10-Q

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

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

For the period ended June 30, 2015

	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

 

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes x No o

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

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company x

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

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 3, 2015
Common Stock, par value $0.01	18,870,811

 

AmeriServ Financial, Inc.
 
INDEX

	Page No.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited) — June 30, 2015 and December 31, 2014		1
Consolidated Statements of Operations (Unaudited) — Three and six months ended June 30, 2015 and 2014		2
Consolidated Statements of Comprehensive Income (Unaudited) — Three and six months ended June 30, 2015 and 2014		4
Consolidated Statements of Cash Flows (Unaudited) — Six months ended June 30, 2015 and 2014		5
Notes to Unaudited Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		30
Item 3. Quantitative and Qualitative Disclosure About Market Risk		44
Item 4. Controls and Procedures		44
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		45
Item 1A. Risk Factors		45
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		45
Item 3. Defaults Upon Senior Securities		45
Item 4. Mine Safety Disclosures		45
Item 5. Other Information		45
Item 6. Exhibits		45

i

Item 1. Financial Statements

AmeriServ Financial, Inc.

CONSOLIDATED BALANCE SHEETS
(In thousands except shares)
(Unaudited)

	June 30, 2015			December 31, 2014
ASSETS
Cash and due from depository institutions	$	16,748		$	23,780
Interest bearing deposits		2,957			2,952
Short-term investments in money market funds		6,886			6,140
Total cash and cash equivalents		26,591			32,872
Investment securities:
Available for sale		122,868			127,110
Held to maturity (fair value $19,776 on June 30, 2015 and $20,213 on December 31, 2014)		19,580			19,840
Loans held for sale		4,393			5,051
Loans		862,485			827,634
Less: Unearned income		635			554
Allowance for loan losses		9,717			9,623
Net loans		852,133			817,457
Premises and equipment, net		12,565			13,012
Accrued interest income receivable		3,310			3,127
Goodwill		11,944			11,944
Bank owned life insurance		37,558			37,417
Net deferred tax asset		8,969			9,548
Federal Home Loan Bank stock		5,180			4,048
Federal Reserve Bank stock		2,125			2,125
Other assets		5,718			5,712
TOTAL ASSETS	$	1,112,934		$	1,089,263
LIABILITIES
Non-interest bearing deposits	$	161,874		$	167,551
Interest bearing deposits		701,028			702,330
Total deposits		862,902			869,881
Short-term borrowings		63,430			38,880
Advances from Federal Home Loan Bank		46,000			42,000
Guaranteed junior subordinated deferrable interest debentures		13,085			13,085
Total borrowed funds		122,515			93,965
Other liabilities		10,212			11,010
TOTAL LIABILITIES		995,629			974,856
SHAREHOLDERS’ EQUITY
Preferred stock, no par value; $1,000 per share liquidation preference; 2,000,000 shares authorized; 21,000 shares issued and outstanding on June 30, 2015 and December 31, 2014		21,000			21,000
Common stock, par value $0.01 per share; 30,000,000 shares authorized; 26,479,630 shares issued and 18,861,811 outstanding on June 30, 2015; 26,402,707 shares issued and 18,784,888 outstanding on December 31, 2014		265			264
Treasury stock at cost, 7,617,819 shares on June 30, 2015 and December 31, 2014		(74,829	)		(74,829	)
Capital surplus		145,411			145,256
Retained earnings		31,926			29,618
Accumulated other comprehensive loss, net		(6,468	)		(6,902	)
TOTAL SHAREHOLDERS’ EQUITY		117,305			114,407
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,112,934		$	1,089,263

 
 
See accompanying notes to unaudited consolidated financial statements.

1

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
INTEREST INCOME
Interest and fees on loans	$	9,480	$	8,939	$	18,936	$	17,971
Interest bearing deposits		5		1		7		2
Short-term investments in money market funds		1		2		3		4
Investment securities:
Available for sale		777		905		1,690		1,829
Held to maturity		146		136		296		272
Total Interest Income		10,409		9,983		20,932		20,078
INTEREST EXPENSE
Deposits		1,171		1,240		2,345		2,451
Short-term borrowings		23		5		33		24
Advances from Federal Home Loan Bank		135		74		260		134
Guaranteed junior subordinated deferrable interest debentures		280		280		560		560
Total Interest Expense		1,609		1,599		3,198		3,169
NET INTEREST INCOME		8,800		8,384		17,734		16,909
Provision for loan losses		200		—		450		—
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		8,600		8,384		17,284		16,909
NON-INTEREST INCOME
Trust and investment advisory fees		2,135		1,948		4,191		3,980
Service charges on deposit accounts		429		501		848		979
Net gains on sale of loans		225		171		416		272
Mortgage related fees		109		160		224		277
Net realized gains on investment securities		28		120		28		177
Bank owned life insurance		171		184		534		371
Other income		595		554		1,163		1,114
Total Non-Interest Income		3,692		3,638		7,404		7,170
NON-INTEREST EXPENSE
Salaries and employee benefits		5,944		6,107		12,017		12,421
Net occupancy expense		718		717		1,559		1,556
Equipment expense		480		494		946		964
Professional fees		1,275		1,464		2,486		2,772
Supplies, postage and freight		175		187		353		370
Miscellaneous taxes and insurance		287		312		584		608
Federal deposit insurance expense		164		154		331		314
Other expense		1,196		1,185		2,373		2,353
Total Non-Interest Expense		10,239		10,620		20,649		21,358

 
 
See accompanying notes to unaudited consolidated financial statements.

2

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS – (continued)
(In thousands, except per share data)
(Unaudited)

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
PRETAX INCOME		2,053		1,402		4,039		2,721
Provision for income tax expense		632		423		1,249		812
NET INCOME		1,421		979		2,790		1,909
Preferred stock dividends		52		52		105		105
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	1,369	$	927	$	2,685	$	1,804
PER COMMON SHARE DATA:
Basic:
Net income	$	0.07	$	0.05	$	0.14	$	0.10
Average number of shares outstanding		18,859		18,795		18,855		18,790
Diluted:
Net income	$	0.07	$	0.05	$	0.14	$	0.10
Average number of shares outstanding		18,941		18,936		18,923		18,920
Cash dividends declared	$	0.01	$	0.01	$	0.02	$	0.02

 
 
See accompanying notes to unaudited consolidated financial statements.

3

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
COMPREHENSIVE INCOME
Net income	$	1,421		$	979		$	2,790		$	1,909
Other comprehensive income, before tax:
Pension obligation change for defined benefit plan		631			—			1,286			392
Income tax effect		(215	)		—			(438	)		(133	)
Unrealized holding (gains) losses on available for sale securities arising during period		(946	)		1,037			(600	)		1,551
Income tax effect		321			(353	)		204			(527	)
Reclassification adjustment for gains on available for sale securities included in net income		(28	)		(120	)		(28	)		(177	)
Income tax effect		10			41			10			60
Other comprehensive income (loss)		(227	)		605			434			1,166
Comprehensive income	$	1,194		$	1,584		$	3,224		$	3,075

 
 
See accompanying notes to unaudited consolidated financial statements.

4

AmeriServ Financial, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Six months ended June 30,
	2015			2014
OPERATING ACTIVITIES
Net income	$	2,790		$	1,909
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		450			—
Depreciation expense		925			924
Net amortization of investment securities		181			186
Net realized gains on investment securities available for sale		(28	)		(177	)
Net gains on loans held for sale		(416	)		(272	)
Amortization of deferred loan fees		(133	)		(134	)
Origination of mortgage loans held for sale		(27,878	)		(18,393	)
Sales of mortgage loans held for sale		28,952			17,378
Increase in accrued interest income receivable		(183	)		(278	)
Decrease in accrued interest payable		(255	)		(306	)
Earnings on bank owned life insurance		(341	)		(371	)
Deferred income taxes		371			254
Stock based compensation expense		156			45
Other, net		443			1,336
Net cash provided by operating activities		5,034			2,101
INVESTING ACTIVITIES
Purchases of investment securities – available for sale		(7,410	)		(7,144	)
Purchases of investment securities – held to maturity		(1,545	)		(1,599	)
Proceeds from sales of investment securities – available for sale		519			5,242
Proceeds from maturities of investment securities – available for sale		10,380			10,763
Proceeds from maturities of investment securities – held to maturity		1,778			667
Purchases of regulatory stock		(9,464	)		(3,897	)
Proceeds from redemption of regulatory stock		8,332			4,056
Long-term loans originated		(118,956	)		(76,648	)
Principal collected on long-term loans		76,896			59,696
Loans purchased or participated		(5,120	)		(1,764	)
Loans sold or participated		12,055			2,250
Proceeds from sale of other real estate owned		478			434
Proceeds from life insurance policy		200			—
Purchases of premises and equipment		(473	)		(1,198	)
Net cash used in investing activities		(32,330	)		(9,142	)
FINANCING ACTIVITIES
Net (decrease) increase in deposit balances		(7,053	)		19,347
Net increase (decrease) in other short-term borrowings		24,550			(22,878	)
Principal borrowings on advances from Federal Home Loan Bank		4,000			9,000
Common stock dividends		(377	)		(376	)
Preferred stock dividends		(105	)		(105	)
Net cash provided by financing activities		21,015			4,988
NET DECREASE IN CASH AND CASH EQUIVALENTS		(6,281	)		(2,053	)
CASH AND CASH EQUIVALENTS AT JANUARY 1		32,872			30,066
CASH AND CASH EQUIVALENTS AT JUNE 30	$	26,591		$	28,013

 
 
See accompanying notes to unaudited consolidated financial statements.

5

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 subsidiaries, AmeriServ Financial Bank (the Bank), AmeriServ Trust and Financial Services Company (the Trust Company), and AmeriServ Life Insurance Company (AmeriServ Life). The Bank is a Pennsylvania state-chartered full service bank with 17 locations in Pennsylvania. The Trust Company offers a complete range of trust and financial services and administers assets valued at $1.9 billion that are not reported on the Company’s balance sheet at June 30, 2015. AmeriServ Life is a captive insurance company that engages in underwriting as a reinsurer of credit life and disability insurance.

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. Significant intercompany accounts and transactions have been eliminated in preparing the consolidated financial statements.

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, 2014.

3. Recent Accounting Pronouncements

In April 2015, the FASB issued ASU 2015-03, Interest — Imputation of Interest (Subtopic 835-30), as part of its initiative to reduce complexity in accounting standards. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. This Update is not expected to have a significant impact on the Company’s financial statements.

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 treated as retired for earnings per share purposes. Options to purchase 179,304 common shares, at exercise prices ranging from $3.18 to $4.70, and 3,625 common shares, at exercise prices ranging from $4.60 to $5.22, were outstanding as of June 30, 2015 and 2014, respectively, but were not included in the computation of diluted earnings per common share because to do so would be antidilutive. Dividends on preferred shares are deducted from net income in the calculation of earnings per common share.

6

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

4. Earnings Per Common Share  – (continued)

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
	(In thousands, except per share data)
Numerator:
Net income	$	1,421		$	979		$	2,790		$	1,909
Preferred stock dividends		(52	)		(52	)		(105	)		(105	)
Net income available to common shareholders	$	1,369		$	927		$	2,685		$	1,804
Denominator:
Weighted average common shares outstanding (basic)		18,859			18,795			18,855			18,790
Effect of stock options		82			141			68			130
Weighted average common shares outstanding (diluted)		18,941			18,936			18,923			18,920
Earnings per common share:
Basic	$	0.07		$	0.05		$	0.14		$	0.10
Diluted		0.07			0.05			0.14			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 $878,000 in income tax payments in the first six months of 2015 as compared to $558,000 for the first six months of 2014. The Company made total interest payments of $3,453,000 in the first six months of 2015 compared to $3,475,000 in the same 2014 period. The Company had $132,000 non-cash transfers to other real estate owned (OREO) in the first six months of 2015 compared to $6,000 non-cash transfers in the same 2014 period.

6. Investment Securities

The cost basis and fair values of investment securities are summarized as follows (in thousands):

Investment securities available for sale (AFS):

	June 30, 2015
	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
US Agency	$	5,933	$	22	$	(19	)	$	5,936
US Agency mortgage-backed securities		97,265		2,708		(363	)		99,610
Corporate bonds		17,504		28		(210	)		17,322
Total	$	120,702	$	2,758	$	(592	)	$	122,868

Investment securities held to maturity (HTM):

	June 30, 2015
	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
US Agency mortgage-backed securities	$	11,680	$	304	$	(73	)	$	11,911
Taxable municipal		3,905		70		(52	)		3,923
Corporate bonds and other securities		3,995		—		(53	)		3,942
Total	$	19,580	$	374	$	(178	)	$	19,776

7

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

6. Investment Securities  – (continued)

Investment securities available for sale (AFS):

	December 31, 2014
	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
US Agency	$	5,931	$	21	$	(46	)	$	5,906
US Agency mortgage-backed securities		102,888		3,197		(317	)		105,768
Corporate bonds		15,497		61		(122	)		15,436
Total	$	124,316	$	3,279	$	(485	)	$	127,110

Investment securities held to maturity (HTM):

	December 31, 2014
	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
US Agency mortgage-backed securities	$	12,481	$	395	$	(50	)	$	12,826
Taxable municipal		3,364		74		(24	)		3,414
Corporate bonds and other securities		3,995		6		(28	)		3,973
Total	$	19,840	$	475	$	(102	)	$	20,213

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 Investor’s Service or Standard & Poor’s rating of “A.” At June 30, 2015, 81.9% of the portfolio was rated “AAA” as compared to 84.1% at December 31, 2014. 3.9% of the portfolio was either rated below “A” or unrated at June 30, 2015. At June 30, 2015, the Company’s consolidated investment securities portfolio had an effective duration of approximately 2.80 years.

The Company sold a $519,000 AFS security for both the second quarter and first six months of 2015 resulting in a $28,000 gross investment security gain. Total proceeds from the sale of AFS securities for the second quarter of 2014 were $2.5 million resulting in $120,000 of gross investment security gains. Total proceeds from the sale of AFS securities for the first six months of 2014 were $5.2 million resulting in $182,000 of gross investment security gains and $5,000 of gross security losses.

The book value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits, and certain Federal Home Loan Bank borrowings was $98,457,000 at June 30, 2015 and $104,780,000 at December 31, 2014.

The following tables present information concerning investments with unrealized losses as of June 30, 2015 and December 31, 2014 (in thousands):

Total investment securities:

	June 30, 2015
	Less than 12 months					12 months or longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
US Agency	$	—	$	—		$	2,881	$	(19	)	$	2,881	$	(19	)
Taxable municipal		2,644		(52	)		—		—			2,644		(52	)
US Agency mortgage-backed securities		16,974		(118	)		12,400		(318	)		29,374		(436	)
Corporate bonds and other securities		6,862		(133	)		8,867		(130	)		15,729		(263	)
Total	$	26,480	$	(303	)	$	24,148	$	(467	)	$	50,628	$	(770	)

8

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

6. Investment Securities  – (continued)

Total investment securities:

	December 31, 2014
	Less than 12 months					12 months or longer					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
US Agency	$	996	$	(4	)	$	2,858	$	(42	)	$	3,854	$	(46	)
US Agency mortgage-backed securities		2,826		(13	)		20,408		(354	)		23,234		(367	)
Taxable municipal		150		(1	)		988		(23	)		1,138		(24	)
Corporate bonds and other securities		2,960		(43	)		8,891		(107	)		11,851		(150	)
Total	$	6,932	$	(61	)	$	33,145	$	(526	)	$	40,077	$	(587	)

The 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 fall, the fair value of securities will increase. There are 51 positions that are considered temporarily impaired at June 30, 2015. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. 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.

Contractual maturities of securities at June 30, 2015 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.

Total investment securities:

	June 30, 2015
	Available for sale				Held to maturity
	Cost Basis		Fair Value		Cost Basis		Fair Value
Within 1 year	$	2,000	$	2,007	$	999	$	1,000
After 1 year but within 5 years		14,302		14,331		2,000		1,967
After 5 years but within 10 years		20,743		21,008		4,782		4,749
After 10 years but within 15 years		50,945		51,947		560		546
Over 15 years		32,712		33,575		11,239		11,514
Total	$	120,702	$	122,868	$	19,580	$	19,776

9

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

7. Loans

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

	June 30, 2015		December 31, 2014
Commercial	$	155,459	$	139,126
Commercial loans secured by real estate		427,174		410,329
Real estate-mortgage		259,144		258,616
Consumer		20,073		19,009
Loans, net of unearned income	$	861,850	$	827,080

Loan balances at June 30, 2015 and December 31, 2014 are net of unearned income of $635,000 and $554,000, respectively. Real estate-construction loans comprised 2.9% and 3.5% of total loans, net of unearned income at June 30, 2015 and December 31, 2014, respectively.

8. Allowance for Loan Losses

The following tables summarize the rollforward of the allowance for loan losses by portfolio segment for the three and six month periods ending June 30, 2015 and 2014 (in thousands).

	Three months ended June 30, 2015,
	Balance at March 31, 2015		Charge-Offs			Recoveries		Provision (Credit)			Balance at June 30, 2015
Commercial	$	3,157	$	—		$	8	$	6		$	3,171
Commercial loans secured by real estate		4,087		(15	)		9		59			4,140
Real estate-mortgage		1,304		(188	)		25		180			1,321
Consumer		191		(16	)		5		21			201
Allocation for general risk		950		—			—		(66	)		884
Total	$	9,689	$	(219	)	$	47	$	200		$	9,717

	Three months ended June 30, 2014,
	Balance at March 31, 2014		Charge-Offs			Recoveries		Provision (Credit)			Balance at June 30, 2014
Commercial	$	3,065	$	—		$	55	$	134		$	3,254
Commercial loans secured by real estate		4,662		—			19		(206	)		4,475
Real estate-mortgage		1,273		(30	)		11		47			1,301
Consumer		139		(22	)		8		20			145
Allocation for general risk		970		—			—		5			975
Total	$	10,109	$	(52	)	$	93	$	—		$	10,150

10

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Allowance for Loan Losses  – (continued)

	Six months ended June 30, 2015,
	Balance at December 31, 2014		Charge-Offs			Recoveries		Provision (Credit)			Balance at June 30, 2015
Commercial	$	3,262	$	(121	)	$	14	$	16		$	3,171
Commercial loans secured by real estate		3,902		(15	)		51		202			4,140
Real estate-mortgage		1,310		(291	)		55		247			1,321
Consumer		190		(63	)		14		60			201
Allocation for general risk		959		—			—		(75	)		884
Total	$	9,623	$	(490	)	$	134	$	450		$	9,717

	Six months ended June 30, 2014,
	Balance at December 31, 2013		Charge-Offs			Recoveries		Provision (Credit)			Balance at June 30, 2014
Commercial	$	2,844	$	(72	)	$	105	$	377		$	3,254
Commercial loans secured by real estate		4,885		(66	)		172		(516	)		4,475
Real estate-mortgage		1,260		(73	)		25		89			1,301
Consumer		136		(58	)		13		54			145
Allocation for general risk		979		—			—		(4	)		975
Total	$	10,104	$	(269	)	$	315	$	—		$	10,150

As a result of successful ongoing problem credit resolution efforts, the Company achieved further asset quality improvements in 2015 and 2014, specifically in the commercial loans secured by real estate category. There was no provision for loan losses in the first six months of 2014, but the Company recorded a $450,000 provision in the first six months of 2015 which was needed to support loan growth.

The following tables summarize the loan portfolio and allowance for loan loss by the primary segments of the loan portfolio (in thousands).

	At June 30, 2015
	Commercial		Commercial Loans Secured by Real Estate		Real Estate- Mortgage		Consumer		Allocation for General Risk		Total
Loans:
Individually evaluated for impairment	$	406	$	776	$	—	$	—			$	1,182
Collectively evaluated for impairment		155,053		426,398		259,144		20,073				860,668
Total loans	$	155,459	$	427,174	$	259,144	$	20,073			$	861,850
Allowance for loan losses:
Specific reserve allocation	$	102	$	512	$	—	$	—	$	—	$	614
General reserve allocation		3,069		3,628		1,321		201		884		9,103
Total allowance for loan losses	$	3,171	$	4,140	$	1,321	$	201	$	884	$	9,717

11

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Allowance for Loan Losses  – (continued)

	At December 31, 2014
	Commercial		Commercial Loans Secured by Real Estate		Real Estate- Mortgage		Consumer		Allocation for General Risk		Total
Loans:
Individually evaluated for impairment	$	—	$	989	$	—	$	—			$	989
Collectively evaluated for impairment		139,126		409,340		258,616		19,009				826,091
Total loans	$	139,126	$	410,329	$	258,616	$	19,009			$	827,080
Allowance for loan losses:
Specific reserve allocation	$	—	$	520	$	—	$	—	$	—	$	520
General reserve allocation		3,262		3,382		1,310		190		959		9,103
Total allowance for loan losses	$	3,262	$	3,902	$	1,310	$	190	$	959	$	9,623

The segments of the Company’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The loan segments 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 and therefore, no further disaggregation into classes is necessary. The overall risk profile for the commercial loan segment is impacted by non-owner occupied CRE loans, which include loans secured by non-owner occupied nonfarm nonresidential properties, as a meaningful but declining portion of the commercial portfolio is centered in these types of accounts. The residential mortgage loan segment is comprised of first lien amortizing residential mortgage loans and home equity loans secured by residential real estate. The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.

Management evaluates for possible impairment any individual loan in the commercial or commercial real estate segment with a loan balance in excess of $100,000 that is in nonaccrual status or classified as a Troubled Debt Restructure (TDR). Loans are considered to be impaired 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 impairment 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 Company does not separately evaluate individual consumer and residential mortgage loans for impairment, unless such loans are part of a larger relationship that is impaired, or are classified as a TDR.

Once the determination has been made that a loan is impaired, the determination of whether a specific allocation of the allowance is necessary is measured by comparing the recorded investment in the loan to the fair value of the loan using one of three methods: (a) the present value of expected future cash flows discounted at the loan’s effective interest rate; (b) the loan’s observable market price; or (c) the fair value of the collateral less selling costs for collateral dependent loans. The method is selected on a loan-by-loan basis, with management primarily utilizing the fair value of collateral method. The evaluation of the need and amount of a specific allocation of the allowance and whether a loan can be removed from impairment status is made on a quarterly basis. The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

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

12

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Allowance for Loan Losses  – (continued)

support an appropriate and adequate allowance for loan losses. At a minimum, annual documented reevaluation of the property is completed by the Bank’s internal Assigned Risk Department to support the value of the property.

When reviewing an appraisal associated with an existing collateral real estate dependent transaction, the Bank’s internal Assigned Risk Department 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 Assigned Risk Department personnel determine 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 Assigned Risk Department personnel rests with the Assigned Risk Department and not the originating account officer.

The following tables present impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary (in thousands).

	June 30, 2015
	Impaired Loans with Specific Allowance				Impaired Loans with no Specific Allowance		Total Impaired Loans
	Recorded Investment		Related Allowance		Recorded Investment		Recorded Investment		Unpaid Principal Balance
Commercial	$	406	$	102	$	—	$	406	$	406
Commercial loans secured by real estate		756		512		20		776		885
Total impaired loans	$	1,162	$	614	$	20	$	1,182	$	1,291

	December 31, 2014
	Impaired Loans with Specific Allowance				Impaired Loans with no Specific Allowance		Total Impaired Loans
	Recorded Investment		Related Allowance		Recorded Investment		Recorded Investment		Unpaid Principal Balance
Commercial loans secured by real estate	$	989	$	520	$	—	$	989	$	1,069
Total impaired loans	$	989	$	520	$	—	$	989	$	1,069

13

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Allowance for Loan Losses  – (continued)

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated (in thousands).

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
Average loan balance:
Commercial	$	220	$	—	$	110	$	—
Commercial loans secured by real estate		1,509		2,296		1,891		2,678
Average investment in impaired loans	$	1,729	$	2,296	$	2,001	$	2,678
Interest income recognized:
Commercial	$	10	$	—	$	11	$	—
Commercial loans secured by real estate		5		1		11		2
Interest income recognized on a cash basis on impaired loans	$	15	$	1	$	22	$	2

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. All loans greater than 90 days past due, or for which any portion of the loan represents a specific allocation of the allowance for loan losses are 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 $250,000 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 2015 required review of a minimum range of 50% to 55% 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 $1,000,000, 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.

14

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Allowance for Loan Losses  – (continued)

The following table presents 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 (in thousands).

	June 30, 2015
	Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	150,704	$	758	$	3,866	$	131	$	155,459
Commercial loans secured by real estate		421,117		2,627		3,175		255		427,174
Total	$	571,821	$	3,385	$	7,041	$	386	$	582,633

	December 31, 2014
	Pass		Special Mention		Substandard		Doubtful		Total
Commercial	$	132,665	$	161	$	6,164	$	136	$	139,126
Commercial loans secured by real estate		406,195		620		3,238		276		410,329
Total	$	538,860	$	781	$	9,402	$	412	$	549,455

It is generally the policy of the bank that the outstanding balance of any residential mortgage 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. The remaining non-accrual balance is reported as impaired with no specific allowance. It is the policy of the bank that the outstanding balance of any consumer loan that exceeds 90-days past due as to principal and/or interest is charged off. The following tables present the performing and non-performing outstanding balances of the residential and consumer portfolios (in thousands).

	June 30, 2015
	Performing		Non-Performing
Real estate-mortgage	$	257,497	$	1,647
Consumer		20,073		—
Total	$	277,570	$	1,647

	December 31, 2014
	Performing		Non-Performing
Real estate-mortgage	$	257,199	$	1,417
Consumer		19,009		—
Total	$	276,208	$	1,417

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 nonaccrual loans (in thousands).

	June 30, 2015
	Current		30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days Past Due		Total Past Due		Total Loans		90 Days Past Due and Still Accruing
Commercial	$	153,174	$	—	$	2,285	$	—	$	2,285	$	155,459	$	—
Commercial loans secured by real estate		426,939		—		—		235		235		427,174		—
Real estate-mortgage		255,924		1,634		637		949		3,220		259,144		—
Consumer		20,009		55		9		—		64		20,073		—
Total	$	856,046	$	1,689	$	2,931	$	1,184	$	5,804	$	861,850	$	—

15

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Allowance for Loan Losses  – (continued)

	December 31, 2014
	Current		30 – 59 Days Past Due		60 – 89 Days Past Due		90 Days Past Due		Total Past Due		Total Loans		90 Days Past Due and Still Accruing
Commercial	$	139,126	$	—	$	—	$	—	$	—	$	139,126	$	—
Commercial loans secured by real estate		410,049		280		—		—		280		410,329		—
Real estate-mortgage		255,021		2,196		332		1,067		3,595		258,616		—
Consumer		18,927		74		8		—		82		19,009		—
Total	$	823,123	$	2,550	$	340	$	1,067	$	3,957	$	827,080	$	—

An allowance for loan losses (“ALL”) is maintained to absorb losses from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of non-performing loans.

Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. For general allowances, historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are complemented by consideration of other qualitative factors.

Management tracks the historical net charge-off activity at each risk rating grade level for the entire commercial portfolio and at the aggregate level for the consumer, residential mortgage and small business portfolios. A historical charge-off factor is calculated utilizing a rolling 12 consecutive historical quarters for the commercial portfolios. This historical charge-off factor for the consumer, residential mortgage and small business portfolios are based on a three year historical average of actual loss experience.

The Company uses a comprehensive methodology and procedural discipline to maintain an ALL to absorb inherent losses in the loan portfolio. The Company believes this is a critical accounting policy since it involves significant estimates and judgments. The allowance consists of three elements: 1) an allowance established on specifically identified problem loans, 2) formula driven general reserves established for loan categories based upon historical loss experience and other qualitative factors which include delinquency, non-performing and TDR loans, loan trends, economic trends, concentrations of credit, trends in loan volume, experience and depth of management, examination and audit results, effects of any changes in lending policies, and trends in policy, financial information, and documentation exceptions, and 3) a general risk reserve which provides support for variance from our assessment of the previously listed qualitative factors, provides protection against credit risks resulting from other inherent risk factors contained in the Company’s loan portfolio, and recognizes the model and estimation risk associated with the specific and formula driven allowances. The qualitative factors used in the formula driven general reserves are evaluated quarterly (and revised if necessary) by the Company’s management to establish allocations which accommodate each of the listed risk factors.

“Pass” rated credits are segregated from “Criticized” and “Classified” credits for the application of qualitative factors.

Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL.

16

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

9. Non-performing Assets Including Troubled Debt Restructurings (TDR)

The following table presents information concerning non-performing assets including TDR (in thousands, except percentages):

	June 30, 2015			December 31, 2014
Non-accrual loans
Commercial	$	209		$	—
Commercial loans secured by real estate		255			778
Real estate-mortgage		1,647			1,417
Total		2,111			2,195
Other real estate owned
Commercial loans secured by real estate		—			384
Real estate-mortgage		126			128
Total		126			512
TDR’s not in non-accrual		328			210
Total non-performing assets including TDR	$	2,565		$	2,917
Total non-performing assets as a percent of loans, net of unearned income, and other real estate owned		0.30	%		0.35	%

The Company had no loans past due 90 days or more for the periods presented which were accruing interest.

The following table sets forth, for the periods indicated, (1) the gross interest income that would have been recorded if non-accrual loans had been current in accordance with their original terms and had been outstanding throughout the period or since origination if held for part of the period, (2) the amount of interest income actually recorded on such loans, and (3) the net reduction in interest income attributable to such loans (in thousands).

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
Interest income due in accordance with original terms	$	24	$	34	$	48	$	67
Interest income recorded		—		—		—		—
Net reduction in interest income	$	24	$	34	$	48	$	67

Consistent with accounting and regulatory guidance, the Bank recognizes a TDR when the Bank, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that would not normally be considered. Regardless of the form of concession granted, the Bank’s objective in offering a TDR is to increase the probability of repayment of the borrower’s loan.

To be considered a TDR, both of the following criteria must be met:

• the borrower must be experiencing financial difficulties; and

• the Bank, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that would not otherwise be considered.

Factors that indicate a borrower is experiencing financial difficulties include, but are not limited to:

• the borrower is currently in default on their loan(s);

• the borrower has filed for bankruptcy;

17

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

9. Non-performing Assets Including Troubled Debt Restructurings (TDR)  – (continued)

• the borrower has insufficient cash flows to service their loan(s); and

• the borrower is unable to obtain refinancing from other sources at a market rate similar to rates available to a non-troubled debtor.

Factors that indicate that a concession has been granted include, but are not limited to:

• the borrower is granted an interest rate reduction to a level below market rates for debt with similar risk; or

• the borrower is granted a material maturity date extension, or extension of the amortization plan to provide payment relief. For purposes of this policy, a material maturity date extension will generally include any maturity date extension, or the aggregate of multiple consecutive maturity date extensions, that exceed 120 days. A restructuring that results in an insignificant delay in payment, i.e. 120 days or less, is not necessarily a TDR. Insignificant payment delays occur when the amount of the restructured payments subject to the delay is insignificant relative to the unpaid principal or collateral value, and will result in an insignificant shortfall in the originally scheduled contractual amount due, and/or the delay in timing of the restructured payment period is insignificant relative to the frequency of payments, the original maturity or the original amortization.

The determination of whether a restructured loan is a TDR requires consideration of all of the facts and circumstances surrounding the modification. No single factor is determinative of whether a restructuring is a TDR. An overall general decline in the economy or some deterioration in a borrower’s financial condition does not automatically mean that the borrower is experiencing financial difficulty. Accordingly, determination of whether a modification is a TDR involves a large degree of judgment.

The Company had no loans modified as TDRs during the second quarter of 2015.

The following table details the loans modified as TDRs during the six month period ended June 30, 2015 (dollars in thousands).

Loans in accrual status	# of Loans		Current Balance		Concession Granted
Commercial loan		1	$	204		Extension of maturity date

The following table details the loans modified as TDRs during the three month period ended June 30, 2014 (dollars in thousands).

Loans in non-accrual status	# of Loans		Current Balance		Concession Granted
Commercial loan secured by real estate		1	$	141		Extension of maturity date

The following table details the loans modified as TDRs during the six month period ended June 30, 2014 (dollars in thousands).

Loans in non-accrual status	# of Loans		Current Balance		Concession Granted
Commercial loan secured by real estate		1	$	253		Extension of maturity date

In all instances where loans have been modified in troubled debt restructurings the pre- and post-modified balances are the same. The specific ALL reserve for loans modified as TDR’s was $542,000 and $365,000 as of June 30, 2015 and 2014, respectively. All TDR’s are individually evaluated for impairment and a related allowance is recorded, as needed.

Once a loan is classified as a TDR, this classification will remain until documented improvement in the financial position of the borrower supports confidence that all principal and interest will be paid according to terms. Additionally, the customer must have re-established a track record of timely payments according to the restructured contract terms for a minimum of six consecutive months prior to consideration for removing the

18

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

9. Non-performing Assets Including Troubled Debt Restructurings (TDR)  – (continued)

loan from non-accrual TDR status. However, a loan will continue to be on non-accrual status until, consistent with our policy, the borrower has made a minimum of an additional six consecutive monthly payments in accordance with the terms of the loan.

The Company had no loans that were classified as TDR’s or were subsequently modified during each 12-month period prior to the current reporting periods, which begin January 1, 2015 and 2014 (six month periods) and April 1, 2015 and 2014 (three month periods), respectively, and that subsequently defaulted during these reporting periods.

The Company is unaware of any additional loans which are required to either be charged-off or added to the non-performing asset totals disclosed above.

10. Federal Home Loan Bank Borrowings

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

	At June 30, 2015
Type	Maturing		Amount		Weighted Average Rate
Open Repo Plus		Overnight	$	63,430		0.33	%
Advances		2015		4,000		0.52
		2016		12,000		0.81
		2017		12,000		1.06
		2018		10,000		1.51
		2019 and over		8,000		1.76
Total advances				46,000		1.17
Total FHLB borrowings			$	109,430		0.68	%

	At December 31, 2014
Type	Maturing		Amount		Weighted Average Rate
Open Repo Plus		Overnight	$	38,880		0.27	%
Advances		2015		4,000		0.52
		2016		12,000		0.81
		2017		12,000		1.06
		2018		10,000		1.51
		2019 and over		4,000		1.88
Total advances				42,000		1.12
Total FHLB borrowings			$	80,880		0.71	%

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

11. Preferred Stock

On August 11, 2011, pursuant to the Small Business Lending Fund (SBLF), the Company issued and sold to the US Treasury 21,000 shares of its Senior Non-Cumulative Perpetual Preferred Stock, Series E (Series E Preferred Stock) for the aggregate proceeds of $21 million. The SBLF is a voluntary program sponsored by the US Treasury that encourages small business lending by providing capital to qualified community banks at favorable rates. The Company used the proceeds from the Series E Preferred Stock issued to the US Treasury to repurchase all 21,000 shares of its outstanding preferred shares previously issued to the US Treasury under the TARP Capital Purchase Program.

19

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

11. Preferred Stock  – (continued)

The Series E Preferred Stock has an aggregate liquidation preference of approximately $21 million and qualifies as Tier 1 Capital for regulatory purposes. The terms of the Series E Preferred Stock provide for the payment of non-cumulative dividends on a quarterly basis. Since January 1, 2014, the dividend rate of the Series E Preferred Stock has been fixed at 1% per annum until February 7, 2016. Beginning on February 8, 2016, the dividend rate will be fixed at 9% per annum.

As long as shares of Series E Preferred Stock remain outstanding, we may not pay dividends to our common shareholders (nor may we repurchase or redeem any shares of our common stock) during any quarter in which we fail to declare and pay dividends on the Series E Preferred Stock and for the next three quarters following such failure. In addition, under the terms of the Series E Preferred Stock, we may only declare and pay dividends on our common stock (or repurchase shares of our common stock), if, after payment of such dividend, the dollar amount of our Tier 1 capital would be at least ninety percent (90%) of Tier 1 capital as of June 30, 2011, excluding any charge-offs and redemptions of the Series E Preferred Stock (the “Tier 1 Dividend Threshold”). The Tier 1 Dividend Threshold is subject to reduction, beginning January 1, 2014, based upon the extent by which the Qualified Small Business Lending by the Bank at September 30, 2013 has increased over the Baseline.

We may redeem the Series E Preferred Stock at any time at our option, at a redemption price of 100% of the liquidation amount plus accrued but unpaid dividends, subject to the approval of our federal banking regulator.

12. Accumulated Other Comprehensive Loss

The following table presents the changes in each component of accumulated other comprehensive loss, net of tax, for the three and six months ended June 30, 2015 and 2014 (in thousands):

	Three months ended June 30, 2015									Three months ended June 30, 2014
	Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)			Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)
Beginning balance	$	2,072		$	(8,313	)	$	(6,241	)	$	1,345		$	(6,659	)	$	(5,314	)
Other comprehensive income (loss) before reclassifications		(625	)		416			(209	)		684			—			684
Amounts reclassified from accumulated other comprehensive loss		(18	)		—			(18	)		(79	)		—			(79	)
Net current period other comprehensive income (loss)		(643	)		416			(227	)		605			—			605
Ending balance	$	1,429		$	(7,897	)	$	(6,468	)	$	1,950		$	(6,659	)	$	(4,709	)

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

20

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

12. Accumulated Other Comprehensive Loss  – (continued)

	Six months ended June 30, 2015									Six months ended June 30, 2014
	Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)			Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)
Beginning balance	$	1,843		$	(8,745	)	$	(6,902	)	$	1,043		$	(6,918	)	$	(5,875	)
Other comprehensive income (loss) before reclassifications		(396	)		848			452			1,024			256			1,280
Amounts reclassified from accumulated other comprehensive loss		(18	)		—			(18	)		(117	)		3			(114	)
Net current period other comprehensive income (loss)		(414	)		848			434			907			259			1,166
Ending balance	$	1,429		$	(7,897	)	$	(6,468	)	$	1,950		$	(6,659	)	$	(4,709	)

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

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2015 and 2014 (in thousands):

	Amount reclassified from accumulated other comprehensive loss(1)
Details about accumulated other comprehensive loss components	For the three months ended June 30, 2015			For the three months ended June 30, 2014			Affected line item in the statement of operations
Unrealized gains and losses on sale of securities
	$	(28	)	$	(120	)		Net realized gains on investment securities
		10			41			Provision for income tax expense
	$	(18	)	$	(79	)		Net of tax
Total reclassifications for the period	$	(18	)	$	(79	)		Net income

(1) Amounts in parentheses indicate credits.

21

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

12. Accumulated Other Comprehensive Loss  – (continued)

	Amount reclassified from accumulated other comprehensive loss(1)
Details about accumulated other comprehensive loss components	For the six months ended June 30, 2015			For the six months ended June 30, 2014			Affected line item in the statement of operations
Unrealized gains and losses on sale of securities
	$	(28	)	$	(177	)		Net realized gains on investment securities
		10			60			Provision for income tax expense
	$	(18	)	$	(117	)		Net of tax
Amortization of defined benefit items(2)
Amortization of prior year service cost	$	—		$	5			Salaries and employee benefits
		—			(2	)		Provision for income tax expense
	$	—		$	3			Net of tax
Total reclassifications for the period	$	(18	)	$	(114	)		Net income

(1) Amounts in parentheses indicate credits.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (see Note 16 for additional details).

13. Regulatory Capital

The Company is subject to various capital requirements administered by the federal banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. For June 30, 2015, the final Basel III rules require the Company to maintain minimum amounts and ratios of common equity Tier I capital (as defined in the regulations) to risk-weighted assets (RWA) (as defined). Additionally under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. For December 31, 2014, regulatory capital ratios were calculated under Basel I rules. As of June 30, 2015, the Bank was categorized as “Well Capitalized” under the regulatory framework for prompt corrective action promulgated by the Federal Reserve. The Company believes that no conditions or events have occurred that would change this conclusion as of such date. To be categorized as Well Capitalized, the Bank must maintain minimum Total Capital, Common Equity Tier 1 Capital, Tier 1 Capital, and Tier 1 leverage ratios as set forth in the table. Additionally, while not a regulatory capital ratio, the Company’s tangible common equity ratio was 7.66% at June 30, 2015 (in thousands, except ratios).

22

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

13. Regulatory Capital  – (continued)

	At June 30, 2015
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total Capital (To RWA) Consolidated	$	132,879		14.63	%	$	72,653		8.00	%	$	90,817		10.00	%
AmeriServ Financial Bank		106,168		11.81			71,907		8.00			89,884		10.00
Common Equity Tier 1 Capital (To RWA) Consolidated		90,191		9.93			40,867		4.50			59,031		6.50
AmeriServ Financial Bank		95,541		10.63			40,448		4.50			58,425		6.50
Tier 1 Capital (To RWA) Consolidated		122,252		13.46			54,490		6.00			72,653		8.00
AmeriServ Financial Bank		95,541		10.63			53,930		6.00			71,907		8.00
Tier 1 Capital (To Average Assets) leverage Consolidated		122,252		11.23			43,543		4.00			54,428		5.00
AmeriServ Financial Bank		95,541		9.01			42,425		4.00			53,032		5.00

	At December 31, 2014
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total Capital (To RWA) Consolidated	$	131,497		14.80	%	$	71,066		8.00	%	$	88,833		10.00	%
AmeriServ Financial Bank		106,084		12.07			70,305		8.00			87,881		10.00
Tier 1 Capital (To RWA) Consolidated		120,992		13.62			35,533		4.00			53,300		6.00
AmeriServ Financial Bank		95,579		10.88			35,153		4.00			52,729		6.00
Tier 1 Capital (To Average Assets) Consolidated		120,992		11.34			42,662		4.00			53,327		5.00
AmeriServ Financial Bank		95,579		9.19			41,608		4.00			52,010		5.00

On July 2, 2013, the Board of Governors of the Federal Reserve System approved final rules that substantially amend the regulatory risk-based capital rules applicable to the Company and the Bank. The final rules implement the “Basel III” regulatory capital reforms, as well as certain changes required by the Dodd-Frank Act, which will require institutions to, among other things, have more capital and a higher quality of capital by increasing the minimum regulatory capital ratios, and requiring capital buffers. The new rules became effective for the Company and the Bank on January 1, 2015, and have an implementation period that stretches to January 1, 2019. For a more detailed discussion see the Capital Resources section of the MD&A.

14. Segment Results

The financial performance of the Company is also monitored by an internal funds transfer pricing profitability measurement system which produces line of business results and key performance measures. The Company’s major business units include retail banking, commercial banking, trust, and investment/parent. The reported results reflect the underlying economics of the business segments. Expenses for centrally provided services are allocated based upon the cost and estimated usage of those services. The businesses are match-funded and interest rate risk is centrally managed and accounted for within the investment/parent business segment. The key performance measure the Company focuses on for each business segment is net income contribution.

23

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

14. Segment Results  – (continued)

Retail banking includes the deposit-gathering branch franchise and lending to both individuals and small businesses. Lending activities include residential mortgage loans, direct consumer loans, and small business commercial loans. Commercial banking to businesses includes commercial loans, and CRE loans. The trust segment contains our wealth management businesses which include the Trust Company and West Chester Capital Advisors (WCCA), our registered investment advisory firm and financial services. Wealth management includes personal trust products and services such as personal portfolio investment management, estate planning and administration, custodial services and pre-need trusts. Also, institutional trust products and services such as 401(k) plans, defined benefit and defined contribution employee benefit plans, and individual retirement accounts are included in this segment. Financial services include the sale of mutual funds, annuities, and insurance products. The wealth management businesses also includes the union collective investment funds, namely the ERECT and BUILD funds which are designed to use union pension dollars in construction projects that utilize union labor. The investment/parent includes the net results of investment securities and borrowing activities, general corporate expenses not allocated to the business segments, interest expense on guaranteed junior subordinated deferrable interest debentures, and centralized interest rate risk management. Inter-segment revenues were not material.

The contribution of the major business segments to the Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three months ended June 30, 2015						Six months ended June 30, 2015						June 30, 2015
	Total revenue			Net income (loss)			Total revenue			Net income (loss)			Total assets
Retail banking	$	6,539		$	743		$	13,063		$	1,402		$	374,659
Commercial banking		4,635			1,334			9,373			2,625			595,827
Trust		2,230			396			4,397			776			5,306
Investment/Parent		(912	)		(1,052	)		(1,695	)		(2,013	)		137,142
Total	$	12,492		$	1,421		$	25,138		$	2,790		$	1,112,934

	Three months ended June 30, 2014						Six months ended June 30, 2014						December 31, 2014
	Total revenue			Net income (loss)			Total revenue			Net income (loss)			Total assets
Retail banking	$	6,470		$	617		$	12,587		$	965		$	376,009
Commercial banking		4,085			1,030			8,412			2,126			563,690
Trust		2,041			356			4,155			664			5,015
Investment/Parent		(574	)		(1,024	)		(1,075	)		(1,846	)		144,549
Total	$	12,022		$	979		$	24,079		$	1,909		$	1,089,263

15. Commitments and Contingent Liabilities

The Company had various outstanding commitments to extend credit approximating $180.3 million and $188.0 million along with standby letters of credit of $7.7 million and $7.2 million as of June 30, 2015 and December 31, 2014, respectively. The Company’s exposure to credit loss in the event of nonperformance by the other party to these commitments to extend credit and standby letters of credit is represented by their contractual amounts. The Bank uses the same credit and collateral policies in making commitments and conditional obligations as for all other lending.

Additionally, the Company is also 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 will have a material adverse effect on the Company’s consolidated financial position, results of operation or cash flows.

24

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

16. 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 shall 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 US Treasury and Agency securities, corporate notes and bonds), listed common stocks (including shares of AmeriServ Financial, Inc. common stock which is limited to 10% of the plan’s assets), mutual funds, and short-term cash equivalent instruments. The net periodic pension cost for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Components of net periodic benefit cost
Service cost	$	400		$	430		$	800		$	860
Interest cost		325			331			650			662
Expected return on plan assets		(525	)		(498	)		(1,050	)		(996	)
Amortization of prior year service cost		—			(5	)		—			(10	)
Recognized net actuarial loss		300			272			600			544
Net periodic pension cost	$	500		$	530		$	1,000		$	1,060

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.

17. Disclosures about Fair Value Measurements

The following disclosures establish a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. 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.

Assets and Liability Measured on a Recurring Basis

Securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quoted market spreads, cash flows, the US 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.

25

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

17. Disclosures about Fair Value Measurements  – (continued)

The following tables present the assets reported on the Consolidated Balance Sheets at their fair value as of June 30, 2015 and December 31, 2014, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Assets and liability measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements at June 30, 2015 Using
	Total		(Level 1)		(Level 2)		(Level 3)
US Agency securities	$	5,936	$	—	$	5,936	$	—
US Agency mortgage-backed securities		99,610		—		99,610		—
Corporate bonds		17,322		—		17,322		—

	Fair Value Measurements at December 31, 2014 Using
	Total		(Level 1)		(Level 2)		(Level 3)
US Agency securities	$	5,906	$	—	$	5,906	$	—
US Agency mortgage-backed securities		105,768		—		105,768		—
Corporate bonds		15,436		—		15,436		—

Assets Measured on a Non-recurring Basis

Loans considered impaired are loans for which, based on current information and events, it is probable that the creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. As detailed in the allowance for loan loss footnote, impaired loans are reported at 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. At June 30, 2015, impaired loans with a carrying value of $1.2 million were reduced by a specific valuation allowance totaling $614,000 resulting in a net fair value of $567,000. At December 31, 2014, impaired loans with a carrying value of $989,000 were reduced by a specific valuation allowance totaling $520,000 million resulting in a net fair value of $469,000.

Other real estate owned is measured at fair value based on appraisals, less cost to sell at the date of foreclosure. Valuations are periodically performed by management. Income and expenses from operations and changes in valuation allowance are included in the net expenses from OREO.

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

	Fair Value Measurements at June 30, 2015 Using
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	567	$	—	$	—	$	567
Other real estate owned		126		—		—		126

	Fair Value Measurements at December 31, 2014 Using
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	469	$	—	$	—	$	469
Other real estate owned		512		—		—		512

26

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

17. Disclosures about Fair Value Measurements  – (continued)

June 30, 2015	Quantitative Information About Level 3 Fair Value Measurements
	Fair Value Estimate	Valuation Techniques	Unobservable Input	Range (Wgtd Ave)
Impaired loans	$567	Appraisal of collateral(1),(3)	Appraisal adjustments(2) Liquidation expenses	0% to 35% (30%) 1% to 15% (10%)
Other real estate owned	126	Appraisal of collateral(1),(3)	Appraisal adjustments(2) Liquidation expenses	0% to 48% (38%) 1% to 20% (10%)

December 31, 2014	Quantitative Information About Level 3 Fair Value Measurements
	Fair Value Estimate	Valuation Techniques	Unobservable Input	Range (Wgtd Ave)
Impaired loans	$469	Appraisal of collateral(1),(3)	Appraisal adjustments(2) Liquidation expenses	0% to 37% (30%) 1% to 15% (10%)
Other real estate owned	512	Appraisal of collateral(1),(3)	Appraisal adjustments(2) Liquidation expenses	47% to 83% (55%) 1% to 61% (9%)

(1) Fair Value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.

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

(3) Includes qualitative adjustments by management and estimated liquidation expenses.

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

For the Company, as for most financial institutions, approximately 90% of its assets and liabilities are considered financial instruments. Many of the Company’s financial instruments, however, lack an available trading market characterized by a willing buyer and willing seller engaging in an exchange transaction. Therefore, significant estimates and present value calculations were used by the Company for the purpose of this disclosure.

Fair values have been determined by the Company using independent third party valuations that use the best available data (Level 2) and an estimation methodology (Level 3) the Company believes is suitable for each category of financial instruments. Management believes that cash, cash equivalents, and loans and deposits with floating interest rates have estimated fair values which approximate the recorded book balances. The estimation methodologies used, the estimated fair values based on US GAAP measurements, and recorded book balances at June 30, 2015 and December 31, 2014, were as follows (in thousands):

	June 30, 2015
	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
FINANCIAL ASSETS:
Cash and cash equivalents	$	26,591	$	26,591	$	26,591	$	—	$	—
Investment securities – AFS		122,868		122,868		—		122,868		—
Investment securities – HTM		19,580		19,776		—		16,809		2,967
Regulatory stock		7,305		7,305		7,305		—		—
Loans held for sale		4,393		4,456		4,456		—		—
Loans, net of allowance for loan loss and unearned income		852,133		852,862		—		—		852,862
Accrued interest income receivable		3,310		3,310		3,310		—		—
Bank owned life insurance		37,558		37,558		37,558		—		—
FINANCIAL LIABILITIES:
Deposits with no stated maturities	$	575,977	$	575,977	$	575,977	$	—	$	—
Deposits with stated maturities		286,925		289,576		—		—		289,576
Short-term borrowings		63,430		63,430		63,430		—		—
All other borrowings		59,085		62,811		—		—		62,811
Accrued interest payable		1,451		1,451		1,451		—		—

27

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

17. Disclosures about Fair Value Measurements  – (continued)

	December 31, 2014
	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
FINANCIAL ASSETS:
Cash and cash equivalents	$	32,872	$	32,872	$	32,872	$	—	$	—
Investment securities – AFS		127,110		127,110		—		127,110		—
Investment securities – HTM		19,840		20,213		—		17,241		2,972
Regulatory stock		6,173		6,173		6,173		—		—
Loans held for sale		5,051		5,127		5,127		—		—
Loans, net of allowance for loan loss and unearned income		817,457		819,935		—		—		819,935
Accrued interest income receivable		3,127		3,127		3,127		—		—
Bank owned life insurance		37,417		37,417		37,417		—		—
FINANCIAL LIABILITIES:
Deposits with no stated maturities	$	568,625	$	568,625	$	568,625	$	—	$	—
Deposits with stated maturities		301,256		304,744		—		—		304,744
Short-term borrowings		38,880		38,880		38,880		—		—
All other borrowings		55,085		59,256		—		—		59,256
Accrued interest payable		1,706		1,706		1,706		—		—

The fair value of cash and cash equivalents, regulatory stock, accrued interest income receivable, short-term borrowings, and accrued interest payable are equal to the current carrying value.

The fair value of investment securities is equal to the available quoted market price for similar securities. The fair value measurements consider observable data that may include dealer quoted market spreads, cash flows, the US 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. The Level 3 securities are valued by discounted cash flows using the US Treasury rate for the remaining term of the securities.

Loans held for sale are priced individually at market rates on the day that the loan is locked for commitment with an investor. All loans in the held for sale account conform to Fannie Mae underwriting guidelines, with the specific intent of the loan being purchased by an investor at the predetermined rate structure. Loans in the held for sale account have specific delivery dates that must be executed to protect the pricing commitment (typically a 30, 45, or 60 day lock period).

The net loan portfolio has been valued using a present value discounted cash flow. The discount rate used in these calculations is based upon the treasury yield curve adjusted for non-interest operating costs, credit loss, current market prices and assumed prepayment risk.

The fair value of bank owned life insurance is based upon the cash surrender value of the underlying policies and matches the book value.

Deposits with stated maturities have been valued using a present value discounted cash flow with a discount rate approximating current market for similar assets and liabilities. Deposits with no stated maturities have an estimated fair value equal to both the amount payable on demand and the recorded book balance.

The fair value of all other borrowings is based on the discounted value of contractual cash flows. The discount rates are estimated using rates currently offered for similar instruments with similar remaining maturities.

28

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

17. Disclosures about Fair Value Measurements  – (continued)

Commitments to extend credit and standby letters of credit are financial instruments generally not subject to sale, and fair values are not readily available. The carrying value, represented by the net deferred fee arising from the unrecognized commitment, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into similar agreements with similar credit risk, is not considered material for disclosure. The contractual amounts of unfunded commitments are presented in Note 15.

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.

29

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“M.D.& A.”)

.....2015 SECOND QUARTER SUMMARY OVERVIEW.....AmeriServ Financial, Inc. reported second quarter 2015 net income available to common shareholders of $1,369,000, or $0.07 per diluted common share. This represented a 40% increase in earnings per share from the second quarter of 2014 where net income available to common shareholders totaled $927,000, or $0.05 per diluted common share. For the six month period ended June 30, 2015, the Company reported net income available to common shareholders of $2,685,000, or $0.14 per diluted share. This also represented a 40% increase in earnings per share from the first half of 2014 where net income available to common shareholders totaled $1,804,000, or $0.10 per diluted common share. Our improved financial performance in the second quarter of 2015 resulted from a combination of revenue growth and non-interest expense reduction. Specifically, growth in net interest income continues to be driven by solid loan growth and effective cost of funds management while the increase in non-interest income reflects the growing contribution of our trust and wealth management business to the Company’s total revenue.

The goal at AmeriServ has been to not only continue to grow in the market place but to improve our overall productivity so as to benefit our shareholders. During the first six months of 2015, loans outstanding including loans held for sale increased by $34 million to a new end of quarter record of $866 million. At the same time, the AmeriServ Trust and Financial Services Company continued its growth and enabled non-interest income in the first six months of 2015 to surpass the same 2014 period by $234,000. But perhaps the most encouraging trend was in the area of operating expenses, for while continuing to grow in the marketplace, operating expenses were $709,000, or 3.3%, less than in the first six months of 2014.

It is the declared intention of the new AmeriServ management team to avoid distractions and to concentrate on increasing earnings per share. Through the first six months of 2015, AmeriServ has achieved this goal increasing EPS by 40% from $0.10 to $0.14. This performance suggests that the gains reported in the first quarter of 2015 over 2014 were not any kind of statistical anomaly but were instead based on sound and identifiable improvements in the basic business of banking.

Banking is in part a business of numbers, but it is also a business of relationships. AmeriServ Trust and Financial Services Company has now passed the $2 billion mark in assets under management and administration. The number by itself is impressive, but it is more impressive to realize that so many of our friends and neighbors rely on us for their retirement planning and wealth management counsel and advice. We have brought together in our Registered Investment Advisory Firm all of our investment expertise in a most unique way. This means that there are no “cookie cutter” solutions but instead an interactive dialogue with the client. These dialogues are the source of great satisfaction for an AmeriServ staff member.

The transition to the new management team has now passed the six-month timeframe. We believe there is a very positive air in the many AmeriServ offices and branch banking centers. Every AmeriServ staff member understands that the success of this company depends on providing the best customer service at all times.

There has been much media attention drawn to the subject of cybercrime. The tech revolution has been underway in banking for more than half a century. But, in the 21^st century, the focus has been on mobile banking with customers using a virtual bank. This permits bank customers to perform many banking functions in a self-serve manner at their leisure. In such an environment, even community financial institutions, such as AmeriServ, find it necessary to be alert for the perpetrators of cybercrimes. Our technical staff works with the largest of bank software vendors and with our governmental regulators to isolate any questionable occurrences or surprises.

We are all aware that there are areas of concern throughout the global and national economy. This means that it is important to observe the time-honored best practices of the banking industry. AmeriServ has, and intends to maintain, a strong and conservatively positioned balance sheet. AmeriServ intends to exceed every regulatory capital requirement. AmeriServ intends to structure its activities so that it has deep liquidity to enable it to remain trouble-free. Both this board and this management team believe that a profitable company must also be a safe and sound company.

30

THREE MONTHS ENDED JUNE 30, 2015 VS. THREE MONTHS ENDED JUNE 30, 2014

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

	Three months ended June 30, 2015			Three months ended June 30, 2014
Net income	$	1,421		$	979
Net income available to common shareholders		1,369			927
Diluted earnings per share		0.07			0.05
Return on average assets (annualized)		0.52	%		0.37	%
Return on average equity (annualized)		4.88	%		3.41	%

The Company continued its positive earnings momentum in the second quarter of 2015 by reporting net income available to common shareholders of $1,369,000, or $0.07 per diluted common share. This represented a 40% increase in earnings per share from the second quarter of 2014 where net income available to common shareholders totaled $927,000, or $0.05 per diluted common share. Solid loan growth in our community banking business contributed to an increase of $416,000, or 5.0%, in net interest income. Non-interest expense in the second quarter of 2015 declined by $381,000, or 3.6%, as we are realizing the savings from several profitability improvement initiatives that were implemented in late 2014. A lower level of professional fees also contributed to the favorable comparison.

.....NET INTEREST INCOME AND MARGIN.....The Company’s net interest income represents the amount by which interest income on average earning assets exceeds interest paid on average 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 average earning assets and average interest bearing liabilities. The following table compares the Company’s net interest income performance for the second quarter of 2015 to the second quarter of 2014 (in thousands, except percentages):

	Three months ended June 30, 2015			Three months ended June 30, 2014			$ Change			% Change
Interest income	$	10,409		$	9,983		$	426			4.3	%
Interest expense		1,609			1,599			10			0.6
Net interest income	$	8,800		$	8,384		$	416			5.0
Net interest margin		3.45	%		3.47	%		(0.02	)		N/M

N/M — not meaningful

The Company’s net interest income in the second quarter of 2015 increased by $416,000, or 5.0%, when compared to the second quarter of 2014. The Company’s net interest margin of 3.45% for the second quarter of 2015 was comparable with the net interest margin of 3.47% for the second quarter of 2014. The Company has been able to increase net interest income and limit its net interest margin decline by both growing its earning assets and controlling its cost of funds through disciplined deposit pricing. Specifically, earning asset growth has occurred in the loan portfolio as total loans averaged $857 million in the second quarter of 2015 which is $62 million, or 7.8%, higher than the $795 million average for the second quarter of 2014. This loan growth reflects the successful results of the Company’s sales calling efforts, with an emphasis on generating commercial loans and owner occupied commercial real estate loans particularly through its loan production offices. Overall, total interest income has increased by $426,000, or 4.3%, in the second quarter of 2015 when compared to the same 2014 period.

Total interest expense for the second quarter of 2015 has been well controlled as it increased by only $10,000, or 0.6%, due to the Company’s proactive efforts to reduce deposit costs. Even with this reduction in deposit costs, the Company continues to have a loyal core deposit base and success in cross selling new loan customers into deposit products. Specifically, total deposits averaged $891 million for the second quarter of 2015 which is $14 million, or 1.6%, higher than the $877 million average for the second quarter of 2014. The Company is pleased that a meaningful portion of this deposit growth occurred in non-interest bearing demand deposit accounts. This decreased interest expense for deposits has been offset by a $79,000 increase in the

31

interest cost for borrowings as the Company has utilized more FHLB term advances to extend borrowings and provide protection against rising interest rates.

The table that follows provides an analysis of net interest income on a tax-equivalent basis for the three month periods ended June 30, 2015 and June 30, 2014 setting forth (i) average assets, liabilities, and stockholders’ 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 these tables, loan balances do include non-accrual loans, and interest income on loans includes loan fees or amortization of such fees which have been deferred, as well as interest recorded on certain non-accrual loans as cash is received. Additionally, a tax rate of 34% is used to compute tax-equivalent yields.

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

	2015								2014
	Average Balance			Interest Income/ Expense		Yield/Rate			Average Balance			Interest Income/ Expense		Yield/Rate
Interest earning assets:
Loans and loans held for sale, net of unearned income	$	857,294		$	9,486		4.40	%	$	795,233		$	8,945		4.47	%
Interest bearing deposits		9,108			5		0.23			7,512			1		0.04
Short-term investment in money market funds		1,235			1		0.40			2,296			2		0.47
Investment securities – AFS		126,220			777		2.46			138,417			905		2.62
Investment securities – HTM		20,214			146		2.89			18,931			136		2.87
Total investment securities		146,434			923		2.52			157,348			1,041		2.65
Total interest earning assets/interest income		1,014,071			10,415		4.09			962,389			9,989		4.14
Non-interest earning assets:
Cash and due from banks		18,067								15,267
Premises and equipment		12,725								13,194
Other assets		69,880								69,538
Allowance for loan losses		(9,744	)							(10,122	)
TOTAL ASSETS	$	1,104,999							$	1,050,266
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand	$	101,586		$	52		0.21	%	$	100,249		$	50		0.20	%
Savings		96,694			40		0.17			89,871			36		0.16
Money markets		231,814			182		0.31			229,626			196		0.34
Time deposits		291,270			897		1.24			304,022			958		1.26
Total interest bearing deposits		721,364			1,171		0.65			723,768			1,240		0.69
Short-term borrowings		27,771			23		0.33			7,249			5		0.28
Advances from Federal Home Loan Bank		45,933			135		1.18			30,378			74		0.96
Guaranteed junior subordinated deferrable interest debentures		13,085			280		8.57			13,085			280		8.57
Total interest bearing liabilities/interest expense		808,153			1,609		0.80			774,480			1,599		0.83

32

	2015								2014
	Average Balance		Interest Income/ Expense			Yield/Rate			Average Balance		Interest Income/ Expense			Yield/Rate
Non-interest bearing liabilities:
Demand deposits		169,250								152,976
Other liabilities		10,741								7,582
Shareholders’ equity		116,855								115,228
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,104,999							$	1,050,266
Interest rate spread							3.29								3.31
Net interest income/Net interest margin				8,806			3.45	%				8,390			3.47	%
Tax-equivalent adjustment				(6	)							(6	)
Net Interest Income			$	8,800							$	8,384

.....PROVISION FOR LOAN LOSSES.....The Company recorded a $200,000 provision for loan losses in the second quarter of 2015 compared to no provision for loan losses in the second quarter of 2014. This provision in the second quarter of 2015 was needed to support the continuing growth of the loan portfolio and cover net loan charge-offs. The Company experienced net loan charge-offs of $172,000, or 0.08%, of total loans in the second quarter of 2015 and recognized a net loan recovery of $41,000 in the second quarter of 2014. Overall, the Company continued to maintain outstanding asset quality in the first half of 2015. At June 30, 2015, non-performing assets totaled $2.6 million, or only 0.30% of total loans, and are $1.9 million lower than the June 30, 2014 level. When determining the provision for loan losses, the Company considers a number of factors, some of which include periodic credit reviews, non-performing assets, loan delinquency and charge-off trends, concentrations of credit, loan volume trends and broader local and national economic trends.

.....NON-INTEREST INCOME.....Non-interest income for the second quarter of 2015 totaled $3.7 million and increased $54,000, or 1.5%, from the second quarter 2014 performance. Factors contributing to this higher level of non-interest income for the quarter included:

* a $187,000, or 9.6%, increase in trust and investment advisory fees due to increased assets under management which reflects successful new business development activities, as well as market forces and effective management of customer accounts;

* a $92,000 reduction in gains realized on the sale of investment securities in the second quarter of 2015 as the Company executed fewer security sale transactions;

* a $72,000 decrease in deposit service charges due to fewer overdraft fees during the quarter; and

* a $54,000, or 31.6%, increase in gains on sale of loans held for sale due to increased volume of purchase and refinance activity in 2015.

.....NON-INTEREST EXPENSE.....Non-interest expense for the second quarter of 2015 totaled $10.2 million and decreased by $381,000, or 3.6%, from the prior year’s second quarter. Factors contributing to the lower non-interest expense in the quarter included:

* a $163,000, or 2.7%, decrease in salaries and employee benefits due to 27 fewer full time equivalent employees as certain employees who elected to participate in an early retirement program in late 2014 were not replaced in order to achieve efficiencies identified as part of a profitability improvement program; and

* a $189,000 decrease in professional fees due to lower legal fees and recruitment costs in the second quarter of 2015.

33

SIX MONTHS ENDED JUNE 30, 2015 VS. SIX MONTHS ENDED JUNE 30, 2014

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

	Six months ended June 30, 2015			Six months ended June 30, 2014
Net income	$	2,790		$	1,909
Net income available to common shareholders		2,685			1,804
Diluted earnings per share		0.14			0.10
Return on average assets (annualized)		0.51	%		0.37	%
Return on average equity (annualized)		4.84	%		3.35	%

The Company reported net income available to common shareholders of $2,685,000, or $0.14 per diluted common share in the first six months of 2015. This represented a 40% increase in earnings per share from the first six months of 2014 where net income available to common shareholders totaled $1,804,000, or $0.10 per diluted common share. Solid loan growth as well as cost of funds control through disciplined deposit pricing in our community banking business contributed to an increase of $825,000 or 4.9% in net interest income. Non-interest income increased due largely to greater revenue from our trust and wealth management business. Non-interest expense in the first six months of 2015 declined by $709,000, or 3.3%, due to savings from several profitability improvement initiatives that were implemented in late 2014 and a lower level of professional fees.

.....NET INTEREST INCOME AND MARGIN.....The following table compares the Company’s net interest income performance for the first six months of 2015 to the first six months of 2014 (in thousands, except percentages):

	Six months ended June 30, 2015			Six months ended June 30, 2014			$ Change			% Change
Interest income	$	20,932		$	20,078		$	854			4.3	%
Interest expense		3,198			3,169			29			0.9
Net interest income	$	17,734		$	16,909		$	825			4.9
Net interest margin		3.51	%		3.52	%		(0.01	)		N/M

N/M — not meaningful

The Company’s net interest income for the first six months of 2015 increased by $825,000, or 4.9%, when compared to the first six months of 2014. The Company’s net interest margin of 3.51% for the first six months of 2015 was only one basis point lower than the net interest margin of 3.52% for the first half of 2014. The Company has been able to increase net interest income given the modest decline in its net interest margin by both growing its earning assets and controlling its cost of funds through disciplined deposit pricing. Specifically, the earning asset growth has occurred in the loan portfolio as total loans averaged $849 million in the first half of 2015 which is $58 million, or 7.4%, higher than the $791 million average for the first half of 2014. This loan growth reflects the successful results of the Company’s sales calling efforts, with an emphasis on generating commercial loans and owner occupied commercial real estate loans particularly through its loan production offices. Interest income in 2015 has also benefitted from a special dividend of $101,000 from the FHLB of Pittsburgh. Overall, total interest income has increased by $854,000, or 4.3%, in the first half of 2015.

Total interest expense for the first half of 2015 has been well controlled as it increased by only $29,000, or 0.9%, due to the Company’s proactive efforts to reduce deposit costs. Total deposit interest expense decreased by $106,000, or 4.3%, in the first six months of 2015 from the same timeframe in 2014. Even with this reduction in deposit costs, the Company continues to have a strong loyal core deposit base and success in cross-selling new loan customers into deposit products. Specifically, total deposits averaged $894 million for the first half of 2015 which is $27 million, or 3.2%, higher than the $866 million average for the first half of 2014. The Company is pleased that a meaningful portion of this deposit growth occurred in non-interest bearing demand deposit accounts. This decreased interest expense for deposits has been offset by a

34

$135,000 increase in the interest cost for borrowings as the Company has utilized more FHLB term advances to extend borrowings and provide protection against rising interest rates.

The table that follows provides an analysis of net interest income on a tax-equivalent basis for the six month periods ended June 30, 2015 and June 30, 2014. For a detailed discussion of the components and assumptions included in the table, see the paragraph before the quarterly table on page 32.

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

	2015									2014
	Average Balance			Interest Income/ Expense			Yield/Rate			Average Balance			Interest Income/ Expense			Yield/Rate
Interest earning assets:
Loans and loans held for sale, net of unearned income	$	849,453		$	18,947			4.45	%	$	791,270		$	17,983			4.53	%
Interest bearing deposits		10,593			7			0.16			6,749			2			0.06
Short-term investment in money market funds		1,235			3			0.40			3,231			4			0.25
Investment securities – AFS		126,804			1,690			2.67			141,236			1,829			2.59
Investment securities – HTM		20,239			296			2.93			18,833			272			2.89
Total investment securities		147,043			1,986			2.70			160,069			2,101			2.63
Total interest earning assets/interest income		1,008,324			20,943			4.15			961,319			20,090			4.18
Non-interest earning assets:
Cash and due from banks		17,680									15,618
Premises and equipment		12,839									13,171
Other assets		70,091									69,689
Allowance for loan losses		(9,709	)								(10,132	)
TOTAL ASSETS	$	1,099,225								$	1,049,665
Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand	$	97,256		$	96			0.20	%	$	91,433		$	88			0.19	%
Savings		94,592			77			0.16			89,202			71			0.16
Money markets		232,178			362			0.31			229,170			388			0.34
Time deposits		298,660			1,810			1.22			303,583			1,904			1.26
Total interest bearing deposits		722,686			2,345			0.65			713,388			2,451			0.69
Short-term borrowings		20,628			33			0.33			18,441			24			0.26
Advances from Federal Home Loan Bank		44,757			260			1.17			28,544			134			0.94
Guaranteed junior subordinated deferrable interest debentures		13,085			560			8.57			13,085			560			8.57
Total interest bearing liabilities/interest expense		801,156			3,198			0.80			773,458			3,169			0.82
Non-interest bearing liabilities:
Demand deposits		170,904									152,894
Other liabilities		10,897									8,519
Shareholders’ equity		116,268									114,794
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,099,225								$	1,049,665
Interest rate spread								3.35									3.36
Net interest income/Net interest margin					17,745			3.51	%					16,921			3.52	%
Tax-equivalent adjustment					(11	)								(12	)
Net Interest Income				$	17,734								$	16,909

35

.....PROVISION FOR LOAN LOSSES.....The Company recorded a $450,000 provision for loan losses in the first six months of 2015 compared to no provision for loan losses in the first six months of 2014. The provision recorded in 2015 was needed to support the continuing growth of the loan portfolio and cover net loan charge-offs. For the six month periods, there were net loan charge-offs of $356,000, or 0.08%, of total loans in first half of 2015 compared to net loan recoveries of $46,000 in 2014. Overall, the Company continued to maintain outstanding asset quality in the first half of 2015. At June 30, 2015, non-performing assets totaled $2.6 million, or only 0.30% of total loans, and are $1.9 million lower than the June 30, 2014 level. In summary, the allowance for loan losses provided a strong 399% coverage of non-performing loans, and 1.13% of total loans, at June 30, 2015, compared to 400% coverage of non-performing loans, and 1.16% of total loans, at December 31, 2014.

.....NON-INTEREST INCOME.....Non-interest income for the first six months of 2015 totaled $7.4 million and increased $234,000, or 3.3%, from the first six months 2014 performance. Factors contributing to this higher level of non-interest income for the period included:

* a $211,000, or 5.3%, increase in trust and investment advisory fees due to increased assets under management which reflects successful new business development activities, as well as market forces and effective management of customer accounts;

* a $163,000 increase in Bank Owned Life Insurance due to the receipt of a death claim during the first quarter of 2015;

* a $144,000, or 52.9%, increase in loan sale gains due to increased mortgage purchase and refinance activity in 2015 as residential mortgage loans sold into the secondary market totaled $29 million in the first six months of 2015 compared to $17 million in the first six months of 2014;

* a $131,000 decrease in deposit service charges due to fewer overdraft fees and account analysis fees during the first half of 2015 as customers have modified their behavior by holding greater deposit balances:

* a $149,000 reduction in gains realized on the sale of investment securities in the first six months of 2015 as the Company executed fewer security sale transactions this year.

.....NON-INTEREST EXPENSE.....Non-interest expense for the first six months of 2015 totaled $20.6 million and decreased by $709,000, or 3.3%, from the prior year’s first six months. Factors contributing to the lower non-interest expense in 2015 included:

* a $404,000, or 3.3%, decrease in salaries and employee benefits due to 27 fewer full time equivalent employees as certain employees who elected to participate in an early retirement program in late 2014 were not replaced in order to achieve efficiencies identified as part of a profitability improvement program; and

* a $286,000 decrease in professional fees due to lower legal fees, director’s fees and recruitment costs in the first six months of 2015.

The remainder of the key non-interest expense categories were relatively consistent between years reflecting the Company’s focus on reducing and controlling costs.

.....INCOME TAX EXPENSE.....The Company recorded an income tax expense of $1,249,000, or an effective tax rate of 30.9%, in the first six months of 2015 compared to income tax expense of $812,000, or an effective tax rate of 29.8%, for the first six months of 2014. The higher effective tax rate was primarily due to increased earnings in the first six months of 2015. The Company’s deferred tax asset was $9.0 million at June 30, 2015 and relates primarily to the allowance for loan losses and AMT carryforwards. BOLI income is the Company’s largest source of tax-free earnings.

.....SEGMENT RESULTS.....Retail banking’s net income contribution was $743,000 in the second quarter and $1.4 million for the first six months of 2015 which was up by $126,000 and $437,000 from the net income contribution for the same 2014 periods, respectively. These increases in earnings in 2015 were due to the previously discussed increase in residential mortgage banking related revenues and BOLI income, both of

36

which more than offset a lower level of deposit service charges and higher loan loss provision. In addition, this segments’ net interest income benefited from higher consumer loan balances and reduced non-interest expenses particularly personnel costs.

The commercial banking segment reported net income contributions of $1.3 million in the second quarter and $2.6 million for the first six months of 2015 which was $304,000 and $499,000 better than the 2014 results for the same periods, respectively. This improved net income contribution was due to higher net interest income as a result of the previously discussed strong growth in commercial and commercial real estate loans over the past year. This growth in net interest income more than offset an increased loan loss provision. Additionally, total non-interest expense was also lower due to cost savings achieved from the profitability improvement program implemented last year.

The trust segment reported net income of $396,000 in the second quarter and $776,000 for the first six months of 2015 which was $40,000 and $112,000 better than the 2014 results for the same periods, respectively. Both trust fee income and financial services income improved due to increased assets under management which reflects successful new business development activities, as well as market forces and effective management of customer accounts.

The investment/parent segment reported net loss of $1.1 million in the second quarter and $2.0 million for the first six months of 2015 which was $28,000 and $167,000 greater than the 2014 results for the same periods, respectively. The decrease between years reflects the benefit of gains realized on investment security sales in 2014 as fewer gains were generated in 2015. However, overall this segment has felt the most earnings pressure from the continued low interest rate environment.

.....BALANCE SHEET.....The Company’s total consolidated assets were $1.113 billion at June 30, 2015, which grew by $23.7 million, or 2.2%, from the December 31, 2014 asset level. The growth in assets was due to a $34.8 million, or 4.2%, increase in net loans during the first six months of 2015. This loan increase was partially offset by a $4.5 million decrease in investment securities and a $6.3 million decline in cash and cash equivalents as the Company utilized these items to help fund the loan growth.

Total deposits decreased by $7.0 million, or 0.8%, in the first six months of 2015. Total FHLB borrowings have increased by $28.6 million since year-end 2014. The FHLB term advances with maturities between three and five years grew by $4 million and now total $46 million as the Company has utilized these advances to help manage interest rate risk and favorably position our balance sheet in a rising rate environment. The Company’s total shareholders’ equity increased by $2.9 million over the first six months of 2015 due to the Company’s net retention of earnings after dividend payments and a reduction in accumulated other comprehensive loss. The Company continues to be considered well capitalized for regulatory purposes with a total capital ratio of 14.63%, and a common equity tier 1 capital ratio of 9.93% at June 30, 2015. (See the discussion of the new Basel III capital requirements under the “Capital Resources” section.) The Company’s book value per common share was $5.11, its tangible book value per common share was $4.47, and its tangible common equity to tangible assets ratio was 7.66% at June 30, 2015.

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

	June 30, 2015			December 31, 2014			June 30, 2014
Total accruing loan delinquency (past due 30 to 89 days)	$	4,383		$	2,643		$	2,932
Total non-accrual loans		2,111			2,195			3,740
Total non-performing assets including TDR*		2,565			2,917			4,469
Accruing loan delinquency, as a percentage of total loans, net of unearned income		0.51	%		0.32	%		0.37	%
Non-accrual loans, as a percentage of total loans, net of unearned income		0.24			0.27			0.47
Non-performing assets, as a percentage of total loans, net of unearned income, and other real estate owned		0.30			0.35			0.56

37

	June 30, 2015		December 31, 2014		June 30, 2014
Non-performing assets as a percentage of total assets		0.23		0.27		0.42
As a percent of average loans, net of unearned income:
Annualized net charge-offs		0.08		0.11		(0.01	)
Annualized provision for loan losses		0.11		0.05		—
Total classified loans (loans rated substandard or doubtful)	$	8,683	$	11,229	$	13,496

* Non-performing assets are comprised of (i) loans that are on a non-accrual basis, (ii) loans that are contractually past due 90 days or more as to interest and principal payments, (iii) performing loans classified as a troubled debt restructuring and (iv) other real estate owned.

The Company continued to maintain strong asset quality in the first six months of 2015 as evidenced by low levels of non-accrual loans, non-performing assets, classified loans, and loan delinquency levels that continue to be well below 1% of total loans. We continue to closely monitor the loan portfolio given the slow recovery in the economy and the number of relatively large-sized commercial and commercial real estate loans within the portfolio. As of June 30, 2015, the 25 largest credits represented 25.3% of total loans outstanding.

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

	June 30, 2015			December 31, 2014			June 30, 2014
Allowance for loan losses	$	9,717		$	9,623		$	10,150
Allowance for loan losses as a percentage of each of the following total loans, net of unearned income		1.13	%		1.16	%		1.27	%
total accruing delinquent loans (past due 30 to 89 days)		221.70			364.09			346.18
total non-accrual loans		460.30			438.21			256.44
total non-performing assets		378.83			329.89			227.12

The Company recorded a $200,000 loan loss provision in the second quarter and $450,000 in the first six months of 2015 and had recorded no loan loss provision for the allowance for loan losses from earnings during the same periods in 2014. The provision recorded in 2015 was needed to support the continuing growth of the loan portfolio and cover net loan charge-offs. As a result, the balance in the allowance for loan losses has increased modestly in the first six months of 2015 while the Company has been able to still maintain strong coverage of non-accrual loans and non-performing assets as indicated in the above table.

.....LIQUIDITY.....The Company’s liquidity position has been strong during the last several years. Our core retail deposit base has grown over the past five years and has been more than adequate to fund the Company’s operations. Cash flow from maturities, prepayments and amortization of securities was also used to help fund loan growth over the past few years. We strive to operate our loan to deposit ratio in a range of 85% to 100%. For the first six months of 2015, the Company’s loan to deposit ratio has averaged 95.1%. We are optimistic that we can increase the loan to deposit ratio in the future given current commercial loan pipelines, continued growth of our loan production offices and our focus on small business lending.

Liquidity can be analyzed by utilizing the Consolidated Statement of Cash Flows. Cash and cash equivalents decreased by $6.3 million from December 31, 2014 to June 30, 2015, due to $32.3 million of cash used in investing activities. This more than offset the $5.0 million of cash provided by operating activities and $21.0 million of cash provided by financing activities. Within investing activities, cash provided from investment security maturities was $12.2 million. Cash advanced for new loan fundings and purchases (excluding residential mortgages sold in the secondary market) totaled $124.1 million and was $35.1 million higher than the $89.0 million of cash received from loan principal payments and participations. Within financing activities, deposits declined by $7.1 million of cash. Total borrowings increased as advances of

38

short-term borrowings and purchases of FHLB term advances grew by $28.6 million. At June 30, 2015, the Company had immediately available $331 million of overnight borrowing capacity at the FHLB and $39 million of unsecured federal funds lines with correspondent banks.

The holding company had $19.0 million of cash, short-term investments, and investment securities at June 30, 2015. Additionally, dividend payments from our subsidiaries can also provide ongoing cash to the holding company. At June 30, 2015, our subsidiary Bank had $3.4 million of cash available for immediate dividends to the holding company under applicable regulatory formulas. Overall, we believe that the holding company has strong liquidity to meet its trust preferred debt service requirements, preferred stock dividends, and its common stock dividends, all of which should approximate $2.1 million over the next twelve months. The most recent $0.01 dividend was announced on July 20, 2015 payable on August 17, 2015 to shareholders of record on August 3, 2015.

.....CAPITAL RESOURCES.....The Bank meaningfully exceeds all regulatory capital ratios for each of the periods presented and is considered well capitalized. The Company’s common equity tier 1 ratio was 9.93%, the tier 1 capital ratio was 13.46%, and the total capital ratio was 14.63% at June 30, 2015. The Company’s tier 1 leverage was 11.23% at June 30, 2015. We anticipate that we will maintain our strong capital ratios throughout the remainder of 2015. We expect that capital generated from earnings will be utilized to pay the SBLF preferred dividend, common stock cash dividend and will also support anticipated balance sheet growth. Additionally, we plan to retain excess cash to position the Company to redeem all or a portion of the SBLF Preferred Stock when the rate increases from 1% to 9% in the first quarter of 2016. We will also be exploring a possible subordinated debt offering in the second half of 2015 in order to provide funds to assist with the SBLF Preferred Stock redemption. Our common dividend payout ratio for the first six months of 2015 was 14.3%.

On January 1, 2015, U.S. federal banking agencies implemented the new Basel III capital standards, which, similar to the previous standards, establish the minimum capital levels to be considered well-capitalized and revise the prompt corrective action requirements under banking regulations. The revisions from the previous standards include a revised definition of capital, the introduction of a minimum Common Equity Tier 1 capital ratio and changed risk weightings for certain assets. The implementation of the new rules will be phased in over a four year period ending January 1, 2019 with minimum capital requirements becoming increasingly more strict each year of the transition. The new minimum capital requirements for each ratio, both, initially on January 1, 2015 and at the end of the transition on January 1, 2019, are as follows: A common equity tier 1 capital ratio of 4.5% initially and 7.0% at January 1, 2019; a tier 1 capital ratio of 6.0% and 8.50%; a total capital ratio of 8.0% and 10.50%; and a tier 1 leverage ratio of 5.00% and 5.00%. Under the new rules, in order to avoid limitations on capital distributions (including dividend payments and certain discretionary bonus payments to executive officers), a banking organization must hold a capital conservation buffer above its minimum risk-based capital requirements, which increases over the transition period, from 0.625% of total risk weighted assets in 2016 to 2.5% in 2019. The Company continues to be committed to maintaining strong capital levels that exceed regulatory requirements while also supporting balance sheet growth and providing a return to our shareholders.

39

.....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. Note that we suspended the 200 basis point downward rate shock since it has little value due to the absolute low level of interest rates. 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
200bp increase		0.3	%		7.9	%
100bp increase		0.1			5.2
100bp decrease		(3.2	)		(13.2	)

The Company believes that its overall interest rate risk position is well controlled. The variability of net interest income is modestly positive in the upward rate shocks due to the Company’s short duration investment securities portfolio, the scheduled repricing of loans tied to LIBOR or prime, and the extension of a portion of borrowed funds. Also, the Company expects that it will not have to reprice its core deposit accounts up as quickly when interest rates rise. The variability of net interest income is negative in the 100 basis point downward rate scenario as the Company has more exposure to assets repricing downward to a greater extent than liabilities due to the absolute low level of interest rates with the fed funds rate currently at approximately 0.25%. 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 shock due to a reduced value for core deposits.

.....OFF BALANCE SHEET ARRANGEMENTS.....The Company incurs off-balance sheet risks in the normal course of business in order to meet the financing needs of its customers. These risks derive from commitments to extend credit and standby letters of credit. Such commitments and standby letters of credit involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated financial statements. The Company had various outstanding commitments to extend credit approximating $180.3 million and standby letters of credit of $7.7 million as of June 30, 2015. 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.

.....CRITICAL ACCOUNTING POLICIES AND ESTIMATES.....The accounting and reporting policies of the Company are in accordance with Generally Accepted Accounting Principles and conform to general practices within the banking industry. Accounting and reporting policies for the allowance for loan losses, goodwill, income taxes, and investment securities 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 — Allowance for Loan Losses
BALANCE SHEET REFERENCE — Allowance for loan losses
INCOME STATEMENT REFERENCE — Provision for loan losses
DESCRIPTION

The allowance for loan losses is calculated with the objective of maintaining reserve levels believed by management to be sufficient to absorb estimated probable 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, including, among others, likelihood of customer default, loss given default, exposure at default, the amounts and timing of expected future cash flows on impaired loans, value of collateral, estimated losses on consumer loans and residential mortgages, and general amounts for historical loss experience. This process also considers economic conditions, uncertainties in estimating losses and inherent risks in the various credit portfolios. All

40

of these factors may be susceptible to significant change. Also, the allocation of the allowance for credit losses to specific loan pools is based on historical loss trends and management’s judgment concerning those trends.

Commercial and commercial real estate loans are the largest category of credits and the most sensitive to changes in assumptions and judgments underlying the determination of the allowance for loan loss. Approximately $7.3 million, or 75%, of the total allowance for loan losses at June 30, 2015 has been allocated to these two loan categories. This allocation also considers other relevant factors such as actual versus estimated losses, economic trends, delinquencies, levels of non-performing and TDR loans, concentrations of credit, trends in loan volume, experience and depth of management, examination and audit results, effects of any changes in lending policies and trends in policy, financial information and documentation exceptions. To the extent actual outcomes differ from management estimates, additional provision for loan losses may be required that would adversely impact earnings in future periods.

ACCOUNT — Goodwill
BALANCE SHEET REFERENCE — Goodwill
INCOME STATEMENT REFERENCE — Goodwill impairment
DESCRIPTION

The Company considers our accounting policies related to goodwill to be critical because the assumptions or judgment used in determining the fair value of assets and liabilities acquired in past acquisitions are subjective and complex. As a result, changes in these assumptions or judgment could have a significant impact on our financial condition or results of operations.

The fair value of acquired assets and liabilities, including the resulting goodwill, was based either on quoted market prices or provided by other third party sources, when available. When third party information was not available, estimates were made in good faith by management primarily through the use of internal cash flow modeling techniques. The assumptions that were used in the cash flow modeling were subjective and are susceptible to significant changes. The Company routinely utilizes the services of an independent third party that is regarded within the banking industry as an expert in valuing core deposits to monitor the ongoing value and changes in the Company’s core deposit base. These core deposit valuation updates are based upon specific data provided from statistical analysis of the Company’s own deposit behavior to estimate the duration of these non-maturity deposits combined with market interest rates and other economic factors.

Goodwill arising from business combinations represents the value attributable to unidentifiable intangible elements in the business acquired. The Company’s goodwill relates to value inherent in the banking and wealth management businesses, and the value is dependent upon the Company’s ability to provide quality, cost-effective services in the face of free competition from other market participants on a regional basis. This ability relies upon continuing investments in processing systems, the development of value-added service features and the ease of use of the Company’s services. As such, goodwill value is supported ultimately by revenue that is driven by the volume of business transacted and the loyalty of the Company’s deposit and customer base over a longer time frame. The quality and value of a Company’s assets is also an important factor to consider when performing goodwill impairment testing. A decline in earnings as a result of a lack of growth or the inability to deliver cost-effective value added services over sustained periods can lead to impairment of goodwill.

Goodwill which has an indefinite useful life is tested for impairment at least annually and written down and charged to results of operations only in periods in which the recorded value is more than the estimated fair value.

ACCOUNT — Income Taxes
BALANCE SHEET REFERENCE — Net deferred tax asset
INCOME STATEMENT REFERENCE — Provision for income tax expense
DESCRIPTION

The provision for income taxes is the sum of income taxes both currently payable and deferred. The changes in deferred tax assets and liabilities are determined based upon the changes in differences between the basis of assets and liabilities for financial reporting purposes and the basis of assets and liabilities as measured

41

by the enacted tax rates that management estimates will be in effect when the differences reverse. This income tax review is completed on a quarterly basis.

In relation to recording the provision for income taxes, management must estimate the future tax rates applicable to the reversal of tax differences, make certain assumptions regarding whether tax differences are permanent or temporary and the related timing of the expected reversal. Also, estimates are made as to whether taxable operating income in future periods will be sufficient to fully recognize any gross deferred tax assets. If recovery is not likely, we must increase our provision for taxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be recoverable. Alternatively, we may make estimates about the potential usage of deferred tax assets that decrease our valuation allowances. As of June 30, 2015, we believe that all of the deferred tax assets recorded on our balance sheet will ultimately be recovered and that no valuation allowances were needed.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We recognize liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary. We record an additional charge in our provision for taxes in the period in which we determine that the recorded tax liability is less than we expect the ultimate assessment to be.

ACCOUNT — Investment Securities
BALANCE SHEET REFERENCE — Investment securities
INCOME STATEMENT REFERENCE — Net realized gains (losses) on investment securities
DESCRIPTION

Available-for-sale and held-to-maturity securities are reviewed quarterly for possible other-than-temporary impairment. The review includes an analysis of the facts and circumstances of each individual investment such as the severity of loss, the length of time the fair value has been below cost, the expectation for that security’s performance, the creditworthiness of the issuer and the Company’s intent and ability to hold the security to recovery. A decline in value that is considered to be other-than-temporary is recorded as a loss within non-interest income in the Consolidated Statements of Operations. At June 30, 2015, the unrealized losses in the available-for-sale security portfolio were comprised of securities issued by government agencies or government sponsored agencies and certain high quality corporate securities. The Company believes the 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 fall, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. 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.

.....FORWARD LOOKING STATEMENT.....

THE STRATEGIC FOCUS:

The challenge for the future is to improve earnings performance to peer levels through a disciplined focus on community banking and improving the profitability of our Trust Company. In accordance with our strategic plan, the Company will maintain its focus as a community bank delivering banking and trust services to the best of our ability and focus on further growing revenues by leveraging our strong capital base and infrastructure. This Company will not succumb to the lure of quick fixes and fancy financial gimmicks. It is our plan to continue to build the Company into a potent banking force in this region and in this industry. Our focus encompasses the following:

• Customer Service — It is the existing and prospective customer that the Company must satisfy. This means good products and fair prices. But it also means quick response time and professional

42

competence. It means speedy problem resolution and a minimizing of bureaucratic frustrations. The Company is training and motivating its staff to meet these standards while providing customers with more banking options that involve leading technologies such as computers, smartphones, and tablets to conduct business.

• Revenue Growth — It is necessary for the Company to focus on growing revenues. This means loan growth, deposit growth and fee growth. It also means close coordination between all customer service areas so as many revenue producing products as possible can be presented to existing and prospective customers. The Company’s Strategic Plan contains action plans in each of these areas particularly on increasing loans through several loan production offices. There will be a particular focus on small business commercial lending. An examination of the peer bank database provides ample proof that a well-executed community banking business model can generate a reliable and rewarding revenue stream.

• Expense Rationalization — The Company remains focused on trying to reduce and rationalize expenses. This has not been a program of broad based cuts, but has been targeted so the Company stays strong but spends less. It is critical to be certain that future expenditures are directed to areas that are playing a positive role in the drive to improve revenues. The Company engaged a consulting firm that specializes in the areas of expense rationalization and profit improvement for community banks in 2014. This firm completed a thorough analysis of our business operations and practices. As a result of this project, the firm provided the Company with recommendations to reduce expenses and improve future profitability. Many of their recommendations have been evaluated and already implemented with further study being done on other recommendations scheduled throughout 2015. The Company expects that its payback on this project will be significant and presently believes that a minimum of $1 million of annual savings from this project will be realized in 2015.

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; (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) increase in dividend rate on the SBLF Preferred Stock and/or the inability to receive regulatory approval to redeem all or a portion of the SBLF Preferred Stock; and (xiii) other external developments which could materially impact the Company’s operational and financial performance.

43

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 Interest Rate Sensitivity section of the M.D. & A.

Item 4.....CONTROLS AND PROCEDURES.....(a) Evaluation of Disclosure Controls and Procedures. The Company’s management carried out an evaluation, under the supervision and with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and the operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2015, pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer along with the Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of June 30, 2015, are effective.

(b) Changes in Internal Controls. There have been no changes in AmeriServ Financial Inc.’s internal controls over financial reporting that occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

44

Part II Other Information

Item 1. Legal Proceedings

There are no material proceedings to which the Company or any of our subsidiaries are a party or by which, to the Company’s’ knowledge, we, or any of our subsidiaries, are threatened. All legal proceedings presently pending or threatened against the Company or our subsidiaries involve routine litigation incidental to our business or that of the subsidiary involved and are not material in respect to the amount in controversy.

Item 1A. Risk Factors

Not Applicable

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

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

None

Item 6. Exhibits

3.1	Amended and Restated Articles of Incorporation as amended through August 11, 2011 (Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-8 (File No. 333-176869) filed on September 16, 2011).
3.2	Bylaws, as amended and restated on December 30, 2014 (Incorporated by reference to Exhibit 3.2 to the Current report on Form 8-K filed on January 2, 2015).
10.1	Employment Agreement dated April 27, 2015, effective March 19, 2015, between AmeriServ Financial, Inc. and Jeffrey A. Stopko (Incorporated by reference to Exhibit 10.1 to the Current report on Form 8-K filed on April 28, 2015).
15.1	Report of S.R. Snodgrass, P.C. regarding unaudited interim financial statement information.
15.2	Awareness Letter of S.R. Snodgrass, P.C.
31.1	Certification pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
101	The following information from AMERISERV FINANCIAL, INC.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL (eTensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income (unaudited), (iv) Consolidated Statements of Cash Flows (unaudited), and (iv) Notes to the Unaudited Consolidated Financial Statements.

45

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 7, 2015	/s/ Jeffrey A. Stopko Jeffrey A. Stopko President and Chief Executive Officer
Date: August 7, 2015	/s/ Michael D. Lynch Michael D. Lynch Senior Vice President and Chief Financial Officer

46

EX-15.1

Exhibit 15.1

Audit Committee
AmeriServ Financial, Inc.

We have reviewed the accompanying consolidated balance sheet of AmeriServ Financial, Inc. and subsidiaries as of June 30, 2015, the related consolidated statements of operations and comprehensive income for the three- and six-month periods ended June 30, 2015 and 2014, and the related consolidated statement of cash flows for the six-month periods ended June 30, 2015 and 2014. These consolidated financial statements are the responsibility of AmeriServ Financial, Inc.’s management.

We conducted our reviews in accordance with standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of AmeriServ Financial, Inc. and subsidiaries as of December 31, 2014, and the related consolidated statements of operations, comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated March 6, 2015, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2014, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

/s/ S.R. Snodgrass, P.C.

Wexford, Pennsylvania
August 7, 2015

EX-15.2

Exhibit 15.2

August 7, 2015

AmeriServ Financial, Inc.
216 Franklin Street
P.O. Box 520
Johnstown, Pennsylvania 15907-0520

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of AmeriServ Financial, Inc. and subsidiaries for the three- and six-months ended June 30, 2015, as indicated in our report dated August 7, 2015; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, is incorporated by reference in the following Registration Statements:

Registration Statement No. 333-176869 on Form S-8
Registration Statement No. 333-67600 on Form S-8
Registration Statement No. 033-53935 on Form S-8
Registration Statement No. 033-55845 on Form S-8
Registration Statement No. 033-55207 on Form S-8
Registration Statement No. 033-55211 on Form S-8
Registration Statement No. 333-129009 on Form S-3
Registration Statement No. 333-121215 on Form S-3
Registration Statement No. 333-120022 on Form S-3
Registration Statement No. 333-50225 on Form S-3
Registration Statement No. 033-56604 on Form S-3

We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

Sincerely,

/s/ S.R. Snodgrass, P.C.
Wexford, Pennsylvania

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO RULES 13a-14 AND 15d-14 OF THE SECURITIES EXCHANGE ACT OF
1934 AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey A. Stopko, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmeriServ Financial, Inc. (ASF);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of ASF as of, and for, the periods presented in this report;

4. ASF’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for ASF and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to ASF, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of ASF’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in ASF’s internal control over financial reporting that occurred during ASF’s most recent fiscal quarter (ASF’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, ASF’s internal control over financial reporting; and

5. ASF’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to ASF’s auditors and the audit committee of ASF’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect ASF’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in ASF’s internal control over financial reporting.

Date: August 7, 2015	/s/ Jeffrey A. Stopko Jeffrey A. Stopko President & CEO

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO RULES 13a-14 AND 15d-14 OF THE SECURITIES EXCHANGE ACT OF
1934 AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael D. Lynch, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AmeriServ Financial, Inc. (ASF);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of ASF as of, and for, the periods presented in this report;

4. ASF’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for ASF and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to ASF, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of ASF’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in ASF’s internal control over financial reporting that occurred during ASF’s most recent fiscal quarter (ASF’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, ASF’s internal control over financial reporting; and

5. ASF’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to ASF’s auditors and the audit committee of ASF’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect ASF’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in ASF’s internal control over financial reporting.

Date: August 7, 2015	/s/ Michael D. Lynch Michael D. Lynch Senior Vice President & CFO

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AmeriServ Financial, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey A. Stopko, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

1). The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and

2). The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Jeffrey A. Stopko

Jeffrey A. Stopko
President and
Chief Executive Officer

August 7, 2015

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of AmeriServ Financial, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael D. Lynch, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

1). The Report fully complies with the requirements of section 13(a) or 15 (d) of the Securities Exchange Act of 1934; and

2). The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael D. Lynch

Michael D. Lynch
Senior Vice President and
Chief Financial Officer

August 7, 2015

XML

Investment Securities (Summary of Cost Basis and Fair Values of Investment Securities) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Investment securities available for sale, Cost Basis	$ 120,702	$ 124,316
Investment securities available for sale, Gross Unrealized Gains	2,758	3,279
Investment securities available for sale, Gross Unrealized Losses	(592)	(485)
Available for Sale, Fair Value, Total	122,868	127,110
Investment securities held to maturity, Cost Basis	19,580	19,840
Investment securities held to maturity, Gross Unrealized Gains	374	475
Investment securities held to maturity, Gross Unrealized Losses	(178)	(102)
Held to Maturity, Fair Value, Total	19,776	20,213
U.S. Agency [Member]
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Investment securities available for sale, Cost Basis	5,933	5,931
Investment securities available for sale, Gross Unrealized Gains	22	21
Investment securities available for sale, Gross Unrealized Losses	(19)	(46)
Available for Sale, Fair Value, Total	5,936	5,906
U.S. Agency mortgage-backed securities [Member]
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Investment securities available for sale, Cost Basis	97,265	102,888
Investment securities available for sale, Gross Unrealized Gains	2,708	3,197
Investment securities available for sale, Gross Unrealized Losses	(363)	(317)
Available for Sale, Fair Value, Total	99,610	105,768
Investment securities held to maturity, Cost Basis	11,680	12,481
Investment securities held to maturity, Gross Unrealized Gains	304	395
Investment securities held to maturity, Gross Unrealized Losses	(73)	(50)
Held to Maturity, Fair Value, Total	11,911	12,826
Corporate bonds [Member]
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Investment securities available for sale, Cost Basis	17,504	15,497
Investment securities available for sale, Gross Unrealized Gains	28	61
Investment securities available for sale, Gross Unrealized Losses	(210)	(122)
Available for Sale, Fair Value, Total	17,322	15,436
Taxable Municipal [Member]
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Investment securities held to maturity, Cost Basis	3,905	3,364
Investment securities held to maturity, Gross Unrealized Gains	70	74
Investment securities held to maturity, Gross Unrealized Losses	(52)	(24)
Held to Maturity, Fair Value, Total	3,923	3,414
Corporate bonds and other securities [Member]
Available-For-Sale-Securities-And-Held-To-Maturity-Securities
Investment securities held to maturity, Cost Basis	$ 3,995	3,995
Investment securities held to maturity, Gross Unrealized Gains		6
Investment securities held to maturity, Gross Unrealized Losses	$ (53)	(28)
Held to Maturity, Fair Value, Total	$ 3,942	$ 3,973

XML

Non-performing Assets Including Troubled Debt Restructurings (Schedule of Interest Income) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Schedule of Interest Income
Interest income due in accordance with original terms	$ 24	$ 34	$ 48	$ 67
Interest income recorded
Net reduction in interest income	$ 24	$ 34	$ 48	$ 67

XML

Allowance for Loan Losses (Average Recorded Investment in Impaired Loans and Related Interest Income Recognized) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Average recorded investment in impaired loans and related interest income recognized
Average investment in impaired loans	$ 1,729	$ 2,296	$ 2,001	$ 2,678
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	15	$ 1	22	$ 2
Commercial [Member]
Average recorded investment in impaired loans and related interest income recognized
Average investment in impaired loans	220		110
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	10		11
Commercial loans secured by real estate [Member]
Average recorded investment in impaired loans and related interest income recognized
Average investment in impaired loans	1,509	$ 2,296	1,891	$ 2,678
Interest income recognized:
Interest income recognized on a cash basis on impaired loans	$ 5	$ 1	$ 11	$ 2

XML

Non-performing Assets Including Troubled Debt Restructurings (Schedule of TDRs) (Details)
$ in Thousands

3 Months Ended

6 Months Ended

Jun. 30, 2014

USD ($)

Jun. 30, 2015

USD ($)

Jun. 30, 2014

USD ($)

Loans in accrual status [Member] | Commercial [Member]

Schedule of TDRs

Number of loans

1

Current Balance

$ 204

Concession Granted

Extension of maturity date

Loans in non-accrual status [Member] | Commercial loans secured by real estate [Member]

Schedule of TDRs

Number of loans

1

1

Current Balance

$ 141

$ 253

Concession Granted

Extension of maturity date

Extension of maturity date

XML

Allowance for Loan Losses (Summary of Primary Segments of Loan Portfolio) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	$ 1,182		$ 989
Collectively evaluated for impairment	860,668		826,091
Total Loans	861,850		827,080
Specific reserve allocation	614		520
General reserve allocation	9,103		9,103
Total allowance for loan losses	9,717	$ 9,689	$ 9,623	$ 10,150	$ 10,109	$ 10,104
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	406
Collectively evaluated for impairment	155,053		$ 139,126
Total Loans	155,459		$ 139,126
Specific reserve allocation	102
General reserve allocation	3,069		$ 3,262
Total allowance for loan losses	3,171	3,157	3,262	3,254	3,065	2,844
Commercial loans secured by real estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment	776		989
Collectively evaluated for impairment	426,398		409,340
Total Loans	427,174		410,329
Specific reserve allocation	512		520
General reserve allocation	3,628		3,382
Total allowance for loan losses	$ 4,140	4,087	$ 3,902	4,475	4,662	4,885
Real estate-mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment
Collectively evaluated for impairment	$ 259,144		$ 258,616
Total Loans	$ 259,144		$ 258,616
Specific reserve allocation
General reserve allocation	$ 1,321		$ 1,310
Total allowance for loan losses	$ 1,321	1,304	$ 1,310	1,301	1,273	1,260
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individually evaluated for impairment
Collectively evaluated for impairment	$ 20,073		$ 19,009
Total Loans	$ 20,073		$ 19,009
Specific reserve allocation
General reserve allocation	$ 201		$ 190
Total allowance for loan losses	$ 201	191	$ 190	145	139	136
Allocation for general risk [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Specific reserve allocation
General reserve allocation	$ 884		$ 959
Total allowance for loan losses	$ 884	$ 950	$ 959	$ 975	$ 970	$ 979

XML

Pension Benefits (Tables)

6 Months Ended

Jun. 30, 2015

Pension Benefits [Abstract]

Schedule of Components of Net Periodic Benefit Cost

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Components of net periodic benefit cost
Service cost	$	400		$	430		$	800		$	860
Interest cost		325			331			650			662
Expected return on plan assets		(525	)		(498	)		(1,050	)		(996	)
Amortization of prior year service cost		-			(5	)		-			(10	)
Recognized net actuarial loss		300			272			600			544
Net periodic pension cost	$	500		$	530		$	1,000		$	1,060

XML

Federal Home Loan Bank Borrowings (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Federal Home Loan Bank (FHLB) borrowings and advances
Open Repo Plus, Maturing Overnight, Amount	$ 63,430	$ 38,880
Advances, Maturing 2015, Amount	4,000	4,000
Advances, Maturing 2016, Amount	12,000	12,000
Advances, Maturing 2017, Amount	12,000	12,000
Advances, Maturing 2018, Amount	10,000	10,000
Advances, Maturing 2019 and over, Amount	8,000	4,000
Advances from Federal Home Loan Bank	46,000	42,000
Total FHLB borrowings, Amount	$ 109,430	$ 80,880
Open Repo Plus Maturity Overnight, Weighted Average Rate	0.33%	0.27%
Advances Maturing 2015, Weighted Average Rate	0.52%	0.52%
Advances Maturing 2016, Weighted Average Rate	0.81%	0.81%
Advances Maturing 2017, Weighted Average Rate	1.06%	1.06%
Advances Maturing 2018, Weighted Average Rate	1.51%	1.51%
Advances Maturing 2019 and over, Weighted Average Rate	1.76%	1.88%
Total advances, Weighted Average Rate	1.17%	1.12%
Aggregate FHLB borrowings, Weighted Average Rate	0.68%	0.71%

XML

Investment Securities (Tables)

6 Months Ended

Jun. 30, 2015

Investment Securities [Abstract]

Schedule of Cost Basis and Fair Values of Investment Securities

Investment securities available for sale (AFS):

	June 30, 2015
			Gross		Gross
	Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value
US Agency	$	5,933	$	22	$	(19	)	$	5,936
US Agency mortgage- backed  securities		97,265		2,708		(363	)		99,610
Corporate bonds		17,504		28		(210	)		17,322
Total	$	120,702	$	2,758	$	(592	)	$	122,868

Investment securities held to maturity (HTM):

	June 30, 2015
			Gross		Gross
	Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value
US Agency mortgage- backed securities	$	11,680	$	304	$	(73	)	$	11,911
Taxable municipal		3,905		70		(52	)		3,923
Corporate bonds and other securities		3,995		-		(53	)		3,942
Total	$	19,580	$	374	$	(178	)	$	19,776

Investment securities available for sale (AFS):

	December 31, 2014
			Gross		Gross
	Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value
US Agency	$	5,931	$	21	$	(46	)	$	5,906
US Agency mortgage- backed  securities		102,888		3,197		(317	)		105,768
Corporate bonds		15,497		61		(122	)		15,436
Total	$	124,316	$	3,279	$	(485	)	$	127,110

Investment securities held to maturity (HTM):

	December 31, 2014
			Gross		Gross
	Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value
US Agency mortgage- backed securities	$	12,481	$	395	$	(50	)	$	12,826
Taxable municipal		3,364		74		(24	)		3,414
Corporate bonds and other securities		3,995		6		(28	)		3,973
Total	$	19,840	$	475	$	(102	)	$	20,213

Schedule of Information Concerning Investments with Unrealized Losses

Total investment securities:

	June 30, 2015
	Less than 12 months					12 months or longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
US Agency	$	-	$	-		$	2,881	$	(19	)	$	2,881	$	(19	)
Taxable municipal		2,644		(52	)		-		-			2,644		(52	)
US Agency mortgage-backed securities		16,974		(118	)		12,400		(318	)		29,374		(436	)
Corporate bonds and other   securities		6,862		(133	)		8,867		(130	)		15,729		(263	)
Total	$	26,480	$	(303	)	$	24,148	$	(467	)	$	50,628	$	(770	)

Total investment securities:

	December 31, 2014
	Less than 12 months					12 months or longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
US Agency	$	996	$	(4	)	$	2,858	$	(42	)	$	3,854	$	(46	)
US Agency mortgage- backed securities		2,826		(13	)		20,408		(354	)		23,234		(367	)
Taxable municipal		150		(1	)		988		(23	)		1,138		(24	)
Corporate bonds and other  securities		2,960		(43	)		8,891		(107	)		11,851		(150	)
Total	$	6,932	$	(61	)	$	33,145	$	(526	)	$	40,077	$	(587	)

Schedule of Contractual Maturities of Securities

Total investment securities:  

	June 30, 2015
	Available for sale				Held to maturity
	Cost Basis		Fair Value		Cost Basis		Fair Value
Within 1 year	$	2,000	$	2,007	$	999	$	1,000
After 1 year but within 5 years		14,302		14,331		2,000		1,967
After 5 years but within 10 years		20,743		21,008		4,782		4,749
After 10 years but within15 years		50,945		51,947		560		546
Over 15 years		32,712		33,575		11,239		11,514
Total	$	120,702	$	122,868	$	19,580	$	19,776

XML

Allowance for Loan Losses (Performing and Non-performing Outstanding Balances) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Performing [Member]
Performing and non-performing outstanding balances of the residential and consumer portfolios
Outstanding balance of consumer loan	$ 277,570	$ 276,208
Performing [Member] | Real estate-mortgage [Member]
Performing and non-performing outstanding balances of the residential and consumer portfolios
Outstanding balance of consumer loan	257,497	257,199
Performing [Member] | Consumer [Member]
Performing and non-performing outstanding balances of the residential and consumer portfolios
Outstanding balance of consumer loan	20,073	19,009
Non-Performing [Member]
Performing and non-performing outstanding balances of the residential and consumer portfolios
Outstanding balance of consumer loan	1,647	1,417
Non-Performing [Member] | Real estate-mortgage [Member]
Performing and non-performing outstanding balances of the residential and consumer portfolios
Outstanding balance of consumer loan	$ 1,647	$ 1,417
Non-Performing [Member] | Consumer [Member]
Performing and non-performing outstanding balances of the residential and consumer portfolios
Outstanding balance of consumer loan

XML

Investment Securities (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Investment [Line Items]
Gross investment gains	$ 28,000	$ 120,000	$ 28,000	$ 182,000
Gross investment losses				5,000
Investment Securities:
Consolidated investment securities portfolio modified, years			2 years 9 months 18 days
Proceeds from sales of investment securities - available for sale	519,000	$ 2,500,000	$ 519,000	$ 5,242,000
Book value of securities available for sale and held to maturity	$ 98,457,000		$ 98,457,000		$ 104,780,000
Positions considered temporarily impaired	51		51
Standard & Poor's, AAA Rating [Member]
Investment [Line Items]
Portfolio rated	81.90%		81.90%		84.10%
Standard & Poor's, A Rating [Member]
Investment [Line Items]
Portfolio rated	3.90%		3.90%

XML

Earnings Per Common Share (Narrative) (Details) - Options and Warrants [Member] - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares not included in computation of earnings per common share	179,304	3,625
Minimum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Exercise price of common shares	$ 3.18	$ 4.60
Maximum [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Exercise price of common shares	$ 4.70	$ 5.22

XML

Allowance for Loan Losses (Narrative) (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Individual loan balance is classified as nonaccrual status or troubled debt restructure	$ 100,000	$ 100,000
Provision for loan losses	(200,000)	(450,000)
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Threshold for individually evaluating loans	250,000	250,000
Pass [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum individual loan balance requiring quarterly review	1,000,000	1,000,000
Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum individual loan balance requiring quarterly review	250,000	250,000
Doubtful [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum individual loan balance requiring quarterly review	$ 100,000	$ 100,000
Minimum [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum percent of portfolio to be reviewed		50.00%
Maximum [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Minimum percent of portfolio to be reviewed		55.00%

XML

Disclosures about Fair Value Measurements (Assets Measured at Fair Value on Non-Recurring Basis) (Details) - USD ($)
$ in Thousands

6 Months Ended

12 Months Ended

Jun. 30, 2015

Dec. 31, 2014

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Carrying value of impaired loans

$ 1,182

$ 989

Fair Value Measurements, Nonrecurring Basis [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Other real estate owned

126

512

Carrying value of impaired loans

$ 567

$ 469

Fair Value Measurements, Nonrecurring Basis [Member] | Impaired Loans [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liquidation expenses

10.00%

10.00%

Valuation Techniques

^[1],[2]

Appraisal of collateral

Appraisal of collateral

Appraisal of Adjustment

30.00%

30.00%

Fair Value Measurements, Nonrecurring Basis [Member] | Other Real Estate Owned [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liquidation expenses

10.00%

9.00%

Valuation Techniques

^[1],[2]

Appraisal of collateral

Appraisal of collateral

Appraisal of Adjustment

38.00%

55.00%

Fair Value Measurements, Nonrecurring Basis [Member] | Minimum [Member] | Impaired Loans [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liquidation expenses

1.00%

1.00%

Appraisal of Adjustment

0.00%

0.00%

Fair Value Measurements, Nonrecurring Basis [Member] | Minimum [Member] | Other Real Estate Owned [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liquidation expenses

1.00%

1.00%

Appraisal of Adjustment

0.00%

47.00%

Fair Value Measurements, Nonrecurring Basis [Member] | Maximum [Member] | Impaired Loans [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liquidation expenses

15.00%

15.00%

Appraisal of Adjustment

35.00%

37.00%

Fair Value Measurements, Nonrecurring Basis [Member] | Maximum [Member] | Other Real Estate Owned [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Liquidation expenses

20.00%

61.00%

Appraisal of Adjustment

48.00%

83.00%

Fair Value Measurements, Nonrecurring Basis [Member] | Level 1 [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Other real estate owned

Carrying value of impaired loans

Fair Value Measurements, Nonrecurring Basis [Member] | Level 2 [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Other real estate owned

Carrying value of impaired loans

Fair Value Measurements, Nonrecurring Basis [Member] | Level 3 [Member]

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Other real estate owned

$ 126

$ 512

Carrying value of impaired loans

$ 567

$ 469

[1] Fair Value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.

[2] Includes qualitative adjustments by management and estimated liquidation expenses.

XML

Regulatory Capital (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Summarized regulatory capital ratio of company
Tangible common equity ratio	7.66%
Consolidated [Member]
Summarized regulatory capital ratio of company
Total Capital (To RWA), Actual Amount	$ 132,879	$ 131,497
Total Capital (To RWA), Actual Ratio	14.63%	14.80%
Total Capital (To RWA), For Capital Adequacy Purposes Amount	$ 72,653	$ 71,066
Total Capital (To RWA), For Capital Adequacy Purposes Ratio	8.00%	8.00%
Total Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 90,817	$ 88,833
Total Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Common Equity Tier 1 Capital (To RWA), Actual Amount	$ 90,191
Common Equity Tier 1 Capital (To RWA), Actual Ratio	9.93%
Common Equity Tier 1 Capital (To RWA), For Capital Adequacy Purposes Amount	$ 40,867
Common Equity Tier 1 Capital (To RWA), For Capital Adequacy Purposes Ratio	4.50%
Common Equity Tier 1 Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 59,031
Common Equity Tier 1 Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.50%
Tier 1 Capital (To RWA), Actual Amount	$ 122,252	$ 120,992
Tier 1 Capital (To RWA), Actual Ratio	13.46%	13.62%
Tier 1 Capital (To RWA), For Capital Adequacy Purposes Amount	$ 54,490	$ 35,533
Tier 1 Capital (To RWA), For Capital Adequacy Purposes Ratio	6.00%	4.00%
Tier 1 Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 72,653	$ 53,300
Tier 1 Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	8.00%	6.00%
Tier 1 Capital (To Average Assets), Actual Amount	$ 122,252	$ 120,992
Tier 1 Capital (To Average Assets), Actual Ratio	11.23%	11.34%
Tier 1 Capital (To Average Assets), For Capital Adequacy Purposes Amount	$ 43,543	$ 42,662
Tier 1 Capital (To Average Assets), For Capital Adequacy Purposes Ratio	4.00%	4.00%
Tier 1 Capital (To Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 54,428	$ 53,327
Tier 1 Capital (To Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
AmeriServ Financial Bank [Member]
Summarized regulatory capital ratio of company
Total Capital (To RWA), Actual Amount	$ 106,168	$ 106,084
Total Capital (To RWA), Actual Ratio	11.81%	12.07%
Total Capital (To RWA), For Capital Adequacy Purposes Amount	$ 71,907	$ 70,305
Total Capital (To RWA), For Capital Adequacy Purposes Ratio	8.00%	8.00%
Total Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 89,884	$ 87,881
Total Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Common Equity Tier 1 Capital (To RWA), Actual Amount	$ 95,541
Common Equity Tier 1 Capital (To RWA), Actual Ratio	10.63%
Common Equity Tier 1 Capital (To RWA), For Capital Adequacy Purposes Amount	$ 40,448
Common Equity Tier 1 Capital (To RWA), For Capital Adequacy Purposes Ratio	4.50%
Common Equity Tier 1 Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 58,425
Common Equity Tier 1 Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.50%
Tier 1 Capital (To RWA), Actual Amount	$ 95,541	$ 95,579
Tier 1 Capital (To RWA), Actual Ratio	10.63%	10.88%
Tier 1 Capital (To RWA), For Capital Adequacy Purposes Amount	$ 53,930	$ 35,153
Tier 1 Capital (To RWA), For Capital Adequacy Purposes Ratio	6.00%	4.00%
Tier 1 Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 71,907	$ 52,729
Tier 1 Capital (To RWA), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	8.00%	6.00%
Tier 1 Capital (To Average Assets), Actual Amount	$ 95,541	$ 95,579
Tier 1 Capital (To Average Assets), Actual Ratio	9.01%	9.19%
Tier 1 Capital (To Average Assets), For Capital Adequacy Purposes Amount	$ 42,425	$ 41,608
Tier 1 Capital (To Average Assets), For Capital Adequacy Purposes Ratio	4.00%	4.00%
Tier 1 Capital (To Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 53,032	$ 52,010
Tier 1 Capital (To Average Assets), To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%

XML

Allowance for Loan Losses (Impaired Loans by Class) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	$ 1,182,000	$ 989,000
Related Allowance	614,000	520,000
Unpaid Principal Balance	1,291,000	1,069,000
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	406,000
Unpaid Principal Balance	406,000
Commercial loans secured by real estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	776,000	989,000
Unpaid Principal Balance	885,000	1,069,000
Impaired Loans with Specific Allowance [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	1,162,000	989,000
Related Allowance	614,000	520,000
Impaired Loans with Specific Allowance [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	406,000
Related Allowance	102,000
Impaired Loans with Specific Allowance [Member] | Commercial loans secured by real estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	756,000	989,000
Related Allowance	512,000	$ 520,000
Impaired Loans with No Specific Allowance [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	$ 20,000
Impaired Loans with No Specific Allowance [Member] | Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment
Impaired Loans with No Specific Allowance [Member] | Commercial loans secured by real estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	$ 20,000

XML

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2015

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

3. Recent Accounting Pronouncements

In April 2015, the FASB issued ASU 2015-03, Interest — Imputation of Interest (Subtopic 835-30), as part of its initiative to reduce complexity in accounting standards. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. This Update is not expected to have a significant impact on the Company's financial statements.

XML

Segment Results (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Contribution of segments to the consolidated results of operations
Total revenue	$ 12,492,000	$ 12,022,000	$ 25,138,000	$ 24,079,000
Net income (loss)	1,421,000	979,000	2,790,000	1,909,000
Total assets	1,112,934,000		1,112,934,000		$ 1,089,263,000
Retail Banking [Member]
Contribution of segments to the consolidated results of operations
Total revenue	6,539,000	6,470,000	13,063,000	12,587,000
Net income (loss)	743,000	617,000	1,402,000	965,000
Total assets	374,659,000		374,659,000		376,009,000
Commercial Banking [Member]
Contribution of segments to the consolidated results of operations
Total revenue	4,635,000	4,085,000	9,373,000	8,412,000
Net income (loss)	1,334,000	1,030,000	2,625,000	2,126,000
Total assets	595,827,000		595,827,000		563,690,000
Trust [Member]
Contribution of segments to the consolidated results of operations
Total revenue	2,230,000	2,041,000	4,397,000	4,155,000
Net income (loss)	396,000	356,000	776,000	664,000
Total assets	5,306,000		5,306,000		5,015,000
Investment/ Parent [Member]
Contribution of segments to the consolidated results of operations
Total revenue	(912,000)	(574,000)	(1,695)	(1,075,000)
Net income (loss)	(1,052,000)	$ (1,024,000)	(2,013,000)	$ (1,846,000)
Total assets	$ 137,142,000		$ 137,142,000		$ 144,549,000

XML

Loans (Summary of Loan Portfolio) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	$ 861,850	$ 827,080
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	155,459	139,126
Commercial loans secured by real estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	427,174	410,329
Real estate-mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	259,144	258,616
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net of unearned income	$ 20,073	$ 19,009

XML

Federal Home Loan Bank Borrowings (Tables)

6 Months Ended

Jun. 30, 2015

Federal Home Loan Bank Borrowings [Abstract]

Federal Home Loan Bank (FHLB) Borrowings and Advances

	At June 30, 2015
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	63,430		0.33	%
Advances	2015		4,000		0.52
	2016		12,000		0.81
	2017		12,000		1.06
	2018		10,000		1.51
	2019 and over		8,000		1.76
Total advances			46,000		1.17
Total FHLB borrowings		$	109,430		0.68	%

	At December 31, 2014
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	38,880		0.27	%
Advances	2015		4,000		0.52
	2016		12,000		0.81
	2017		12,000		1.06
	2018		10,000		1.51
	2019 and over		4,000		1.88
Total advances			42,000		1.12
Total FHLB borrowings		$	80,880		0.71	%

XML

Non-performing Assets Including Troubled Debt Restructurings (TDR) (Tables)

6 Months Ended

Jun. 30, 2015

Nonperforming Assets Including Troubled Debt Restructurings [Abstract]

Non-performing Assets Including TDR

	June 30, 2015			December 31, 2014
Non-accrual loans
Commercial		209			-
Commercial loans secured by real estate	$	255		$	778
Real estate-mortgage		1,647			1,417
Total		2,111			2,195
Other real estate owned
Commercial loans secured by real estate		-			384
Real estate-mortgage		126			128
Total		126			512
TDR's not in non-accrual		328			210
Total non-performing assets including TDR	$	2,565		$	2,917
Total non-performing assets as a percent of loans, net of unearned income, and other real estate owned		0.30	%		0.35	%

Schedule of Interest Income

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Interest income due in accordance with original terms	$	24	$	34	$	48	$	67
Interest income recorded		-		-		-		-
Net reduction in interest income	$	24	$	34	$	48	$	67

Schedule of TDRs

The following table details the loans modified as TDRs during the six month period ended June 30, 2015 (dollars in thousands).

Loans in accrual status	# of Loans		Current Balance		Concession Granted
Commercial loan		1	$	204	Extension of maturity date

The following table details the loans modified as TDRs during the three month period ended June 30, 2014 (dollars in thousands).

Loans in non-accrual status	# of Loans		Current Balance		Concession Granted
Commercial loan secured by real estate		1	$	141	Extension of maturity date

The following table details the loans modified as TDRs during the six month period ended June 30, 2014 (dollars in thousands).

Loans in non-accrual status	# of Loans		Current Balance		Concession Granted
Commercial loan secured by real estate		1	$	253	Extension of maturity date

XML

Non-performing Assets Including Troubled Debt Restructurings (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Nonperforming Assets Including Troubled Debt Restructurings [Abstract]
Aggregate of multiple consecutive maturity date extensions delay in payment, days	120 days
Timely payments on contract terms for minimum consecutive months prior to consideration for removing loan from TDR status	6 months
Minimum consecutive months payment for removing the loan from non-accrual status	6 months
ALL reserve for TDR's	$ 542,000	$ 365,000

XML

Loans (Narative) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Financing Receivable, Impaired [Line Items]
Real estate-construction loans, percentage	2.90%	3.50%
Loan balances net of unearned income	$ 635	$ 554

XML

Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2015

Accumulated Comprehensive Loss [Abstract]

Changes in Each Component of Accumulated Other Comprehensive Loss

	Three months ended June 30, 2015									Three months ended June 30, 2014
	Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)			Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)
Beginning balance	$	2,072		$	(8,313	)	$	(6,241	)	$	1,345		$	(6,659	)	$	(5,314	)
Other comprehensive income (loss) before reclassifications		(625	)		416			(209	)		684			—			684
Amounts reclassified from accumulated other comprehensive loss		(18	)		—			(18	)		(79	)		—			(79	)
Net current period other comprehensive income (loss)		(643	)		416			(227	)		605			—			605
Ending balance	$	1,429		$	(7,897	)	$	(6,468	)	$	1,950		$	(6,659	)	$	(4,709	)

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

	Six months ended June 30, 2015									Six months ended June 30, 2014
	Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)			Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)
Beginning balance	$	1,843		$	(8,745	)	$	(6,902	)	$	1,043		$	(6,918	)	$	(5,875	)
Other comprehensive income (loss) before reclassifications		(396	)		848			452			1,024			256			1,280
Amounts reclassified from accumulated other comprehensive loss		(18	)		—			(18	)		(117	)		3			(114	)
Net current period other comprehensive income (loss)		(414	)		848			434			907			259			1,166
Ending balance	$	1,429		$	(7,897	)	$	(6,468	)	$	1,950		$	(6,659	)	$	(4,709	)

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

Amounts Reclassified out of Each Component of Accumulated Other Comprehensive Loss

	Amount reclassified from accumulated other comprehensive loss(1)
Details about accumulated other comprehensive loss components	For the three months ended June 30, 2015			For the three months ended June 30, 2014			Affected line item in the statement of operations
Unrealized gains and losses on sale of securities
	$	(28	)	$	(120	)		Net realized gains on investment securities
		10			41			Provision for income tax expense
	$	(18	)	$	(79	)		Net of tax
Total reclassifications for the period	$	(18	)	$	(79	)		Net income

(1) Amounts in parentheses indicate credits.

	Amount reclassified from accumulated other comprehensive loss(1)
Details about accumulated other comprehensive loss components	For the six months ended June 30, 2015			For the six months ended June 30, 2014			Affected line item in the statement of operations
Unrealized gains and losses on sale of securities
	$	(28	)	$	(177	)		Net realized gains on investment securities
		10			60			Provision for income tax expense
	$	(18	)	$	(117	)		Net of tax
Amortization of defined benefit items(2)
Amortization of prior year service cost	$	—		$	5			Salaries and employee benefits
		—			(2	)		Provision for income tax expense
	$	—		$	3			Net of tax
Total reclassifications for the period	$	(18	)	$	(114	)		Net income

(1) Amounts in parentheses indicate credits.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (see Note 16 for additional details).

XML

Regulatory Capital (Tables)

6 Months Ended

Jun. 30, 2015

Regulatory Capital [Abstract]

Summarized Regulatory Capital Ratio

	At June 30, 2015
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total Capital (To RWA)
Consolidated	$	132,879		14.63	%	$	72,653		8.00	%	$	90,817		10.00	%
AmeriServ Financial Bank		106,168		11.81			71,907		8.00			89,884		10.00
Common Equity Tier 1 Capital (To RWA)
Consolidated		90,191		9.93			40,867		4.50			59,031		6.50
AmeriServ Financial Bank		95,541		10.63			40,448		4.50			58,425		6.50
Tier 1 Capital (To RWA)
Consolidated		122,252		13.46			54,490		6.00			72,653		8.00
AmeriServ Financial Bank		95,541		10.63			53,930		6.00			71,907		8.00
Tier 1 Capital (To Average Assets) leverage
Consolidated		122,252		11.23			43,543		4.00			54,428		5.00
AmeriServ Financial Bank		95,541		9.01			42,425		4.00			53,032		5.00

	At December 31, 2014
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total Capital (To RWA)
Consolidated	$	131,497		14.80	%	$	71,066		8.00	%	$	88,833		10.00	%
AmeriServ Financial Bank		106,084		12.07			70,305		8.00			87,881		10.00
Tier 1 Capital (To RWA)
Consolidated		120,992		13.62			35,533		4.00			53,300		6.00
AmeriServ Financial Bank		95,579		10.88			35,153		4.00			52,729		6.00
Tier 1 Capital (To Average Assets)
Consolidated		120,992		11.34			42,662		4.00			53,327		5.00
AmeriServ Financial Bank		95,579		9.19			41,608		4.00			52,010		5.00

XML

Basis of Preparation

6 Months Ended

Jun. 30, 2015

Basis of Preparation [Abstract]

Basis of Preparation

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, 2014.

XML

Segment Results (Tables)

6 Months Ended

Jun. 30, 2015

Segment Results [Abstract]

Schedule of Segment Results

	Three months ended						Six months ended						June 30,
	June 30, 2015						June 30, 2015						2015
	Total revenue			Net income (loss)			Total revenue			Net income (loss)			Total assets
Retail banking	$	6,539		$	743		$	13,063		$	1,402		$	374,659
Commercial banking		4,635			1,334			9,373			2,625			595,827
Trust		2,230			396			4,397			776			5,306
Investment/Parent		(912	)		(1,052	)		(1.695	)		(2,013	)		137,142
Total	$	12,492		$	1,421		$	25,138		$	2,790		$	1,112,934

	Three months ended						Six months ended						December 31,
	June 30, 2014						June 30, 2014						2014
	Total revenue			Net income (loss)			Total revenue			Net income (loss)			Total assets
Retail banking	$	6,470		$	617		$	12,587		$	965		$	376,009
Commercial banking		4,085			1,030			8,412			2,126			563,690
Trust		2,041			356			4,155			664			5,015
Investment/Parent		(574	)		(1,024	)		(1,075	)		(1,846	)		144,549
Total	$	12,022		$	979		$	24,079		$	1,909		$	1,089,263

XML

Investment Securities (Information Concerning Investments with Unrealized Losses) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Information concerning investments with unrealized losses
Less than 12 months, Fair Value	$ 26,480	$ 6,932
Less than 12 months, Unrealized Losses	(303)	(61)
12 months or longer, Fair Value	24,148	33,145
12 months or longer, Unrealized Losses	(467)	(526)
Total, Fair Value	50,628	40,077
Total, Unrealized Losses	$ (770)	(587)
U.S. Agency [Member]
Information concerning investments with unrealized losses
Less than 12 months, Fair Value		996
Less than 12 months, Unrealized Losses		(4)
12 months or longer, Fair Value	$ 2,881	2,858
12 months or longer, Unrealized Losses	(19)	(42)
Total, Fair Value	2,881	3,854
Total, Unrealized Losses	(19)	(46)
U.S. Agency mortgage-backed securities [Member]
Information concerning investments with unrealized losses
Less than 12 months, Fair Value	16,974	2,826
Less than 12 months, Unrealized Losses	(118)	(13)
12 months or longer, Fair Value	12,400	20,408
12 months or longer, Unrealized Losses	(318)	(354)
Total, Fair Value	29,374	23,234
Total, Unrealized Losses	(436)	(367)
Taxable Municipal [Member]
Information concerning investments with unrealized losses
Less than 12 months, Fair Value	2,644	150
Less than 12 months, Unrealized Losses	$ (52)	(1)
12 months or longer, Fair Value		988
12 months or longer, Unrealized Losses		(23)
Total, Fair Value	$ 2,644	1,138
Total, Unrealized Losses	(52)	(24)
Corporate bonds and other securities [Member]
Information concerning investments with unrealized losses
Less than 12 months, Fair Value	6,862	2,960
Less than 12 months, Unrealized Losses	(133)	(43)
12 months or longer, Fair Value	8,867	8,891
12 months or longer, Unrealized Losses	(130)	(107)
Total, Fair Value	15,729	11,851
Total, Unrealized Losses	$ (263)	$ (150)

XML

Non-performing Assets Including Troubled Debt Restructurings (Non-performing Assets Including TDR) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Non-performing assets including TDR
Non-accrual loans	$ 2,111	$ 2,195
Other real estate owned	126	512
TDR's not in non-accrual	328	210
Total non-performing assets including TDR	$ 2,565	$ 2,917
Total non-performing assets as a percent of loans, net of unearned income, and other real estate owned	0.30%	0.35%
Commercial [Member]
Non-performing assets including TDR
Non-accrual loans	$ 209
Commercial loans secured by real estate [Member]
Non-performing assets including TDR
Non-accrual loans	$ 255	$ 778
Other real estate owned		384
Real estate-mortgage [Member]
Non-performing assets including TDR
Non-accrual loans	$ 1,647	1,417
Other real estate owned	$ 126	$ 128

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Cash and due from depository institutions	$ 16,748	$ 23,780
Interest bearing deposits	2,957	2,952
Short-term investments in money market funds	6,886	6,140
Total cash and cash equivalents	26,591	32,872
Investment securities:
Available for sale	122,868	127,110
Held to maturity (fair value $19,776 on June 30, 2015 and $20,213 on December 31, 2014)	19,580	19,840
Loans held for sale	4,393	5,051
Loans	862,485	827,634
Less: Unearned income	635	554
Allowance for loan losses	9,717	9,623
Net loans	852,133	817,457
Premises and equipment, net	12,565	13,012
Accrued interest income receivable	3,310	3,127
Goodwill	11,944	11,944
Bank owned life insurance	37,558	37,417
Net deferred tax asset	8,969	9,548
Federal Home Loan Bank stock	5,180	4,048
Federal Reserve Bank stock	2,125	2,125
Other assets	5,718	5,712
TOTAL ASSETS	1,112,934	1,089,263
LIABILITIES
Non-interest bearing deposits	161,874	167,551
Interest bearing deposits	701,028	702,330
Total deposits	862,902	869,881
Short-term borrowings	63,430	38,880
Advances from Federal Home Loan Bank	46,000	42,000
Guaranteed junior subordinated deferrable interest debentures	13,085	13,085
Total borrowed funds	122,515	93,965
Other liabilities	10,212	11,010
TOTAL LIABILITIES	995,629	974,856
SHAREHOLDERS' EQUITY
Preferred stock, no par value; $1,000 per share liquidation preference; 2,000,000 shares authorized; 21,000 shares issued and outstanding on June 30, 2015 and December 31, 2014	21,000	21,000
Common stock, par value $0.01 per share; 30,000,000 shares authorized; 26,479,630 shares issued and 18,861,811 outstanding on June 30, 2015; 26,402,707 shares issued and 18,784,888 outstanding on December 31, 2014	265	264
Treasury stock at cost, 7,617,819 shares on June 30, 2015 and December 31, 2014	(74,829)	(74,829)
Capital surplus	145,411	145,256
Retained earnings	31,926	29,618
Accumulated other comprehensive loss, net	(6,468)	(6,902)
TOTAL SHAREHOLDERS' EQUITY	117,305	114,407
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 1,112,934	$ 1,089,263

XML

Allowance for Loan Losses (Rollforward of the Allowance for Loan Losses by Portfolio Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of period	$ 9,689	$ 10,109	$ 9,623	$ 10,104
Charge-offs	(219)	(52)	(490)	(269)
Recoveries	47	$ 93	134	$ 315
Provision (Credit)	200		450
Balance at end of period	9,717	$ 10,150	9,717	$ 10,150
Commercial [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of period	$ 3,157	$ 3,065	3,262	2,844
Charge-offs			(121)	(72)
Recoveries	$ 8	$ 55	14	105
Provision (Credit)	6	134	16	377
Balance at end of period	3,171	3,254	3,171	3,254
Commercial loans secured by real estate [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of period	4,087	$ 4,662	3,902	4,885
Charge-offs	(15)		(15)	(66)
Recoveries	9	$ 19	51	172
Provision (Credit)	59	(206)	202	(516)
Balance at end of period	4,140	4,475	4,140	4,475
Real estate-mortgage [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of period	1,304	1,273	1,310	1,260
Charge-offs	(188)	(30)	(291)	(73)
Recoveries	25	11	55	25
Provision (Credit)	180	47	247	89
Balance at end of period	1,321	1,301	1,321	1,301
Consumer [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of period	191	139	190	136
Charge-offs	(16)	(22)	(63)	(58)
Recoveries	5	8	14	13
Provision (Credit)	21	20	60	54
Balance at end of period	201	145	201	145
Allocation for general risk [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance at beginning of period	$ 950	$ 970	$ 959	$ 979
Charge-offs
Recoveries
Provision (Credit)	$ (66)	$ 5	$ (75)	$ (4)
Balance at end of period	$ 884	$ 975	$ 884	$ 975

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
OPERATING ACTIVITIES
Net income	$ 2,790,000	$ 1,909,000
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	450,000
Depreciation expense	925,000	$ 924,000
Net amortization of investment securities	181,000	186,000
Net realized gains on investment securities available for sale	(28,000)	(177,000)
Net gains on loans held for sale	(416,000)	(272,000)
Amortization of deferred loan fees	(133,000)	(134,000)
Origination of mortgage loans held for sale	(27,878,000)	(18,393,000)
Sales of mortgage loans held for sale	28,952,000	17,378,000
Increase in accrued interest income receivable	(183,000)	(278,000)
Decrease in accrued interest payable	(255,000)	(306,000)
Earnings on bank owned life insurance	(341,000)	(371,000)
Deferred income taxes	371,000	254,000
Stock based compensation expense	156,000	45,000
Other, net	443,000	1,336,000
Net cash provided by operating activities	5,034,000	2,101,000
INVESTING ACTIVITIES
Purchases of investment securities - available for sale	(7,410,000)	(7,144,000)
Purchases of investment securities - held to maturity	(1,545,000)	(1,599,000)
Proceeds from sales of investment securities - available for sale	519,000	5,242,000
Proceeds from maturities of investment securities - available for sale	10,380,000	10,763,000
Proceeds from maturities of investment securities - held to maturity	1,778,000	667,000
Purchases of regulatory stock	(9,464,000)	(3,897,000)
Proceeds from redemption of regulatory stock	8,332,000	4,056,000
Long-term loans originated	(118,956,000)	(76,648,000)
Principal collected on long-term loans	76,896,000	59,696,000
Loans purchased or participated	(5,120,000)	(1,764,000)
Loans sold or participated	12,055,000	2,250,000
Proceeds from sale of other real estate owned	478,000	$ 434,000
Proceeds from life insurance policy	200,000
Purchases of premises and equipment	(473,000)	$ (1,198,000)
Net cash used in investing activities	(32,330,000)	(9,142,000)
FINANCING ACTIVITIES
Net (decrease) increase in deposit balances	(7,053,000)	19,347,000
Net increase (decrease) in other short-term borrowings	24,550,000	(22,878,000)
Principal borrowings on advances from Federal Home Loan Bank	4,000,000	9,000,000
Common stock dividends	(377,000)	(376,000)
Preferred stock dividends	(105,000)	(105,000)
Net cash provided by financing activities	21,015,000	4,988,000
NET DECREASE IN CASH AND CASH EQUIVALENTS	(6,281,000)	(2,053,000)
CASH AND CASH EQUIVALENTS AT JANUARY 1	32,872,000	30,066,000
CASH AND CASH EQUIVALENTS AT JUNE 30	$ 26,591,000	$ 28,013,000

XML

Accumulated Other Comprehensive Loss (Changes in Each Component of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accumulated Other Comprehensive Loss [Line Items]
Beginning Balance	$ (6,241)	$ (5,314)	$ (6,902)	$ (5,875)
Other comprehensive income (loss) before reclassifications	(209)	684	452	1,280
Amounts reclassified from accumulated other comprehensive loss	(18)	(79)	(18)	(114)
Net current period other comprehensive income (loss)	(227)	605	434	1,166
Ending Balance	(6,468)	(4,709)	(6,468)	(4,709)
Net Unrealized Gains and Losses on Investment Securities [Member]
Accumulated Other Comprehensive Loss [Line Items]
Beginning Balance	2,072	1,345	1,843	1,043
Other comprehensive income (loss) before reclassifications	(625)	684	(396)	1,024
Amounts reclassified from accumulated other comprehensive loss	(18)	(79)	(18)	(117)
Net current period other comprehensive income (loss)	(643)	605	(414)	907
Ending Balance	1,429	1,950	1,429	1,950
Defined Benefit Pension Items [Member]
Accumulated Other Comprehensive Loss [Line Items]
Beginning Balance	(8,313)	$ (6,659)	(8,745)	(6,918)
Other comprehensive income (loss) before reclassifications	$ 416		$ 848	256
Amounts reclassified from accumulated other comprehensive loss				3
Net current period other comprehensive income (loss)	$ 416		$ 848	259
Ending Balance	$ (7,897)	$ (6,659)	$ (7,897)	$ (6,659)

XML

Principles of Consolidation (Details) - Jun. 30, 2015 $ in Billions	USD ($)
Principles of Consolidation [Abstract]
Number of locations	17
Trust and financial services and administers assets	$ 1.9

XML

Pension Benefits (Narrative) (Details) - Jun. 30, 2015 - Pension Plans, Defined Benefit [Member]	Total
Pension Benefits [Line Items]
Minimum number of annual hours	1,000
Vesting term	5 years
Maximum percent of plan assets comprised of AmeriServ Financial, Inc. common stock	10.00%

XML

Pension Benefits

6 Months Ended

Jun. 30, 2015

Pension Benefits [Abstract]

Pension Benefits

16.          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 shall 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 US Treasury and Agency securities, corporate notes and bonds), listed common stocks (including shares of AmeriServ Financial, Inc. common stock which is limited to 10% of the plan's assets), mutual funds, and short-term cash equivalent instruments. The net periodic pension cost for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three months ended						Six months ended
	June 30,						June 30,
	2015			2014			2015			2014
Components of net periodic benefit cost
Service cost	$	400		$	430		$	800		$	860
Interest cost		325			331			650			662
Expected return on plan assets		(525	)		(498	)		(1,050	)		(996	)
Amortization of prior year service cost		-			(5	)		-			(10	)
Recognized net actuarial loss		300			272			600			544
Net periodic pension cost	$	500		$	530		$	1,000		$	1,060

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.

XML

Earnings Per Common Share (Summary of Earnings Per Common Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator:
Net income	$ 1,421	$ 979	$ 2,790	$ 1,909
Preferred stock dividends	(52)	(52)	(105)	(105)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$ 1,369	$ 927	$ 2,685	$ 1,804
Denominator:
Weighted average common shares outstanding (basic)	18,859	18,795	18,855	18,790
Effect of stock options	82	141	68	130
Weighted average common shares outstanding (diluted)	18,941	18,936	18,923	18,920
Earnings per common share:
Basic	$ 0.07	$ 0.05	$ 0.14	$ 0.10
Diluted	$ 0.07	$ 0.05	$ 0.14	$ 0.10

XML

Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Common Share [Abstract]

Summary of Earnings Per Common Share

	Three months ended June 30,						Six months ended  June 30,
	2015			2014			2015			2014
	(In thousands, except per share data)
Numerator:
Net income	$	1,421		$	979		$	2,790		$	1,909
Preferred stock dividends		(52	)		(52	)		(105	)		(105	)
Net income available to common shareholders	$	1,369		$	927		$	2,685		$	1,804
Denominator:
Weighted average common shares outstanding (basic)		18,859			18,795			18,855			18,790
Effect of stock options		82			141			68			130
Weighted average common shares outstanding (diluted)		18,941			18,936			18,923			18,920
Earnings per common share:
Basic	$	0.07		$	0.05		$	0.14		$	0.10
Diluted		0.07			0.05			0.14			0.10

XML

Disclosures about Fair Value Measurements (Fair Value of Financial Instruments) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
FINANCIAL ASSETS: Carrying Value
Cash and cash equivalents	$ 26,591	$ 32,872	$ 28,013	$ 30,066
Held to maturity (fair value $19,776 on June 30, 2015 and $20,213 on December 31, 2014)	19,580	19,840
Regulatory stock	7,305	6,173
Loans held for sale	4,393	5,051
Loans, net of allowance for loan loss and unearned income	852,133	817,457
Accrued interest income receivable	3,310	3,127
Bank owned life insurance	37,558	37,417
Cash and cash equivalents	26,591	32,872
Investment securities - AFS	122,868	127,110
Investment securities - HTM	19,776	20,213
Regulatory stock	7,305	6,173
Loans held for sale	4,393	5,051
Loans, net of allowance for loan loss and unearned income	852,862	819,935
Accrued interest income receivable	3,310	3,127
Bank owned life insurance	37,558	37,417
FINANCIAL LIABILITIES: Carrying Value
Deposits with no stated maturities	575,977	568,625
Deposits with stated maturities	286,925	301,256
Short-term borrowings	63,430	38,880
All other borrowings	59,085	55,085
Accrued interest payable	1,451	1,706
Deposits with no stated maturities	575,977	568,625
Deposits with stated maturities	289,576	304,744
Short-term borrowings	63,430	38,880
All other borrowings	62,811	59,256
Accrued interest payable	1,451	1,706
Total Fair Value [Member]
FINANCIAL ASSETS: Carrying Value
Loans held for sale	4,456	5,127
Loans held for sale	4,456	5,127
Level 1 [Member]
FINANCIAL ASSETS: Carrying Value
Loans held for sale	4,456	5,127
Cash and cash equivalents	$ 26,591	$ 32,872
Investment securities - AFS
Investment securities - HTM
Regulatory stock	$ 7,305	$ 6,173
Loans held for sale	$ 4,456	$ 5,127
Loans, net of allowance for loan loss and unearned income
Accrued interest income receivable	$ 3,310	$ 3,127
Bank owned life insurance	37,558	37,417
FINANCIAL LIABILITIES: Carrying Value
Deposits with no stated maturities	$ 575,977	$ 568,625
Deposits with stated maturities
Short-term borrowings	$ 63,430	$ 38,880
All other borrowings
Accrued interest payable	$ 1,451	$ 1,706
Level 2 [Member]
FINANCIAL ASSETS: Carrying Value
Loans held for sale
Cash and cash equivalents
Investment securities - AFS	$ 122,868	$ 127,110
Investment securities - HTM	$ 16,809	$ 17,241
Regulatory stock
Loans held for sale
Loans, net of allowance for loan loss and unearned income
Accrued interest income receivable
Bank owned life insurance
FINANCIAL LIABILITIES: Carrying Value
Deposits with no stated maturities
Deposits with stated maturities
Short-term borrowings
All other borrowings
Accrued interest payable
Level 3 [Member]
FINANCIAL ASSETS: Carrying Value
Loans held for sale
Cash and cash equivalents
Investment securities - AFS
Investment securities - HTM	$ 2,967	$ 2,972
Regulatory stock
Loans held for sale
Loans, net of allowance for loan loss and unearned income	$ 852,862	$ 819,935
Accrued interest income receivable
Bank owned life insurance
FINANCIAL LIABILITIES: Carrying Value
Deposits with no stated maturities
Deposits with stated maturities	$ 289,576	$ 304,744
Short-term borrowings
All other borrowings	$ 62,811	$ 59,256
Accrued interest payable

XML

Principles of Consolidation

6 Months Ended

Jun. 30, 2015

Principles of Consolidation [Abstract]

Principles of Consolidation

1. Principles of Consolidation

The accompanying consolidated financial statements include the accounts of AmeriServ Financial, Inc. (the Company) and its wholly-owned subsidiaries, AmeriServ Financial Bank (the Bank), AmeriServ Trust and Financial Services Company (the Trust Company), and AmeriServ Life Insurance Company (AmeriServ Life). The Bank is a Pennsylvania state-chartered full service bank with 17 locations in Pennsylvania. The Trust Company offers a complete range of trust and financial services and administers assets valued at $1.9 billion that are not reported on the Company's balance sheet at June 30, 2015. AmeriServ Life is a captive insurance company that engages in underwriting as a reinsurer of credit life and disability insurance.

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. Significant intercompany accounts and transactions have been eliminated in preparing the consolidated financial statements.

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS [Abstract]
Held to maturity securities, fair value	$ 19,776	$ 20,213
Preferred stock, par value	$ 0.00	$ 0.00
Preferred stock, liquidation preference per share	$ 1,000	$ 1,000
Preferred stock, shares authorized	2,000,000	2,000,000
Preferred stock, shares issued	21,000	21,000
Preferred stock, shares outstanding	21,000	21,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	26,479,630	26,402,707
Common stock, shares outstanding	18,861,811	18,784,888
Treasury stock, shares	7,617,819	7,617,819

XML

Preferred Stock

6 Months Ended

Jun. 30, 2015

Preferred Stock [Abstract]

Preferred Stock

11.         Preferred Stock

On August 11, 2011, pursuant to the Small Business Lending Fund (SBLF), the Company issued and sold to the US Treasury 21,000 shares of its Senior Non-Cumulative Perpetual Preferred Stock, Series E (Series E Preferred Stock) for the aggregate proceeds of $21 million. The SBLF is a voluntary program sponsored by the US Treasury that encourages small business lending by providing capital to qualified community banks at favorable rates. The Company used the proceeds from the Series E Preferred Stock issued to the US Treasury to repurchase all 21,000 shares of its outstanding preferred shares previously issued to the US Treasury under the TARP Capital Purchase Program.

The Series E Preferred Stock has an aggregate liquidation preference of approximately $21 million and qualifies as Tier 1 Capital for regulatory purposes. The terms of the Series E Preferred Stock provide for the payment of non-cumulative dividends on a quarterly basis. Since January 1, 2014, the dividend rate of the Series E Preferred Stock has been fixed at 1% per annum until February 7, 2016. Beginning on February 8, 2016, the dividend rate will be fixed at 9% per annum.

As long as shares of Series E Preferred Stock remain outstanding, we may not pay dividends to our common shareholders (nor may we repurchase or redeem any shares of our common stock) during any quarter in which we fail to declare and pay dividends on the Series E Preferred Stock and for the next three quarters following such failure. In addition, under the terms of the Series E Preferred Stock, we may only declare and pay dividends on our common stock (or repurchase shares of our common stock), if, after payment of such dividend, the dollar amount of our Tier 1 capital would be at least ninety percent (90%) of Tier 1 capital as of June 30, 2011, excluding any charge-offs and redemptions of the Series E Preferred Stock (the “Tier 1 Dividend Threshold”). The Tier 1 Dividend Threshold is subject to reduction, beginning January 1, 2014, based upon the extent by which the Qualified Small Business Lending by the Bank at September 30, 2013 has increased over the Baseline.

We may redeem the Series E Preferred Stock at any time at our option, at a redemption price of 100% of the liquidation amount plus accrued but unpaid dividends, subject to the approval of our federal banking regulator.

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 03, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	AMERISERV FINANCIAL INC /PA/
Entity Central Index Key	0000707605
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		18,870,811

XML

Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2015

Accumulated Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss

12. Accumulated Other Comprehensive Loss

The following table presents the changes in each component of accumulated other comprehensive loss, net of tax, for the three and six months ended June 30, 2015 and 2014 (in thousands):

	Three months ended June 30, 2015									Three months ended June 30, 2014
	Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)			Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)
Beginning balance	$	2,072		$	(8,313	)	$	(6,241	)	$	1,345		$	(6,659	)	$	(5,314	)
Other comprehensive income (loss) before reclassifications		(625	)		416			(209	)		684			—			684
Amounts reclassified from accumulated other comprehensive loss		(18	)		—			(18	)		(79	)		—			(79	)
Net current period other comprehensive income (loss)		(643	)		416			(227	)		605			—			605
Ending balance	$	1,429		$	(7,897	)	$	(6,468	)	$	1,950		$	(6,659	)	$	(4,709	)

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

	Six months ended June 30, 2015									Six months ended June 30, 2014
	Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)			Net Unrealized Gains and (Losses) on Investment Securities AFS(1)			Defined Benefit Pension Items(1)			Total(1)
Beginning balance	$	1,843		$	(8,745	)	$	(6,902	)	$	1,043		$	(6,918	)	$	(5,875	)
Other comprehensive income (loss) before reclassifications		(396	)		848			452			1,024			256			1,280
Amounts reclassified from accumulated other comprehensive loss		(18	)		—			(18	)		(117	)		3			(114	)
Net current period other comprehensive income (loss)		(414	)		848			434			907			259			1,166
Ending balance	$	1,429		$	(7,897	)	$	(6,468	)	$	1,950		$	(6,659	)	$	(4,709	)

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

The following table presents the amounts reclassified out of each component of accumulated other comprehensive loss for the three and six months ended June 30, 2015 and 2014 (in thousands):

	Amount reclassified from accumulated other comprehensive loss(1)
Details about accumulated other comprehensive loss components	For the three months ended June 30, 2015			For the three months ended June 30, 2014			Affected line item in the statement of operations
Unrealized gains and losses on sale of securities
	$	(28	)	$	(120	)		Net realized gains on investment securities
		10			41			Provision for income tax expense
	$	(18	)	$	(79	)		Net of tax
Total reclassifications for the period	$	(18	)	$	(79	)		Net income

(1) Amounts in parentheses indicate credits.

	Amount reclassified from accumulated other comprehensive loss(1)
Details about accumulated other comprehensive loss components	For the six months ended June 30, 2015			For the six months ended June 30, 2014			Affected line item in the statement of operations
Unrealized gains and losses on sale of securities
	$	(28	)	$	(177	)		Net realized gains on investment securities
		10			60			Provision for income tax expense
	$	(18	)	$	(117	)		Net of tax
Amortization of defined benefit items(2)
Amortization of prior year service cost	$	—		$	5			Salaries and employee benefits
		—			(2	)		Provision for income tax expense
	$	—		$	3			Net of tax
Total reclassifications for the period	$	(18	)	$	(114	)		Net income

(1) Amounts in parentheses indicate credits.

(2) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (see Note 16 for additional details).

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
INTEREST INCOME
Interest and fees on loans	$ 9,480	$ 8,939	$ 18,936	$ 17,971
Interest bearing deposits	5	1	7	2
Short-term investments in money market funds	1	2	3	4
Investment securities:
Available for sale	777	905	1,690	1,829
Held to maturity	146	136	296	272
Total Interest Income	10,409	9,983	20,932	20,078
INTEREST EXPENSE
Deposits	1,171	1,240	2,345	2,451
Short-term borrowings	23	5	33	24
Advances from Federal Home Loan Bank	135	74	260	134
Guaranteed junior subordinated deferrable interest debentures	280	280	560	560
Total Interest Expense	1,609	1,599	3,198	3,169
NET INTEREST INCOME	8,800	8,384	17,734	$ 16,909
Provision for loan losses	200		450
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	8,600	8,384	17,284	$ 16,909
NON-INTEREST INCOME
Trust and investment advisory fees	2,135	1,948	4,191	3,980
Service charges on deposit accounts	429	501	848	979
Net gains on sale of loans	225	171	416	272
Mortgage related fees	109	160	224	277
Net realized gains on investment securities	28	120	28	177
Bank owned life insurance	171	184	534	371
Other income	595	554	1,163	1,114
Total Non-Interest Income	3,692	3,638	7,404	7,170
NON-INTEREST EXPENSE
Salaries and employee benefits	5,944	6,107	12,017	12,421
Net occupancy expense	718	717	1,559	1,556
Equipment expense	480	494	946	964
Professional fees	1,275	1,464	2,486	2,772
Supplies, postage and freight	175	187	353	370
Miscellaneous taxes and insurance	287	312	584	608
Federal deposit insurance expense	164	154	331	314
Other expense	1,196	1,185	2,373	2,353
Total Non-Interest Expense	10,239	10,620	20,649	21,358
PRETAX INCOME	2,053	1,402	4,039	2,721
Provision for income tax expense	632	423	1,249	812
NET INCOME	1,421	979	2,790	1,909
Preferred stock dividends	52	52	105	105
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$ 1,369	$ 927	$ 2,685	$ 1,804
Basic:
Net income	$ 0.07	$ 0.05	$ 0.14	$ 0.10
Average number of shares outstanding	18,859	18,795	18,855	18,790
Diluted:
Net income	$ 0.07	$ 0.05	$ 0.14	$ 0.10
Average number of shares outstanding	18,941	18,936	18,923	18,920
Cash dividends declared	$ 0.01	$ 0.01	$ 0.02	$ 0.02

XML

Investment Securities

6 Months Ended

Jun. 30, 2015

Investment Securities [Abstract]

Investment Securities

6. Investment Securities

The cost basis and fair values of investment securities are summarized as follows (in thousands):

Investment securities available for sale (AFS):

	June 30, 2015
			Gross		Gross
	Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value
US Agency	$	5,933	$	22	$	(19	)	$	5,936
US Agency mortgage- backed  securities		97,265		2,708		(363	)		99,610
Corporate bonds		17,504		28		(210	)		17,322
Total	$	120,702	$	2,758	$	(592	)	$	122,868

Investment securities held to maturity (HTM):

	June 30, 2015
			Gross		Gross
	Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value
US Agency mortgage- backed securities	$	11,680	$	304	$	(73	)	$	11,911
Taxable municipal		3,905		70		(52	)		3,923
Corporate bonds and other securities		3,995		-		(53	)		3,942
Total	$	19,580	$	374	$	(178	)	$	19,776

Investment securities available for sale (AFS):

	December 31, 2014
			Gross		Gross
	Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value
US Agency	$	5,931	$	21	$	(46	)	$	5,906
US Agency mortgage- backed  securities		102,888		3,197		(317	)		105,768
Corporate bonds		15,497		61		(122	)		15,436
Total	$	124,316	$	3,279	$	(485	)	$	127,110

Investment securities held to maturity (HTM):

	December 31, 2014
			Gross		Gross
	Cost		Unrealized		Unrealized			Fair
	Basis		Gains		Losses			Value
US Agency mortgage- backed securities	$	12,481	$	395	$	(50	)	$	12,826
Taxable municipal		3,364		74		(24	)		3,414
Corporate bonds and other securities		3,995		6		(28	)		3,973
Total	$	19,840	$	475	$	(102	)	$	20,213

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 Investor's Service or Standard & Poor's rating of "A." At June 30, 2015, 81.9% of the portfolio was rated "AAA” as compared to 84.1% at December 31, 2014. 3.9% of the portfolio was either rated below “A” or unrated at June 30, 2015. At June 30, 2015, the Company's consolidated investment securities portfolio had an effective duration of approximately 2.80 years.

The Company sold a $519,000 AFS security for both the second quarter and first six months of 2015 resulting in a $28,000 gross investment security gain. Total proceeds from the sale of AFS securities for the second quarter of 2014 were $2.5 million resulting in $120,000 of gross investment security gains. Total proceeds from the sale of AFS securities for the first six months of 2014 were $5.2 million resulting in $182,000 of gross investment security gains and $5,000 of gross security losses.

The book value of securities, both available for sale and held to maturity, pledged to secure public and trust deposits, and certain Federal Home Loan Bank borrowings was $98,457,000 at June 30, 2015 and $104,780,000 at December 31, 2014.

The following tables present information concerning investments with unrealized losses as of June 30, 2015 and December 31, 2014 (in thousands):

Total investment securities:

	June 30, 2015
	Less than 12 months					12 months or longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
US Agency	$	-	$	-		$	2,881	$	(19	)	$	2,881	$	(19	)
Taxable municipal		2,644		(52	)		-		-			2,644		(52	)
US Agency mortgage-backed securities		16,974		(118	)		12,400		(318	)		29,374		(436	)
Corporate bonds and other   securities		6,862		(133	)		8,867		(130	)		15,729		(263	)
Total	$	26,480	$	(303	)	$	24,148	$	(467	)	$	50,628	$	(770	)

Total investment securities:

	December 31, 2014
	Less than 12 months					12 months or longer					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Losses			Value		Losses			Value		Losses
US Agency	$	996	$	(4	)	$	2,858	$	(42	)	$	3,854	$	(46	)
US Agency mortgage- backed securities		2,826		(13	)		20,408		(354	)		23,234		(367	)
Taxable municipal		150		(1	)		988		(23	)		1,138		(24	)
Corporate bonds and other  securities		2,960		(43	)		8,891		(107	)		11,851		(150	)
Total	$	6,932	$	(61	)	$	33,145	$	(526	)	$	40,077	$	(587	)

The 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 fall, the fair value of securities will increase. There are 51 positions that are considered temporarily impaired at June 30, 2015. Management generally views changes in fair value caused by changes in interest rates as temporary; therefore, these securities have not been classified as other-than-temporarily impaired. 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.

Contractual maturities of securities at June 30, 2015 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.

Total investment securities:  

	June 30, 2015
	Available for sale				Held to maturity
	Cost Basis		Fair Value		Cost Basis		Fair Value
Within 1 year	$	2,000	$	2,007	$	999	$	1,000
After 1 year but within 5 years		14,302		14,331		2,000		1,967
After 5 years but within 10 years		20,743		21,008		4,782		4,749
After 10 years but within15 years		50,945		51,947		560		546
Over 15 years		32,712		33,575		11,239		11,514
Total	$	120,702	$	122,868	$	19,580	$	19,776

XML

Consolidated Statement of Cash Flows

6 Months Ended

Jun. 30, 2015

CONSOLIDATED STATEMENTS OF CASH FLOWS [Abstract]

Consolidated Statement of Cash Flows

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 $878,000 in income tax payments in the first six months of 2015 as compared to $558,000 for the first six months of 2014. The Company made total interest payments of $3,453,000 in the first six months of 2015 compared to $3,475,000 in the same 2014 period. The Company had $132,000 non-cash transfers to other real estate owned (OREO) in the first six months of 2015 compared to $6,000 non-cash transfers in the same 2014 period.

XML

Disclosures about Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Disclosures about Fair Value Measurements [Abstract]

Disclosures about Fair Value Measurements

17.         Disclosures about Fair Value Measurements

The following disclosures establish a hierarchal disclosure framework associated with the level of pricing observability utilized in measuring assets and liabilities at fair value. 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.

Assets and Liability Measured on a Recurring Basis

Securities classified as available for sale are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quoted market spreads, cash flows, the US 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.

The following tables present the assets reported on the Consolidated Balance Sheets at their fair value as of June 30, 2015 and December 31, 2014, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Assets and liability measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements at June 30, 2015 Using
	Total		(Level 1)		(Level 2)		(Level 3)
US Agency securities	$	5,936	$	-	$	5,936	$	-
US Agency mortgage-backed securities		99,610		-		99,610		-
Corporate bonds		17,322		-		17,322		-

	Fair Value Measurements at December 31, 2014 Using
	Total		(Level 1)		(Level 2)		(Level 3)
US Agency securities	$	5,906	$	-	$	5,906	$	-
US Agency mortgage-backed securities		105,768		-		105,768		-
Corporate bonds		15,436		-		15,436		-

Assets Measured on a Non-recurring Basis

Loans considered impaired are loans for which, based on current information and events, it is probable that the creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. As detailed in the allowance for loan loss footnote, impaired loans are reported at 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. At June 30, 2015, impaired loans with a carrying value of $1.2 million were reduced by a specific valuation allowance totaling $614,000 resulting in a net fair value of $567,000. At December 31, 2014, impaired loans with a carrying value of $989,000 were reduced by a specific valuation allowance totaling $520,000 million resulting in a net fair value of $469,000.

Other real estate owned is measured at fair value based on appraisals, less cost to sell at the date of foreclosure. Valuations are periodically performed by management. Income and expenses from operations and changes in valuation allowance are included in the net expenses from OREO.

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

	Fair Value Measurements at June 30, 2015 Using
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	567	$	-	$	-	$	567
Other real estate owned		126		-		-		126

	Fair Value Measurements at December 31, 2014 Using
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	469	$	-	$	-	$	469
Other real estate owned		512		-		-		512

June 30, 2015

	Quantitative Information About Level 3 Fair Value Measurements
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range(Wgtd Ave)
Impaired loans	$	567	Appraisal of collateral(1), (3)	Appraisal adjustments(2) Liquidation expenses	0% to 35%(30%) 1% to 15%(10%)
Other real estate owned		126	Appraisal of collateral (1),(3)	Appraisal adjustments(2) Liquidation expenses	0% to 48%(38%) 1% to 20%(10%)

December 31, 2014

	Quantitative Information About Level 3 Fair Value Measurements
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range(Wgtd Ave)
Impaired loans	$	469	Appraisal of collateral(1),(3)	Appraisal adjustments(2) Liquidation expenses	0% to 37%(30%) 1% to 15%(10%)
Other real estate owned		512	Appraisal of collateral (1),(3)	Appraisal adjustments(2) Liquidation expenses	47% to 83%(55%) 1% to 61%(9%)

(1)

Fair Value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.

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

(3) Includes qualitative adjustments by management and estimated liquidation expenses.

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

For the Company, as for most financial institutions, approximately 90% of its assets and liabilities are considered financial instruments. Many of the Company's financial instruments, however, lack an available trading market characterized by a willing buyer and willing seller engaging in an exchange transaction. Therefore, significant estimates and present value calculations were used by the Company for the purpose of this disclosure.

Fair values have been determined by the Company using independent third party valuations that use the best available data (Level 2) and an estimation methodology (Level 3) the Company believes is suitable for each category of financial instruments. Management believes that cash, cash equivalents, and loans and deposits with floating interest rates have estimated fair values which approximate the recorded book balances. The estimation methodologies used, the estimated fair values based on US GAAP measurements, and recorded book balances at June 30, 2015 and December 31, 2014, were as follows (in thousands):

	June 30, 2015
	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
FINANCIAL ASSETS:
Cash and cash equivalents	$	26,591	$	26,591	$	26,591	$	-	$	-
Investment securities - AFS		122,868		122,868		-		122,868		-
Investment securities – HTM		19,580		19,776		-		16,809		2,967
Regulatory stock		7,305		7,305		7,305		-		-
Loans held for sale		4,393		4,456		4,456		-		-
Loans, net of allowance for loan loss and unearned income		852,133		852,862		-		-		852,862
Accrued interest income receivable		3,310		3,310		3,310		-		-
Bank owned life insurance		37,558		37,558		37,558		-		-
FINANCIAL LIABILITIES:
Deposits with no stated maturities	$	575,977	$	575,977	$	575,977	$	-	$	-
Deposits with stated maturities		286,925		289,576		-		-		289,576
Short-term borrowings		63,430		63,430		63,430		-		-
All other borrowings		59,085		62,811		-		-		62,811
Accrued interest payable		1,451		1,451		1,451		-		-

	December 31, 2014
	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
FINANCIAL ASSETS:
Cash and cash equivalents	$	32,872	$	32,872	$	32,872	$	-	$	-
Investment securities - AFS		127,110		127,110		-		127,110		-
Investment securities – HTM		19,840		20,213		-		17,241		2,972
Regulatory stock		6,173		6,173		6,173		-		-
Loans held for sale		5,051		5,127		5,127		-		-
Loans, net of allowance for loan loss and unearned income		817,457		819,935		-		-		819,935
Accrued interest income receivable		3,127		3,127		3,127		-		-
Bank owned life insurance		37,417		37,417		37,417		-		-
FINANCIAL LIABILITIES:
Deposits with no stated maturities	$	568,625	$	568,625	$	568,625	$	-	$	-
Deposits with stated maturities		301,256		304,744		-		-		304,744
Short-term borrowings		38,880		38,880		38,880		-		-
All other borrowings		55,085		59,256		-		-		59,256
Accrued interest payable		1,706		1,706		1,706		-		-

The fair value of cash and cash equivalents, regulatory stock, accrued interest income receivable, short-term borrowings, and accrued interest payable are equal to the current carrying value.

The fair value of investment securities is equal to the available quoted market price for similar securities. The fair value measurements consider observable data that may include dealer quoted market spreads, cash flows, the US 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. The Level 3 securities are valued by discounted cash flows using the US Treasury rate for the remaining term of the securities.

Loans held for sale are priced individually at market rates on the day that the loan is locked for commitment with an investor. All loans in the held for sale account conform to Fannie Mae underwriting guidelines, with the specific intent of the loan being purchased by an investor at the predetermined rate structure. Loans in the held for sale account have specific delivery dates that must be executed to protect the pricing commitment (typically a 30, 45, or 60 day lock period).

The net loan portfolio has been valued using a present value discounted cash flow. The discount rate used in these calculations is based upon the treasury yield curve adjusted for non-interest operating costs, credit loss, current market prices and assumed prepayment risk.

The fair value of bank owned life insurance is based upon the cash surrender value of the underlying policies and matches the book value.

Deposits with stated maturities have been valued using a present value discounted cash flow with a discount rate approximating current market for similar assets and liabilities. Deposits with no stated maturities have an estimated fair value equal to both the amount payable on demand and the recorded book balance.

The fair value of all other borrowings is based on the discounted value of contractual cash flows. The discount rates are estimated using rates currently offered for similar instruments with similar remaining maturities.

Commitments to extend credit and standby letters of credit are financial instruments generally not subject to sale, and fair values are not readily available. The carrying value, represented by the net deferred fee arising from the unrecognized commitment, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into similar agreements with similar credit risk, is not considered material for disclosure. The contractual amounts of unfunded commitments are presented in Note15.

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.

XML

Regulatory Capital

6 Months Ended

Jun. 30, 2015

Regulatory Capital [Abstract]

Regulatory Capital

13.          Regulatory Capital

The Company is subject to various capital requirements administered by the federal banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. For June 30, 2015, the final Basel III rules require the Company to maintain minimum amounts and ratios of common equity Tier I capital (as defined in the regulations) to risk-weighted assets (RWA) (as defined). Additionally under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. For December 31, 2014, regulatory capital ratios were calculated under Basel I rules. As of June 30, 2015, the Bank was categorized as “Well Capitalized” under the regulatory framework for prompt corrective action promulgated by the Federal Reserve. The Company believes that no conditions or events have occurred that would change this conclusion as of such date. To be categorized as Well Capitalized, the Bank must maintain minimum Total Capital, Common Equity Tier 1 Capital, Tier 1 Capital, and Tier 1 leverage ratios as set forth in the table. Additionally, while not a regulatory capital ratio, the Company's tangible common equity ratio was 7.66% at June 30, 2015 (in thousands, except ratios).

	At June 30, 2015
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total Capital (To RWA)
Consolidated	$	132,879		14.63	%	$	72,653		8.00	%	$	90,817		10.00	%
AmeriServ Financial Bank		106,168		11.81			71,907		8.00			89,884		10.00
Common Equity Tier 1 Capital (To RWA)
Consolidated		90,191		9.93			40,867		4.50			59,031		6.50
AmeriServ Financial Bank		95,541		10.63			40,448		4.50			58,425		6.50
Tier 1 Capital (To RWA)
Consolidated		122,252		13.46			54,490		6.00			72,653		8.00
AmeriServ Financial Bank		95,541		10.63			53,930		6.00			71,907		8.00
Tier 1 Capital (To Average Assets) leverage
Consolidated		122,252		11.23			43,543		4.00			54,428		5.00
AmeriServ Financial Bank		95,541		9.01			42,425		4.00			53,032		5.00

	At December 31, 2014
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total Capital (To RWA)
Consolidated	$	131,497		14.80	%	$	71,066		8.00	%	$	88,833		10.00	%
AmeriServ Financial Bank		106,084		12.07			70,305		8.00			87,881		10.00
Tier 1 Capital (To RWA)
Consolidated		120,992		13.62			35,533		4.00			53,300		6.00
AmeriServ Financial Bank		95,579		10.88			35,153		4.00			52,729		6.00
Tier 1 Capital (To Average Assets)
Consolidated		120,992		11.34			42,662		4.00			53,327		5.00
AmeriServ Financial Bank		95,579		9.19			41,608		4.00			52,010		5.00

On July 2, 2013, the Board of Governors of the Federal Reserve System approved final rules that substantially amend the regulatory risk-based capital rules applicable to the Company and the Bank. The final rules implement the “Basel III” regulatory capital reforms, as well as certain changes required by the Dodd-Frank Act, which will require institutions to, among other things, have more capital and a higher quality of capital by increasing the minimum regulatory capital ratios, and requiring capital buffers. The new rules became effective for the Company and the Bank on January 1, 2015, and have an implementation period that stretches to January 1, 2019. For a more detailed discussion see the Capital Resources section of the MD&A.

XML

Non-performing Assets Including Troubled Debt Restructurings (TDR)

6 Months Ended

Jun. 30, 2015

Nonperforming Assets Including Troubled Debt Restructurings [Abstract]

Non-performing Assets Including Troubled Debt Restructurings (TDR)

9.           Non-performing Assets Including Troubled Debt Restructurings (TDR)

The following table presents information concerning non-performing assets including TDR (in thousands, except percentages):

	June 30, 2015			December 31, 2014
Non-accrual loans
Commercial		209			-
Commercial loans secured by real estate	$	255		$	778
Real estate-mortgage		1,647			1,417
Total		2,111			2,195
Other real estate owned
Commercial loans secured by real estate		-			384
Real estate-mortgage		126			128
Total		126			512
TDR's not in non-accrual		328			210
Total non-performing assets including TDR	$	2,565		$	2,917
Total non-performing assets as a percent of loans, net of unearned income, and other real estate owned		0.30	%		0.35	%

The Company had no loans past due 90 days or more for the periods presented which were accruing interest.

The following table sets forth, for the periods indicated, (1) the gross interest income that would have been recorded if non-accrual loans had been current in accordance with their original terms and had been outstanding throughout the period or since origination if held for part of the period, (2) the amount of interest income actually recorded on such loans, and (3) the net reduction in interest income attributable to such loans (in thousands).

	Three months ended				Six months ended
	June 30,				June 30,
	2015		2014		2015		2014
Interest income due in accordance with original terms	$	24	$	34	$	48	$	67
Interest income recorded		-		-		-		-
Net reduction in interest income	$	24	$	34	$	48	$	67

Consistent with accounting and regulatory guidance, the Bank recognizes a TDR when the Bank, for economic or legal reasons related to a borrower's financial difficulties, grants a concession to the borrower that would not normally be considered. Regardless of the form of concession granted, the Bank's objective in offering a TDR is to increase the probability of repayment of the borrower's loan.

To be considered a TDR, both of the following criteria must be met:

• the borrower must be experiencing financial difficulties; and

• the Bank, for economic or legal reasons related to the borrower's financial difficulties, grants a concession to the borrower that would not otherwise be considered.

Factors that indicate a borrower is experiencing financial difficulties include, but are not limited to:

• the borrower is currently in default on their loan(s);

• the borrower has filed for bankruptcy;

• the borrower has insufficient cash flows to service their loan(s); and

• the borrower is unable to obtain refinancing from other sources at a market rate similar to rates available to a non-troubled debtor.

Factors that indicate that a concession has been granted include, but are not limited to:

• the borrower is granted an interest rate reduction to a level below market rates for debt with similar risk; or

• the borrower is granted a material maturity date extension, or extension of the amortization plan to provide payment relief. For purposes of this policy, a material maturity date extension will generally include any maturity date extension, or the aggregate of multiple consecutive maturity date extensions, that exceed 120 days. A restructuring that results in an insignificant delay in payment, i.e. 120 days or less, is not necessarily a TDR. Insignificant payment delays occur when the amount of the restructured payments subject to the delay is insignificant relative to the unpaid principal or collateral value, and will result in an insignificant shortfall in the originally scheduled contractual amount due, and/or the delay in timing of the restructured payment period is insignificant relative to the frequency of payments, the original maturity or the original amortization.

The determination of whether a restructured loan is a TDR requires consideration of all of the facts and circumstances surrounding the modification. No single factor is determinative of whether a restructuring is a TDR. An overall general decline in the economy or some deterioration in a borrower's financial condition does not automatically mean that the borrower is experiencing financial difficulty. Accordingly, determination of whether a modification is a TDR involves a large degree of judgment.

The Company had no loans modified as TDRs during the second quarter of 2015.

The following table details the loans modified as TDRs during the six month period ended June 30, 2015 (dollars in thousands).

Loans in accrual status	# of Loans		Current Balance		Concession Granted
Commercial loan		1	$	204	Extension of maturity date

The following table details the loans modified as TDRs during the three month period ended June 30, 2014 (dollars in thousands).

Loans in non-accrual status	# of Loans		Current Balance		Concession Granted
Commercial loan secured by real estate		1	$	141	Extension of maturity date

The following table details the loans modified as TDRs during the six month period ended June 30, 2014 (dollars in thousands).

Loans in non-accrual status	# of Loans		Current Balance		Concession Granted
Commercial loan secured by real estate		1	$	253	Extension of maturity date

In all instances where loans have been modified in troubled debt restructurings the pre- and post-modified balances are the same. The specific ALL reserve for loans modified as TDR's was $542,000 and $365,000 as of June 30, 2015 and 2014, respectively. All TDR's are individually evaluated for impairment and a related allowance is recorded, as needed.

Once a loan is classified as a TDR, this classification will remain until documented improvement in the financial position of the borrower supports confidence that all principal and interest will be paid according to terms. Additionally, the customer must have re-established a track record of timely payments according to the restructured contract terms for a minimum of six consecutive months prior to consideration for removing the loan from non-accrual TDR status. However, a loan will continue to be on non-accrual status until, consistent with our policy, the borrower has made a minimum of an additional six consecutive monthly payments in accordance with the terms of the loan.

The Company had no loans that were classified as TDR's or were subsequently modified during each 12-month period prior to the current reporting periods, which begin January 1, 2015 and 2014 (six month periods) and April 1, 2015 and 2014 (three month periods), respectively, and that subsequently defaulted during these reporting periods.

The Company is unaware of any additional loans which are required to either be charged-off or added to the non-performing asset totals disclosed above.

XML

Accumulated Other Comprehensive Loss (Amounts Reclassified out of Each Component of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Unrealized gains and losses on sale of securities:
Net realized gains on available for sale securities		$ (28)	$ (120)	$ (28)	$ (177)
Provision for income tax expense		10	41	10	60
Net of tax		(18)	(79)	$ (18)	(117)
Amortization of defined benefit items
Amortization of prior year service cost	[1]				5
Provision for income tax expense	[1]				(2)
Net of tax	[1]				3
Total reclassifications for the period		$ (18)	$ (79)	$ (18)	$ (114)

[1] These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost (see Note 16 for additional details).

XML

Loans

6 Months Ended

Jun. 30, 2015

Loans [Abstract]

Loans

7. Loans

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

	June 30, 2015		December 31, 2014
Commercial	$	155,459	$	139,126
Commercial loans secured by real estate		427,174		410,329
Real estate – mortgage		259,144		258,616
Consumer		20,073		19,009
Loans, net of unearned income	$	861,850	$	827,080

Loan balances at June 30, 2015 and December 31, 2014 are net of unearned income of $635,000 and $554,000, respectively. Real estate-construction loans comprised 2.9% and 3.5% of total loans, net of unearned income at June 30, 2015 and December 31, 2014, respectively.

XML

Allowance for Loan Losses

6 Months Ended

Jun. 30, 2015

Allowance for Loan Losses [Abstract]

Allowance for Loan Losses

8. Allowance for Loan Losses

The following tables summarize the rollforward of the allowance for loan losses by portfolio segment for the three and six month periods ending June 30, 2015 and 2014 (in thousands).

	Three months ended June 30, 2015,
	Balance at March 31, 2015		Charge- Offs			Recoveries		Provision (Credit)			Balance at June 30, 2015
Commercial	$	3,157	$	-		$	8	$	6		$	3,171
Commercial loans secured by real estate		4,087		(15	)		9		59			4,140
Real estate-mortgage		1,304		(188	)		25		180			1,321
Consumer		191		(16	)		5		21			201
Allocation for general risk		950		-			-		(66	)		884
Total	$	9,689	$	(219	)	$	47	$	200		$	9,717

	Three months ended June 30, 2014,
	Balance at March 31, 2014		Charge- Offs			Recoveries		Provision (Credit)			Balance at June 30, 2014
Commercial	$	3,065	$	-		$	55	$	134		$	3,254
Commercial loans secured by real estate		4,662		-			19		(206	)		4,475
Real estate-mortgage		1,273		(30	)		11		47			1,301
Consumer		139		(22	)		8		20			145
Allocation for general risk		970		-			-		5			975
Total	$	10,109	$	(52	)	$	93	$	-		$	10,150

	Six months ended June 30, 2015,
	Balance at December 31, 2014		Charge- Offs			Recoveries		Provision (Credit)			Balance at  June 30, 2015
Commercial	$	3,262	$	(121	)	$	14	$	16		$	3,171
Commercial loans secured by real estate		3,902		(15	)		51		202			4,140
Real estate-mortgage		1,310		(291	)		55		247			1,321
Consumer		190		(63	)		14		60			201
Allocation for general risk		959		-			-		(75	)		884
Total	$	9,623	$	(490	)	$	134	$	450		$	9,717

	Six months ended June 30, 2014,
	Balance at December 31, 2013		Charge- Offs			Recoveries		Provision (Credit)			Balance at June 30, 2014
Commercial	$	2,844	$	(72	)	$	105	$	377		$	3,254
Commercial loans secured by real estate		4,885		(66	)		172		(516	)		4,475
Real estate-mortgage		1,260		(73	)		25		89			1,301
Consumer		136		(58	)		13		54			145
Allocation for general risk		979		-			-		(4	)		975
Total	$	10,104	$	(269	)	$	315	$	-		$	10,150

As a result of successful ongoing problem credit resolution efforts, the Company achieved further asset quality improvements in 2015 and 2014, specifically in the commercial loans secured by real estate category. There was no provision for loan losses in the first six months of 2014, but the Company recorded a $450,000 provision in the first six months of 2015 which was needed to support loan growth.

The following tables summarize the loan portfolio and allowance for loan loss by the primary segments of the loan portfolio (in thousands).

	At June 30, 2015
Loans:	Commercial		Commercial Loans Secured by Real Estate		Real Estate- Mortgage		Consumer		Allocation for General Risk		Total
Individually evaluated for impairment	$	406	$	776	$	—	$	—			$	1,182
Collectively evaluated for impairment		155,053		426,398		259,144		20,073				860,668
Total loans	$	155,459	$	427,174	$	259,144	$	20,073			$	861,850
Allowance for loan losses:
Specific reserve allocation	$	102	$	512	$	—	$	—	$	—	$	614
General reserve allocation		3,069		3,628		1,321		201		884		9,103
Total allowance for loan losses	$	3,171	$	4,140	$	1,321	$	201	$	884	$	9,717

	At December 31, 2014
Loans:	Commercial		Commercial Loans Secured  by Real Estate		Real Estate- Mortgage		Consumer		Allocation for General Risk		Total
Individually evaluated for impairment	$	—	$	989	$	—	$	—			$	989
Collectively evaluated for impairment		139,126		409,340		258,616		19,009				826,091
Total loans	$	139,126	$	410,329	$	258,616	$	19,009			$	827,080
Allowance for loan losses:
Specific reserve allocation	$	—	$	520	$	—	$	-	$	—	$	520
General reserve allocation		3,262		3,382		1,310		190		959		9,103
Total allowance for loan losses	$	3,262	$	3,902	$	1,310	$	190	$	959	$	9,623

The segments of the Company's loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The loan segments 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 and therefore, no further disaggregation into classes is necessary. The overall risk profile for the commercial loan segment is impacted by non-owner occupied CRE loans, which include loans secured by non-owner occupied nonfarm nonresidential properties, as a meaningful but declining portion of the commercial portfolio is centered in these types of accounts. The residential mortgage loan segment is comprised of first lien amortizing residential mortgage loans and home equity loans secured by residential real estate. The consumer loan segment consists primarily of installment loans and overdraft lines of credit connected with customer deposit accounts.

Management evaluates for possible impairment any individual loan in the commercial or commercial real estate segment with a loan balance in excess of $100,000 that is in nonaccrual status or classified as a Troubled Debt Restructure (TDR). Loans are considered to be impaired 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 impairment 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 Company does not separately evaluate individual consumer and residential mortgage loans for impairment, unless such loans are part of a larger relationship that is impaired, or are classified as a TDR.

Once the determination has been made that a loan is impaired, the determination of whether a specific allocation of the allowance is necessary is measured by comparing the recorded investment in the loan to the fair value of the loan using one of three methods:  (a) the present value of expected future cash flows discounted at the loan's effective interest rate; (b) the loan's observable market price; or (c) the fair value of the collateral less selling costs for collateral dependent loans. The method is selected on a loan-by-loan basis, with management primarily utilizing the fair value of collateral method. The evaluation of the need and amount of a specific allocation of the allowance and whether a loan can be removed from impairment status is made on a quarterly basis. The Company's policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition.

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 loan losses. At a minimum, annual documented reevaluation of the property is completed by the Bank's internal Assigned Risk Department to support the value of the property.

When reviewing an appraisal associated with an existing collateral real estate dependent transaction, the Bank's internal Assigned Risk Department 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 Assigned Risk Department personnel determine 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 Assigned Risk Department personnel rests with the Assigned Risk Department and not the originating account officer.

The following tables present impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary (in thousands).

	June 30, 2015
	Impaired Loans with Specific Allowance				Impaired Loans with no Specific  Allowance		Total  Impaired Loans
	Recorded Investment		Related Allowance		Recorded Investment		Recorded Investment		Unpaid Principal Balance
Commercial	$	406	$	102	$	-	$	406	$	406
Commercial loans secured by real estate		756		512		20		776		885
Total impaired loans	$	1,162	$	614	$	20	$	1,182	$	1,291

	December 31, 2014
	Impaired Loans with Specific Allowance				Impaired Loans with no Specific Allowance		Total  Impaired Loans
	Recorded Investment		Related Allowance		Recorded Investment		Recorded Investment		Unpaid   Principal Balance
Commercial loans secured by real estate	$	989	$	520	$	-	$	989	$	1,069
Total impaired loans	$	989	$	520	$	-	$	989	$	1,069

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated (in thousands).

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
Average loan balance:
Commercial	$	220	$	-	$	110	$	-
Commercial loans secured by real estate		1,509		2,296		1,891		2,678
Average investment in impaired loans	$	1,729	$	2,296	$	2,001	$	2,678
Interest income recognized:
Commercial	$	10	$	-	$	11	$	-
Commercial loans secured by real estate		5		1		11		2
Interest income recognized on a cash basis on impaired loans	$	15	$	1	$	22	$	2

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. All loans greater than 90 days past due, or for which any portion of the loan represents a specific allocation of the allowance for loan losses are 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 $250,000 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 2015 required review of a minimum range of 50% to 55% 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 $1,000,000, 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.

The following table presents 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 (in thousands).

	June 30, 2015
	Pass		Special Mention		Substandard			Doubtful	Total
Commercial	$	150,704	$	758	$	3,866	$	131	$	155,459
Commercial loans secured by real estate		421,117		2,627		3,175		255		427,174
Total	$	571,821	$	3,385	$	7,041	$	386	$	582,633

	December 31, 2014
	Pass		Special Mention		Substandard			Doubtful	Total
Commercial	$	132,665	$	161	$	6,164	$	136	$	139,126
Commercial loans secured by real estate		406,195		620		3,238		276		410,329
Total	$	538,860	$	781	$	9,402	$	412	$	549,455

It is generally the policy of the bank that the outstanding balance of any residential mortgage 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. The remaining non-accrual balance is reported as impaired with no specific allowance. It is the policy of the bank that the outstanding balance of any consumer loan that exceeds 90-days past due as to principal and/or interest is charged off. The following tables present the performing and non-performing outstanding balances of the residential and consumer portfolios (in thousands).

	June 30, 2015
	Performing		Non-Performing
Real estate- mortgage	$	257,497	$	1,647
Consumer		20,073		-
Total	$	277,570	$	1,647

	December 31, 2014
	Performing		Non-Performing
Real estate- mortgage	$	257,199	$	1,417
Consumer		19,009		-
Total	$	276,208	$	1,417

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 nonaccrual loans (in thousands).

	June 30, 2015
	Current		30-59  Days Past  Due		60-89 Days Past Due		90 Days Past Due		Total Past Due		Total Loans		90 Days Past Due and Still Accruing
Commercial	$	153,174	$	—	$	2,285	$	—	$	2,285	$	155,459	$	—
Commercial loans secured by real estate		426,939		—		—		235		235		427,174		—
Real estate- mortgage		255,924		1,634		637		949		3,220		259,144		—
Consumer		20,009		55		9		—		64		20,073		—
Total	$	856,046	$	1,689	$	2,931	$	1,184	$	5,804	$	861,850	$	—

	December 31, 2014
	Current		30-59 Days Past  Due		60-89 Days  Past Due		90 Days Past Due		Total Past Due		Total Loans		90 Days Past Due and Still Accruing
Commercial	$	139,126	$	—	$	—	$	—	$	—	$	139,126	$	—
Commercial loans secured by real estate		410,049		280		—		—		280		410,329		—
Real estate- mortgage		255,021		2,196		332		1,067		3,595		258,616		—
Consumer		18,927		74		8		—		82		19,009		—
Total	$	823,123	$	2,550	$	340	$	1,067	$	3,957	$	827,080	$	—

An allowance for loan losses (“ALL”) is maintained to absorb losses from the loan portfolio. The ALL is based on management's continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of non-performing loans.

Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. For general allowances, historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are complemented by consideration of other qualitative factors.

Management tracks the historical net charge-off activity at each risk rating grade level for the entire commercial portfolio and at the aggregate level for the consumer, residential mortgage and small business portfolios. A historical charge-off factor is calculated utilizing a rolling 12 consecutive historical quarters for the commercial portfolios. This historical charge-off factor for the consumer, residential mortgage and small business portfolios are based on a three year historical average of actual loss experience.

The Company uses a comprehensive methodology and procedural discipline to maintain an ALL to absorb inherent losses in the loan portfolio. The Company believes this is a critical accounting policy since it involves significant estimates and judgments. The allowance consists of three elements: 1) an allowance established on specifically identified problem loans, 2) formula driven general reserves established for loan categories based upon historical loss experience and other qualitative factors which include delinquency, non-performing and TDR loans, loan trends, economic trends, concentrations of credit, trends in loan volume, experience and depth of management, examination and audit results, effects of any changes in lending policies, and trends in policy, financial information, and documentation exceptions, and 3) a general risk reserve which provides support for variance from our assessment of the previously listed qualitative factors, provides protection against credit risks resulting from other inherent risk factors contained in the Company's loan portfolio, and recognizes the model and estimation risk associated with the specific and formula driven allowances. The qualitative factors used in the formula driven general reserves are evaluated quarterly (and revised if necessary) by the Company's management to establish allocations which accommodate each of the listed risk factors.

“Pass” rated credits are segregated from “Criticized” and “Classified” credits for the application of qualitative factors.

Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL.

XML

Federal Home Loan Bank Borrowings

6 Months Ended

Jun. 30, 2015

Federal Home Loan Bank Borrowings [Abstract]

Federal Home Loan Bank Borrowings

10.         Federal Home Loan Bank Borrowings

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

	At June 30, 2015
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	63,430		0.33	%
Advances	2015		4,000		0.52
	2016		12,000		0.81
	2017		12,000		1.06
	2018		10,000		1.51
	2019 and over		8,000		1.76
Total advances			46,000		1.17
Total FHLB borrowings		$	109,430		0.68	%

	At December 31, 2014
				Weighted
Type	Maturing	Amount		Average Rate
Open Repo Plus	Overnight	$	38,880		0.27	%
Advances	2015		4,000		0.52
	2016		12,000		0.81
	2017		12,000		1.06
	2018		10,000		1.51
	2019 and over		4,000		1.88
Total advances			42,000		1.12
Total FHLB borrowings		$	80,880		0.71	%

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

XML

Pension Benefits (Net Periodic Pension Cost) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net periodic pension cost
Service cost	$ 400	$ 430	$ 800	$ 860
Interest cost	325	331	650	662
Expected return on plan assets	$ (525)	(498)	$ (1,050)	(996)
Amortization of prior year service cost		(5)		(10)
Recognized net actuarial loss	$ 300	272	$ 600	544
Net periodic pension cost	$ 500	$ 530	$ 1,000	$ 1,060

XML

Disclosures about Fair Value Measurements (Assets and Liabilities Measured on Recurring Basis) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	$ 122,868	$ 127,110
U.S. Agency Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	5,936	5,906
U.S. Agency mortgage-backed securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	99,610	105,768
Corporate Bond Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	$ 17,322	$ 15,436
Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale
Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	$ 122,868	$ 127,110
Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale
Fair Value Measurements, Recurring Basis [Member] | U.S. Agency Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	$ 5,936	$ 5,906
Fair Value Measurements, Recurring Basis [Member] | U.S. Agency mortgage-backed securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	99,610	105,768
Fair Value Measurements, Recurring Basis [Member] | Corporate Bond Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	$ 17,322	$ 15,436
Fair Value Measurements, Recurring Basis [Member] | Level 1 [Member] | U.S. Agency Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale
Fair Value Measurements, Recurring Basis [Member] | Level 1 [Member] | U.S. Agency mortgage-backed securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale
Fair Value Measurements, Recurring Basis [Member] | Level 1 [Member] | Corporate Bond Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale
Fair Value Measurements, Recurring Basis [Member] | Level 2 [Member] | U.S. Agency Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	$ 5,936	$ 5,906
Fair Value Measurements, Recurring Basis [Member] | Level 2 [Member] | U.S. Agency mortgage-backed securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	99,610	105,768
Fair Value Measurements, Recurring Basis [Member] | Level 2 [Member] | Corporate Bond Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale	$ 17,322	$ 15,436
Fair Value Measurements, Recurring Basis [Member] | Level 3 [Member] | U.S. Agency Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale
Fair Value Measurements, Recurring Basis [Member] | Level 3 [Member] | U.S. Agency mortgage-backed securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale
Fair Value Measurements, Recurring Basis [Member] | Level 3 [Member] | Corporate Bond Securities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Available for sale

XML

Commitments and Contingent Liabilities (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Commitments to extend credit [Member]
Loss Contingencies [Line Items]
Amount of commitment	$ 180.3	$ 188.0
Standby letters of credit [Member]
Loss Contingencies [Line Items]
Amount of commitment	$ 7.7	$ 7.2

XML

Disclosures about Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Disclosures about Fair Value Measurements [Abstract]

Schedule of Assets and Liabilities Measured on Recurring Basis

	Fair Value Measurements at June 30, 2015 Using
	Total		(Level 1)		(Level 2)		(Level 3)
US Agency securities	$	5,936	$	-	$	5,936	$	-
US Agency mortgage-backed securities		99,610		-		99,610		-
Corporate bonds		17,322		-		17,322		-

	Fair Value Measurements at December 31, 2014 Using
	Total		(Level 1)		(Level 2)		(Level 3)
US Agency securities	$	5,906	$	-	$	5,906	$	-
US Agency mortgage-backed securities		105,768		-		105,768		-
Corporate bonds		15,436		-		15,436		-

Schedule of Assets Measured at Fair Value on Non-Recurring Basis

	Fair Value Measurements at June 30, 2015 Using
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	567	$	-	$	-	$	567
Other real estate owned		126		-		-		126

	Fair Value Measurements at December 31, 2014 Using
	Total		(Level 1)		(Level 2)		(Level 3)
Impaired loans	$	469	$	-	$	-	$	469
Other real estate owned		512		-		-		512

June 30, 2015

	Quantitative Information About Level 3 Fair Value Measurements
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range(Wgtd Ave)
Impaired loans	$	567	Appraisal of collateral(1), (3)	Appraisal adjustments(2) Liquidation expenses	0% to 35%(30%) 1% to 15%(10%)
Other real estate owned		126	Appraisal of collateral (1),(3)	Appraisal adjustments(2) Liquidation expenses	0% to 48%(38%) 1% to 20%(10%)

December 31, 2014

	Quantitative Information About Level 3 Fair Value Measurements
	Fair Value Estimate		Valuation Techniques	Unobservable Input	Range(Wgtd Ave)
Impaired loans	$	469	Appraisal of collateral(1),(3)	Appraisal adjustments(2) Liquidation expenses	0% to 37%(30%) 1% to 15%(10%)
Other real estate owned		512	Appraisal of collateral (1),(3)	Appraisal adjustments(2) Liquidation expenses	47% to 83%(55%) 1% to 61%(9%)

(1)

Fair Value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.

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

(3) Includes qualitative adjustments by management and estimated liquidation expenses.

Schedule of Financial Instruments

	June 30, 2015
	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
FINANCIAL ASSETS:
Cash and cash equivalents	$	26,591	$	26,591	$	26,591	$	-	$	-
Investment securities - AFS		122,868		122,868		-		122,868		-
Investment securities – HTM		19,580		19,776		-		16,809		2,967
Regulatory stock		7,305		7,305		7,305		-		-
Loans held for sale		4,393		4,456		4,456		-		-
Loans, net of allowance for loan loss and unearned income		852,133		852,862		-		-		852,862
Accrued interest income receivable		3,310		3,310		3,310		-		-
Bank owned life insurance		37,558		37,558		37,558		-		-
FINANCIAL LIABILITIES:
Deposits with no stated maturities	$	575,977	$	575,977	$	575,977	$	-	$	-
Deposits with stated maturities		286,925		289,576		-		-		289,576
Short-term borrowings		63,430		63,430		63,430		-		-
All other borrowings		59,085		62,811		-		-		62,811
Accrued interest payable		1,451		1,451		1,451		-		-

	December 31, 2014
	Carrying Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
FINANCIAL ASSETS:
Cash and cash equivalents	$	32,872	$	32,872	$	32,872	$	-	$	-
Investment securities - AFS		127,110		127,110		-		127,110		-
Investment securities – HTM		19,840		20,213		-		17,241		2,972
Regulatory stock		6,173		6,173		6,173		-		-
Loans held for sale		5,051		5,127		5,127		-		-
Loans, net of allowance for loan loss and unearned income		817,457		819,935		-		-		819,935
Accrued interest income receivable		3,127		3,127		3,127		-		-
Bank owned life insurance		37,417		37,417		37,417		-		-
FINANCIAL LIABILITIES:
Deposits with no stated maturities	$	568,625	$	568,625	$	568,625	$	-	$	-
Deposits with stated maturities		301,256		304,744		-		-		304,744
Short-term borrowings		38,880		38,880		38,880		-		-
All other borrowings		55,085		59,256		-		-		59,256
Accrued interest payable		1,706		1,706		1,706		-		-

XML

Allowance for Loan Losses (Classes of Loan Portfolio by Categories) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Current	$ 856,046	$ 823,123
Past Due	5,804	3,957
Total Loans	$ 861,850	$ 827,080
90 Days Past Due and Still Accruing
30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	$ 1,689	$ 2,550
60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	2,931	340
90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	1,184	1,067
Commercial [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Current	153,174	$ 139,126
Past Due	2,285
Total Loans	$ 155,459	$ 139,126
90 Days Past Due and Still Accruing
Commercial [Member] | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due
Commercial [Member] | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	$ 2,285
Commercial [Member] | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due
Commercial loans secured by real estate [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Current	$ 426,939	$ 410,049
Past Due	235	280
Total Loans	$ 427,174	$ 410,329
90 Days Past Due and Still Accruing
Commercial loans secured by real estate [Member] | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due		$ 280
Commercial loans secured by real estate [Member] | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due
Commercial loans secured by real estate [Member] | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	$ 235
Real estate-mortgage [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Current	255,924	$ 255,021
Past Due	3,220	3,595
Total Loans	$ 259,144	$ 258,616
90 Days Past Due and Still Accruing
Real estate-mortgage [Member] | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	$ 1,634	$ 2,196
Real estate-mortgage [Member] | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	637	332
Real estate-mortgage [Member] | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	949	1,067
Consumer [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Current	20,009	18,927
Past Due	64	82
Total Loans	$ 20,073	$ 19,009
90 Days Past Due and Still Accruing
Consumer [Member] | 30-59 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	$ 55	$ 74
Consumer [Member] | 60-89 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due	$ 9	$ 8
Consumer [Member] | 90 Days Past Due [Member]
Classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans
Past Due

XML

Commitments and Contingent Liabilities

6 Months Ended

Jun. 30, 2015

Commitments and Contingent Liabilities [Abstract]

Commitments and Contingent Liabilities

15.          Commitments and Contingent Liabilities

The Company had various outstanding commitments to extend credit approximating $180.3 million and $188.0 million along with standby letters of credit of $7.7 million and $7.2 million as of June 30, 2015 and December 31, 2014, respectively. The Company's exposure to credit loss in the event of nonperformance by the other party to these commitments to extend credit and standby letters of credit is represented by their contractual amounts. The Bank uses the same credit and collateral policies in making commitments and conditional obligations as for all other lending.

Additionally, the Company is also 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 will have a material adverse effect on the Company's consolidated financial position, results of operation or cash flows.

XML

Loans (Tables)

6 Months Ended

Jun. 30, 2015

Loans [Abstract]

Summary of Loan Portfolio

	June 30, 2015		December 31, 2014
Commercial	$	155,459	$	139,126
Commercial loans secured by real estate		427,174		410,329
Real estate – mortgage		259,144		258,616
Consumer		20,073		19,009
Loans, net of unearned income	$	861,850	$	827,080

XML

Allowance for Loan Losses (Loan Portfolio Summarized by Categories) (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	$ 582,633	$ 549,455
Commercial [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	155,459	139,126
Commercial loans secured by real estate [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	427,174	410,329
Pass [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	571,821	538,860
Pass [Member] | Commercial [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	150,704	132,665
Pass [Member] | Commercial loans secured by real estate [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	421,117	406,195
Special Mention [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	3,385	781
Special Mention [Member] | Commercial [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	758	161
Special Mention [Member] | Commercial loans secured by real estate [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	2,627	620
Substandard [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	7,041	9,402
Substandard [Member] | Commercial [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	3,866	6,164
Substandard [Member] | Commercial loans secured by real estate [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	3,175	3,238
Doubtful [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	386	412
Doubtful [Member] | Commercial [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	131	136
Doubtful [Member] | Commercial loans secured by real estate [Member]
Loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the internal risk rating system
Loan portfolio	$ 255	$ 276

XML

Investment Securities (Contractual Maturities of Securities) (Details) - Major Types of Debt Securities [Domain] - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Contractual maturities of securities
Available for Sale, Cost Basis, Within 1 year	$ 2,000
Available for Sale, Cost Basis, After 1 year but within 5 years	14,302
Available for Sale, Cost Basis, After 5 years but within 10 years	20,743
Available for Sale, Cost Basis, After 10 years but within15 years	50,945
Available for Sale, Cost Basis, Over 15 years	32,712
Available for Sale, Cost Basis, Total	120,702
Available for Sale, Fair Value, Within 1 year	2,007
Available for Sale, Fair Value, After 1 year but within 5 years	14,331
Available for Sale, Fair Value, After 5 years but within 10 years	21,008
Available for Sale, Fair Value, After 10 years but within15 years	51,947
Available for Sale, Fair Value, Over 15 years	33,575
Available for Sale, Fair Value, Total	122,868	$ 127,110
Held to Maturity, Cost Basis, Within 1 year	999
Held to Maturity, Cost Basis, After 1 year but within 5 years	2,000
Held to Maturity, Cost Basis, After 5 years but within 10 years	4,782
Held to Maturity, Cost Basis, After 10 years but within 15 years	560
Held to Maturity, Cost Basis, Over 15 years	11,239
Held to Maturity, Cost Basis, Total	19,580	19,840
Held to Maturity, Fair Value, Within 1 year	1,000
Held to Maturity, Fair Value, After 1 year but within 5 years	1,967
Held to Maturity, Fair Value, After 5 years but within 10 years	4,749
Held to Maturity, Fair Value, After 10 years but within 15 years	546
Held to Maturity, Fair Value, Over 15 years	11,514
Held to Maturity, Fair Value, Total	$ 19,776	$ 20,213

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
COMPREHENSIVE INCOME
Net income	$ 1,421	$ 979	$ 2,790	$ 1,909
Other comprehensive income, before tax:
Pension obligation change for defined benefit plan	631		1,286	392
Income tax effect	(215)		(438)	(133)
Unrealized holding gains on available for sale securities arising during period	(946)	$ 1,037	(600)	1,551
Income tax effect	321	(353)	204	(527)
Reclassification adjustment for gains on available for sale securities included in net income	(28)	(120)	(28)	(177)
Income tax effect	10	41	10	60
Other comprehensive income	(227)	605	434	1,166
Comprehensive income	$ 1,194	$ 1,584	$ 3,224	$ 3,075

XML

Earnings Per Common Share

6 Months Ended

Jun. 30, 2015

Earnings Per Common Share [Abstract]

Earnings Per Common Share

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 treated as retired for earnings per share purposes. Options to purchase 179,304 common shares, at exercise prices ranging from $3.18 to $4.70, and 3,625 common shares, at exercise prices ranging from $4.60 to $5.22, were outstanding as of June 30, 2015 and 2014, respectively, but were not included in the computation of diluted earnings per common share because to do so would be antidilutive. Dividends on preferred shares are deducted from net income in the calculation of earnings per common share.

	Three months ended June 30,						Six months ended  June 30,
	2015			2014			2015			2014
	(In thousands, except per share data)
Numerator:
Net income	$	1,421		$	979		$	2,790		$	1,909
Preferred stock dividends		(52	)		(52	)		(105	)		(105	)
Net income available to common shareholders	$	1,369		$	927		$	2,685		$	1,804
Denominator:
Weighted average common shares outstanding (basic)		18,859			18,795			18,855			18,790
Effect of stock options		82			141			68			130
Weighted average common shares outstanding (diluted)		18,941			18,936			18,923			18,920
Earnings per common share:
Basic	$	0.07		$	0.05		$	0.14		$	0.10
Diluted		0.07			0.05			0.14			0.10

XML

Preferred Stock (Details) - Series E Preferred Stock [Member] - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Aug. 11, 2011	Jun. 30, 2015
Temporary Equity [Line Items]
Shares of stock issued	21,000
Value of stock issued	$ 21
Dividend rate		9.00%
Minimum Tier 1 capital required to pay dividends		90.00%
Redemption price, percent of liquidation amount		100.00%

XML

Disclosures about Fair Value Measurements (Narrative) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Disclosures about Fair Value Measurements [Abstract]
Carrying value of impaired loans	$ 1,182,000	$ 989,000
Specific valuation allowance	614,000	520,000
Net fair value of impaired loans	$ 567,000	$ 469,000
Assets and liabilities considered financial instruments, percentage	90.00%

XML

Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2015

Allowance for Loan Losses [Abstract]

Rollforward of the Allowance for Loan Losses by Portfolio Segment

	Three months ended June 30, 2015,
	Balance at March 31, 2015		Charge- Offs			Recoveries		Provision (Credit)			Balance at June 30, 2015
Commercial	$	3,157	$	-		$	8	$	6		$	3,171
Commercial loans secured by real estate		4,087		(15	)		9		59			4,140
Real estate-mortgage		1,304		(188	)		25		180			1,321
Consumer		191		(16	)		5		21			201
Allocation for general risk		950		-			-		(66	)		884
Total	$	9,689	$	(219	)	$	47	$	200		$	9,717

	Three months ended June 30, 2014,
	Balance at March 31, 2014		Charge- Offs			Recoveries		Provision (Credit)			Balance at June 30, 2014
Commercial	$	3,065	$	-		$	55	$	134		$	3,254
Commercial loans secured by real estate		4,662		-			19		(206	)		4,475
Real estate-mortgage		1,273		(30	)		11		47			1,301
Consumer		139		(22	)		8		20			145
Allocation for general risk		970		-			-		5			975
Total	$	10,109	$	(52	)	$	93	$	-		$	10,150

	Six months ended June 30, 2015,
	Balance at December 31, 2014		Charge- Offs			Recoveries		Provision (Credit)			Balance at  June 30, 2015
Commercial	$	3,262	$	(121	)	$	14	$	16		$	3,171
Commercial loans secured by real estate		3,902		(15	)		51		202			4,140
Real estate-mortgage		1,310		(291	)		55		247			1,321
Consumer		190		(63	)		14		60			201
Allocation for general risk		959		-			-		(75	)		884
Total	$	9,623	$	(490	)	$	134	$	450		$	9,717

	Six months ended June 30, 2014,
	Balance at December 31, 2013		Charge- Offs			Recoveries		Provision (Credit)			Balance at June 30, 2014
Commercial	$	2,844	$	(72	)	$	105	$	377		$	3,254
Commercial loans secured by real estate		4,885		(66	)		172		(516	)		4,475
Real estate-mortgage		1,260		(73	)		25		89			1,301
Consumer		136		(58	)		13		54			145
Allocation for general risk		979		-			-		(4	)		975
Total	$	10,104	$	(269	)	$	315	$	-		$	10,150

Summary of Primary Segments of Loan Portfolio

	At June 30, 2015
Loans:	Commercial		Commercial Loans Secured by Real Estate		Real Estate- Mortgage		Consumer		Allocation for General Risk		Total
Individually evaluated for impairment	$	406	$	776	$	—	$	—			$	1,182
Collectively evaluated for impairment		155,053		426,398		259,144		20,073				860,668
Total loans	$	155,459	$	427,174	$	259,144	$	20,073			$	861,850
Allowance for loan losses:
Specific reserve allocation	$	102	$	512	$	—	$	—	$	—	$	614
General reserve allocation		3,069		3,628		1,321		201		884		9,103
Total allowance for loan losses	$	3,171	$	4,140	$	1,321	$	201	$	884	$	9,717

	At December 31, 2014
Loans:	Commercial		Commercial Loans Secured  by Real Estate		Real Estate- Mortgage		Consumer		Allocation for General Risk		Total
Individually evaluated for impairment	$	—	$	989	$	—	$	—			$	989
Collectively evaluated for impairment		139,126		409,340		258,616		19,009				826,091
Total loans	$	139,126	$	410,329	$	258,616	$	19,009			$	827,080
Allowance for loan losses:
Specific reserve allocation	$	—	$	520	$	—	$	-	$	—	$	520
General reserve allocation		3,262		3,382		1,310		190		959		9,103
Total allowance for loan losses	$	3,262	$	3,902	$	1,310	$	190	$	959	$	9,623

Impaired Loans by Class

	June 30, 2015
	Impaired Loans with Specific Allowance				Impaired Loans with no Specific  Allowance		Total  Impaired Loans
	Recorded Investment		Related Allowance		Recorded Investment		Recorded Investment		Unpaid Principal Balance
Commercial	$	406	$	102	$	-	$	406	$	406
Commercial loans secured by real estate		756		512		20		776		885
Total impaired loans	$	1,162	$	614	$	20	$	1,182	$	1,291

	December 31, 2014
	Impaired Loans with Specific Allowance				Impaired Loans with no Specific Allowance		Total  Impaired Loans
	Recorded Investment		Related Allowance		Recorded Investment		Recorded Investment		Unpaid   Principal Balance
Commercial loans secured by real estate	$	989	$	520	$	-	$	989	$	1,069
Total impaired loans	$	989	$	520	$	-	$	989	$	1,069

Average Recorded Investment in Impaired Loans and Related Interest Income Recognized

	Three months ended June 30,				Six months ended June 30,
	2015		2014		2015		2014
Average loan balance:
Commercial	$	220	$	-	$	110	$	-
Commercial loans secured by real estate		1,509		2,296		1,891		2,678
Average investment in impaired loans	$	1,729	$	2,296	$	2,001	$	2,678
Interest income recognized:
Commercial	$	10	$	-	$	11	$	-
Commercial loans secured by real estate		5		1		11		2
Interest income recognized on a cash basis on impaired loans	$	15	$	1	$	22	$	2

Loan Portfolio Summarized by Categories

	June 30, 2015
	Pass		Special Mention		Substandard			Doubtful	Total
Commercial	$	150,704	$	758	$	3,866	$	131	$	155,459
Commercial loans secured by real estate		421,117		2,627		3,175		255		427,174
Total	$	571,821	$	3,385	$	7,041	$	386	$	582,633

	December 31, 2014
	Pass		Special Mention		Substandard			Doubtful	Total
Commercial	$	132,665	$	161	$	6,164	$	136	$	139,126
Commercial loans secured by real estate		406,195		620		3,238		276		410,329
Total	$	538,860	$	781	$	9,402	$	412	$	549,455

Performing and Non-performing Outstanding Balances

	June 30, 2015
	Performing		Non-Performing
Real estate- mortgage	$	257,497	$	1,647
Consumer		20,073		-
Total	$	277,570	$	1,647

	December 31, 2014
	Performing		Non-Performing
Real estate- mortgage	$	257,199	$	1,417
Consumer		19,009		-
Total	$	276,208	$	1,417

Classes of Loan Portfolio by Categories

	June 30, 2015
	Current		30-59  Days Past  Due		60-89 Days Past Due		90 Days Past Due		Total Past Due		Total Loans		90 Days Past Due and Still Accruing
Commercial	$	153,174	$	—	$	2,285	$	—	$	2,285	$	155,459	$	—
Commercial loans secured by real estate		426,939		—		—		235		235		427,174		—
Real estate- mortgage		255,924		1,634		637		949		3,220		259,144		—
Consumer		20,009		55		9		—		64		20,073		—
Total	$	856,046	$	1,689	$	2,931	$	1,184	$	5,804	$	861,850	$	—

	December 31, 2014
	Current		30-59 Days Past  Due		60-89 Days  Past Due		90 Days Past Due		Total Past Due		Total Loans		90 Days Past Due and Still Accruing
Commercial	$	139,126	$	—	$	—	$	—	$	—	$	139,126	$	—
Commercial loans secured by real estate		410,049		280		—		—		280		410,329		—
Real estate- mortgage		255,021		2,196		332		1,067		3,595		258,616		—
Consumer		18,927		74		8		—		82		19,009		—
Total	$	823,123	$	2,550	$	340	$	1,067	$	3,957	$	827,080	$	—

XML

Consolidated Statement of Cash Flows (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENTS OF CASH FLOWS [Abstract]
Income tax payments	$ 878,000	$ 558,000
Total interest payments	3,453,000	3,475,000
Non-cash transfers to other real estate owned	$ 132,000	$ 6,000

XML

Segment Results

6 Months Ended

Jun. 30, 2015

Segment Results [Abstract]

Segment Results

14.          Segment Results

The financial performance of the Company is also monitored by an internal funds transfer pricing profitability measurement system which produces line of business results and key performance measures. The Company's major business units include retail banking, commercial banking, trust, and investment/parent. The reported results reflect the underlying economics of the business segments. Expenses for centrally provided services are allocated based upon the cost and estimated usage of those services. The businesses are match-funded and interest rate risk is centrally managed and accounted for within the investment/parent business segment. The key performance measure the Company focuses on for each business segment is net income contribution.

Retail banking includes the deposit-gathering branch franchise and lending to both individuals and small businesses. Lending activities include residential mortgage loans, direct consumer loans, and small business commercial loans. Commercial banking to businesses includes commercial loans, and CRE loans. The trust segment contains our wealth management businesses which include the Trust Company, West Chester Capital Advisors (WCCA), our registered investment advisory firm and financial services. Wealth management includes personal trust products and services such as personal portfolio investment management, estate planning and administration, custodial services and pre-need trusts. Also, institutional trust products and services such as 401(k) plans, defined benefit and defined contribution employee benefit plans, and individual retirement accounts are included in this segment. Financial services include the sale of mutual funds, annuities, and insurance products. The wealth management businesses also includes the union collective investment funds, namely the ERECT and BUILD funds which are designed to use union pension dollars in construction projects that utilize union labor. The investment/parent includes the net results of investment securities and borrowing activities, general corporate expenses not allocated to the business segments, interest expense on guaranteed junior subordinated deferrable interest debentures, and centralized interest rate risk management. Inter-segment revenues were not material.

The contribution of the major business segments to the Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three months ended						Six months ended						June 30,
	June 30, 2015						June 30, 2015						2015
	Total revenue			Net income (loss)			Total revenue			Net income (loss)			Total assets
Retail banking	$	6,539		$	743		$	13,063		$	1,402		$	374,659
Commercial banking		4,635			1,334			9,373			2,625			595,827
Trust		2,230			396			4,397			776			5,306
Investment/Parent		(912	)		(1,052	)		(1.695	)		(2,013	)		137,142
Total	$	12,492		$	1,421		$	25,138		$	2,790		$	1,112,934

	Three months ended						Six months ended						December 31,
	June 30, 2014						June 30, 2014						2014
	Total revenue			Net income (loss)			Total revenue			Net income (loss)			Total assets
Retail banking	$	6,470		$	617		$	12,587		$	965		$	376,009
Commercial banking		4,085			1,030			8,412			2,126			563,690
Trust		2,041			356			4,155			664			5,015
Investment/Parent		(574	)		(1,024	)		(1,075	)		(1,846	)		144,549
Total	$	12,022		$	979		$	24,079		$	1,909		$	1,089,263