Executive Summary

Q2 2025 posted a net loss of $0.28M and diluted EPS of -$0.02, largely due to a $3.13M provision for credit losses tied to resolving the company’s largest problem CRE loan; operating metrics improved with net interest margin rising to 3.10% and efficiency ratio to 80.73% .
Net interest income grew 17% YoY to $10.39M on a steeper yield curve and lower funding costs following Fed easing; total non-interest income declined 6% YoY on softer wealth management fees, while non-interest expense fell 12% YoY on lower professional fees post activist resolution .
Management expects further NIM improvement and net interest income growth in 2H 2025 given deposit cost declines and disciplined pricing; Board declared a $0.03 dividend (3.9% annualized yield at $3.08 stock price, 60% YTD payout) .
Wall Street consensus estimates via S&P Global were unavailable for EPS and revenue; comparison to estimates is not possible for this quarter.
Potential stock catalysts: continued NIM expansion, credit normalization after CRE resolution, and dividend continuity supporting capital return narrative .

What Went Well and What Went Wrong

What Went Well

Net interest income increased $1.52M YoY (+17.1%) to $10.39M on controlled balance sheet growth, improved earning asset yields, and reduced deposit/borrowing costs after Fed rate cuts .
Efficiency improved materially: efficiency ratio fell to 80.73% from 100.33% in Q2 2024, reflecting tighter expense control and lower professional fees after activist-related costs subsided .
CEO tone on outlook: “We believe that our balance sheet is well positioned for further quarterly net interest income growth and net interest margin improvement…” underscoring confidence in 2H 2025 trajectory .

What Went Wrong

Provision for credit losses surged to $3.13M (vs $0.43M in Q2 2024), driven by a $2.8M charge-off to write down a large mixed-use CRE loan to a court-approved sale price and higher historical loss rates under CECL .
Non-interest income declined 6.3% YoY, with wealth management fees down 9.1% YoY on market volatility earlier in 2025 and lapping large 2024 new business wins .
Asset quality metrics worsened sequentially: non-performing assets rose to $16.4M (+9.7% QoQ) and net charge-offs elevated; allowance coverage fell to 93% of NPLs (from 101% in Q1) as the CRE resolution flowed through .

Financial Results

P&L and EPS versus prior periods

Metric	Q2 2024	Q1 2025	Q2 2025
Net Interest Income ($USD Millions)	$8.88	$9.93	$10.39
Total Non-Interest Income ($USD Millions)	$4.37	$4.12	$4.10
Provision for Credit Losses ($USD Millions)	$0.43	$(0.10)	$3.13
Pretax Income (Loss) ($USD Millions)	$(0.48)	$2.39	$(0.35)
Net Income (Loss) ($USD Millions)	$(0.38)	$1.91	$(0.28)
Diluted EPS ($USD)	$(0.02)	$0.12	$(0.02)
Net Interest Margin (%)	2.74%	3.01%	3.10%
Efficiency Ratio (%)	100.33%	83.67%	80.73%

Non-Interest Income Composition

Metric ($USD Millions)	Q2 2024	Q1 2025	Q2 2025
Wealth Management Fees	$3.06	$2.86	$2.78
Service Charges	$0.29	$0.28	$0.27
Mortgage Banking Revenue	$0.11	$0.03	$0.06
BOLI	$0.24	$0.26	$0.24
Other Income	$0.67	$0.69	$0.71
Trading Gains	$0.00	$0.00	$0.04

Balance Sheet and Credit KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Avg Loans ($USD Billions)	$1.03B	$1.06B	$1.07B
Deposits (Period-End, $USD Billions)	$1.17B	$1.22B	$1.24B
Loan-to-Deposit Ratio (Avg)	—	87.4%	86.2%
Non-Performing Assets ($USD Millions)	$12.82	$15.00	$16.42
NPLs / Total Loans (%)	—	1.29%	1.42%
Allowance Coverage of NPLs (%)	—	101%	93%
Net Charge-offs / Avg Loans (%)	0.08%	0.02%	1.09%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin	FY 2025/2H 2025	Management expected NIM to continue improving through 2025 .	Management expects NIM to continue improving through 2H 2025 .	Maintained
Deposit Costs	FY 2025	Trend down following Fed easing; deposit cost averaged 2.04% in Q1 .	Continued declines contributing to NIM improvement; deposit cost averaged 2.06% in 1H .	Maintained
Net Interest Income	FY 2025	Balance sheet well positioned for further net interest income growth .	Well positioned for further quarterly net interest income growth in 2H 2025 .	Maintained
Dividend	Q2 2025	$0.03 declared for Q1 2025 .	$0.03 declared for Q2 2025 (3.9% annualized yield; 60% YTD payout) .	Maintained

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was available for ASRV; themes below reflect management commentary from Q1/Q2 press releases.

Topic	Previous Mentions (Q-2 & Q-1)	Current Period (Q2 2025)	Trend
Rate environment & NIM	Expected NIM improvement through 2025 with Fed easing; Q1 NIM +31 bps YoY .	NIM at 3.10%; management expects further improvement in 2H 2025 .	Improving
Deposit funding & costs	Deposit cost trending down; average 2.04% in Q1; business development driving deposit growth .	Deposit cost averaged 2.06% in 1H; deposits up; no brokered deposits .	Improving
Credit quality	Allowance coverage 101% of NPLs; NPLs at 1.29% of loans (Q1) .	Large CRE resolution drove $2.8M charge-off; NPL ratio 1.42%; coverage 93% .	Mixed (resolution but higher NPLs)
Wealth management	Fees down in Q1 on market volatility; AUM $2.5B .	Fees down YoY; AUM increased to $2.6B; advisory agreement with SB Value to help grow AUM .	Stabilizing; strategic push
Activist & governance	Settlement reached June 2024; professional fees trending lower .	Lower professional fees drove expense declines; cooperation with SB Value extended to 2029 .	Positive

Management Commentary

“We believe that our balance sheet is well positioned for further quarterly net interest income growth and net interest margin improvement… Additionally, our non-interest expense has favorably declined in both quarters of 2025.” – Jeffrey A. Stopko, President & CEO .
“AmeriServ Financial achieved positive operating leverage in the first quarter of 2025 as our total revenue increased while our non-interest expenses declined.” – Jeffrey A. Stopko, President & CEO .
On strategic collaboration: “Over the past year, we have benefitted greatly from our collaborative engagement with SBV… We will continue to focus on executing our strategy to enhance value for shareholders…” – J. Michael Adams, Jr., Chairman .

Q&A Highlights

No Q2 2025 earnings call transcript was available; there were no published Q&A highlights to review for this quarter.

Estimates Context

Wall Street consensus estimates via S&P Global for Q2 2025 EPS and revenue were unavailable; as a result, we cannot quantify beats/misses versus consensus this quarter.
Reported diluted EPS was -$0.02 and net loss was $0.28M; net interest income rose to $10.39M; non-interest income was $4.10M, driven by lower wealth management fees YoY .

Key Takeaways for Investors

Credit event overshadowed operating progress: the $2.8M CRE charge-off and $3.13M provision drove the quarterly loss; absent the one-time credit hit, core NII/NIM trends are constructive for 2H 2025 .
Margin expansion is the core driver: NIM at 3.10% with management expecting continued improvement given deposit cost tailwinds and pricing discipline; this is pivotal as NII is ~70% of revenue .
Expense discipline is tangible: efficiency ratio improved to 80.73% and professional fees fell sharply as activist-related costs rolled off, supporting operating leverage .
Wealth management stabilizing: AUM rose to $2.6B with a new advisory agreement and extended cooperation with SB Value to drive growth, though fees remain below 2024 levels .
Liquidity and funding stable: deposits increased; no brokered deposits used; loan-to-deposit ratio at ~86% suggests capacity to grow loans prudently .
Asset quality watch: NPLs and net charge-offs elevated in Q2 due to specific CRE resolution; allowance coverage remains solid but dipped; monitor subsequent quarters for normalization .
Capital return consistent: $0.03 dividend maintained; payout 60% of YTD earnings and 3.9% yield at the referenced price reinforces shareholder return focus amid improving fundamentals .

AMERISERV FINANCIAL INC /PA/ (ASRV)·Q2 2025 Earnings Summary