivable on held to maturity debt securities totaled $452,000 and $384,000 at June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025. 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 June 30, 2026, the Company had an allowance for credit losses on the available for sale securities portfolio totaling $30,000 compared to no allowance at December 31, 2025.

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 (recovery) provision 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 regarding intent or requirement to sell is met.

Accrued interest receivable on available for sale debt securities totaled $1.1 million and $977,000 at June 30, 2026 and December 31, 2025, 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

11

Table of Contents

Company had one available for sale debt securities in non-accrual status at June 30, 2026 totaling $500,000 with an associated allowance for credit losses of $30,000. When this corporate security was transferred to non-accrual status, interest income from investments was unfavorably impacted due to the reversal of previously recognized income. Specifically, unpaid interest on this security, which was reversed during the first six months of 2026, totaled $50,000. The Company had no available for sale debt securities in non-accrual status at December 31, 2025.

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):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​

​

​

​

Gross

​

Gross

​

Allowance

​

​

​

​

​

​

​

​

Unrealized

​

Unrealized

​

For Credit

​

Fair

​

​ ​ ​

Cost Basis

​ ​ ​

Gains

​ ​ ​

Losses

​

Losses

​ ​ ​

Value

​

​

(In Thousands)

U.S. Agency

​

$

5,077

​

$

—

​

$

(416)

​

$

—

​

$

4,661

U.S. Agency mortgage-backed securities

​

144,254

​

357

​

(10,052)

​

​

—

​

134,559

Municipal

​

18,443

​

105

​

(521)

​

​

—

​

18,027

Corporate bonds

​

48,240

​

395

​

(952)

​

​

(30)

​

47,653

Total

​

$

216,014

​

$

857

​

$

(11,941)

​

$

(30)

​

$

204,900

​

Investment securities held to maturity (HTM):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​

​

​

​

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

​

$

—

​

$

(245)

​

$

2,255

U.S. Agency mortgage-backed securities

​

​

48,838

​

​

—

​

​

48,838

​

​

137

​

​

(2,243)

​

​

46,732

Municipal

​

32,465

​

(1)

​

32,464

​

—

​

(1,647)

​

30,817

Corporate bonds and other securities

​

2,000

​

(66)

​

1,934

​

—

​

(26)

​

1,908

Total

​

$

85,803

​

$

(67)

​

$

85,736

​

$

137

​

$

(4,161)

​

$

81,712

​

Investment securities available for sale (AFS):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2025

​

​

​

​

​

Gross

​

Gross

​

Allowance

​

​

​

​

​

​

​

​

Unrealized

​

Unrealized

​

For Credit

​

Fair

​

​ ​ ​

Cost Basis

​ ​ ​

Gains

​ ​ ​

Losses

​

Losses

​ ​ ​

Value

​

​

(In Thousands)

U.S. Agency

​

$

5,162

​

$

—

​

$

(372)

​

$

—

​

$

4,790

U.S. Agency mortgage-backed securities

​

119,381

​

639

​

(9,164)

​

​

—

​

110,856

Municipal

​

10,155

​

140

​

(361)

​

​

—

​

9,934

Corporate bonds

​

51,473

​

387

​

(1,212)

​

​

—

​

50,648

Total

​

$

186,171

​

$

1,166

​

$

(11,109)

​

$

—

​

$

176,228

​

12

Table of Contents

Investment securities held to maturity (HTM):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2025

​

​

​

​

​

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

​

$

—

​

$

(216)

​

$

2,284

U.S. Agency mortgage-backed securities

​ ​ ​

​

36,592

​

​

—

​

​

36,592

​

​

210

​

​

(1,820)

​

​

34,982

Municipal

​

30,754

​

(1)

​

30,753

​

6

​

(1,415)

​

29,344

Corporate bonds and other securities

​

2,500

​

(89)

​

2,411

​

—

​

(105)

​

2,306

Total

​

$

72,346

​

$

(90)

​

$

72,256

​

$

216

​

$

(3,556)

​

$

68,916

​

The Company sold no AFS securities during the second quarter or first six months of 2026 and 2025.

The carrying value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits was $150.5 million at June 30, 2026 and $142.7 million at December 31, 2025.

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 June 30, 2026, the Company had low premium risk as the book value of our mortgage-backed securities purchased at a premium was only 100.6% of the par value.

Contractual maturities of securities, cost basis for available for sale and carrying value for held to maturity as well as fair market values, at June 30, 2026 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 June 30, 2026 was 49.4 months and was longer than the duration at December 31, 2025 which was 45.1 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:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​

Available for sale

​

Held to maturity

​

​ ​ ​

Cost Basis

​ ​ ​

Fair Value

​ ​ ​

Carrying Value

​ ​ ​

Fair Value

Within 1 year

​

$

4,231

​

$

4,207

​

$

3,791

​

$

3,763

After 1 year but within 5 years

​

25,976

​

25,048

​

18,576

​

17,812

After 5 years but within 10 years

​

43,836

​

43,231

​

14,184

​

13,068

Over 10 years

​

141,971

​

132,414

​

49,185

​

47,069

Total

​

$

216,014

​

$

204,900

​

$

85,736

​

$

81,712

​

13

Table of Contents

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 June 30, 2026 and December 31, 2025, aggregated by security type and length of time in a continuous loss position (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​

Less Than 12 Months

​

12 Months or Longer

​

Total

​

​

Fair

​

Unrealized

​

Fair

​

Unrealized

​

Fair

​

Unrealized

​

​ ​ ​

Value

​ ​ ​

Losses

​ ​ ​

Value

​ ​ ​

Losses

​ ​ ​

Value

​ ​ ​

Losses

U.S. Agency

​

$

—

​

$

—

​

$

4,661

​

$

(416)

​

$

4,661

​

$

(416)

U.S. Agency mortgage-backed securities

​

​

46,134

​

​

(643)

​

​

52,998

​

​

(9,409)

​

​

99,132

​

​

(10,052)

Municipal

​

8,202

​

​

(118)

​

​

4,724

​

​

(403)

​

​

12,926

​

​

(521)

Corporate bonds

​

10,209

​

​

(88)

​

​

15,454

​

​

(864)

​

​

25,663

​

​

(952)

Total

​

$

64,545

​

$

(849)

​

$

77,837

​

$

(11,092)

​

$

142,382

​

$

(11,941)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 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

​

$

—

​

$

—

​

$

4,790

​

$

(372)

​

$

4,790

​

$

(372)

U.S. Agency mortgage-backed securities

​

​

9,198

​

​

(28)

​

​

60,272

​

​

(9,136)

​

​

69,470

​

​

(9,164)

Municipal

​

—

​

​

—

​

​

5,670

​

​

(361)

​

​

5,670

​

​

(361)

Corporate bonds

​

5,086

​

​

(64)

​

​

20,416

​

​

(1,148)

​

​

25,502

​

​

(1,212)

Total

​

$

14,284

​

$

(92)

​

$

91,148

​

$

(11,017)

​

$

105,432

​

$

(11,109)

​

At June 30, 2026 within the available for sale debt securities portfolio, the Company had 44 U.S. Agency mortgage-backed securities, 10 municipal, and 19 corporate bonds that have been in a gross unrealized loss position for less than 12 months with depreciation of 1.3% from its amortized cost basis. Additionally, at June 30, 2026, within the available for sale debt securities portfolio, the Company had six U.S. Agency, 121 U.S. Agency mortgage-backed securities, 13 municipal, and 29 corporate bonds that have been in a gross unrealized loss position for greater than 12 months with depreciation of 12.5% 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 six months ended June 30, 2026 and 2025 (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended June 30, 2026

​

​

Balance at March 31, 2026

​

Charge-Offs

​

Recoveries

​

Provision (Recovery)

​

Balance at June 30, 2026

Corporate bonds

​

$

34

​

$

—

​

$

—

​

$

(4)

​

$

30

Total

​

$

34

​

$

—

​

$

—

​

$

(4)

​

$

30

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended June 30, 2025

​

​

Balance at March 31, 2025

​

Charge-Offs

​

Recoveries

​

Provision (Recovery)

​

Balance at June 30, 2025

Corporate bonds

​

$

1,000

​

$

—

​

$

—

​

$

—

​

$

1,000

Total

​

$

1,000

​

$

—

​

$

—

​

$

—

​

$

1,000

​

14

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six months ended June 30, 2026

​

​

Balance at December 31, 2025

​

Charge-Offs

​

Recoveries

​

Provision (Recovery)

​

Balance at June 30, 2026

Corporate bonds

​

$

—

​

$

—

​

$

—

​

$

30

​

$

30

Total

​

$

—

​

$

—

​

$

—

​

$

30

​

$

30

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six months ended June 30, 2025

​

​

Balance at December 31, 2024

​

Charge-Offs

​

Recoveries

​

Provision (Recovery)

​

Balance at June 30, 2025

Corporate bonds

​

$

360

​

$

—

​

$

—

​

$

640

​

$

1,000

Total

​

$

360

​

$

—

​

$

—

​

$

640

​

$

1,000

​

The Company recorded a provision for credit losses on available for sale debt securities of $30,000 during the first six months of 2026 in order to create a partial reserve for a senior debt corporate investment that was deemed to be credit impaired. For the first six 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 for a corporate security due to further credit deterioration.

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 six months ended June 30, 2026 and 2025 (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended June 30, 2026

​

​

Balance at March 31, 2026

​

Charge-Offs

​

Recoveries

​

Provision (Recovery)

​

Balance at June 30, 2026

Municipal

​

$

1

​

$

—

​

$

—

​

$

—

​

$

1

Corporate bonds and other securities

​

​

82

​

​

—

​

​

—

​

​

(16)

​

​

66

Total

​

$

83

​

$

—

​

$

—

​

$

(16)

​

$

67

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended June 30, 2025

​

​

Balance at March 31, 2025

​

Charge-Offs

​

Recoveries

​

Provision (Recovery)

​

Balance at June 30, 2025

Municipal

​

$

1

​

$

—

​

$

—

​

$

1

​

$

2

Corporate bonds and other securities

​

​

95

​

​

—

​

​

—

​

​

(12)

​

​

83

Total

​

$

96

​

$

—

​

$

—

​

$

(11)

​

$

85

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six months ended June 30, 2026

​

​

Balance at December 31, 2025

​

Charge-Offs

​

Recoveries

​

Provision (Recovery)

​

Balance at June 30, 2026

Municipal

​

$

1

​

$

—

​

$

—

​

$

—

​

$

1

Corporate bonds and other securities

​

​

89

​

​

—

​

​

—

​

​

(23)

​

​

66

Total

​

$

90

​

$

—

​

$

—

​

$

(23)

​

$

67

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six months ended June 30, 2025

​

​

Balance at December 31, 2024

​

Charge-Offs

​

Recoveries

​

Provision (Recovery)

​

Balance at June 30, 2025

Municipal

​

$

2

​

$

—

​

$

—

​

$

—

​

$

2

Corporate bonds and other securities

​

​

87

​

​

—

​

​

—

​

​

(4)

​

​

83

Total

​

$

89

​

$

—

​

$

—

​

$

(4)

​

$

85

​

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

15

Table of Contents

these securities. The allowance for credit losses on the 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 June 30, 2026, 2.4% of the total investment securities portfolio was rated AAA as compared to 1.7% at December 31, 2025. At June 30, 2026, 80.6% of the total investment securities portfolio was rated AA or higher compared to 76.5% at December 31, 2025. Approximately 11.8% of the total investment securities portfolio was either rated below A or unrated at June 30, 2026 as compared to 13.5% at December 31, 2025.

Specifically, the following table summarizes the carrying value of held to maturity debt securities at June 30, 2026, aggregated by credit quality indicator (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​

Credit Rating

​

​

AAA/AA/A

​

BBB/BB/B

​

Unrated

​

Total

U.S. Agency

​ ​ ​

$

2,500

​

$

—

​ ​ ​

$

—

​ ​ ​

$

2,500

U.S. Agency mortgage-backed securities

​

​

48,838

​

​

—

​

​

—

​

​

48,838

Municipal

​

​

31,964

​

​

500

​

​

—

​

​

32,464

Corporate bonds and other securities

​

​

1,000

​

​

—

​

​

934

​

​

1,934

Total

​

$

84,302

​

$

500

​

$

934

​

$

85,736

​

​

​

​

​

​

Trading Securities

​

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

​

​	​	​	​	​	​	​
​	​	June 30, 2026		​	December 31, 2025
U.S. Treasury	​	$	3,794	​	$	3,401
Municipal		​	4,794	​	​	3,852
Total	​	$	8,588	​	$	7,253

​

The following table presents the net gain on trading securities included in trading securities revenue for the three- and six-month periods ended June 30, 2026 and 2025 (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended

​

Six months ended

​

​

June 30,

​

June 30,

​

​ ​ ​

2026

​ ​ ​

2025

​ ​ ​

2026

​ ​ ​

2025

Net realized gain on sales

​

$

22

​

$

38

​

$

26

​

$

38

Net unrealized gain

​

94

​

35

​

42

​

35

Net gain on trading securities

​

116

​

73

​

68

​

73

Less: Portfolio expenses and management fees

​

56

​

38

​

71

​

38

Trading securities revenue (loss)

​

$

60

​

$

35

​

$

(3)

​

$

35

​

​

​

​

​

​

​

​

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 June 30, 2026 and December 31, 2025, accrued interest receivable on loans totaled $4.4 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.

​

16

Table of Contents

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):

​	​	​	​	​	​	​
​	​	June 30, 2026		​	December 31, 2025
Commercial:	​	​	​	​	​	​
Commercial real estate (owner occupied) (1)	​	$	84,955	​	$	85,233
Commercial and industrial	​	​	142,241	​	​	144,325
Commercial real estate (non-owner occupied):		​	​	​	​	​
Retail (1)	​	​	168,046	​	​	171,530
Multi-family (1)	​	​	121,722	​	​	131,085
Other (1)	​	​	217,770	​	​	217,935
Residential mortgages (1)		​	166,777	​	​	169,814
Consumer		​	113,503	​	​	112,805
Loans, net of unearned income	​	$	1,015,014	​	$	1,032,727

(1) Real estate construction loans constituted 4.4% and 5.0% of the Company’s total loans, net of unearned income as of June 30, 2026 and December 31, 2025, respectively.

​

Loan balances at June 30, 2026 and December 31, 2025 are net of unearned income of $404,000 and $466,000, 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. 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

17

Table of Contents

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 roll forward of the allowance for credit losses by loan portfolio segment for the three- and six-month periods ended June 30, 2026 and 2025 (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended June 30, 2026

​

​

Balance at

​

Charge-

​

​

​

​

Provision

​

Balance at

​

​

March 31, 2026

​

Offs

​

Recoveries

​

(Recovery)

​

June 30, 2026

Commercial real estate (owner occupied)

​ ​ ​

$

321

​ ​ ​

$

—

​ ​ ​

$

6

​ ​ ​

$

(10)

​ ​ ​

$

317

Commercial and industrial

​

​

2,935

​

​

—

​

​

1

​

​

18

​

​

2,954

Commercial real estate (non-owner occupied) - retail

​

​

3,286

​

​

—

​

​

—

​

​

(134)

​

​

3,152

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

​

​

1,257

​

​

—

​

​

—

​

​

(37)

​

​

1,220

Other commercial real estate (non-owner occupied)

​

​

3,846

​

​

—

​

​

3

​

​

(168)

​

​

3,681

Residential mortgages

​

372

​

—

​

3

​

(7)

​

368

Consumer

​

1,189

​

(63)

​

26

​

52

​

1,204

Total

​

$

13,206

​

$

(63)

​

$

39

​

$

(286)

​

$

12,896

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended June 30, 2025

​

​

Balance at

​

Charge-

​

​

​

​

Provision

​

Balance at

​

​

March 31, 2025

​

Offs

​

Recoveries

​

(Recovery)

​

June 30, 2025

Commercial real estate (owner occupied)

​ ​ ​

$

329

​

$

—

​ ​ ​

$

6

​ ​ ​

$

(16)

​ ​ ​

$

319

Commercial and industrial

​

2,879

​

(200)

​

32

​

301

​

3,012

Commercial real estate (non-owner occupied) - retail

​

​

3,817

​

​

—

​

​

—

​

​

(301)

​

​

3,516

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

​

​

1,619

​

​

—

​

​

—

​

​

(173)

​

​

1,446

Other commercial real estate (non-owner occupied)

​

​

3,586

​

​

(2,762)

​

​

3

​

​

3,490

​

​

4,317

Residential mortgages

​

391

​

—

​

1

​

(82)

​

310

Consumer

​

1,191

​

(15)

​

27

​

(63)

​

1,140

Total

​

$

13,812

​

$

(2,977)

​

$

69

​

$

3,156

​

$

14,060

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six months ended June 30, 2026

​

​

Balance at

​

Charge-

​

​

​

​

Provision

​

Balance at

​

​

December 31, 2025

​

Offs

​

Recoveries

​

(Recovery)

​

June 30, 2026

Commercial real estate (owner occupied)

​ ​ ​

$

319

​

$

—

​ ​ ​

$

12

​ ​ ​

$

(14)

​ ​ ​

$

317

Commercial and industrial

​

​

2,987

​

​

—

​

​

3

​

​

(36)

​

​

2,954

Commercial real estate (non-owner occupied) - retail

​

​

3,248

​

​

(241)

​

​

—

​

​

145

​

​

3,152

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

​

​

1,403

​

​

—

​

​

—

​

​

(183)

​

​

1,220

Other commercial real estate (non-owner occupied)

​

​

3,725

​

​

—

​

​

10

​

​

(54)

​

​

3,681

Residential mortgages

​

296

​

—

​

19

​

53

​

368

Consumer

​

1,150

​

(76)

​

43

​

87

​

1,204

Total

​

$

13,128

​

$

(317)

​

$

87

​

$

(2)

​

$

12,896

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

18

Table of Contents

​

​

Six months ended June 30, 2025

​

​

Balance at

​

Charge-

​

​

​

​

Provision

​

Balance at

​

​

December 31, 2024

​

Offs

​

Recoveries

​

(Recovery)

​

June 30, 2025

Commercial real estate (owner occupied)

​ ​ ​

$

398

​

$

—

​ ​ ​

$

12

​ ​ ​

$

(91)

​ ​ ​

$

319

Commercial and industrial

​

2,860

​

(200)

​

43

​

309

​

3,012

Commercial real estate (non-owner occupied) - retail

​

​

3,695

​

​

—

​

​

—

​

​

(179)

​

​

3,516

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

​

​

1,478

​

​

—

​

​

—

​

​

(32)

​

​

1,446

Other commercial real estate (non-owner occupied)

​

​

3,451

​

​

(2,762)

​

​

6

​

​

3,622

​

​

4,317

Residential mortgages

​

839

​

—

​

2

​

(531)

​

310

Consumer

​

1,191

​

(119)

​

46

​

22

​

1,140

Total

​

$

13,912

​

$

(3,081)

​

$

109

​

$

3,120

​

$

14,060

​

The Company recorded a $286,000 provision for credit losses recovery for loans in the second quarter of 2026 as compared to a $3.2 million provision for credit losses in the second quarter of 2025. For the six months of 2026, the Company recognized a $2,000 provision for credit losses recovery for loans after recognizing a $3.1 million provision for credit losses in the first six months of 2025. The provision recovery in the second quarter of 2026 reflected a continuing favorable trend for historical loss rates. In addition, contraction in portfolio balances since the second quarter of 2025 contributed to the allowance for loan credit losses at June 30, 2026 being $1.2 million, or 8.3%, lower than the allowance for loan credit losses at June 30, 2025. The increased provision for credit losses expense in 2025 primarily reflected the resolution of a problem asset, a loan secured by a mixed use commercial real estate retail/office property in the Pittsburgh market, which also included a $2.8 million charge-down.

Non-performing assets from the loan portfolio, which are discussed in detail below, decreased from $8.5 million at December 31, 2025 to $7.9 million at June 30, 2026. The decrease primarily reflects the partial charge-down of a CRE loan secured by retail property as well as paydown activity on a large non-accrual loan relationship. Non-performing assets from the loan portfolio were at 0.78% of total loans as of June 30, 2026. During the first six months of 2026, the Company experienced net loan charge-offs of $230,000, or 0.05% of total average loans, compared to net charge-offs of $3.0 million, or 0.56% of total average loans, in the first six months of 2025. In summary, the allowance for credit losses on the loan portfolio provided 167% coverage of non-performing loans and 1.27% of total loans at June 30, 2026 compared to 158% coverage of non-performing loans and 1.27% of total loans at December 31, 2025.

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.

​

19

Table of Contents

These modified historical loss rates are multiplied by the outstanding principal balance of each loan to calculate a required reserve. Ultimately, 43% of the June 30, 2026 general reserve represented qualitative adjustment with 57% 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.

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.

20

Table of Contents

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At June 30, 2026

​

​ ​ ​

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

​

$

2,765

​

$

1,992

​

$

161

​

$

—

​

$

2,011

​

$

203

$

—

​

$

7,132

Collectively evaluated

​

82,190

​

140,249

​

167,885

​

​

121,722

​

215,759

​

166,574

​

113,503

​

1,007,882

Total loans

​

$

84,955

​

$

142,241

​

$

168,046

​

$

121,722

​

$

217,770

​

$

166,777

$

113,503

​

$

1,015,014

Allowance for credit losses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Specific reserve allocation

​

$

—

​

$

541

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

541

General reserve allocation

​

317

​

2,413

​

3,152

​

​

1,220

​

3,681

​

368

​

1,204

​

12,355

Total allowance for credit losses

​

$

317

​

$

2,954

​

$

3,152

​

$

1,220

​

$

3,681

​

$

368

​

$

1,204

​

$

12,896

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 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

​

$

2,875

​

$

2,148

​

$

415

​

$

—

​

$

2,034

​

$

155

$

—

​

$

7,627

Collectively evaluated

​

82,358

​

142,177

​

171,115

​

​

131,085

​

215,901

​

169,659

​

112,805

​

1,025,100

Total loans

​

$

85,233

​

$

144,325

​

$

171,530

​

$

131,085

​

$

217,935

​

$

169,814

$

112,805

​

$

1,032,727

Allowance for credit losses:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Specific reserve allocation

​

$

—

​

$

558

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

558

General reserve allocation

​

319

​

2,429

​

3,248

​

​

1,403

​

3,725

​

296

​

1,150

​

12,570

Total allowance for credit losses

​

$

319

​

$

2,987

​

$

3,248

​

$

1,403

​

$

3,725

​

$

296

​

$

1,150

​

$

13,128

​

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
June 30, 2026	​	Real Estate
Commercial:	​	​	​
Commercial real estate (owner occupied)	​	$	2,765
Commercial and industrial	​	​	1,309
Commercial real estate (non-owner occupied):	​	​	​
Retail	​	​	161
Other	​	​	2,011
Residential mortgages	​	​	203
Total	​	$	6,449

​

​	​	​	​	​	​	​
​	​	Collateral Type
December 31, 2025	​	Real Estate		​	Business Assets
Commercial:	​	​	​	​	​	​
Commercial real estate (owner occupied)	​	$	2,774	​	$	101
Commercial and industrial	​	​	1,362	​	​	72
Commercial real estate (non-owner occupied):	​	​	​		​	​
Retail	​	​	415	​	​	—
Other	​	​	2,034	​	​	—
Residential mortgages	​	​	155		​	—
Total	​	$	6,740	​	$	173

​

21

Table of Contents

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 June 30, 2026

​

​ ​ ​

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)

​

$

2,765

​

$

—

​

$

2,765

​

$

—

​

$

—

​

$

2,765

Commercial and industrial

​

​

1,309

​

​

683

​

​

1,992

​

​

—

​

​

135

​

​

2,127

Commercial real estate (non-owner occupied) - retail

​

​

161

​

​

—

​

​

161

​

​

—

​

​

—

​

​

161

Other commercial real estate (non-owner occupied)

​

​

2,011

​

​

—

​

​

2,011

​

​

—

​

​

—

​

​

2,011

Residential mortgages

​

​

—

​

​

164

​

​

164

​

​

56

​

​

—

​

​

220

Consumer

​

​

—

​

​

589

​

​

589

​

​

—

​

​

7

​

​

596

Total

​

$

6,246

​

$

1,436

​

$

7,682

​

$

56

​

$

142

​

$

7,880

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 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)

​

$

2,875

​

$

—

​

$

2,875

​

$

—

​

$

—

​

$

2,875

Commercial and industrial

​

​

1,437

​

​

714

​

​

2,151

​

​

—

​

​

216

​

​

2,367

Commercial real estate (non-owner occupied) - retail

​

​

415

​

​

—

​

​

415

​

​

—

​

​

—

​

​

415

Other commercial real estate (non-owner occupied)

​

​

2,034

​

​

—

​

​

2,034

​

​

—

​

​

—

​

​

2,034

Residential mortgages

​

​

155

​

​

51

​

​

206

​

​

10

​

​

—

​

​

216

Consumer

​

​

—

​

​

611

​

​

611

​

​

—

​

​

—

​

​

611

Total

​

$

6,916

​

$

1,376

​

$

8,292

​

$

10

​

$

216

​

$

8,518

​

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

22

Table of Contents

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, 2026 requires review of approximately 38% 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.

23

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 June 30, 2026

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revolving

​

Revolving

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans

​

Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized

​

Converted

​

​

​

​

​

Term Loans Amortized Cost Basis by Origination Year

​

Cost

​

to

​

​

​

​

​ ​ ​

2026

​ ​ ​

2025

​ ​ ​

2024

​ ​ ​

2023

​ ​ ​

2022

​ ​ ​

Prior

​ ​ ​

Basis

​ ​ ​

Term

​ ​ ​

Total

​

​

(In Thousands)

Commercial real estate (owner occupied)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

2,936

​

$

8,762

​

$

10,131

​

$

15,842

​

$

5,633

​

$

37,063

​

$

741

​

$

—

​

$

81,108

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

491

​

​

223

​

​

—

​

​

714

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

3,105

​

​

28

​

​

—

​

​

3,133

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

2,936

​

$

8,762

​

$

10,131

​

$

15,842

​

$

5,633

​

$

40,659

​

$

992

​

$

—

​

$

84,955

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Commercial and industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

3,898

​

$

23,882

​

$

9,722

​

$

13,215

​

$

10,937

​

$

26,495

​

$

49,680

​

$

—

​

$

137,829

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1,990

​

​

—

​

​

1,990

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

281

​

​

504

​

​

1,239

​

​

—

​

​

2,024

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

398

​

​

—

​

​

—

​

​

398

Total

​

$

3,898

​

$

23,882

​

$

9,722

​

$

13,215

​

$

11,218

​

$

27,397

​

$

52,909

​

$

—

​

$

142,241

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Commercial real estate (non-owner occupied) - retail

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

4,460

​

$

20,081

​

$

25,577

​

$

34,955

​

$

8,549

​

$

74,242

​

$

21

​

$

—

​

$

167,885

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

​

—

​

​

—

​

​

—

​

​

161

​

​

—

​

​

—

​

​

—

​

​

—

​

​

161

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

4,460

​

$

20,081

​

$

25,577

​

$

35,116

​

$

8,549

​

$

74,242

​

$

21

​

$

—

​

$

168,046

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

241

​

$

—

​

$

—

​

$

—

​

$

—

​

$

241

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

580

​

$

9,722

​

$

20,390

​

$

30,084

​

$

11,699

​

$

48,278

​

$

24

​

$

—

​

$

120,777

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

945

​

​

—

​

​

—

​

​

945

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

580

​

$

9,722

​

$

20,390

​

$

30,084

​

$

11,699

​

$

49,223

​

$

24

​

$

—

​

$

121,722

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Other commercial real estate (non-owner occupied)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

16,690

​

$

22,735

​

$

15,696

​

$

23,714

​

$

33,174

​

$

90,180

​

$

8,575

​

$

—

​

$

210,764

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

4,995

​

​

—

​

​

—

​

​

4,995

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

170

​

​

1,841

​

​

—

​

​

—

​

​

2,011

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

16,690

​

$

22,735

​

$

15,696

​

$

23,714

​

$

33,344

​

$

97,016

​

$

8,575

​

$

—

​

$

217,770

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Total by risk rating

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

28,564

​

$

85,182

​

$

81,516

​

$

117,810

​

$

69,992

​

$

276,258

​

$

59,041

​

$

—

​

$

718,363

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

5,486

​

​

2,213

​

​

—

​

​

7,699

Substandard

​

​

—

​

​

—

​

​

—

​

​

161

​

​

451

​

​

6,395

​

​

1,267

​

​

—

​

​

8,274

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

398

​

​

—

​

​

—

​

​

398

Total

​

$

28,564

​

$

85,182

​

$

81,516

​

$

117,971

​

$

70,443

​

$

288,537

​

$

62,521

​

$

—

​

$

734,734

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

241

​

$

—

​

$

—

​

$

—

​

$

—

​

$

241

​

​

24

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 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

​

$

8,901

​

$

10,312

​

$

16,564

​

$

6,050

​

$

9,460

​

$

29,511

​

$

433

​

$

—

​

$

81,231

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

520

​

​

223

​

​

—

​

​

743

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

2,738

​

​

521

​

​

—

​

​

—

​

​

3,259

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

8,901

​

$

10,312

​

$

16,564

​

$

6,050

​

$

12,198

​

$

30,552

​

$

656

​

$

—

​

$

85,233

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Commercial and industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

22,994

​

$

10,640

​

$

14,643

​

$

12,800

​

$

5,307

​

$

18,626

​

$

50,490

​

$

5,010

​

$

140,510

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1,240

​

​

—

​

​

1,240

Substandard

​

​

—

​

​

—

​

​

—

​

​

307

​

​

363

​

​

304

​

​

1,178

​

​

25

​

​

2,177

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

398

​

​

—

​

​

—

​

​

398

Total

​

$

22,994

​

$

10,640

​

$

14,643

​

$

13,107

​

$

5,670

​

$

19,328

​

$

52,908

​

$

5,035

​

$

144,325

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

200

​

$

1,396

​

$

178

​

$

—

​

$

—

​

$

1,774

Commercial real estate (non-owner occupied) - retail

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

17,984

​

$

26,374

​

$

35,435

​

$

14,284

​

$

30,707

​

$

46,305

​

$

26

​

$

—

​

$

171,115

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

​

—

​

​

—

​

​

415

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

415

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

17,984

​

$

26,374

​

$

35,850

​

$

14,284

​

$

30,707

​

$

46,305

​

$

26

​

$

—

​

$

171,530

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

9,762

​

$

24,594

​

$

32,750

​

$

11,515

​

$

15,867

​

$

34,378

​

$

24

​

$

—

​

$

128,890

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

2,195

​

​

—

​

​

—

​

​

2,195

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

9,762

​

$

24,594

​

$

32,750

​

$

11,515

​

$

15,867

​

$

36,573

​

$

24

​

$

—

​

$

131,085

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Other commercial real estate (non-owner occupied)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

23,090

​

$

22,060

​

$

27,401

​

$

32,037

​

$

40,743

​

$

58,392

​

$

6,973

​

$

—

​

$

210,696

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

5,205

​

​

—

​

​

—

​

​

5,205

Substandard

​

​

—

​

​

—

​

​

—

​

​

180

​

​

—

​

​

1,854

​

​

—

​

​

—

​

​

2,034

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total

​

$

23,090

​

$

22,060

​

$

27,401

​

$

32,217

​

$

40,743

​

$

65,451

​

$

6,973

​

$

—

​

$

217,935

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

3,145

​

$

—

​

$

—

​

$

3,145

Total by risk rating

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

82,731

​

$

93,980

​

$

126,793

​

$

76,686

​

$

102,084

​

$

187,212

​

$

57,946

​

$

5,010

​

$

732,442

Special Mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

5,725

​

​

1,463

​

​

—

​

​

7,188

Substandard

​

​

—

​

​

—

​

​

415

​

​

487

​

​

3,101

​

​

4,874

​

​

1,178

​

​

25

​

​

10,080

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

398

​

​

—

​

​

—

​

​

398

Total

​

$

82,731

​

$

93,980

​

$

127,208

​

$

77,173

​

$

105,185

​

$

198,209

​

$

60,587

​

$

5,035

​

$

750,108

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

200

​

$

1,396

​

$

3,323

​

$

—

​

$

—

​

$

4,919

​

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

25

Table of Contents

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At June 30, 2026

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Revolving

​

Revolving

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans

​

Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortized

​

Converted

​

​

​

​

​

Term Loans Amortized Cost Basis by Origination Year

​

Cost

​

to

​

​

​

​

​ ​ ​

2026

​ ​ ​

2025

​ ​ ​

2024

​ ​ ​

2023

​ ​ ​

2022

​ ​ ​

Prior

​ ​ ​

Basis

​ ​ ​

Term

​ ​ ​

Total

​

​

(In Thousands)

Residential mortgages

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Performing

​

$

2,751

​

$

4,686

​

$

13,813

​

$

14,128

​

$

9,368

​

$

121,811

​

$

—

​

$

—

​

$

166,557

Non-performing

​

​

—

​

​

—

​

​

131

​

​

—

​

​

—

​

​

89

​

​

—

​

​

—

​

​

220

Total

​

$

2,751

​

$

4,686

​

$

13,944

​

$

14,128

​

$

9,368

​

$

121,900

​

$

—

​

$

—

​

$

166,777

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Consumer

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Performing

​

$

5,464

​

$

9,822

​

$

7,391

​

$

6,922

​

$

11,559

​

$

8,903

​

$

62,853

​

$

—

​

$

112,914

Non-performing

​

​

—

​

​

—

​

​

3

​

​

71

​

​

—

​

​

118

​

​

397

​

​

—

​

​

589

Total

​

$

5,464

​

$

9,822

​

$

7,394

​

$

6,993

​

$

11,559

​

$

9,021

​

$

63,250

​

$

—

​

$

113,503

Current period gross charge-offs

​

$

4

​

$

1

​

$

4

​

$

14

​

$

9

​

$

44

​

$

—

​

$

—

​

$

76

Total by payment performance

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Performing

​

$

8,215

​

$

14,508

​

$

21,204

​

$

21,050

​

$

20,927

​

$

130,714

​

$

62,853

​

$

—

​

$

279,471

Non-performing

​

​

—

​

​

—

​

​

134

​

​

71

​

​

—

​

​

207

​

​

397

​

​

—

​

​

809

Total

​

$

8,215

​

$

14,508

​

$

21,338

​

$

21,121

​

$

20,927

​

$

130,921

​

$

63,250

​

$

—

​

$

280,280

Current period gross charge-offs

​

$

4

​

$

1

​

$

4

​

$

14

​

$

9

​

$

44

​

$

—

​

$

—

​

$

76

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 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

​

$

4,377

​

$

13,914

​

$

15,006

​

$

10,054

​

$

53,478

​

$

72,769

​

$

—

​

$

—

​

$

169,598

Non-performing

​

​

—

​

​

—

​

​

—

​

​

—

​

​

155

​

​

61

​

​

—

​

​

—

​

​

216

Total

​

$

4,377

​

$

13,914

​

$

15,006

​

$

10,054

​

$

53,633

​

$

72,830

​

$

—

​

$

—

​

$

169,814

Current period gross charge-offs

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Consumer

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Performing

​

$

11,546

​

$

8,581

​

$

7,999

​

$

12,952

​

$

5,820

​

$

5,363

​

$

59,823

​

$

110

​

$

112,194

Non-performing

​

​

—

​

​

5

​

​

75

​

​

17

​

​

—

​

​

322

​

​

192

​

​

—

​

​

611

Total

​

$

11,546

​

$

8,586

​

$

8,074

​

$

12,969

​

$

5,820

​

$

5,685

​

$

60,015

​

$

110

​

$

112,805

Current period gross charge-offs

​

$

1

​

$

28

​

$

41

​

$

8

​

$

1

​

$

75

​

$

—

​

$

—

​

$

154

Total by payment performance

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Performing

​

$

15,923

​

$

22,495

​

$

23,005

​

$

23,006

​

$

59,298

​

$

78,132

​

$

59,823

​

$

110

​

$

281,792

Non-performing

​

​

—

​

​

5

​

​

75

​

​

17

​

​

155

​

​

383

​

​

192

​

​

—

​

​

827

Total

​

$

15,923

​

$

22,500

​

$

23,080

​

$

23,023

​

$

59,453

​

$

78,515

​

$

60,015

​

$

110

​

$

282,619

Current period gross charge-offs

​

$

1

​

$

28

​

$

41

​

$

8

​

$

1

​

$

75

​

$

—

​

$

—

​

$

154

​

26

Table of Contents

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 June 30, 2026

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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)

​

$

82,190

​

$

—

​

$

—

​

$

—

​

$

—

​

$

2,765

​

$

84,955

Commercial and industrial

​

​

140,143

​

​

106

​

​

—

​

​

—

​

​

106

​

​

1,992

​

​

142,241

Commercial real estate (non-owner occupied) - retail

​

165,056

​

2,829

​

​

—

​

—

​

2,829

​

161

​

​

168,046

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

​

121,722

​

—

​

​

—

​

—

​

—

​

—

​

​

121,722

Other commercial real estate (non-owner occupied)

​

​

215,447

​

​

312

​

​

—

​

​

—

​

​

312

​

​

2,011

​

​

217,770

Residential mortgages

​

166,217

​

38

​

​

302

​

56

​

396

​

164

​

​

166,777

Consumer

​

112,155

​

733

​

​

26

​

—

​

759

​

589

​

​

113,503

Total

​

$

1,002,930

​

$

4,018

​

$

328

​

$

56

​

$

4,402

​

$

7,682

​

$

1,015,014

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 2025

​

​

​

​

​

​

​

​

​

​

​ ​ ​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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)

​

$

82,358

​

$

—

​

$

—

​

$

—

​

$

—

​

$

2,875

​

$

85,233

Commercial and industrial

​

​

141,691

​

​

455

​

​

28

​

​

—

​

​

483

​

​

2,151

​

​

144,325

Commercial real estate (non-owner occupied) - retail

​

171,115

​

—

​

​

—

​

—

​

—

​

415

​

​

171,530

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

​

131,085

​

—

​

​

—

​

—

​

—

​

—

​

​

131,085

Other commercial real estate (non-owner occupied)

​

​

215,901

​

​

—

​

​

—

​

​

—

​

​

—

​

​

2,034

​

​

217,935

Residential mortgages

​

168,602

​

926

​

​

70

​

10

​

1,006

​

206

​

​

169,814

Consumer

​

111,354

​

728

​

​

112

​

—

​

840

​

611

​

​

112,805

Total

​

$

1,022,106

​

$

2,109

​

$

210

​

$

10

​

$

2,329

​

$

8,292

​

$

1,032,727

​

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.

​

27

Table of Contents

The following tables summarize the amortized cost basis of loans modified to borrowers experiencing financial difficulty during the three and six months ended June 30, 2026 and 2025 (in thousands).

There were no loans modified to borrowers experiencing financial difficulty during the three months ended June 30, 2026.

​	​	​	​	​	​	​	​
​	​	Six months ended June 30, 2026					​
​	​	Combination - Payment Delay and Term Extension					​
​	​ ​ ​	Amortized Cost Basis		​ ​ ​	% of Total Class of Loans		​ ​ ​
Commercial real estate (non-owner occupied) - retail	​	$	161	​	​	0.10	%
Total	​	$	161	​	​	​	​

​

As of June 30, 2026, the modified loan described in the table above was in non-accrual status and payments were 130 days past due.

There were no loans modified to borrowers experiencing financial difficulty during the three months ended June 30, 2025.

​	​	​	​	​	​	​	​
​	​	Six months ended June 30, 2025					​
​	​	Term Extension					​
​	​ ​ ​	Amortized Cost Basis		​ ​ ​	% of Total Class of Loans		​ ​ ​
Residential mortgages	​	$	192	​	​	0.11	%
Total	​	$	192	​	​	​	​

​

At June 30, 2026 and 2025, 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 six months ended June 30, 2026 and 2025. As noted above, there were no loans modified to borrowers experiencing financial difficulty during the three months ended June 30, 2026 and 2025.

​

​	​	​
Six months ended June 30, 2026
Combination - Payment Delay and Term Extension
Loan Type	​ ​ ​	Financial Effect
Commercial real estate (non-owner occupied) - retail	​	Provided a maturity date extension of nine months and interest due of $66,828 was deferred until maturity.

​

​	​	​
Six months ended June 30, 2025
Term Extension
Loan Type	​ ​ ​	Financial Effect
Residential mortgages	​	Provided maturity date extension of 230 months (approximately 19 years).

​

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. During the first half of 2026, a partial charge-down of $241,000 was recorded on the modified commercial real estate (non-owner occupied) – retail loan disclosed above. The charge-down was necessary to properly align the loan balance with the value of the collateral less estimated costs to sell. The Company had no other loans which were modified to borrowers experiencing financial difficulty which subsequently defaulted during the three or six months ended June 30, 2026 and 2025.

​

28

Table of Contents

​

​

9.  Borrowings and Advances from Federal Home Loan Bank

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

​

​	​	​	​	​	​	​	​	​
​	​	At June 30, 2026
​	​	​	​	​	​	​	Weighted
Type	​	Maturing	​	Amount		​	Average Rate
FHLB Advances		2026	​	$	9,350		4.52	%
​		2027	​		15,100		4.23	​
​		2028	​		11,745		4.46	​
Total FHLB advances		​	​	$	36,195		4.38	%

​

​	​	​	​	​	​	​	​	​
​	​	At December 31, 2025
​	​	​	​	​	​	​	Weighted
Type	​	Maturing	​	Amount		​	Average Rate
FHLB Advances		2026	​	$	17,770		4.26	%
​		2027	​		15,100		4.23	​
​		2028	​		11,745		4.46	​
Total FHLB advances		​	​	$	44,615		4.30	%

​

The Company has the ability to purchase federal funds under lines with two correspondent banks which have an average maturity of overnight. There were no borrowings under these lines at June 30, 2026 and December 31, 2025. As a member of the FHLB, the Bank can obtain advances on a revolving line of credit (open repo plus) which are typically overnight borrowings. The rate on open repo plus advances can change daily. There were no borrowings under the FHLB open repo plus line at June 30, 2026 and December 31, 2025.

​

In addition to advances on the open repo plus line, the Bank can obtain short- to long-term advances from the FHLB. 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, 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 and advances on the open repo plus line.

​

The Parent Company has a $3 million unsecured, 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 May 2027. There were no borrowings under the line at June 30, 2026 and December 31, 2025.

​

29

Table of Contents

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 six months ended June 30, 2026 and 2025 (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended June 30, 2026

​

Three months ended June 30, 2025

​

​ ​ ​

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

​

$

(8,893)

​

$

(30)

​

$

945

​

$

(7,978)

​

$

(11,208)

​

$

(160)

​

$

(1,616)

​

$

(12,984)

Other comprehensive income before reclassifications

​

137

​

4

​

—

​

141

​

901

​

​

57

​

—

​

958

Amounts reclassified from accumulated other comprehensive loss

​

—

​

12

​

—

​

12

​

—

​

​

(19)

​

—

​

(19)

Net current period other comprehensive income

​

137

​

16

​

—

​

153

​

901

​

​

38

​

—

​

939

Ending balance

​

$

(8,756)

​

$

(14)

​

$

945

​

$

(7,825)

​

$

(10,307)

​

$

(122)

​

$

(1,616)

​

$

(12,045)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six months ended June 30, 2026

​

Six months ended June 30, 2025

​

​ ​ ​

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

​

$

(7,854)

​

$

(94)

​

$

599

​

$

(7,349)

​

$

(13,332)

​

$

(135)

​

$

(1,616)

​

$

(15,083)

Other comprehensive (loss) income before reclassifications

​

(902)

​

24

​

346

​

(532)

​

3,025

​

48

​

—

​

3,073

Amounts reclassified from accumulated other comprehensive loss

​

—

​

56

​

—

​

56

​

—

​

(35)

​

—

​

(35)

Net current period other comprehensive (loss) income

​

(902)

​

80

​

346

​

(476)

​

3,025

​

13

​

—

​

3,038

Ending balance

​

$

(8,756)

​

$

(14)

​

$

945

​

$

(7,825)

​

$

(10,307)

​

$

(122)

​

$

(1,616)

​

$

(12,045)

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

​

The following tables present the amounts reclassified out of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2026 and 2025 (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	​ ​ ​	June 30, 2026		​ ​ ​	June 30, 2025		​ ​ ​	statement of operations
Interest rate hedge	​	​	​	​	​	​	​	​
​	​	$	15	​	$	(24)	​	Interest expense - Deposits
​	​	​	(3)	​	​	5	​	Provision (credit) for income taxes
​	​	$	12	​	$	(19)		​
Total reclassifications for the period	​	$	12	​	$	(19)		​

(1) Amounts in parentheses indicate credits.

30

Table of Contents

​	​	​	​	​	​	​	​	​
​	​	Amount reclassified from accumulated					​	​
​	​	other comprehensive loss(1)					​	​
​	​	For the six		​	For the six		​	​
Details about accumulated other	​	months ended		​	months ended		​	Affected line item in the
comprehensive loss components	​ ​ ​	June 30, 2026		​ ​ ​	June 30, 2025		​ ​ ​	statement of operations
Interest rate hedge	​	​	​	​	​	​	​	​
​	​	$	71	​	$	(44)	​	Interest expense - Deposits
​	​	​	(15)	​	​	9	​	Provision (credit) for income taxes
​	​	$	56	​	$	(35)		​
Total reclassifications for the period	​	$	56	​	$	(35)		​

(1) Amounts in parentheses indicate credits.

​

​

11.  Regulatory Capital

The Company qualifies as a small bank holding company under the Federal Reserve’s Small Bank Holding Company Policy Statement, which exempts bank holding companies with less than $3 billion in assets from reporting consolidated regulatory capital ratios and from minimum regulatory capital requirements. However, the Bank is subject to various capital requirements administered by the federal banking agencies. Under the Basel III capital adequacy rules and the regulatory framework for prompt corrective action, there are specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Such quantitative measures involve the maintenance of minimum amounts and ratios of common tier 1, tier 1, and total capital to risk-weighted assets and tier 1 capital to average assets. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by the federal regulators.

In 2019, the federal banking agencies issued a final rule establishing the community bank leverage ratio (CBLR), which is an optional framework designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. The criteria to be considered a qualifying community banking organization includes a leverage ratio greater than 9%, less than $10 billion in average total assets, off-balance sheet exposures of 25% or less of total assets, and trading assets/liabilities of 5% or less of total assets. It should be noted that effective July 1, 2026, the federal banking agencies revised the CBLR framework to reduce the minimum leverage ratio to 8%.

The Bank has elected to opt into the CBLR framework and had ratios of 9.46% and 9.32% as of June 30, 2026 and December 31, 2025, respectively. Therefore, the Bank is considered to have satisfied the risk-based and leverage capital requirements in the federal banking agencies’ capital rules. Additionally, the Bank is considered to have met the well-capitalized ratio requirements under the regulatory framework for prompt corrective action promulgated by the Federal Reserve.

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

31

Table of Contents

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.

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 six months of 2026 and 2025 performance (in thousands, except percentages).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At June 30, 2026

​

​

​

​

​

​

​

​

​

​

​

Increase

​

​

​

​

Aggregate

​

Weighted

​

​

​

(Decrease)

​

​

​

​

Notional

​

Average Rate

​

Repricing

​

In Interest

​

​

Hedge Type

​

Amount

​

Received/(Paid)

​

Frequency

​

Income

Swap assets

​ ​ ​

N/A

​ ​ ​

$

63,143

​ ​ ​

5.99

%

Monthly

​ ​ ​

$

347

Swap liabilities

N/A

​

(63,143)

(5.99)

Monthly

​

(347)

Net exposure

​

​

$

—

—

%

​

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At June 30, 2025

​

​

​

​

​

​

​

​

​

​

​

Increase

​

​

​

​

Aggregate

​

Weighted

​

​

​

(Decrease)

​

​

​

​

Notional

​

Average Rate

​

Repricing

​

In Interest

​

​

Hedge Type

​

Amount

​

Received/(Paid)

​

Frequency

​

Income

Swap assets

​ ​ ​

N/A

​ ​ ​

$

64,509

​ ​ ​

6.66

%

Monthly

​ ​ ​

$

644

Swap liabilities

N/A

​

(64,509)

(6.66)

Monthly

​

(644)

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 June 30, 2026 and December 31, 2025 was $4.8 million and $4.9 million, respectively.

​

Interest Rate Hedges

​

The Company had interest rate swaps with a total notional value of $10 million and $70 million outstanding as of June 30, 2026 and 2025, respectively, 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.

​

32

Table of Contents

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 June 30, 2026 and 2025.

​

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 June 30, 2026, the Company had $15,000 of losses which resulted in an increase in interest expense. This compared to $24,000 of gains during the three months ended June 30, 2025 which resulted in a decrease in interest expense. During the six months ended June 30, 2026, the Company had $71,000 of losses which resulted in an increase in interest expense. This compared to $44,000 of gains during the six months ended June 30, 2025 which resulted in a decrease in interest expense. In the twelve months that follow June 30, 2026, the Company estimates that approximately $24,000 of losses will be reclassified as an increase to interest expense. This reclassified amount could differ from amounts actually recognized due to changes in interest rates. As of June 30, 2026, the maximum remaining length of time over which forecasted transactions are hedged is approximately six months 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 six months ended June 30, 2026 and 2025 (in thousands).

​

​	​	​	​	​	​	​	​	​
​	​	Three months ended June 30, 2026
Derivatives in Cash Flow Hedging Relationships	​	Amount Recognized in Other Comprehensive Income 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	​	$	20	​ ​ ​	Interest expense - Deposits	​ ​ ​	$	15
Total	​	$	20	​	​		$	15

​

​	​	​	​	​	​	​	​	​
​	​	Three months ended June 30, 2025
Derivatives in Cash Flow Hedging Relationships	​	Amount Recognized in Other Comprehensive Income 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	​	$	48	​ ​ ​	Interest expense - Deposits	​ ​ ​	$	(24)
Total	​	$	48	​	​		$	(24)

​

​	​	​	​	​	​	​	​	​
​	​	Six months ended June 30, 2026
Derivatives in Cash Flow Hedging Relationships	​	Amount Recognized in Other Comprehensive Income 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	​	$	101	​ ​ ​	Interest expense - Deposits	​ ​ ​	$	71
Total	​	$	101	​	​		$	71

​

33

Table of Contents

​	​	​	​	​	​	​	​	​
​	​	Six months ended June 30, 2025
Derivatives in Cash Flow Hedging Relationships	​	Amount Recognized in Other Comprehensive Income 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	​	$	17	​ ​ ​	Interest expense - Deposits	​ ​ ​	$	(44)
Total	​	$	17	​	​		$	(44)

​

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 June 30, 2026 and 2025.

​

​

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, Chief Executive Officer and Chief Financial 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

34

Table of Contents

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

At June 30, 2026, the Company had various outstanding commitments to extend credit approximating $217.3 million along with standby letters of credit of $8.8 million, compared to commitments to extend credit of $239.9 million and standby letters of credit of $8.8 million as of December 31, 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.

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 allowance for credit losses on off-balance sheet credit exposures is adjusted through the (recovery) provision 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 June 30, 2026 of $12,000 while a provision for credit losses recovery of $12,000 was recognized for the same 2025 period. For the six months ended June 30, 2026 and 2025, the Company recorded a provision for credit losses recovery of $82,000 and $720,000, 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 $255,000 at June 30, 2026 compared to $337,000 at December 31, 2025.

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 5% of the plan’s assets), mutual funds, and short-term cash equivalent instruments. The net periodic pension benefit for the three and six months ended June 30, 2026 and 2025 was as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three months ended

​

Six months ended

​

​ ​ ​

June 30,

​

June 30,

​

​

2026

​ ​ ​

2025

​ ​ ​

2026

​ ​ ​

2025

COMPONENTS OF NET PERIODIC PENSION BENEFIT:

​

​

​

​

​

​

​

​

​

​

Service cost

​

$

159

​

$

187

​

$

317

​

$

374

Interest cost

​

339

​

366

​

678

​

732

Expected return on plan assets

​

(1,075)

​

(1,040)

​

(2,149)

​

(2,080)

Net periodic pension benefit

​

$

(577)

​

$

(487)

​

$

(1,154)

​

$

(974)

​

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 accrued pension obligation, which had a positive (debit) balance of $37.7 million and $36.1 million, was reclassified to other assets on the Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025, respectively.

35

Table of Contents

The balance of the accrued pension obligation continues to be a positive value as a result of the strong return on plan assets 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 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 June 30, 2026 and December 31, 2025, 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 six months ended June 30, 2026 and 2025.

Additionally, the Company received shares of restricted common stock due to the spin-off of a portion of the issuer’s business. The shares cannot be sold or transferred and are not listed on any stock exchange. The restricted shares have no carrying value on the Company’s Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025.

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.

36

Table of Contents

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 June 30, 2026 and December 31, 2025, by level within the fair value hierarchy (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurements at June 30, 2026

​

​ ​ ​

Total

​ ​ ​

Level 1

​ ​ ​

Level 2

​ ​ ​

Level 3

Available for sale securities:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Agency

​

$

4,661

​

$

—

​

$

4,661

​

$

—

U.S. Agency mortgage-backed securities

​

​

134,559

​

​

—

​

​

134,559

​

​

—

Municipal

​

18,027

​

—

​

18,027

​

—

Corporate bonds

​

47,653

​

—

​

47,653

​

—

Trading securities:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury

​

​

3,794

​

​

—

​

​

3,794

​

​

—

Municipal

​

4,794

​

—

​

4,794

​

—

Interest rate swap asset (1)

​

3,161

​

—

​

3,161

​

—

Interest rate swap liability (2)

​

(3,183)

​

—

​

(3,183)

​

—

Interest rate hedge (2)

​

(17)

​

—

​

(17)

​

—

Risk participation agreement (2)

​

(185)

​

—

​

(185)

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurements at December 31, 2025

​

​ ​ ​

Total

​ ​ ​

Level 1

​ ​ ​

Level 2

​ ​ ​

Level 3

Equity securities (1)

​

$

183

​

$

183

​

$

—

​

$

—

Available for sale securities:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Agency

​

4,790

​

—

​

4,790

​

—

U.S. Agency mortgage-backed securities

​

​

110,856

​

​

—

​

​

110,856

​

​

—

Municipal

​

9,934

​

—

​

9,934

​

—

Corporate bonds

​

50,648

​

—

​

50,648

​

—

Trading securities:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury

​

​

3,401

​

​

—

​

​

3,401

​

​

—

Municipal

​

​

3,852

​

—

​

3,852

​

—

Interest rate swap asset (1)

​

2,614

​

—

​

2,614

​

—

Interest rate swap liability (2)

​

(2,639)

​

—

​

(2,639)

​

—

Interest rate hedge (2)

​

(118)

​

—

​

(118)

​

—

Risk participation agreement (2)

​

(303)

​

—

​

(303)

​

—

(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 June 30, 2026 and December 31, 2025, 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.

37

Table of Contents

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurements

June 30, 2026

​

Total

​

Level 1

​ ​ ​

Level 2

​ ​ ​

Level 3

Other real estate owned and repossessed assets

​

$

142

​

$

—

​

$

—

​

$

142

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurements

December 31, 2025

​ ​ ​

Total

​ ​ ​

Level 1

​ ​ ​

Level 2

​ ​ ​

Level 3

Other real estate owned and repossessed assets

​

$

216

​

$

—

​

$

—

​

$

216

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Quantitative Information About Level 3 Fair Value Measurements
​	​	​		​	Valuation	​	Unobservable	​	​	​
June 30, 2026	​ ​ ​	Fair Value		​ ​ ​	Techniques	​ ​ ​	Input	​ ​ ​	Range (Wgtd Avg)
Other real estate owned and repossessed assets	​	$	142		Appraisal of collateral (1)		Appraisal adjustments (2)		29% to 58% (38%)	​
​	​	​	​	​	​	​	Liquidation expenses	​	8% to 30% (15%)	​

​

​	​	​	​	​	​	​	​	​	​	​
​	​	Quantitative Information About Level 3 Fair Value Measurements
​	​	​		​	Valuation	​	Unobservable	​	​	​
December 31, 2025	​ ​ ​	Fair Value		​ ​ ​	Techniques	​ ​ ​	Input	​ ​ ​	Range (Wgtd Avg)
Other real estate owned and repossessed assets	​ ​ ​	$	216		Appraisal of collateral (1)		Appraisal adjustments (2)		29% to 59% (45%)	​
​	​	​	​	​	​	​	Liquidation expenses	​	0% to 30% (11%)	​

(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), which 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.

38

Table of Contents

The estimated fair values based on US GAAP measurements and recorded carrying values at June 30, 2026 and December 31, 2025 for the remaining financial instruments not required to be reported at fair value were as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​ ​ ​

Carrying

​ ​ ​

​

​

​ ​ ​

​

​

​ ​ ​

​

​

​ ​ ​

​

​

​

​

Value

​

​

Fair Value

​

​

Level 1

​

​

Level 2

​

​

Level 3

​

​

​

(In Thousands)

FINANCIAL ASSETS:

​

​

​

​

​

​

​

​

​

​

Investment securities – HTM

​

$

85,736

​

$

81,712

​

$

—

​

$

80,725

​

$

987

Loans held for sale

​

760

​

​

771

​

​

771

​

—

​

—

Loans, net of allowance for credit losses and unearned income

​

1,002,118

​

​

988,779

​

​

—

​

—

​

988,779

FINANCIAL LIABILITIES:

​

​

​

​

​

​

​

​

​

​

Deposits with stated maturities

​

​

362,812

​

​

362,443

​

​

—

​

​

—

​

​

362,443

All other borrowings (1)

​

62,983

​

62,312

​

—

​

—

​

62,312

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2025

​

​ ​ ​

Carrying

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Value

​

​ ​ ​

Fair Value

​

​ ​ ​

Level 1

​

​ ​ ​

Level 2

​

​ ​ ​

Level 3

​

​

​

(In Thousands)

FINANCIAL ASSETS:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Investment securities – HTM

​

$

72,256

​

$

68,916

​

$

—

​

$

67,936

​

$

980

Loans held for sale

​

241

​

​

244

​

​

244

​

—

​

—

Loans, net of allowance for credit losses and unearned income

​

1,019,599

​

​

1,010,336

​

​

—

​

—

​

1,010,336

FINANCIAL LIABILITIES:

​

​

​

​

​

​

​

​

​

​

Deposits with stated maturities

​

​

377,747

​

​

377,938

​

​

—

​

​

—

​

​

377,938

All other borrowings (1)

​

71,382

​

71,382

​

—

​

—

​

71,382

(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 JUNE 30, 2026 VS. THREE MONTHS ENDED JUNE 30, 2025

…..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
​	​	June 30, 2026		​	June 30, 2025
Net income (loss)	​	$	2,738	​	$	(282)	​
Diluted earnings per share	​		0.16	​		(0.02)	​
Return on average assets (annualized)	​		0.75	%		(0.08)	%
Return on average equity (annualized)	​		9.12	%		(1.02)	%

​

The Company reported second quarter 2026 net income of $2,738,000, or $0.16 per diluted common share. This performance represented a $3.0 million improvement from the second quarter of 2025 when the net loss totaled $282,000, or $0.02 per diluted common share. Record quarterly earnings were achieved in the second quarter of 2026 due to growth in total revenue and favorable asset quality trends. The increase in total revenue was primarily caused by meaningful improvement in net interest income as the second quarter 2026 net interest margin increased by 24-basis points from the prior year’s second quarter leading to a $942,000 increase in net interest income. In addition, the Company’s increased 2026 second quarter earnings reflected a lower provision for credit losses.

39

Table of Contents

…..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 second quarter of 2026 to the second quarter of 2025 (in thousands, except percentages):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​ ​ ​

Three

​ ​ ​

Three

​ ​ ​

​ ​ ​

​

​ ​ ​

​ ​ ​

​

​

months ended

​

months ended

​

​

​

​

​

​

​

June 30, 2026

​

June 30, 2025

​

Change

​

% Change

Interest income

​

$

18,099

​

$

17,689

​

$

410

2.3

%

Interest expense

​

6,763

​

7,295

​

(532)

(7.3)

​

Net interest income

​

$

11,336

​

$

10,394

​

$

942

9.1

​

Net interest margin

​

3.34

%

3.10

%

0.24

%

7.7

​

​

The Company's net interest income in the second quarter of 2026 increased by $942,000, or 9.1%, from the prior year's second quarter while the net interest margin of 3.34% for the second quarter of 2026 represented a 24-basis point improvement from the second quarter of 2025. The increase reflects controlled balance sheet growth, as both total earning assets and total deposits were at higher average levels due to the Company’s effective balance sheet management. 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 2025 favorably impacted total interest-bearing deposits and borrowings costs. In addition, the U.S. Treasury yield curve demonstrated a more traditional 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 second quarter of 2026 declined from the 2025 second quarter average by $47.2 million, or 4.4%, due to increased loan payoff activity, particularly from the commercial real estate (CRE) portfolio, which exceeded loan originations. However, total loans continue to be above the $1.0 billion threshold, averaging $1.022 billion for the second quarter of 2026. Total loan interest income decreased by $331,000, or 2.2%, in the second quarter of 2026 compared to last year’s second quarter. This decline reflects the lower average loan balance more than offsetting the benefits of a better interest rate environment in 2026, and a portion of CRE loans, that were booked during the COVID pandemic when interest rates were low, repricing upward during 2026.

Investment securities, including the available for sale, held to maturity, and trading portfolios, averaged $303.3 million for the second quarter of 2026, which was $41.8 million, or 16.0%, higher than the $261.5 million average for the second quarter of last year. Additionally, short-term investments and bank deposits were higher by $21.1 million in the second quarter of 2026. These increases reflect the higher level of loan prepayment activity, as well as the strengthening of the Company’s liquidity position 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 fund deposits. The increased level of average investment securities along with improved yields for new securities purchased caused interest income from investments to increase by $624,000, or 24.2%, for the second quarter of 2026 compared to the same period in 2025. Overall, the average balance of total interest earning assets increased from last year’s second quarter average by $15.8 million, or 1.2%, while total interest income increased by $410,000, or 2.3%, from the second quarter of 2025.

On the liability side of the balance sheet, total average deposits of $1.27 billion for the second quarter of 2026 were $29.8 million, or 2.4%, higher than the 2025 second 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 80.5% in the second quarter of 2026, 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.

40

Table of Contents

Total interest expense in the second quarter of 2026 decreased by $532,000, or 7.3%, when compared to the second quarter of 2025. Deposit interest expense decreased by $344,000, or 5.4%, despite total average interest-bearing deposits growing by $40.1 million, or 3.8%, compared to the second quarter of last year. Overall, total deposit cost (including the benefit of non-interest-bearing demand deposits which decreased slightly between years) averaged 1.92% in the second quarter of 2026, which was a 15-basis point improvement from the second quarter of 2025.

Total borrowings interest expense decreased by $188,000, or 21.2%, for the second quarter of 2026 when compared to the second quarter of 2025. The Company’s average utilization of overnight borrowed funds in the second quarter of 2026 was lower than the 2025 second quarter average level by $3.3 million, or 91.5%, due to the higher level of total average deposits. The decrease in borrowings interest expense also reflects the Federal Reserve’s 2025 action to ease monetary policy by 75-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 $37.1 million for the second quarter of 2026, which was $13.8 million, or 27.0%, lower than the $50.9 million average for the 2025 second 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 June 30, 2026 and 2025 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, municipal securities, and trading securities for the three months ended June 30, 2026 and 2025 was $51,000 and $14,000, 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.

41

Table of Contents

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​ ​ ​

2026

​ ​ ​

​

2025

​

​

​

​

​

​

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

​

$

1,022,054

​

$

14,639

​

5.68

%

​

$

1,069,207

​

$

14,940

5.55

%

Short-term investments and bank deposits

​

31,469

​

292

​

3.66

​

​

10,349

​

​

175

6.71

​

Investment securities – AFS

​

212,732

​

2,270

​

4.27

​

​

188,532

​

​

1,876

3.98

​

Investment securities – HTM

​

82,419

​

877

​

4.26

​

​

67,904

​

​

665

3.92

​

Total investment securities

​

295,151

​

3,147

​

4.27

​

​

256,436

​

​

2,541

3.96

​

Trading securities

​

​

8,128

​

​

72

​

3.59

​

​

​

5,040

​

​

47

​

3.84

​

Total interest earning assets/interest income

​

1,356,802

​

18,150

​

5.35

​

​

1,341,032

​

​

17,703

5.30

​

Non-interest earning assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

​

13,495

​

​

​

​

​

​

​

15,431

​

​

​

​

​

Premises and equipment

​

17,232

​

​

​

​

​

​

​

17,648

​

​

​

​

​

Other assets

​

93,806

​

​

​

​

​

​

​

88,637

​

​

​

​

​

Allowance for credit losses

​

(13,594)

​

​

​

​

​

​

​

(15,007)

​

​

​

​

​

TOTAL ASSETS

​

$

1,467,741

​

​

​

​

​

​

​

$

1,447,741

​

​

​

​

​

Interest bearing liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest bearing deposits:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest bearing demand

​

$

336,953

​

$

1,553

​

1.85

%

​

$

322,136

​

$

1,700

2.12

%

Savings

​

125,239

​

31

​

0.10

​

​

123,078

​

​

30

0.10

​

Money markets

​

271,584

​

1,398

​

2.06

​

​

245,971

​

​

1,292

2.11

​

Time deposits

​

369,282

​

3,082

​

3.35

​

​

371,801

​

​

3,386

3.65

​

Total interest bearing deposits

​

1,103,058

​

6,064

​

2.21

​

​

1,062,986

​

​

6,408

2.42

​

Short-term borrowings

​

306

​

3

​

3.88

​

​

3,604

​

​

43

4.79

​

Advances from Federal Home Loan Bank

​

37,146

​

409

​

4.35

​

​

50,899

​

​

555

4.37

​

Subordinated debt

​

27,000

​

264

​

3.90

​

​

27,000

​

​

264

3.90

​

Lease liabilities

​

3,778

​

23

​

2.47

​

​

4,137

​

​

25

2.45

​

Total interest bearing liabilities/interest expense

​

1,171,288

​ ​ ​

6,763

2.32

​

​

​

1,148,626

​ ​ ​

​

7,295

​

2.54

​ ​ ​

Non-interest bearing liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

Demand deposits

​

167,043

​

​

​

​

​

​

177,337

​

​

​

​

Other liabilities

​

9,048

​

​

​

​

​

​

10,839

​

​

​

​

Shareholders’ equity

​

120,362

​

​

​

​

​

​

110,939

​

​

​

​

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

​

$

1,467,741

​

​

​

​

​

​

$

1,447,741

​

​

​

​

Interest rate spread

​

​

​

​

3.03

​

​

​

​

​

​

​

2.76

Net interest income/ Net interest margin (non-GAAP)

​

​

​

​

11,387

​

3.34

%

​

​

​

​

10,408

​

3.10

%

Tax-equivalent adjustment

​

​

​

​

(51)

​

​

​

​

​

​

(14)

​

​

Net Interest Income (GAAP)

​

​

​

​

$

11,336

​

​

​

​

​

$

10,394

​

​

​

…..PROVISION FOR CREDIT LOSSES…..The Company recorded a $294,000 provision for credit losses recovery in the second quarter of 2026 after recognizing a $3.1 million provision for credit losses in the second quarter of 2025, resulting in a favorable shift of $3.4 million. The provision for credit losses recovery in the second quarter of 2026 reflected $286,000 provision recovery on loans resulting from the continuing favorable trend for historical loss rates along with a softening of reserve requirements due to the contraction in the size of the loan portfolio. In addition, a $20,000 provision recovery was recognized in the second quarter of 2026 for the investment securities portfolio primarily related to the call of a held to maturity corporate security. The large provision for credit losses in the second quarter of 2025 was necessary to resolve a large non-performing loan which also included a related $2.8 million charge-down.

42

Table of Contents

…..NON-INTEREST INCOME…..Non-interest income for the second quarter of 2026 totaled $4.6 million and increased by $471,000, or 11.5%, from the second quarter of 2025 performance. Factors contributing to the higher level of non-interest income for the quarter included:

● wealth management fees increased by $312,000, or 11.2%, due to market appreciation of customer assets as the equity markets moved to record levels in the second quarter of 2026; and

● a $118,000, or 48.4%, increase in bank owned life insurance (BOLI) revenue due to the receipt of a larger death claim in 2026.

…..NON-INTEREST EXPENSE…..Non-interest expense for the second quarter of 2026 totaled $12.8 million and increased by $1.1 million, or 9.3%, from the prior year’s second quarter. Factors contributing to the higher level of non-interest expense for the quarter included:

● a $520,000, or 57.6%, increase in professional fees due to additional expenses related to expanded consulting services provided to the Company by SB Value Partners in accordance with its consulting arrangement;

● a $336,000, or 4.7%, increase in salaries and employee benefits due primarily to annual salary increases; and

● an $81,000, or 12.4%, increase in other expense due to the recognition of workout expenses related to a loan relationship secured by an owner-occupied CRE property.

…..INCOME TAX EXPENSE…..The Company recorded income tax expense of $661,000, or an effective tax rate of 19.4%, in the second quarter of 2026. This compares to a credit for income taxes of $70,000 in the second quarter of 2025.

SIX MONTHS ENDED JUNE 30, 2026 VS. SIX MONTHS ENDED JUNE 30, 2025

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

​	​	​	​	​	​	​	​
​	​ ​ ​	Six months ended		​	Six months ended		​
​	​ ​ ​	June 30, 2026		​ ​ ​	June 30, 2025		​ ​ ​
​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​
Net income	​	$	4,532	​	$	1,626	​
Diluted earnings per share	​		0.27	​		0.10	​
Return on average assets	​		0.63	%		0.23	%
Return on average equity	​		7.58	​		2.99	​

​

For the six-month period ended June 30, 2026, the Company reported net income of $4,532,000, or $0.27 per diluted common share. This represented a 170% increase in earnings per share from the six-month period of 2025 when net income totaled $1,626,000, or $0.10 per diluted common share. An increase in total revenue was caused by meaningful improvement in net interest income for the first six months of 2026 because of effective balance sheet management. Specifically, the Company’s net interest margin increased by 24-basis points for the first six months of 2026 leading to a $1.8 million increase in net interest income which is important since it represents approximately 72% of total revenue. Additionally, improved wealth management fees contributed to growth in non-interest income. The Company’s earnings performance in the first half of 2026 was also favorably impacted by a lower provision for credit losses reflecting improvement in asset quality. Overall, the improvement in the Company’s financial performance through the first six months of 2026 exceeded earnings through the first six months of 2025 by $2.9 million, or 179%, and resulted from increased total revenue and a lower provision for credit losses which more than offset higher non-interest expense.

43

Table of Contents

Management believes that the Company is well positioned for organic growth in the second half of 2026 as a result of its strong liquidity and solid capital positions. The Company will continue to diligently focus on both revenue growth and expense control to further improve its operating efficiency

…..NET INTEREST INCOME AND MARGIN…..The following table compares the Company’s net interest income performance for the first six months of 2026 to the first six months of 2025 (in thousands, except percentages):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​ ​ ​

Six months ended

​

Six months ended

​

​ ​ ​

​

​ ​ ​

​ ​ ​

​

​ ​ ​

June 30, 2026

​ ​ ​

June 30, 2025

​ ​ ​

Change

​

% Change

Interest income

​

$

35,601

​

$

34,711

​

$

890

2.6

%

Interest expense

​

13,437

​

14,386

​

(949)

(6.6)

​

Net interest income

​

$

22,164

​

$

20,325

​

$

1,839

9.0

​

Net interest margin

​

3.30

%

3.06

%

0.24

%

7.8

​

​

The Company's net interest income for the first six months of 2026 increased by $1.8 million, or 9.0%, when compared to the first six months of 2025. The Company’s net interest margin of 3.30% for the six months of 2026 represented a 24-basis point increase. As previously discussed for the quarterly comparison, along with the sharply improved net interest margin performance, the increase reflects controlled balance sheet growth, as both total earning assets and total deposits are at higher average levels due to effective balance sheet management. 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 2025 favorably impacted total interest-bearing deposits and borrowings costs. Also, the U.S. Treasury yield curve demonstrated a more traditional steeper upward slope which favorably impacted earning asset yields. Management believes the net interest margin will continue to improve through the second half of 2026.

Similar to the trend noted for the quarterly comparison, total average loans in the first six months of 2026 declined from the 2025 six-month average by $42.3 million, or 4.0%, due to increased loan payoff activity, particularly from the CRE portfolio, which exceeded loan originations. Total loan interest income decreased by $433,000, or 1.5%, in the first six months of 2026 compared to the first six months of 2025. This decline was due to the lower average loan balance more than offsetting the benefits of a better interest rate environment in 2026, and a portion of CRE loans, that were booked during the COVID pandemic when interest rates were low, repricing upward during the first half of 2026.

Total investment securities, including the available for sale, held to maturity, and trading portfolios, averaged $291.1 million for the first six months of 2026, which was $37.0 million, or 14.6%, higher than the $254.1 million average for the first six months of 2025. Additionally, short-term investments and bank deposits were higher by $19.1 million in the first half of 2026. These increases reflect the higher level of loan prepayment activity, as well as the strengthening of the Company’s liquidity position during the fourth quarter of 2025 and throughout the first half of 2026 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 $43.5 million, or 17.0%, since December 31, 2025. The higher balances and improved yields for new securities purchased caused interest income from investments to increase by $1.1 million, or 21.3%, for the first six months of 2026 compared to last year’s first six months. Overall, through six months of 2026, the average balance of total interest earning assets increased from last year’s average by $13.7 million, or 1.0%, while total interest income increased by $890,000, or 2.6%, from the first half of 2025 due to the increased revenue contribution from the investment securities portfolio.

On the liability side of the balance sheet, total average deposits through the first six months of 2026 were $27.1 million, or 2.2%, higher when compared to the first six months of 2025 due to the Company’s successful business development efforts. Additionally, as previously mentioned, the Company’s core deposit base continued 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 decreased by $949,000, or 6.6%, for the first six months of 2026 when compared to the same time period of 2025. Deposit interest expense declined by $549,000, or 4.4%, through the first six months of 2026 despite total average interest-bearing deposits growing by $39.6 million, or 3.8%, compared to the first six months of

44

Table of Contents

last year. The decrease in deposit interest expense reflects management’s effective deposit pricing strategies along with the benefit of the Federal Reserve easing monetary policy during the final four months of 2025. Overall, total deposit cost (including the benefit of non-interest-bearing demand deposits which declined between years) averaged 1.92% in the first six months of 2026, which was a 14-basis point improvement from the first six months of 2025.

Total borrowings interest expense declined by $400,000, or 21.6%, for the first six months of 2026 when compared to the same time period of 2025. The Company’s utilization of overnight borrowed funds for the six months of 2026 was lower than the first half of 2025, resulting in the average decreasing by $4.4 million, or 88.5%, due to the higher level of total average deposits. Also, management elected not to replace the majority of maturing Federal Home Loan Bank (FHLB) term advances during the full year of 2025 and did not replace any during the first half of 2026 because of the strength of the Company’s liquidity position. Therefore, the total average balance of advances from the FHLB during the first half of 2026 decreased by $13.0 million, or 24.5%, from the same period of last year. The decrease in borrowings interest expense also reflects the Federal Reserve’s 2025 action to ease monetary policy by 75-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 six-month periods ended June 30, 2026 and 2025. For a detailed discussion of the components and assumptions included in the table, see the paragraph on page 41 before the quarterly table. The tax equivalent adjustments to interest income on loans, municipal securities, and trading securities for the six months ended June 30, 2026 and 2025 was $99,000 and $21,000, 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.

45

Table of Contents

Six months ended June 30 (In thousands, except percentages)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​ ​ ​

2026

​ ​ ​

2025

​

​

​

​

​

​

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

​

$

1,024,595

​

$

29,084

​

5.66

%

$

1,066,931

​

$

29,455

5.50

%

Short-term investments and bank deposits

​

30,165

​

550

​

3.62

​

11,085

​

​

289

5.19

​

Investment securities – AFS

​

204,147

​

4,283

​

4.20

​

185,528

​

​

3,686

3.97

​

Investment securities – HTM

​

79,275

​

1,640

​

4.14

​

66,059

​

​

1,255

3.80

​

Total investment securities

​

283,422

​

5,923

​

4.18

​

251,587

​

​

4,941

3.93

​

Trading securities

​

​

7,687

​

​

143

​

3.73

​

​

2,534

​

​

47

​

3.82

​

Total interest earning assets/interest income

​

1,345,869

​

35,700

​

5.32

​

1,332,137

​

​

34,732

5.25

​

Non-interest earning assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

​

13,733

​

​

​

​

​

​

15,599

​

​

​

​

​

Premises and equipment

​

17,315

​

​

​

​

​

​

17,822

​

​

​

​

​

Other assets

​

94,350

​

​

​

​

​

​

88,860

​

​

​

​

​

Allowance for credit losses

​

(13,516)

​

​

​

​

​

​

(14,745)

​

​

​

​

​

TOTAL ASSETS

​

$

1,457,751

​

​

​

​

​

​

$

1,439,673

​

​

​

​

​

Interest bearing liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest bearing deposits:

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest bearing demand

​

$

330,501

​

$

3,012

​

1.84

%

$

331,819

​

$

3,552

2.16

%

Savings

​

124,645

​

61

​

0.10

​

122,106

​

​

59

0.10

​

Money markets

​

261,318

​

2,627

​

2.03

​

241,888

​

​

2,480

2.07

​

Time deposits

​

373,214

​

6,283

​

3.40

​

354,249

​

​

6,441

3.67

​

Total interest bearing deposits

​

1,089,678

​

11,983

​

2.22

​

1,050,062

​

​

12,532

2.41

​

Short-term borrowings

​

577

​

12

​

4.11

​

5,005

​

​

119

4.79

​

Advances from Federal Home Loan Bank

​

39,907

​

868

​

4.32

​

52,891

​

​

1,157

4.41

​

Subordinated debt

​

27,000

​

527

​

3.90

​

27,000

​

​

527

3.90

​

Lease liabilities

​

3,823

​

47

​

2.47

​

4,172

​

​

51

2.45

​

Total interest bearing liabilities/interest expense

​

1,160,985

​ ​ ​

13,437

2.33

​

​

1,139,130

​ ​ ​

​

14,386

​

2.54

​ ​ ​

Non-interest bearing liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

Demand deposits

​

166,573

​

​

​

​

​

179,053

​

​

​

​

Other liabilities

​

9,675

​

​

​

​

​

11,661

​

​

​

​

Shareholders’ equity

​

120,518

​

​

​

​

​

109,829

​

​

​

​

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

​

$

1,457,751

​

​

​

​

​

$

1,439,673

​

​

​

​

Interest rate spread

​

​

​

​

2.99

​

​

​

​

​

​

2.71

Net interest income/ Net interest margin (non-GAAP)

​

​

​

​

22,263

​

3.30

%

​

​

​

20,346

​

3.06

%

Tax-equivalent adjustment

​

​

​

​

(99)

​

​

​

​

​

(21)

​

​

Net Interest Income (GAAP)

​

​

​

​

$

22,164

​

​

​

​

$

20,325

​

​

​

…..PROVISION FOR CREDIT LOSSES…..For the first six months of 2026, the Company recognized a $77,000 provision for credit losses recovery after recognizing a $3.0 million provision for credit losses in the first six months of 2025, resulting in a net favorable change of $3.1 million. The $2,000 provision recovery for loans in the first half of 2026 reflected a continuing favorable trend for historical loss rates along with a softening of reserve requirements due to the contraction in the size of the loan portfolio. In addition, the Company recorded an $82,000 provision recovery for unfunded commitments due to a decline in outstanding loan commitments. Both of these items were partially offset by a $7,000 provision expense for the investment securities portfolio. The provision expense for the investment securities

46

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portfolio was comprised of an increase for available for sale securities due to the creation of a partial reserve for a senior debt corporate bond and a reduction for held to maturity securities due to the call of a corporate bond.

…..NON-INTEREST INCOME…..Non-interest income for the first six months of 2026 totaled $8.5 million and increased by $317,000, or 3.9%, from the first six months of 2025 performance. Factors contributing to the higher level of non-interest income for the six-month period included:

● wealth management fees increased by $308,000, or 5.5%, which is attributed market appreciation of customer assets as the equity markets moved to record levels in the second quarter of 2026. Overall, the fair market value of wealth management assets totaled $2.8 billion at June 30, 2026 and increased by $75 million, or 2.8%, since December 31, 2025; and

● a $92,000, or 18.1%, increase in BOLI revenue resulting from the receipt of a larger death claim in 2026.

…..NON-INTEREST EXPENSE…..Non-interest expense for the first six months of 2026 totaled $25.2 million and increased by $1.7 million, or 7.2%, from the prior year’s first six months. Factors contributing to the higher level of non-interest expense for the six-month period included:

● a $1.0 million, or 63.0%, increase in professional fees due to additional expenses related to expanded consulting services provided to the Company by SB Value Partners in accordance with its consulting arrangement;

● a $338,000, or 2.4%, increase in salaries and employee benefits due primarily to annual salary increases; and

● a $155,000, or 12.3%, increase in other expense driven primarily by the recognition of additional workout expenses related to a loan relationship secured by an owner-occupied CRE property.

…..INCOME TAX EXPENSE…..The Company recorded an income tax expense of $1.1 million, or an effective tax rate of 19.3%, in the first half of 2026. This compares to an income tax expense for the first half of 2025 of $408,000, or an effective tax rate of 20.1%. 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 June 30, 2026, which increased by $8.3 million, or 0.6%, from the December 31, 2025 asset level. This change was related primarily to higher levels of investment securities and other assets which were partially offset by reduced levels of cash and cash equivalents and loans and loans held for sale. Investment securities, including held to maturity, available for sale and trading, increased by $43.5 million, or 17.0%, as the Company’s liquidity position strengthened throughout the first half of 2026 allowing more funds to be available to invest in the securities portfolio. Other assets increased $4.3 million, or 9.6%, due to increases in the positive balance of the accrued pension liability, the market value for the interest rate swaps, and prepaid expenses as well as amounts receivable from the issuers of two called investment securities. Since the excess liquidity from deposit growth was directed to the investment securities portfolio during the first half of 2026, cash and cash equivalents decreased by $22.8 million, or 44.9%. Finally, loans and loans held for sale decreased by $17.2 million, or 1.7%, due to payoff activity exceeding loan originations.

Total deposits increased by $13.2 million, or 1.1%, in the first six months of 2026. Management believes this demonstrates customer confidence as well as the strength and loyalty of the Company’s core deposit base. As of June 30, 2026, the 25 largest depositors represented 29.5% of total deposits, which increased from December 31, 2025 when it was 28.5%. As of June 30, 2026 and December 31, 2025, the estimated amount of uninsured deposits was $497.0 million and $476.2 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. FHLB term advances were reduced by $8.4 million, or 18.9%, since year-end 2025 as a result of the higher level of deposits.

The Company’s total shareholders’ equity increased by $3.8 million, or 3.2%, during the first half of 2026. The increase in capital was the result of the Company’s earnings performance during the first six months of 2026 more than

47

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offsetting its common stock dividend payments to shareholders along with the positive impact on accumulated other comprehensive loss from the revaluation of the pension obligation. In addition, capital was increased as a result of the issuance of common stock under the amended and restated consulting agreement with SB Value Partners. These increases were partially offset by the decline in the market value of the available for sale investment securities portfolio which had an unfavorable impact on accumulated other comprehensive loss.

The Bank continues to be considered well capitalized for regulatory purposes with a community bank leverage ratio of 9.46% at June 30, 2026. See the discussion of the capital requirements under the Capital Resources section below. As of June 30, 2026, the Company’s book value per common share was $7.26 and its tangible book value per common share was $6.45⁽¹⁾. In addition, the Company’s equity to assets ratio was 8.42% and its tangible common equity to tangible assets ratio was 7.55%⁽¹⁾ at June 30, 2026. The tangible common equity ratio increased by 21-basis points when compared to December 31, 2025.

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

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

​

​	​	​	​	​	​	​	​	​	​	​
​	​ ​ ​	June 30,		​ ​ ​	December 31,		​ ​ ​	June 30,		​
​	​	2026		​	2025		​	2025		​
Total accruing loan delinquency		$	4,402		$	2,329		$	2,528	​
Total non-accrual loans		​	7,682		​	8,292		​	14,141	​
Total non-performing loans(1)		​	7,738		​	8,302		​	15,161	​
Accruing loan delinquency, as a percentage of total loans, net of unearned income		​	0.43	%	​	0.23	%	​	0.24	%
Non-accrual loans, as a percentage of total loans, net of unearned income		​	0.76		​	0.80		​	1.32	​
Non-performing loans, as a percentage of total loans, net of unearned income(1)		​	0.76		​	0.80		​	1.42	​
Non-performing loans as a percentage of total assets(1)		​	0.53		​	0.57		​	1.05	​
As a percent of average loans, net of unearned income:		​	​		​	​		​	​	​
Annualized net charge-offs		​	0.05		​	0.46		​	0.56	​
Annualized provision for credit losses - loans		​	—		​	0.39		​	0.59	​
Total classified loans (loans rated substandard or doubtful)(2)	​	$	9,481	​	$	11,305	​	$	21,170	​

⁽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 increase in accruing loan delinquency since year-end 2025 was attributable to a higher level of delinquency within the non-owner occupied commercial real estate retail loan class which was partially offset by a decrease in residential mortgage loan delinquency. Non-performing loans decreased from $8.3 million at December 31, 2025 to $7.7 million at June 30, 2026 due to the partial charge-down of a CRE loan secured by retail property as well as paydown activity on a large non-accrual loan relationship. Risk rating upgrade activity and, to a lesser extent, the aforementioned charge-down and paydown activity contributed to the decrease in classified loans. Specifically, classified loans decreased $1.8 million, or 16.1%, from December 31, 2025 and totaled $9.5 million at June 30, 2026.

Non-performing loans represented 0.76% of total loans as of June 30, 2026. The Company recognized net loan charge-offs of $230,000, or 0.05% of total average loans, in the first six months of 2026 compared to net loan charge-offs of $3.0 million, or 0.56% of total average loans, in the first six months of 2025.

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 June 30, 2026, the 25 largest credits represented 25.8% of total loans outstanding, which increased from December 31, 2025 when it was 24.6%.

48

Table of Contents

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.

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 335% as of June 30, 2026. It should be noted that this ratio declined from 352% at December 31, 2025 due to the growth of total regulatory capital in the first six months of 2026 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 50.0% and 50.4% of total loans as of June 30, 2026 and December 31, 2025, 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.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2026

​

​

Commercial

​

Commercial

​

​

​

​

​

​

​

Real Estate

​

Real Estate

​

Other Commercial

​

​

​

​

​

(Non-Owner Occupied) -

​

(Non-Owner Occupied) -

​

Real Estate

​

​

​

​

​ ​ ​

Retail

​ ​ ​

Multi-Family

​ ​ ​

(Non-Owner Occupied)

​ ​ ​

Total

​

​

(In thousands)

1-4 unit residential

​

$

—

​

$

—

​

$

24,251

​

$

24,251

Multi-family

​

—

​

105,694

​

—

​

105,694

Mixed use - apartments & retail/office

​

​

—

​

​

16,028

​

​

—

​

​

16,028

Retail strip plaza

​

​

62,264

​

​

—

​

​

—

​

​

62,264

Mall

​

​

3,022

​

​

—

​

​

—

​

​

3,022

Major shopping center with anchor tenants

​

​

25,107

​

​

—

​

​

—

​

​

25,107

Commercial office - urban

​

​

—

​

​

—

​

​

10,462

​

​

10,462

Commercial office - suburban

​

​

—

​

​

—

​

​

19,265

​

​

19,265

Hotel/motel

​

—

​

—

​

35,210

​

35,210

Retail/service shops

​

77,653

​

—

​

—

​

77,653

Personal care/hospital/medical office

​

—

​

—

​

25,335

​

25,335

Manufacturing/warehouse

​

—

​

—

​

88,426

​

88,426

Other

​

—

​

—

​

1,024

​

1,024

Land acquisition and development

​

—

​

—

​

13,797

​

13,797

Total

​

$

168,046

​

$

121,722

​

$

217,770

​

$

507,538

​

49

Table of Contents

…..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):

​	​	​	​	​	​	​	​	​	​	​
​	​ ​ ​	June 30,		​ ​ ​	December 31,		​ ​ ​	June 30,
​	​	2026		​	2025		​	2025
Allowance for credit losses - loans	​	$	12,896	​	$	13,128	​	$	14,060	​
Allowance for credit losses - loans as a percentage of each of the following:	​		​	​		​	​	​	​	​
total loans, net of unearned income	​		1.27	%		1.27	%	​	1.32	%
total non-accrual loans	​		167.87	​		158.32	​	​	99.43	​
total non-performing loans	​		166.66	​		158.13	​	​	92.74	​
Allowance for credit losses - securities	​	$	97	​	$	90	​	$	1,085	​
Allowance for credit losses - unfunded loan commitments	​	​	255	​		337	​	​	246	​

​

The allowance for loan credit losses decreased since December 31, 2025 by $232,000, or 1.8%, to $12.9 million at June 30, 2026. The reduction in the allowance balance was the result of an improvement in asset quality and a decrease in outstanding loan balances since year-end 2025. Overall, the Company continues to maintain solid coverage of total loans as the allowance for loan credit losses provided 1.27% coverage of total loans at June 30, 2026. Additionally, at June 30, 2026, the allowance for loan credit losses provided 167% coverage of non-performing loans.

​

The allowance for credit losses on the investment securities portfolio was comprised of $30,000 on available for sale (AFS) securities and $67,000 on held to maturity (HTM) securities as of June 30, 2026. This compares to no reserve on AFS securities and $90,000 on HTM securities as of December 31, 2025. The increase in the reserve on AFS securities reflects a partial reserve established for a senior debt corporate bond that was deemed to be credit impaired during the first half of 2026. The decrease in the reserve on HTM securities reflects the call of a corporate bond. The decrease in the allowance for credit losses on unfunded commitments since year-end 2025 resulted primarily from a decline in outstanding loan commitments.

​

…..LIQUIDITY…..The Company’s liquidity position continued to strengthen during the first half of 2026 due to loan prepayment activity as well as deposit growth. Specifically, total average deposits were $27.1 million, or 2.2%, higher when compared to the 2025 first six-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 June 30, 2026, total deposits grew by $13.2 million, or 1.1%, since December 31, 2025, 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 and bank deposits grew in the first six months of 2026 compared to the first six months of last year, increasing by $19.1 million. Advances from the FHLB averaged $39.9 million in the first half of 2026 which was $13.0 million, or 24.5%, lower than the $52.9 million average in the first half of 2025. 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 2026 has been lower than the 2025 level. Total short-term borrowings averaged $577,000 for the first six months of 2026 after averaging $5.0 million for the first six months of 2025. 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 security yields improved, making purchases so far in 2026 more attractive. In addition, loan pipelines are currently at a typical level. Total average loans in the first six months of 2026 were lower than the 2025 first six-month average by $42.3 million, or 4.0%. We strive to operate our loan to deposit ratio in a range of 80% to

50

Table of Contents

100%. The Company’s loan to deposit ratio averaged 80.5% in the second quarter of 2026, 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 decreased by $22.8 million from December 31, 2025, to $28.0 million at June 30, 2026, due to $25.8 million of net cash used in investing activities and $759,000 of net cash used in operating activities which more than offset $3.7 million of net cash provided by financing activities. Within investing activities, cash advanced for new loans originated totaled $62.4 million while cash received from loan principal payments was $80.0 million leading to a net decrease in loans of $17.6 million. Additionally, investment security purchases exceeded maturities resulting in a net increase in securities of $43.1 million. Within financing activities, total borrowings on advances from FHLB decreased by $8.4 million while total deposits increased by $13.2 million.

​

The holding company had $6.2 million of cash, short-term investments, and investment securities at June 30, 2026, which represented a $801,000 increase from the holding company’s cash position since December 31, 2025. Dividend payments from our subsidiary provide ongoing cash to the holding company. At June 30, 2026, our subsidiary Bank had $10.9 million of cash available for immediate dividends to the holding company under applicable regulatory formulas. Additionally, the holding company has 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 June 30, 2026. 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 $28.0 million and $50.9 million at June 30, 2026 and December 31, 2025, 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 June 30, 2026, the Company had $268 million of overnight borrowing availability at the FHLB, $41 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 community bank leverage ratio (CBLR) is an alternative capital framework available to certain community banking organizations, consistent with section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. In order to qualify for the CBLR, the following criteria must be met:

● a leverage ratio of greater than 9%. It should be noted that effective July 1, 2026, the CBLR framework was revised to lower the minimum leverage ratio to 8%;

● less than $10 billion in average total consolidated assets;

● off-balance sheet exposures of 25% or less of total consolidated assets;

● trading assets plus trading liabilities of 5% or less of total consolidated assets; and

● not subject to the advanced approaches capital framework.

​

51

Table of Contents

Based on evaluation of the criteria above, the Bank is considered a qualifying community banking organization and has elected to opt into the CBLR framework. The following table summarizes the calculation of the Bank’s tier 1 leverage ratio, calculated as tier 1 capital divided by average total consolidated assets, as of June 30, 2026 and December 31, 2025 (in thousands, except ratios).

​	​	​	​	​	​	​	​
​	June 30,		​	​	December 31,		​
​	2026		​	​	2025		​
Tier 1 capital	$	138,255	​	​	$	134,815	​
Average total consolidated assets		1,461,351	​		​	1,446,382	​
Community bank leverage ratio		9.46	%		​	9.32	%

​

Our current 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 $7.26 per common share and a tangible book value of $6.45⁽¹⁾ per common share on June 30, 2026. In addition, our common equity ratio was 8.42% and our tangible common equity ratio was 7.55%⁽¹⁾. At June 30, 2026, the Company had approximately 17.0 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	​	(3.8)	%	3.3	%
100 bp increase		(1.8)		3.3	​
100 bp decrease		1.2		(5.7)	​
200 bp decrease		0.7		(15.6)	​

​

The Company believes that its overall interest rate risk position is well controlled. The fed funds rate was unchanged from year-end 2025 as the Federal Reserve has not taken further action to change interest rates so far in 2026. As of June 30, 2026, the fed funds rate was at a targeted range of 3.50% to 3.75%.

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, the Company has effectively utilized interest rate swaps and hedges 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. The interest rate hedges fix the cost of certain deposits that are indexed and move with short-term interest rates which reduces the Company’s negative variability of net interest income in a rising interest rate environment. 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 was slightly positive in the downward rate scenarios as the Company has marginally more exposure to short-term liabilities repricing downward to a greater extent than assets.

The market value of portfolio equity increases 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.

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…..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 $217.3 million and standby letters of credit of $8.8 million as of June 30, 2026. 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 June 30, 2026 and December 31, 2025 (in thousands, except share and ratio data):

​	​	​	​	​	​	​
​	June 30,		​ ​ ​	December 31,		​ ​ ​
​	2026		​	2025		​
Total shareholders’ equity	$	123,084		$	119,312
Less: Intangible assets		13,658			13,667
Tangible common equity		109,426			105,645
Total assets		1,462,143			1,453,813
Less: Intangible assets		13,658			13,667
Tangible assets	​	1,448,485	​	​	1,440,146	​
Tangible common equity ratio (non-GAAP)		7.55	%		7.34	%
Total shares outstanding		16,964,267	​		16,522,267	​
Tangible book value per share (non-GAAP)	$	6.45	​	$	6.39	​

​

…..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 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

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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 — (Recovery) provision 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 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 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 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.

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. Loans, or portions thereof, are charged-off against the ACL when they are deemed uncollectible.

​

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 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.

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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.

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. The Company enters into offsetting positions to minimize interest rate and equity risk to the Company. These derivative financial instruments are reported at fair value with any resulting gain or loss recorded in current period earnings in amounts that offset. These instruments and their offsetting positions are recorded in other assets and other liabilities on the Consolidated Balance Sheets.

…..FORWARD LOOKING STATEMENT…..

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

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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 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; (xv) unanticipated effects to our banking platform, including risks and unanticipated costs related to a core system migration; and (xvi) 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 President, Chief Executive Officer and 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 June 30, 2026, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the President, Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of June 30, 2026 are effective.

(b) Changes in Internal Controls. Effective June 19, 2026, AmeriServ Financial, Inc. migrated to a new core banking system. The Company designed new controls and modified existing controls as part of this system migration project. While the implementation of the new core banking system required adjustments to workflows and control design, management has monitored the transition closely and concluded that these changes did not adversely affect and are not reasonably likely to materially affect the Company’s internal controls over financial reporting (as defined in Rule 13a-15(f)).

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

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Item 4.   Mine Safety Disclosures

Not applicable

Item 5.   Other Information

Rule 10b5-1 Trading Plans

During the quarter ended June 30, 2026, 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.
32.1	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 June 30, 2026, 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: August 14, 2026	/s/ Jeffrey A. Stopko
​	Jeffrey A. Stopko
​	President, Chief Executive Officer & Chief Financial Officer
​	​
Date: August 14, 2026	/s/ Jessica L. Johnson
​	Jessica L. Johnson
​	Senior Vice President & Chief Accounting Officer

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​

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