First
Quarter
2026
First
Quarter
2025
$ Change
% Change
Net income
$
1,794,000
$
1,908,000
$
(114,000)
(6.0) %
Diluted earnings per share
$
0.11
$
0.12
$
(0.01)
(8.3) %
Jeffrey A. Stopko, President and Chief Executive Officer, commented on the first quarter 2026 financial results: "AmeriServ Financial achieved positive operating leverage in the first quarter of 2026 as our total revenue increased at a faster rate than our total non-interest expense. The increase in total revenue was caused by meaningful improvement in our net interest income because of effective balance sheet management. Specifically, our net interest margin increased by 25-basis points from the first quarter of 2025 leading to an $897,000 increase in net interest income, which is important since this category represents approximately 73% of our total revenue. Our Company is well positioned for organic growth in 2026 as we have strong liquidity and solid capital. We will continue to diligently focus on both revenue growth and expense control to further improve the Company's operating efficiency in 2026."
All first quarter financial performance metrics within this document are compared to the first quarter of 2025 unless otherwise noted.
Net interest income in the first quarter of 2026 increased by $897,000, or 9.0%, when compared to the first quarter of 2025. The Company's net interest margin of 3.26% for the first quarter of 2026 represents a 25-basis point improvement from the first quarter of 2025. Along with the significantly improved net interest margin performance, the increase also reflects controlled balance sheet growth, as both total earning assets and total deposits are at higher average levels due to our effective balance sheet management and business development strategies. This, combined with effective pricing strategies, resulted in both the total earning asset yield and cost of interest-bearing funds improving between years. The Federal Reserve's action to lower short-term interest rates during the final four months of 2025 favorably impacted total interest-bearing deposits and borrowings costs. Also, while the U.S. Treasury yield curve is relatively flat on the short end, yields in the mid to long end of the curve are higher and demonstrate a steeper upward slope which favorably impacted earning asset yields. Management believes the net interest margin will continue to improve as we move through 2026 given the effective execution of our strategy. Non-interest expense increased in the first quarter of 2026 compared to last year's first quarter while non-interest income decreased compared to the first quarter of 2025. The first quarter provision for credit losses in 2026 was at a normal level but compared unfavorably to a credit recognized for the provision in the first quarter of last year. Overall, the Company's earnings performance for the first quarter of 2026 compares unfavorably to the first quarter of 2025 by $114,000, or 6.0%, as the improvement in net interest income was more than offset by higher total non-interest expense, the higher provision for credit losses and the lower level of non-interest income.
Total investment securities averaged $271.6 million for the first quarter of 2026, which was $24.9 million, or 10.1%, higher than the $246.7 million average for the first quarter of 2025. Additionally, overnight short-term investments were higher by $17.0 million in the first quarter of 2026. These increases reflect a higher level of loan prepayment activity as well as our liquidity position strengthening throughout 2025 and the first quarter of 2026 due to deposit growth. Therefore, more funds were available to invest in the securities portfolio during a time when security yields improved, making purchases more attractive. As a result, the securities portfolio grew by $31.6 million, or 13.7%, since March 31, 2025. New investment security purchases were also necessary to replace cash flow from maturing securities to maintain appropriate balances for pledging purposes related to public fund deposits. The higher balances and improved yields for new securities purchases caused interest income from investments to increase by $582,000, or 23.2%, for the first quarter of 2026 compared to last year's first quarter.
Total average loans for the first quarter of 2026 declined from the first quarter of 2025 by $37.5 million, or 3.5%, due to increased loan payoff activity, particularly from the commercial real estate (CRE) portfolio, during the second half of 2025 and exceeded loan originations. Total loans continue to be above the $1.0 billion threshold, averaging $1.027 billion for the first quarter of 2026. Total loan interest income in the first quarter of 2026 declined compared to the first quarter of 2025 as the lower average loan balance more than offset the more favorable 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 quarter of 2026. Total loan interest income decreased by $102,000, or 0.7%, when compared to the first quarter of 2025. Overall, the first quarter of 2026 average balance of total interest earning assets increased from last year's first quarter average by $11.7 million, or 0.9%, while total interest income increased by $480,000, or 2.8%, from the first quarter of 2025.
On the liability side of the balance sheet, total average deposits for the first quarter of 2026 were $24.5 million, or 2.0%, higher when compared to the first quarter average of 2025 due to the Company's successful business development efforts. Additionally, the Company's core deposit base continues to demonstrate the strength and stability that it has for many years due to customer loyalty and confidence in AmeriServ Financial Bank. The Company does not utilize brokered deposits as a funding source. The loan to deposit ratio averaged 82.7% in the first quarter of 2026, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support our customers and our community during times of economic volatility.
Total interest expense decreased favorably by $417,000, or 5.9%, for the first quarter of 2026 when compared to the same time period of 2025. Deposit interest expense decreased by $205,000, or 3.3%, despite total average interest-bearing deposits growing by $39.2 million, or 3.8%, compared to the first quarter of 2025. 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. This reduction in interest-bearing deposit costs contributed to the previously mentioned improvement in the net interest margin. Overall, total deposit cost (including the benefit of non-interest-bearing demand deposits) averaged 1.93% for the first quarter of 2026, which is an 11-basis point improvement from the first quarter of 2025.
Total borrowings interest expense decreased by $212,000, or 21.9%, for the first quarter of 2026. The Company's utilization of overnight borrowed funds during the first quarter of 2026 was lower than it was for the first quarter of 2025, resulting in the first quarter average decreasing by $5.6 million, or 86.7%, 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 quarter 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 quarter of 2026 decreased by $12.2 million, or 22.2%, from last year's first quarter. 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 Company recorded a $217,000 provision for credit losses in the first quarter of 2026 after recording a $97,000 provision recovery in the first quarter of 2025, resulting in an unfavorable shift of $314,000. The provision for credit losses in the first quarter reflects a $284,000 provision for credit losses on loans resulting from updates to both historical loss rates and qualitative adjustments and an additional $27,000 of provision expense was recognized to create a partial reserve for a senior debt corporate investment within the securities portfolio. Both of these items were partially offset by a $94,000 provision recovery related to unfunded commitments because of a decline in outstanding loan commitments.
Non-performing assets were relatively stable since December 31, 2025, increasing by $204,000, or 2.4%, and totaling $8.7 million. The increase reflects the transfer of a $500,000 senior debt corporate security into non-accrual status that became impaired during the first quarter of 2026. The transfer of this security into non-accrual status more than offset a $296,000 reduction to non-performing loans since year end 2025. Non-performing loans represented 0.78% of total loans at March 31, 2026 and decreased by 2-basis points from December 31, 2025. The Company recognized net loan charge-offs of $206,000, or 0.08% of total average loans, in the first quarter of 2026 compared to net loan charge-offs of $64,000, or 0.02% of total average loans, in the first quarter of 2025. Overall, the Company's allowance for loan credit losses provided 165% coverage of non-performing loans and represented 1.28% of total loans at March 31, 2026.
Total non-interest income in the first quarter of 2026 decreased by $154,000, or 3.7%, from the prior year's first quarter. Other income is lower by $110,000, or 15.9%, after a net gain was recognized from two separate sales in the first quarter of 2025 of a Bank branch office and an OREO property. There was no such sale activity in the first quarter of 2026. Also, contributing to the unfavorable comparison for total non-interest income was the Company recognizing a $63,000 loss on trading securities from a $7.2 million trading account that did not exist in the first quarter of 2025. Partially offsetting these unfavorable items were increases to service charges on deposit accounts by $27,000, or 9.8%, because of the deposit growth the Company experienced and a $22,000, or 78.6%, increase in mortgage banking revenue due to increased production in 2026. Finally, wealth management fees are relatively consistent with the level achieved in the first quarter of 2025. Overall, the fair market value of wealth management assets totaled $2.6 billion at March 31, 2026 and decreased by $68.0 million, or 2.5%, since December 31, 2025.
Total non-interest expense in the first quarter of 2026 increased by $595,000, or 5.1%, when compared to the first quarter of 2025. Professional fees increased by $480,000, or 70.1%, due to additional expenses related to the amended and restated consulting agreement with SB Value Partners that expands the nature and scope of the consulting services provided to the Company. Details of this revised agreement were provided in the Company's Report on Form 8-K filed on January 7, 2026. Also contributing to the increase in professional fees were higher costs for recruitment and outside professional services. Other expenses were $108,000, or 9.5%, higher due to the bank having to recognize additional workout expenses related to a loan relationship secured by an owner-occupied CRE property. The additional costs related to this property were the sole reason for the unfavorable quarter over quarter comparison for other expenses. Slightly offsetting the higher level of expense was reduced FDIC deposit insurance expense by $30,000, or 12.5%.
The Company recorded income tax expense of $426,000 in the first quarter of 2026, or an effective tax rate of 19.2%, which compares to income tax expense of $478,000, or an effective tax rate of 20.0%, in the first quarter of 2025.
The Company had total assets of $1.47 billion, shareholders' equity of $120.7 million, a book value of $7.12 per common share and a tangible book value of $6.31(1) per common share on March 31, 2026. Book value per common share increased by $0.42, or 6.3%, and tangible book value per common share also increased by $0.43, or 7.3%, over the past 12 months. The Company and Bank continued to maintain strong capital ratios that exceed the regulatory defined well-capitalized status as of March 31, 2026.
QUARTERLY COMMON STOCK DIVIDEND
The Company's Board of Directors declared a $0.03 per share quarterly common stock cash dividend. The cash dividend is payable May 18, 2026, to shareholders of record on May 4, 2026. This cash dividend represents a 3.0% annualized yield using the April 17, 2026 closing stock price of $3.94 and a 27.3% payout ratio based upon 2026 first quarter earnings.
Forward-Looking Statements
This press release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. Such statements are not historical facts and include expressions about management's confidence and strategies and management's current views and expectations about new and existing programs and products, relationships, opportunities, technology, market conditions, dividend program, and future payment obligations. These statements may be identified by such forward-looking terminology as "continuing," "expect," "look," "believe," "anticipate," "may," "will," "should," "projects," "strategy," or similar statements. Actual results may differ materially from such forward-looking statements, and no reliance should be placed on any forward-looking statement. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, changes in the financial markets, the level of inflation, and the direction of interest rates; volatility in earnings due to certain financial assets and liabilities held at fair value; competition levels; loan and investment prepayments differing from our assumptions; insufficient allowance for credit losses; a higher level of loan charge-offs and delinquencies than anticipated; material adverse changes in our operations or earnings; a decline in the economy in our market areas; changes in relationships with major customers; changes in effective income tax rates; higher or lower cash flow levels than anticipated; inability to hire or retain qualified employees; a decline in the levels of deposits or loss of alternate funding sources; a decrease in loan origination volume or an inability to close loans currently in the pipeline; changes in laws and regulations; adoption, interpretation and implementation of accounting pronouncements; operational risks, including the risk of fraud by employees, customers or outsiders; unanticipated effects to our banking platform, including risks and unanticipated costs related to a core system migration; developments in technology, such as artificial intelligence, and our ability to incorporate innovative technologies in our business and provide products and services that satisfy our customers' expectations for convenience and security; and the inability to successfully implement or expand new lines of business or new products and services. These forward-looking statements involve risks and uncertainties that could cause AmeriServ's results to differ materially from management's current expectations. Such risks and uncertainties are detailed in AmeriServ's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2025. Forward-looking statements are based on the beliefs and assumptions of AmeriServ's management and on currently available information. The statements in this press release are made as of the date of this press release, even if subsequently made available by AmeriServ on its website or otherwise. AmeriServ undertakes no responsibility to publicly update or revise any forward-looking statement.
(1)
Non-GAAP Financial Information. See "Reconciliation of Non-GAAP Financial Measures" at end of release.
AMERISERV FINANCIAL, INC.
NASDAQ: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA
March 31, 2026
(Dollars in thousands, except per share and ratio data)
(Unaudited)
2026
1QTR
PERFORMANCE DATA FOR THE PERIOD:
Net income (loss)
$
1,794
PERFORMANCE PERCENTAGES (annualized):
Return on average assets
0.50
%
Return on average equity
6.03
Return on average tangible common equity (1)
6.80
Net interest margin
3.26
Net charge-offs (recoveries) as a percentage of average loans
0.08
Efficiency ratio (3)
83.26
EARNINGS PER COMMON SHARE:
Basic
$
0.11
Average number of common shares outstanding
16,927
Diluted
$
0.11
Average number of common shares outstanding
16,928
Cash dividends paid per share
$
0.03
2025
1QTR
2QTR
3QTR
4QTR
FULL YEAR 2025
PERFORMANCE DATA FOR THE PERIOD:
Net income (loss)
$
1,908
$
(282)
$
2,544
$
1,442
$
5,612
PERFORMANCE PERCENTAGES (annualized):
Return on average assets
0.54
%
(0.08)
%
0.70
%
0.39
%
0.39
%
Return on average equity
7.12
(1.02)
9.06
4.96
5.03
Return on average tangible common equity (1)
8.14
(1.16)
10.32
5.63
5.73
Net interest margin
3.01
3.10
3.27
3.23
3.15
Net charge-offs (recoveries) as a percentage of average loans
0.02
1.09
(0.01)
0.74
0.46
Efficiency ratio (3)
83.67
80.73
77.55
84.14
81.47
EARNINGS PER COMMON SHARE:
Basic
$
0.12
$
(0.02)
$
0.15
$
0.09
$
0.34
Average number of common shares outstanding
16,519
16,519
16,519
16,521
16,520
Diluted
$
0.12
$
(0.02)
$
0.15
$
0.09
$
0.34
Average number of common shares outstanding
16,519
16,519
16,519
16,562
16,530
Cash dividends paid per share
$
0.03
$
0.03
$
0.03
$
0.03
$
0.12
AMERISERV FINANCIAL, INC.
NASDAQ: ASRV
--CONTINUED--
(Dollars in thousands, except per share, statistical, and ratio data)
(Unaudited)
2026
1QTR
FINANCIAL CONDITION DATA AT PERIOD END:
Assets
$
1,472,654
Short-term investments/overnight funds
41,039
Investment securities, net of allowance for credit losses - securities
263,085
Trading securities
7,164
Total loans and loans held for sale, net of unearned income
1,031,482
Allowance for credit losses - loans
13,206
Intangible assets
13,662
Deposits
1,269,950
Short-term and FHLB borrowings
40,895
Subordinated debt, net
26,778
Shareholders' equity
120,703
Non-performing assets
8,722
Tangible common equity ratio (1)
7.34
%
Total capital (to risk weighted assets) ratio
13.47
PER COMMON SHARE:
Book value
$
7.12
Tangible book value (1)
6.31
Market value (2)
3.62
Wealth management assets, fair market value (4)
$
2,613,708
STATISTICAL DATA AT PERIOD END:
Full-time equivalent employees
299
Branch locations
16
Common shares outstanding
16,964,267
2025
1QTR
2QTR
3QTR
4QTR
FINANCIAL CONDITION DATA AT PERIOD END:
Assets
$
1,431,524
$
1,448,733
$
1,461,494
$
1,453,813
Short-term investments/overnight funds
3,865
4,805
39,098
39,418
Investment securities, net of allowance for credit losses - securities
231,454
237,320
236,740
248,484
Trading securities
0
