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What changed in AMERISERV FINANCIAL INC /PA/'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of AMERISERV FINANCIAL INC /PA/'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+260 added−338 removedSource: 10-K (2025-03-19) vs 10-K (2024-03-27)

Top changes in AMERISERV FINANCIAL INC /PA/'s 2024 10-K

260 paragraphs added · 338 removed · 196 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

58 edited+11 added−16 removed72 unchanged
Biggest changeFurther, non-owner occupied commercial real estate loans represented 49.3% and 45.5% of total loans as of December 31, 2023 and 2022, respectively. 5 Table of Contents The following table presents our non-owner occupied commercial real estate loan portfolio by property type. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, 2023 ​ ​ COMMERCIAL ​ COMMERCIAL ​ ​ ​ ​ ​ ​ ​ REAL ESTATE ​ REAL ESTATE ​ OTHER COMMERCIAL ​ ​ ​ ​ ​ (NON-OWNER OCCUPIED) - ​ (NON-OWNER OCCUPIED) - ​ REAL ESTATE ​ ​ ​ ​ RETAIL MULTI-FAMILY (NON-OWNER OCCUPIED) TOTAL ​ ​ (IN THOUSANDS) 1-4 unit residential ​ $ — ​ $ — ​ $ 27,038 ​ $ 27,038 Multi-family ​ — ​ 92,037 ​ — ​ 92,037 Mixed use - apartments & retail/office ​ ​ — ​ ​ 17,971 ​ ​ — ​ ​ 17,971 Retail strip plaza ​ ​ 45,691 ​ ​ — ​ ​ — ​ ​ 45,691 Mall ​ ​ 3,995 ​ ​ — ​ ​ — ​ ​ 3,995 Major shopping center with anchor tenants ​ ​ 29,471 ​ ​ — ​ ​ — ​ ​ 29,471 Commercial office - urban ​ ​ — ​ ​ — ​ ​ 13,734 ​ ​ 13,734 Commercial office - suburban ​ ​ — ​ ​ — ​ ​ 9,404 ​ ​ 9,404 Mixed use - retail/office ​ ​ — ​ ​ — ​ ​ 34,144 ​ ​ 34,144 Hotel/motel ​ — ​ — ​ 43,546 ​ 43,546 Retail/service shops ​ 82,804 ​ — ​ — ​ 82,804 Personal care/hospital/medical office ​ — ​ — ​ 20,291 ​ 20,291 Manufacturing/warehouse ​ — ​ — ​ 85,981 ​ 85,981 Other ​ — ​ — ​ 68 ​ 68 Land acquisition and development ​ — ​ — ​ 6,080 ​ 6,080 Total ​ $ 161,961 ​ $ 110,008 ​ $ 240,286 ​ $ 512,255 ​ Residential Mortgages This category includes mortgages that are secured by residential property.
Biggest changeFurther, non-owner occupied commercial real estate loans represented 51.3% and 49.3% of total loans as of December 31, 2024 and 2023, respectively. 5 Table of Contents The following table presents our non-owner occupied commercial real estate loan portfolio by property type. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ DECEMBER 31, 2024 ​ ​ COMMERCIAL ​ COMMERCIAL ​ ​ ​ ​ ​ ​ ​ REAL ESTATE ​ REAL ESTATE ​ OTHER COMMERCIAL ​ ​ ​ ​ ​ (NON-OWNER OCCUPIED) - ​ (NON-OWNER OCCUPIED) - ​ REAL ESTATE ​ ​ ​ ​ RETAIL MULTI-FAMILY (NON-OWNER OCCUPIED) TOTAL ​ ​ (IN THOUSANDS) 1-4 unit residential ​ $ — ​ $ — ​ $ 30,036 ​ $ 30,036 Multi-family ​ — ​ 114,055 ​ — ​ 114,055 Mixed use - apartments & retail/office ​ ​ — ​ ​ 18,309 ​ ​ — ​ ​ 18,309 Retail strip plaza ​ ​ 57,674 ​ ​ — ​ ​ — ​ ​ 57,674 Mall ​ ​ 3,622 ​ ​ — ​ ​ — ​ ​ 3,622 Major shopping center with anchor tenants ​ ​ 30,201 ​ ​ — ​ ​ — ​ ​ 30,201 Commercial office - urban ​ ​ — ​ ​ — ​ ​ 22,160 ​ ​ 22,160 Commercial office - suburban ​ ​ — ​ ​ — ​ ​ 27,675 ​ ​ 27,675 Hotel/motel ​ — ​ — ​ 38,324 ​ 38,324 Retail/service shops ​ 90,281 ​ — ​ — ​ 90,281 Personal care/hospital/medical office ​ — ​ — ​ 20,783 ​ 20,783 Manufacturing/warehouse ​ — ​ — ​ 87,748 ​ 87,748 Other ​ — ​ — ​ 1,063 ​ 1,063 Land acquisition and development ​ — ​ — ​ 6,093 ​ 6,093 Total ​ $ 181,778 ​ $ 132,364 ​ $ 233,882 ​ $ 548,024 ​ Residential Mortgages This category includes mortgages that are secured by residential property.
It is a full-service bank offering (i) retail banking services, such as demand, savings and time deposits, checking accounts, money market accounts, secured and unsecured consumer loans, mortgage loans, safe deposit boxes, holiday club accounts, and money orders; and (ii) lending, depository and related financial services to commercial, industrial, financial, and governmental customers, such as commercial real estate mortgage loans (CRE), short and medium-term loans, revolving credit arrangements, lines of credit, inventory and accounts receivable financing, real estate construction loans, business savings accounts, time deposits, wire transfers, night depository, and lock box services.
It is a full-service bank offering (i) retail banking services, such as demand, savings and time deposits, checking accounts, money market accounts, secured and unsecured consumer loans, mortgage loans, safe deposit boxes, holiday club accounts, and money orders; and (ii) lending, depository and related financial services to commercial, industrial, financial, and governmental customers, such as commercial real estate (CRE) mortgage loans, short and medium-term loans, revolving credit arrangements, lines of credit, inventory and accounts receivable financing, real estate construction loans, business savings accounts, time deposits, wire transfers, night depository, and lock box services.
New branches, or acquisitions or mergers, are required to be pre-approved by the responsible agency, which in the case of the Company and the Bank is the Federal Reserve and the PDB.
New branches, or acquisitions or mergers, are required to be pre-approved by the responsible agency, which in the case of the Company is the Federal Reserve and the PDB.
While it is impractical to discuss all laws and regulations that regularly affect the business of the Company and its subsidiaries, set forth below is an overview of some of the major provisions and statutes that apply. CAPITAL REQUIREMENTS One of the most significant regulatory requirements for banking institutions is minimum capital, imposed as a ratio of capital to assets.
While it is impractical to discuss all laws and regulations that regularly affect the business of the Company, set forth below is an overview of some of the major provisions and statutes that apply. CAPITAL REQUIREMENTS One of the most significant regulatory requirements for banking institutions is minimum capital, imposed as a ratio of capital to assets.
As a result of these key union goals, the Company’s salaries and benefit costs are higher than its non-union peers as we offer good wages and strong benefits which include affordable health care and strong retirement benefits with the majority of current union employees participating in a defined benefit pension plan.
As a result of these key union goals, the Company’s salaries and benefit costs are higher than its non-union peers as we offer good wages and strong benefits which include affordable health care and strong retirement benefits with a portion of current union employees participating in a defined benefit pension plan.
The FDIC retains the ability to cease collection early, extend the special assessment collection period, and impose a final shortfall special assessment to collect the difference between actual losses and the amounts collected after the receiverships for Silicon Valley Bank and Signature Bank terminate.
The FDIC retained the ability to cease collection early, extend the special assessment collection period, and impose a final shortfall special assessment to collect the difference between actual losses and the amounts collected after the receiverships for Silicon Valley Bank and Signature Bank terminate.
As the financial services industry continues to consolidate, the scope of potential competition affecting our subsidiaries will also increase. Brokerage houses, consumer finance companies, insurance companies, financial technology firms, and pension trusts are important competitors for various types of financial services. Personal and corporate trust investment counseling services are offered by insurance companies, other firms, and individuals.
As the financial services industry continues to consolidate, the scope of potential competition affecting the Company will also increase. Brokerage houses, consumer finance companies, insurance companies, financial technology firms, and pension trusts are important competitors for various types of financial services. Personal and corporate trust investment counseling services are offered by insurance companies, other firms, and individuals.
Generally, a bank is prohibited from paying any dividend or making any capital distribution or paying any management fee to its holding company if the bank would thereafter be undercapitalized. 11 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ Well ​ Plus Buffer Capitalized Common equity tier 1 capital ratio 7.00 % 6.50 % Tier 1 capital ratio 8.50 % 8.00 % Total capital ratio 10.50 % 10.00 % ​ DIVIDEND RESTRICTIONS The primary source of cash to pay dividends, if any, to the Company’s shareholders and to meet the Company’s obligations is dividends paid to the Company by the Bank and the Trust Company.
Generally, a bank is prohibited from paying any dividend or making any capital distribution or paying any management fee to its holding company if the bank would thereafter be undercapitalized. ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ Well ​ Plus Buffer Capitalized Common equity tier 1 capital ratio 7.00 % 6.50 % Tier 1 capital ratio 8.50 % 8.00 % Total capital ratio 10.50 % 10.00 % ​ DIVIDEND RESTRICTIONS The primary source of cash to pay dividends, if any, to the Company’s shareholders and to meet the Company’s obligations is dividends paid to the Company by the Bank.
The Company and its subsidiaries derive substantially all of their income from banking, bank related services, and trust and wealth management related services. The Company functions primarily as a coordinating and servicing unit for its subsidiary entities in general management, accounting and taxes, loan review, internal audit, investment accounting, marketing and risk management.
The Company and its subsidiary derive substantially all of their income from banking, bank related services, and trust and wealth management related services. The Company functions primarily as a coordinating and servicing unit for its subsidiary entity in general management, accounting and taxes, loan review, internal audit, investment accounting, marketing and risk management.
The assets as of December 12 Table of Contents 31 st in both of the prior two calendar years will be used to determine the appropriate size threshold. The agencies will evaluate large banks under four performance tests: the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.
The assets as of December 31 st in both of the prior two calendar years will be used to determine the appropriate size threshold. The agencies will evaluate large banks under four performance tests: the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.
The Bank does not engage, and has never engaged, in subprime residential mortgage lending. Secondary Market Activities The residential lending department of the Bank continues to originate one-to-four family mortgage loans for customers, some of which are sold to outside investors in the secondary market and some of which are retained for the Bank’s portfolio.
The Bank does not engage, and has never engaged, in subprime residential mortgage lending. Secondary Market Activities The residential lending department of the Bank originates one-to-four family mortgage loans for customers, some of which are sold to outside investors in the secondary market and some of which are retained for the Bank’s portfolio.
The investment portfolio of the Company and its subsidiaries are proactively managed, including in accordance with federal and state laws and regulations and in accordance with generally accepted accounting principles (GAAP).
The investment portfolio of the Company and its subsidiary are proactively managed, including in accordance with federal and state laws and regulations and in accordance with generally accepted accounting principles (GAAP).
Through 17 branch locations in Allegheny, Cambria, Centre, Somerset, and Westmoreland counties, Pennsylvania and Washington county, Maryland, the Bank conducts a general banking business.
Through 16 branch locations in Allegheny, Cambria, Centre, Somerset, and Westmoreland counties, Pennsylvania and Washington county, Maryland, the Bank conducts a general banking business.
The Bank has also been a preferred mortgage and consumer loan provider for the Pennsylvania State Education Association for almost 10 years which provides us with the opportunity to expand our lending in these products throughout Pennsylvania.
The Bank has also been a preferred mortgage and consumer loan provider for the Pennsylvania State Education Association for 11 years which provides us with the opportunity to expand our lending in these products throughout Pennsylvania.
“Happy Valley” is another often-used term to refer to the State College area, including the borough and the townships of College, Harris, Patton, and Ferguson. The unemployment rate for the State College MSA decreased from a 3.2% average in 2022 to a 2.9% average in 2023 and remains one of the lowest of all regions in the Commonwealth.
“Happy Valley” is another often-used term to refer to the State College area, including the borough and the townships of College, Harris, Patton, and Ferguson. The unemployment rate for the State College MSA decreased from a 2.9% average in 2023 to a 2.7% average in 2024 and remains one of the lowest of all regions in the Commonwealth.
The Company has also adopted a hybrid remote work policy for certain positions. Talent and Promoting Diversity A core tenet of the Company’s talent philosophy is to both develop talent from within and supplement with external hires. Whenever possible, the Company seeks to fill positions by promotion and transfer from within the organization.
The Company has also adopted a hybrid remote work policy for certain positions. Talent and Promoting Members from Underrepresented Communities A core tenet of the Company’s talent philosophy is to both develop talent from within and supplement with external hires. Whenever possible, the Company seeks to fill positions by promotion and transfer from within the organization.
Failure of a financial institution to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the Company.
Failure to maintain and implement adequate programs to combat money laundering and terrorist financing, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the Company.
As a result of the Dodd-Frank Act, the calculated assessment rate is applied to average consolidated assets less the average tangible equity of the IDI during the assessment period to determine the dollar amount of the quarterly assessment.
As a result of the Dodd-Frank Act, the calculated assessment rate is applied to average consolidated assets less the average tangible equity of the IDI during the 12 Table of Contents assessment period to determine the dollar amount of the quarterly assessment.
The Company’s executive team and the Compensation/Human Resources Committee of the Board of Directors oversee the strategic management of the Company’s human capital resources, and the Company’s Human Resources Department manages the day-to-day of those resources. Employee profile The Company employed 323 people as of December 31, 2023 in full- and part-time positions.
The Company’s executive team and the Compensation/Human Resources Committee of the Board of Directors oversee the strategic management of the Company’s human capital resources, and the Company’s Human Resources Department manages the day-to-day of those resources. Employee profile The Company employed 313 people as of December 31, 2024, in full- and part-time positions.
The Company has consistently viewed its positive union relationships as a potential source of additional revenue. Examples of success in these efforts include the previously mentioned ERECT Fund where the wealth management group is trustee for this $243 million fund whose purpose is to invest in commercial construction projects with the requirement that they utilize union labor.
The Company has consistently viewed its positive union relationships as a potential source of additional revenue. Examples of success in these efforts include the previously mentioned ERECT Fund where the wealth and capital management division is trustee for this $253 million fund whose purpose is to invest in commercial construction projects with the requirement that they utilize union labor.
The Hagerstown, MD-Martinsburg, WV MSA unemployment rate decreased from a 3.4% average in 2022 to a 2.8% average in 2023. The Company also has loan production offices in Wilkins Township in Allegheny County and Altoona in Blair County, Pennsylvania. Wilkins Township in Allegheny County, Pennsylvania is located 15 miles east of the city of Pittsburgh.
The Hagerstown, MD-Martinsburg, WV MSA unemployment rate increased from a 2.8% average in 2023 to a 3.3% average in 2024. The Company also has loan production offices in Wilkins Township in Allegheny County and Altoona in Blair County, Pennsylvania. Wilkins Township in Allegheny County, Pennsylvania is located 15 miles east of the city of Pittsburgh.
In addition to being located adjacent to I-99 and a major highway system, Altoona also has easy access to rail and air transportation. The average unemployment rate in the Altoona MSA decreased from 4.1% in 2022 to 3.5% in 2023.
In addition to being located adjacent to I-99 and a major highway system, Altoona also has easy access to rail and air transportation. The average unemployment rate in the Altoona MSA decreased from 3.5% in 2023 to 3.3% in 2024.
Since inception of the partnership, the Bank has funded over $315 million in mortgage and consumer loans to unionized teachers and their family members. 10 Table of Contents Competitive Compensation As part of the Company’s compensation philosophy, market competitive programs are maintained for employees to attract and retain top talent.
Since the inception of the partnership, the Bank has funded over $330 million in mortgage and consumer loans to unionized teachers and their family members. Competitive Compensation As part of the Company’s compensation philosophy, market competitive programs are maintained for employees to attract and retain top talent.
The Bank is an FDIC-insured institution, therefore, deposits are insured up to the standard insurance amount of $250,000 per depositor. As of December 31, 2023 and 2022, the estimated amount of uninsured deposits was $384.5 million and $316.5 million, respectively.
The Bank is an FDIC-insured institution; therefore, deposits are insured up to the standard insurance amount of $250,000 per depositor. As of December 31, 2024 and 2023, the estimated amount of uninsured deposits was $435.7 million and $384.5 million, respectively.
The Company also utilizes certain Trust Company specialty deposits related to the ERECT funds as a funding source, which serve as an alternative to wholesale borrowings and can exhibit some limited degree of volatility.
The Company also utilizes certain AmeriServ Wealth and Capital Management specialty deposits related to the ERECT funds as a funding source, which serve as an alternative to wholesale borrowings and can exhibit some limited degree of volatility.
Investment securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL ​ ​ ​ ​ ​ ​ ​ U.S.
Investment securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL ​ ​ ​ ​ ​ ​ ​ U.S.
The unemployment rate for the Pittsburgh MSA decreased from a 4.3% average in 2022 to a 3.7% average in 2023. Altoona is the business center of Blair County, Pennsylvania with a strong retail, government and manufacturing base. The top field of employment in Altoona and the metro area is healthcare.
The unemployment rate for the Pittsburgh MSA decreased from a 3.7% average in 2023 to a 3.5% average in 2024. 9 Table of Contents Altoona is the business center of Blair County, Pennsylvania with a strong retail, government and manufacturing base. The top field of employment in Altoona and the metro area is healthcare.
It has a workforce of over 400,000 with strengths in manufacturing and technology. It also offers an affordable cost of doing business and living, all within an hour of the Washington, D.C./Baltimore regions. There are also plenty of facilities and land slated for industrial/commercial development. Hagerstown has become a choice location for manufacturers, financial services, and distribution companies.
It also offers an affordable cost of doing business and living, all within an hour of the Washington, D.C./Baltimore regions. There are also plenty of facilities and land slated for industrial/commercial development. Hagerstown has become a choice location for manufacturers, financial services, and distribution companies.
The Company’s principal activities consist of owning and operating its two wholly owned subsidiary entities. At December 31, 2023, the Company had, on a consolidated basis, total assets, deposits, and shareholders’ equity of $1.4 billion, $1.2 billion, and $102.3 million, respectively.
The Company’s principal activities consist of owning and operating its wholly owned subsidiary entity. At December 31, 2024, the Company had, on a consolidated basis, total assets, deposits, and shareholders’ equity of $1.4 billion, $1.2 billion, and $107.2 million, respectively.
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities below. PRIVACY PROVISIONS Federal banking regulators adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about customers to non-affiliated third parties.
For more information regarding quarterly cash dividends, see Part II, Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities below. PRIVACY PROVISIONS Federal banking regulators adopted rules that limit the ability of banks and other financial institutions to disclose non-public information about customers to non-affiliated third parties.
The Bank also operates 18 automated bank teller machines (ATMs) through its 24-hour banking network that is linked with NYCE, a regional ATM network, and CIRRUS, a national ATM network. West Chester Capital Advisors (WCCA), a SEC-registered investment advisor, is a subsidiary of the Bank. The Company also operates loan production offices (LPOs) in Altoona and Wilkins Township in Pennsylvania.
The Bank also operates 17 automated bank teller machines (ATMs) through its 24-hour banking network that are linked with NYCE, a regional ATM network, and CIRRUS, a national ATM network. AmeriServ Wealth Advisors, Inc. (AWA), a SEC-registered investment advisor, is a subsidiary of the Bank. The Company also operates loan production offices (LPOs) in Altoona and Wilkins Township in Pennsylvania.
COMPETITION Our subsidiaries face strong competition from other commercial banks, savings banks, credit unions, savings and loan associations, and other financial or investment service institutions for business in the communities they serve. Several of these institutions are affiliated with major banking and financial institutions which are substantially larger and have greater financial resources than the Bank and the Trust Company.
COMPETITION The Company faces strong competition from other commercial banks, savings banks, credit unions, savings and loan associations, and other financial or investment service institutions for business in the communities it serves. Several of these institutions are affiliated with major banking and financial institutions which are substantially larger and have greater financial resources than the Company.
The Company’s talent acquisition team uses internal and external resources to recruit highly skilled and talented candidates; employee referrals are also encouraged. The Company is dedicated to recruitment and career development practices that support its employees and promotes diversity in its workforce at all levels of the Company.
The Company’s talent acquisition team uses internal and external resources to recruit highly skilled and talented candidates; employee referrals are also encouraged. The Company is dedicated to recruitment and career development practices that support its employees at all levels of the Company. The Company is committed to having a workforce that reflects the communities in which it serves.
This final rule was effective January 1, 2023, and applicable to the first quarterly assessment period of 2023. ​ On November 16, 2023, the FDIC adopted a final rule on special assessment to recover the losses to the DIF from the protection of uninsured depositors following the closures of Silicon Valley Bank, Santa Clara, CA, and Signature Bank, New York, NY during March 2023.
Deposit insurance assessments fund the DIF. ​ On November 16, 2023, the FDIC adopted a final rule on special assessment to recover the losses to the DIF from the protection of uninsured depositors following the closures of Silicon Valley Bank, Santa Clara, CA, and Signature Bank, New York, NY during March 2023.
The Company’s other wholly owned subsidiary is AmeriServ Trust and Financial Services Company (the Trust Company) which was formed in October 1992. When used in this report, the “Company” may refer, depending on the context, to AmeriServ Financial, Inc. individually or AmeriServ Financial, Inc. and its direct and indirect subsidiaries.
The Company’s other wholly owned subsidiary, the former AmeriServ Trust and Financial Services Company (the Trust Company), was merged with and into the Bank effective October 1, 2024. When used in this report, the “Company” may refer, depending on the context, to AmeriServ Financial, Inc. individually or AmeriServ Financial, Inc. and its direct and indirect subsidiaries.
The Company does not use brokered deposits as a funding source. 7 Table of Contents The following table sets forth the average balance of the Company’s deposits and average rates paid thereon for the past two calendar years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 ​ ​ (IN THOUSANDS, EXCEPT PERCENTAGES) ​ Demand: ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-interest bearing ​ $ 191,580 — % $ 215,196 — % Interest bearing ​ 225,713 1.80 ​ 227,838 0.53 ​ Savings ​ 127,539 0.10 ​ 137,845 0.10 ​ Money market ​ 302,964 2.46 ​ 289,674 0.69 ​ Time deposits (1) ​ 306,044 3.06 ​ 285,760 1.08 ​ Total deposits ​ $ 1,153,840 2.18 % $ 1,156,313 0.68 % (1) Time deposits include certificates of deposit (CDs) and individual retirement accounts (IRAs). ​ The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects bank depositors against loss.
The Company does not use brokered deposits as a funding source. 7 Table of Contents The following table sets forth the average balance of the Company’s deposits and average rates paid thereon for the past two calendar years: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 ​ ​ (IN THOUSANDS, EXCEPT PERCENTAGES) ​ Demand: ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-interest bearing ​ $ 178,686 — % $ 191,580 — % Interest bearing ​ 225,741 1.88 ​ 225,713 1.80 ​ Savings ​ 120,231 0.10 ​ 127,539 0.10 ​ Money market ​ 314,138 2.77 ​ 302,964 2.46 ​ Time deposits (1) ​ 330,013 3.75 ​ 306,044 3.06 ​ Total deposits ​ $ 1,168,809 2.57 % $ 1,153,840 2.18 % (1) Time deposits include certificates of deposit (CDs) and individual retirement accounts (IRAs). ​ The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects bank depositors against loss.
The policy provides that bank holding companies should not maintain a level of cash dividend that undermines the bank holding company’s ability to serve as a source of strength to its banking subsidiary. A bank holding company may not pay dividends when it is insolvent. For more information regarding quarterly cash dividends, see Part II, Item 5.
The policy provides that bank holding 11 Table of Contents companies should not maintain a level of cash dividend that undermines the bank holding company’s ability to serve as a source of strength to its banking subsidiary. A bank holding company may not pay dividends when it is insolvent.
At December 31, 2023, the Bank’s non-owner occupied commercial real estate loan concentration stood at 375% of total regulatory capital. It should be noted that this ratio increased from 350% at December 31, 2022 due to growth in non-owner occupied commercial real estate loan balances as well as a slight decrease in total regulatory capital between years.
At December 31, 2024, the Bank’s non-owner occupied commercial real estate loan concentration stood at 379% of total regulatory capital. It should be noted that this ratio increased from 375% at December 31, 2023, due to growth in non-owner occupied commercial real estate loan balances which more than offset the increase in total regulatory capital between years.
Government securities, changes in the federal funds rate and discount rate on member bank borrowings, and changes in reserve requirements on bank deposits. These means are used in varying combinations to influence overall growth of bank loans, investments, and deposits, and may also affect interest rate charges on loans or 8 Table of Contents interest paid for deposits.
These means are used in varying combinations to influence overall growth of bank loans, investments, and deposits, and may also affect interest rate charges on loans or interest paid for deposits.
Slow economic conditions, coupled with a declining population trend, creates a growth challenge moving forward. Economic conditions are stronger in the State College market and have demonstrated the same improvement experienced in the national economy. The community is a college town, dominated economically and demographically by the presence of the University Park campus of the Pennsylvania State University.
Economic conditions are stronger in the State College market and mirror economic conditions experienced in the national economy. The community is a college town, dominated economically and demographically by the presence of the University Park campus of the Pennsylvania State University.
AGENCY ​ MUNICIPAL ​ OTHER ​ SECURITIES ​ MATURITY Within 1 year ​ — % 3.58 % 1.16 % 2.82 % ​ 2.59 % After 1 year but within 5 years ​ — ​ 3.37 ​ 4.21 ​ — ​ ​ 3.48 ​ After 5 years but within 10 years ​ 2.01 ​ 2.84 ​ 7.36 ​ 3.86 ​ ​ 2.91 ​ Over 10 years ​ — ​ 2.82 ​ 7.44 ​ 3.87 ​ ​ 3.96 ​ Total ​ 2.01 ​ 3.08 ​ 4.58 ​ 3.83 ​ ​ 3.43 ​ ​ DEPOSITS The Bank believes it has a stable core deposit base made up of traditional commercial bank products that exhibit modest fluctuation during the year, other than jumbo certificates of deposit and certain municipal deposits, which demonstrate some seasonality.
AGENCY ​ MUNICIPAL ​ OTHER ​ SECURITIES ​ MATURITY Within 1 year ​ — % 3.00 % 3.24 % — % ​ 3.10 % After 1 year but within 5 years ​ — ​ 3.41 ​ 5.18 ​ — ​ ​ 3.53 ​ After 5 years but within 10 years ​ 2.01 ​ 2.69 ​ 7.18 ​ 3.89 ​ ​ 2.79 ​ Over 10 years ​ — ​ 3.50 ​ 6.68 ​ 4.12 ​ ​ 4.20 ​ Total ​ 2.01 ​ 3.05 ​ 5.30 ​ 4.11 ​ ​ 3.58 ​ ​ DEPOSITS The Bank believes it has a stable core deposit base made up of traditional commercial bank products that exhibit modest fluctuation during the year, other than jumbo certificates of deposit and certain municipal deposits, which demonstrate some seasonality.
The following is a summary of key data (dollars in thousands) and ratios of the Bank at December 31, 2023: ​ ​ ​ ​ ​ ​ Headquarters Johnstown, PA Total Assets ​ $ 1,378,660 ​ Total Investment Securities (net of allowance for credit losses) ​ 222,213 ​ Total Loans and Loans Held for Sale (net of unearned income) ​ 1,038,401 ​ Total Deposits ​ 1,162,066 ​ Total Net Loss ​ (250) ​ Asset Leverage Ratio ​ 8.78 % Return on Average Assets ​ (0.02) ​ Return on Average Equity ​ (0.22) ​ Total Full-time Equivalent Employees ​ 236 ​ ​ RISK MANAGEMENT OVERVIEW Risk identification and management are essential elements for the successful management of the Company.
The following is a summary of key data (dollars in thousands) and ratios of the Bank at December 31, 2024: ​ ​ ​ ​ ​ ​ AmeriServ Financial Bank Johnstown, PA Total Assets ​ $ 1,417,476 ​ Total Investment Securities (net of allowance for credit losses) ​ 215,304 ​ Total Loans and Loans Held for Sale (net of unearned income) ​ 1,068,409 ​ Total Deposits ​ 1,202,928 ​ Total Net Income ​ 7,081 ​ Asset Leverage Ratio ​ 9.15 % Return on Average Assets ​ 0.51 ​ Return on Average Equity ​ 5.69 ​ Total Full-time Equivalent Employees ​ 278 ​ ​ RISK MANAGEMENT OVERVIEW Risk identification and management are essential elements for the successful management of the Company.
HUMAN CAPITAL RESOURCES The Company’s long-term growth and success depends on its ability to attract, develop and retain a high-performing and diverse workforce. The Company strives to provide a work environment that promotes collaboration, productivity, and employee engagement, which in turn drives both employee and customer success, as well as benefits the communities in which the Company does business.
The Company strives to provide a work environment that promotes collaboration, productivity, and employee engagement, which in turn drives both employee and customer success, as well as benefits the communities in which the Company does business.
AGENCY ​ MUNICIPAL ​ BONDS ​ SECURITIES ​ FOR SALE Within 1 year ​ 5.20 % 2.71 % 5.16 % — % ​ 4.48 % After 1 year but within 5 years ​ 2.69 ​ 3.01 ​ 5.95 ​ 2.83 ​ ​ 5.41 ​ After 5 years but within 10 years ​ 1.67 ​ 2.41 ​ 7.18 ​ 2.81 ​ ​ 5.50 ​ Over 10 years ​ 2.69 ​ — ​ 4.31 ​ 3.09 ​ ​ 3.09 ​ Total ​ 2.22 ​ 2.71 ​ 6.40 ​ 3.07 ​ ​ 4.13 ​ ​ ​ Investment securities held to maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL ​ ​ ​ ​ ​ ​ ​ U.S.
AGENCY ​ MUNICIPAL ​ BONDS ​ SECURITIES ​ FOR SALE Within 1 year ​ — % 3.01 % 5.15 % 3.24 % ​ 4.33 % After 1 year but within 5 years ​ 1.79 ​ 3.08 ​ 6.11 ​ 2.22 ​ ​ 5.51 ​ After 5 years but within 10 years ​ 1.62 ​ 2.28 ​ 7.05 ​ 2.95 ​ ​ 5.62 ​ Over 10 years ​ 2.69 ​ — ​ 4.27 ​ 3.20 ​ ​ 3.20 ​ Total ​ 1.93 ​ 2.71 ​ 6.41 ​ 3.18 ​ ​ 4.14 ​ ​ ​ Investment securities held to maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL ​ ​ ​ ​ ​ ​ ​ U.S.
It should be noted that approximately 50% of these uninsured deposits relate to public funds from municipalities, government entities, and school districts which by law are required to be collateralized with investment securities or FHLB letters of credit to protect these depositor funds. ​ The maturities on CDs with balances that exceed the FDIC insurance limit of $250,000 as of December 31, 2023, are as follows: ​ ​ ​ ​ ​ ​ (IN THOUSANDS) MATURING IN: ​ Three months or less ​ $ 27,194 Over three through six months ​ 13,655 Over six through twelve months ​ 36,248 Over twelve months ​ 4,734 Total ​ $ 81,831 ​ AMERISERV TRUST AND FINANCIAL SERVICES COMPANY AmeriServ Trust and Financial Services Company is a trust company organized under Pennsylvania law in October 1992.
It should be noted that approximately 50% of these uninsured deposits relate to public funds from municipalities, government entities, and school districts which by law are required to be collateralized with investment securities or FHLB letters of credit to protect these depositor funds. ​ The maturities on CDs with balances that exceed the FDIC insurance limit of $250,000 as of December 31, 2024, are as follows: ​ ​ ​ ​ ​ ​ (IN THOUSANDS) MATURING IN: ​ Three months or less ​ $ 39,775 Over three through six months ​ 17,377 Over six through twelve months ​ 20,741 Over twelve months ​ 18,009 Total ​ $ 95,902 ​ MONETARY POLICIES Commercial banks are affected by the policies of various regulatory authorities including the Board of Governors of the Federal Reserve System (the Federal Reserve).
Johnstown is home to The University of Pittsburgh at Johnstown, Pennsylvania Highlands Community College and Conemaugh Health System. The high-tech defense industry is the main non-health care staple of the Johnstown economy, with the region fulfilling many federal government contracts, punctuated by one of the premier defense trade shows in the U.S., the annual Showcase for Commerce.
The high-tech defense industry is the main non-health care staple of the Johnstown economy, with the region fulfilling many federal government contracts, punctuated by one of the premier defense trade shows in the U.S., the annual Showcase for Commerce. The city also hosts annual events such as the Flood City Music Festival that attracts several thousand visitors.
Yields are not presented on a tax-equivalent basis, but are based upon the cost basis and are weighted for the scheduled maturity.
The following table sets forth the weighted average yield for each type of investment security and range of maturity as of December 31, 2024. Yields are not presented on a tax-equivalent basis but are based upon the cost basis and are weighted for the scheduled maturity.
MONETARY POLICIES Commercial banks are affected by policies of various regulatory authorities including the Board of Governors of the Federal Reserve System (the Federal Reserve). An important function of the Federal Reserve is to regulate the national supply of bank credit. Among the instruments of monetary policy used by the Federal Reserve are: open market operations in U.S.
An important function of the Federal Reserve is to regulate the national supply of bank credit. Among the instruments of monetary policy used by the Federal Reserve are open market operations in U.S. Government securities, changes in the federal funds rate and discount rate on member bank borrowings, and changes in reserve requirements on bank deposits.
See Note 1 within the Notes to Consolidated Financial Statements for information regarding the Company’s calculation of the allowance for credit losses on both the held to maturity and available for sale investment securities portfolios. The following table sets forth the weighted average yield for each type of investment security and range of maturity as of December 31, 2023.
The Company measures current expected credit losses on debt securities in accordance with ASC 326, Financial Instruments – Credit Losses . See Note 1 within the Notes to Consolidated Financial Statements for information regarding the Company’s calculation of the allowance for credit losses on both the held to maturity and available for sale investment securities portfolios.
These filings are available to the public on the internet at the SEC’s website at http://www.sec.gov . Our internet address is http://www.ameriserv.com .
As such, it does not apply to the Company. AVAILABLE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. These filings are available to the public on the internet at the SEC’s website at http://www.sec.gov . Our internet address is http://www.ameriserv.com .
A large percentage of the population in State College falls into the 18 to 34-year-old age group, while potential customers in the Cambria/Somerset markets tend to be over 50 years of age. 9 Table of Contents Hagerstown in Washington County, Maryland offers a rare combination of business advantages providing a major crossroads location that is convenient to the entire East Coast at the intersection of I-81 and I-70.
A large percentage of the population in State College falls into the 18- to 34-year-old age group, while potential customers in the Cambria/Somerset markets tend to be over 50 years of age.
The city also hosts annual events such as the Flood City Music Festival that draws several thousand visitors. The Johnstown, PA MSA unemployment rate decreased from a 5.1% average in 2022 to a 4.4% average in 2023. The Johnstown, PA MSA continues to have one of the highest jobless rates among the 18 metropolitan statistical areas across the state.
The Johnstown, PA MSA unemployment rate decreased from a 4.4% average in 2023 to a 4.1% average in 2024. The Johnstown, PA MSA continues to have one of the higher jobless rates among the 18 metropolitan statistical areas across the state. A declining population trend creates a growth challenge moving forward.
The Company is focused on sourcing and hiring with fair and equitable approaches, creating an environment where all employees can develop and thrive. INDUSTRY REGULATION The banking and trust industry, and the operation of bank holding companies, is highly regulated by federal and state law, and by numerous regulations adopted by the federal and state banking agencies.
INDUSTRY REGULATION The financial services industry, and the operation of bank holding companies, is highly regulated by federal and state law, and by numerous regulations adopted by the federal and state banking agencies.
The wealth management business also includes the union collective investment funds, the ERECT funds, which are designed to use union pension dollars in construction projects that utilize union labor. At December 31, 2023, the Trust Company had total assets of $6.4 million and total shareholders’ equity of $6.1 million.
The division also includes financial services, which provide the sale of mutual funds, annuities, and insurance products. AmeriServ Wealth and Capital Management also offers the union collective investment funds, the ERECT funds, which are designed to use union pension dollars in construction projects that utilize union labor.
In addition, some of these competitors, such as credit unions, are subject to a lesser degree of regulation or taxation than that imposed on us. MARKET AREA & ECONOMY After a year of the most aggressive Fed tightening in four decades in 2022, most economists, including the Federal Reserve staff, expected a recession when 2023 began.
In addition, some of these competitors, such as credit unions, are subject to a lesser degree of regulation or taxation than that imposed on the Company. 8 Table of Contents MARKET AREA & ECONOMY Both growth and inflation exceeded expectations in 2024.
Its staff of approximately 44 professionals administers assets valued at approximately $2.5 billion that are not recognized on the Company’s balance sheet at December 31, 2023. The Trust Company focuses on wealth management. Wealth management includes personal trust products and services such as personal investment portfolio management, estate planning and administration, custodial services and pre-need trusts.
The division focuses on wealth management and administers assets valued at approximately $2.6 billion that are not recognized on the Company’s balance sheet at December 31, 2024.
The final rule will be effective April 1, 2024, with the first collection for the special assessment reflected on the invoice for the first quarterly assessment period of 2024 with a payment date of June 28, 2024. 13 Table of Contents AVAILABLE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC.
The final rule was effective April 1, 2024, with the first collection for the special assessment reflected on the invoice for the first quarterly assessment period of 2024 with a payment date of June 28, 2024. The special assessment applies only to banking organizations with $5 billion or more in total consolidated assets.
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. This segment also includes financial services, which provide the sale of mutual funds, annuities, and insurance products.
Wealth management includes personal trust products and services such as personal investment portfolio management, estate planning and administration, custodial services and pre-need trusts, as well as institutional trust products and services such as 401(k) plans, defined benefit and defined contribution employee benefit plans, and individual retirement accounts.
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The Company measures current expected credit losses on debt securities in accordance with ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments .
Added
As stated above, effective October 1, 2024, AmeriServ Trust and Financial Services Company merged with and into the Bank. The former Trust Company now functions as a division of the Bank, named AmeriServ Wealth and Capital Management.
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In 2023, the Trust Company contributed earnings to the Company as its gross revenue amounted to $10.4 million and the net income contribution was $1.1 million. The Trust Company is subject to regulation and supervision by the Federal Reserve Bank of Philadelphia and the PDB.
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Gross domestic product growth slowed to 1.6% in the first quarter of 2024, but inflation spiked, sidelining the Federal Reserve until the end of the third quarter of 2024. Growth accelerated to 3.0% in the second quarter and 3.1% in the third quarter, but inflation receded.
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The recession never happened, making resilience the economic word of 2023. In early March, two regional banks failed in quick succession, followed by a third a few weeks later, rocking the financial markets.
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There was an unprecedented unemployment rise through 2024 due to slower hiring and steady, solid labor force growth. In fact, 2024 was the first time the unemployment rate ever rose more than 0.5% without significant layoffs. The unemployment rate was 4.1% in December.
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After weeks of stalemate, Congressional leaders eventually agreed to suspend the debt ceiling in late May, but ratings agencies viewed the systemic dysfunction as worthy of a credit downgrade that further rocked markets. Recession fears subsided over the summer when consumer services spending soared.
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The rise in the unemployment rate during 2024 caused the Federal Reserve to cut interest rates despite economic strength. Market expectations for Fed easing went on a rollercoaster in 2024. Sticky inflation early in the year pulled expectations back, before labor market weakness in the summer reignited calls for quick cuts.
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In the third quarter of 2023, gross domestic product (GDP) grew 4.9% annualized, the fastest since mid-2021, further quelling recession fears. Inflation subsided at an accelerating pace all year. Fed rhetoric was still hawkish at the September Federal Open Market Committee (FOMC) meeting, but the FOMC stopped hiking in July.
Added
The Fed initiated easing with a 50-basis point September cut, followed by 25-basis point cuts at both fourth quarter Federal Open Market Committee meetings. In the waning weeks of 2024, noting stalled inflation, the Fed signaled slower easing in 2025. The U.S. economy expanded at an annualized 2.3% in the fourth quarter of 2024, the slowest growth in three quarters.
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At the December FOMC meeting, a dovish pivot by Chair Powell suggested the focus for 2024 will shift to deciding when to end quantitative tightening and start to cut fed funds. The S&P 500 rose 23.8% in 2023. The 10-year U.S. Treasury yield started and ended the year at 3.87%. There was plenty of movement in the interim.
Added
The 2024 annual growth was 2.5%. The resilience of American consumers was the driving force behind the solid economic growth. Donald Trump won the 2024 presidential election and carried enough House and Senate seats to secure a Republican sweep of both the executive and legislative branches.
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GDP far exceeded expectations in 2023, thanks to consumer and government spending. The 2023 budget was more stimulative than expected, and a surge in late filings for 2021 Employer Tax Credits further lifted demand. A resilient labor market allowed consumers to maintain elevated spending. GDP growth and falling inflation are the key ingredients to a soft landing.
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Weighing President Trump’s plans, traders anticipate inflation and stronger growth, which could lead to higher yields and higher stocks. In 2024, the S&P 500 rose 23.3% and the U.S. Treasury 10-year yield rose 70-basis points to 4.58%. Personal Consumption Expenditures (PCE) inflation receded late in 2024, but not the core Consumer Price Index (CPI).
Removed
The pace of nonfarm payrolls growth slowed through 2023 but remained solid through the end of the year, even with the United Auto Workers strike in October. The labor market has become more balanced, with job openings falling and wage growth moderating. The Fed’s 25 basis point hike in July could very well be the last for this cycle.
Added
Core PCE inflation was 2.8%, while core CPI inflation was 3.3%. Johnstown, Pennsylvania, where the Company is headquartered, continues to have a cost of living that is lower than the national average. Johnstown is home to The University of Pittsburgh at Johnstown, Pennsylvania Highlands Community College and Conemaugh Health System.
Removed
History suggests the longer the Fed pauses, the larger the chance the next move is in the other direction. December FOMC minutes indicate Fed officials are already discussing rate cuts, but with no urgency. Johnstown, Pennsylvania, where the Company is headquartered, continues to have a cost of living that is lower than the national average.
Added
Hagerstown in Washington County, Maryland offers a rare combination of business advantages providing a major crossroads location that is convenient to the entire East Coast at the intersection of I-81 and I-70. It has a workforce of over 400,000 with strengths in manufacturing and technology.
Removed
The Company is committed to having a workforce that reflects the communities in which it serves. The Company strives to promote inclusion through defined Company values and behaviors. With the support from the Board of Directors, the Company continues to explore additional diversity, equity, inclusion, and belonging efforts through multiple approaches to inclusion: candidates, employees, and the marketplace.
Added
HUMAN CAPITAL RESOURCES The Company’s long-term growth and success also depends on its ability to attract, develop and retain a high-performing workforce that represent the communities in which we operate.
Removed
Deposit insurance assessments fund the DIF. ​ On October 18, 2022, the FDIC adopted a final rule that increased initial base deposit insurance assessment rates by 2 basis points, beginning with the first quarterly assessment period of 2023.
Added
The Company strives to promote inclusion through defined Company values and behaviors. The Company is focused on 10 Table of Contents sourcing and hiring with fair and equitable approaches, creating an environment where all employees can develop and thrive.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+2 added−3 removed13 unchanged
Biggest changeThe Information Security Department, among other duties, supervises internal employee training relating to cybersecurity risks, conducts access reviews relating to the Company’s information systems, and monitors implemented security measures. ​ The Company has established a Management Technology Committee and a Board Technology Committee. These Committees provide oversight and governance of information technology and the Information Security Program and meet quarterly.
Biggest changeThe Information Security Department, among other duties, supervises internal employee training relating to cybersecurity risks, conducts access reviews relating to the Company’s information systems, and monitors implemented security measures.
The Board Technology Committee’s responsibilities include: (1) monitoring the strategic deployment and usage of Information Technology throughout the Company using reports and presentations from management; (2) oversight of cybersecurity preparedness through information security reports, discussion of internal events and discussion of cybersecurity topics pertinent to the Company and the industry; (3) oversight of activities in support of the Company’s business continuity/disaster recovery program to ensure optimal corporate resiliency in the unlikely event of a disaster; and (4) providing broad strategic guidance on the technology direction of the Company by, among other things, overseeing the development of the AmeriServ Strategic Technology Plan. ​
The Board Technology Committee’s responsibilities include: (1) monitoring the strategic deployment and usage of Information Technology throughout the Company using reports and presentations from management; 14 Table of Contents (2) oversight of cybersecurity preparedness through information security reports, discussion of internal events and discussion of cybersecurity topics pertinent to the Company and the industry; (3) oversight of activities in support of the Company’s business continuity/disaster recovery program to ensure optimal corporate resiliency in the unlikely event of a disaster; and (4) providing broad strategic guidance on the technology direction of the Company by, among other things, overseeing the development of the AmeriServ Strategic Technology Plan. ​
Periodic risk assessments are performed to identify technical and physical risks to information systems. These risk assessments identify internal and external threats that could cause a cybersecurity incident, assessing the likelihood of potential impact of those threats, and assessing the measures and controls in place to manage the risks.
Periodic risk assessments are performed to identify technical and physical risks to 13 Table of Contents information systems. These risk assessments identify internal and external threats that could cause a cybersecurity incident, assessing the likelihood of potential impact of those threats, and assessing the measures and controls in place to manage the risks.
The Information Technology Department is managed by the Chief Information Officer (CIO), who reports to the Company’s President and CEO. The present CIO has been employed by the Company in the information technology area for two and a half years and was previously the CISO at the Company for two years.
The Information Technology Department is managed by the Chief Information Officer (CIO), who reports to the Company’s President and CEO. The present CIO has been employed by the Company in the information technology area for three years and was previously the CISO at the Company for two years.
The present CIO has over thirty-five years of IT experience, twelve of that in banking. The CIO holds a current Certified Information Systems Security Professional (CISSP) designation. ​ The Chief Information Security Officer (CISO) whose responsibilities constitute the second line of defense provides the vision, leadership, and strategies necessary to protect the information security of the Company.
The present CIO has over 36 years of IT experience, 13 of that in banking. The CIO holds a current Certified Information Systems Security Professional (CISSP) designation. ​ The Chief Information Security Officer (CISO) whose responsibilities constitute the second line of defense provides the vision, leadership, and strategies necessary to protect the information security of the Company.
The Crisis Communication Plan, managed by the Director of Marketing and Alternative Delivery, is reviewed and tested at least annually. ​ 14 Table of Contents The Company uses third-party vendors to assist in monitoring, detecting, and managing cyber threats, including managed security service monitoring, penetration testing and vulnerability assessment.
The Crisis Communication Plan, managed by the Director of Marketing and Alternative Delivery, is reviewed and tested at least annually. ​ The Company uses third-party vendors to assist in monitoring, detecting, and managing cyber threats, including managed security service monitoring, penetration testing and vulnerability assessment. The Management Enterprise Risk Committee has established risk management guidelines for third-party vendors.
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The Management Enterprise Risk Committee has established risk management guidelines for third-party vendors.
Added
To date, the Company has not detected any material cybersecurity incident to our own systems.
Removed
To date, the Company has not detected any material cybersecurity incident to our own systems. However, during the second quarter of 2023, a prominent third-party vendor experienced a cybersecurity incident due to a previously unknown (i.e., zero-day) vulnerability in a popular file sharing software the vendor used called MOVEit Transfer.
Added
The CISO has over 30 years of IT and IT security experience in various organizations with 14 years in the banking industry. ​ The Company has established a Management Technology Committee and a Board Technology Committee. These Committees provide oversight and governance of information technology and the Information Security Program and meet quarterly.
Removed
For further information regarding this incident, please see our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 filed on August 10, 2023 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 filed on November 9, 2023.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES The principal offices of the Company and the Bank occupy the five-story AmeriServ Financial building at the corner of Main and Franklin Streets in Johnstown plus eleven floors of the building adjacent thereto. The Company occupies the main office and its subsidiary entities have 14 locations which are owned.
Biggest changeITEM 2. PROPERTIES The principal offices of the Company occupy the five-story AmeriServ Financial building at the corner of Main and Franklin Streets in Johnstown plus eleven floors of the building adjacent thereto. The Company occupies the main office, and its subsidiary entity has 13 locations which are owned.
Seven additional locations are leased with terms expiring from April 30, 2025 to June 30, 2033. ​ 15 Table of Contents
Seven additional locations are leased with terms expiring from April 30, 2025 to December 31, 2033. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn the opinion of management, after review and consultation with counsel, there are no material legal proceedings currently pending to which the Company or any of its subsidiaries is a party or of which any of their property is the subject.
Biggest changeIn the opinion of management, after review and consultation with counsel, there are no material legal proceedings currently pending to which the Company or its subsidiary is a party or of which any of their property is the subject. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ ​ 15 Table of Contents PART II
Removed
As discussed further in the Non-Interest Expense section of Item 7, Management’s Discussion and Analysis of Consolidated Financial Position and Results of Operations, during 2023, the Company incurred certain non-interest expenses due to increased legal and professional fees resulting from the activities of an activist investor and a proxy contest relating to the Company’s 2023 annual meeting of shareholders, some of which expenses involved lawsuits brought by the activist investor in connection with the Company’s 2023 annual meeting of shareholders. ​ ITEM 4.
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MINE SAFETY DISCLOSURES Not applicable. ​ ​ 16 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Company’s common stock is traded on The NASDAQ Stock Market under the symbol “ASRV.” The following table sets forth the actual high and low closing prices and the cash dividends declared per share for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH ​ ​ PRICES ​ DIVIDENDS ​ HIGH LOW DECLARED Year ended December 31, 2023: ​ ​ ​ ​ ​ ​ First Quarter ​ $ 4.09 ​ $ 3.05 ​ $ 0.030 Second Quarter ​ 3.28 ​ 2.46 ​ 0.030 Third Quarter ​ 3.33 ​ 2.41 ​ 0.030 Fourth Quarter ​ 3.28 ​ 2.51 ​ 0.030 Year ended December 31, 2022: ​ ​ ​ First Quarter ​ $ 4.50 ​ $ 3.85 ​ $ 0.025 Second Quarter ​ 4.08 ​ 3.92 ​ 0.030 Third Quarter ​ 4.03 ​ 3.80 ​ 0.030 Fourth Quarter ​ 4.10 ​ 3.70 ​ 0.030 ​ The declaration of cash dividends on the Company’s common stock is at the discretion of the Board, and any decision to declare a dividend is based on a number of factors, including, but not limited to, earnings, prospects, financial condition, regulatory capital levels, applicable covenants under any credit agreements and other contractual restrictions, Pennsylvania law, federal and Pennsylvania bank regulatory law, and other factors deemed relevant.
Biggest changeThe Company’s common stock is traded on The NASDAQ Stock Market under the symbol “ASRV.” The following table sets forth the actual high and low closing prices and the cash dividends declared per share for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CASH ​ ​ PRICES ​ DIVIDENDS ​ HIGH LOW DECLARED Year ended December 31, 2024: ​ ​ ​ ​ ​ ​ First Quarter ​ $ 3.27 ​ $ 2.39 ​ $ 0.03 Second Quarter ​ 2.86 ​ 2.26 ​ 0.03 Third Quarter ​ 2.79 ​ 2.27 ​ 0.03 Fourth Quarter ​ 3.04 ​ 2.58 ​ 0.03 Year ended December 31, 2023: ​ ​ ​ First Quarter ​ $ 4.09 ​ $ 3.05 ​ $ 0.03 Second Quarter ​ 3.28 ​ 2.46 ​ 0.03 Third Quarter ​ 3.33 ​ 2.41 ​ 0.03 Fourth Quarter ​ 3.28 ​ 2.51 ​ 0.03 ​ The declaration of cash dividends on the Company’s common stock is at the discretion of the Board, and any decision to declare a dividend is based on a number of factors, including, but not limited to, earnings, prospects, financial condition, regulatory capital levels, applicable covenants under any credit agreements and other contractual restrictions, Pennsylvania law, federal and Pennsylvania bank regulatory law, and other factors deemed relevant.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES COMMON STOCK As of March 20, 2024, the Company had 2,489 shareholders of record for its common stock.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES COMMON STOCK As of March 10, 2025, the Company had 2,439 shareholders of record for its common stock.
Removed
Additionally, the Company does not currently have a common stock repurchase program authorized. ​ ITEM 6. [RESERVED] ​ ​ 17 Table of Contents
Added
Additionally, the Company does not currently have a common stock repurchase program authorized. ​ On June 13, 2024, the Company entered into a Stock Purchase Agreement with Driver Opportunity Partners (Driver), in connection with a settlement agreement. In accordance with the agreement, the Company repurchased 628,003 shares of common stock from Driver at a per share price of $2.38.
Added
The Driver share repurchase was authorized by the Board of Directors. ​ ITEM 6. [RESERVED] ​ ​ 16 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

124 edited+49 added−120 removed60 unchanged
Biggest changeDifferences between the net interest spread and margin from a GAAP basis to a tax-equivalent basis were not material. 23 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED DECEMBER 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ ​ ​ INTEREST ​ ​ ​ ​ ​ ​ INTEREST ​ ​ ​ ​ ​ ​ INTEREST ​ ​ ​ ​ AVERAGE ​ INCOME/ ​ YIELD/ ​ AVERAGE ​ INCOME/ ​ YIELD/ ​ AVERAGE ​ INCOME/ ​ YIELD/ ​ BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE ​ ​ (IN THOUSANDS, EXCEPT PERCENTAGES) Interest earning assets: ​ ​ ​ ​ ​ ​ ​ Loans, net of unearned income ​ $ 997,204 ​ $ 51,643 5.18 % $ 977,541 ​ $ 41,497 4.25 % $ 988,761 ​ $ 40,603 4.11 % Short-term investments and bank deposits ​ 3,942 ​ 251 6.38 ​ 23,213 ​ 209 0.90 ​ 46,977 ​ 58 0.12 ​ Commercial paper ​ — ​ — — ​ — ​ — — ​ 329 ​ 2 0.52 ​ Investment securities: ​ ​ ​ ​ ​ ​ ​ Available for sale ​ 201,077 ​ 7,059 3.51 ​ 185,710 ​ 5,610 3.02 ​ 159,458 ​ 4,543 2.85 ​ Held to maturity ​ 61,090 ​ 1,922 3.15 ​ 59,516 ​ 1,755 2.95 ​ 50,434 ​ 1,481 2.94 ​ Total investment securities ​ 262,167 ​ 8,981 3.43 ​ 245,226 ​ 7,365 3.00 ​ 209,892 ​ 6,024 2.87 ​ TOTAL INTEREST EARNING ASSETS/ INTEREST INCOME ​ 1,263,313 ​ 60,875 4.84 ​ 1,245,980 ​ 49,071 3.95 ​ 1,245,959 ​ 46,687 3.76 ​ Non-interest earning assets: ​ ​ ​ ​ ​ ​ ​ Cash and due from banks ​ 15,446 ​ ​ ​ ​ 17,602 ​ ​ ​ ​ 18,736 ​ ​ ​ ​ Premises and equipment ​ 17,270 ​ ​ ​ ​ 17,498 ​ ​ ​ ​ 17,749 ​ ​ ​ ​ Other assets ​ 75,111 ​ ​ ​ ​ 77,194 ​ ​ ​ ​ 77,806 ​ ​ ​ ​ Allowance for credit losses ​ (13,066) ​ ​ ​ ​ (11,895) ​ ​ ​ ​ (11,919) ​ ​ ​ ​ TOTAL ASSETS ​ $ 1,358,074 ​ ​ ​ ​ ​ ​ $ 1,346,379 ​ ​ ​ ​ ​ ​ $ 1,348,331 ​ ​ ​ ​ ​ ​ Interest bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest bearing deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest bearing demand ​ $ 225,713 ​ $ 4,058 ​ 1.80 % $ 227,838 ​ $ 1,198 ​ 0.53 % $ 213,736 ​ $ 248 ​ 0.12 % Savings ​ 127,539 ​ 124 ​ 0.10 ​ 137,845 ​ 135 ​ 0.10 ​ 126,050 ​ 173 ​ 0.14 ​ Money market ​ 302,964 ​ 7,457 ​ 2.46 ​ 289,674 ​ 2,008 ​ 0.69 ​ 297,844 ​ 673 ​ 0.23 ​ Other time ​ 306,044 ​ 9,375 ​ 3.06 ​ 285,760 ​ 3,083 ​ 1.08 ​ 305,251 ​ 3,712 ​ 1.22 ​ Total interest bearing deposits ​ 962,260 ​ 21,014 ​ 2.18 ​ 941,117 ​ 6,424 ​ 0.68 ​ 942,881 ​ 4,806 ​ 0.51 ​ Federal funds purchased and other short-term borrowings ​ 35,755 ​ 1,944 ​ 5.44 ​ 9,268 ​ 364 ​ 3.97 ​ 389 ​ 1 ​ 0.37 ​ Advances from Federal Home Loan Bank ​ 22,167 ​ 731 ​ 3.30 ​ 33,253 ​ 553 ​ 1.66 ​ 49,328 ​ 875 ​ 1.77 ​ Guaranteed junior subordinated deferrable interest debentures ​ — ​ — ​ — ​ — ​ — ​ — ​ 9,741 ​ 944 ​ 9.69 ​ Subordinated debt ​ 27,000 ​ 1,054 ​ 3.90 ​ 27,000 ​ 1,054 ​ 3.90 ​ 15,079 ​ 854 ​ 5.66 ​ Lease liabilities ​ 3,238 ​ 97 ​ 3.00 ​ 3,446 ​ 100 ​ 2.89 ​ 3,729 ​ 106 ​ 2.86 ​ TOTAL INTEREST BEARING LIABILITIES/INTEREST EXPENSE ​ 1,050,420 ​ 24,840 ​ 2.36 ​ 1,014,084 ​ 8,495 ​ 0.84 ​ 1,021,147 ​ 7,586 ​ 0.75 ​ Non-interest bearing liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ 191,580 ​ ​ ​ ​ ​ 215,196 ​ ​ ​ ​ ​ 211,557 ​ ​ ​ ​ ​ Other liabilities ​ 12,507 ​ ​ ​ ​ ​ 8,113 ​ ​ ​ ​ ​ 6,446 ​ ​ ​ ​ ​ Shareholders’ equity ​ 103,567 ​ ​ ​ ​ ​ 108,986 ​ ​ ​ ​ ​ 109,181 ​ ​ ​ ​ ​ TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ​ $ 1,358,074 ​ ​ ​ ​ ​ ​ $ 1,346,379 ​ ​ ​ ​ ​ ​ $ 1,348,331 ​ ​ ​ ​ ​ ​ Interest rate spread ​ ​ ​ ​ ​ 2.48 ​ ​ ​ ​ ​ 3.11 ​ ​ ​ ​ ​ 3.01 ​ Net interest income/net interest margin (non-GAAP) ​ ​ ​ 36,035 ​ 2.86 % ​ ​ 40,576 ​ 3.27 % ​ ​ 39,101 ​ 3.15 % Tax-equivalent adjustment ​ ​ ​ (15) ​ ​ ​ ​ ​ (13) ​ ​ ​ ​ ​ (18) ​ ​ ​ Net interest income (GAAP) ​ ​ ​ ​ $ 36,020 ​ ​ ​ ​ ​ $ 40,563 ​ ​ ​ ​ ​ $ 39,083 ​ ​ ​ ​ Net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense.
Biggest changeDifferences between the net interest spread and margin from a GAAP basis to a tax-equivalent basis were not material. 20 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED DECEMBER 31, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ INTEREST ​ ​ ​ ​ ​ ​ INTEREST ​ ​ ​ ​ ​ AVERAGE ​ INCOME/ ​ YIELD/ ​ AVERAGE ​ INCOME/ ​ YIELD/ ​ ​ BALANCE EXPENSE RATE BALANCE EXPENSE RATE ​ ​ (IN THOUSANDS, EXCEPT PERCENTAGES) Interest earning assets: ​ ​ ​ ​ Loans and loans held for sale, net of unearned income ​ $ 1,037,734 ​ $ 56,785 5.47 % $ 997,204 ​ $ 51,643 5.18 % Short-term investments and bank deposits ​ 3,853 ​ 250 6.49 ​ 3,942 ​ 251 6.38 ​ Investment securities: ​ ​ ​ ​ ​ Available for sale ​ 188,072 ​ 7,209 3.83 ​ 201,077 ​ 7,059 3.51 ​ Held to maturity ​ 65,415 ​ 2,287 3.50 ​ 61,090 ​ 1,922 3.15 ​ Total investment securities ​ 253,487 ​ 9,496 3.75 ​ 262,167 ​ 8,981 3.43 ​ TOTAL INTEREST EARNING ASSETS/ INTEREST INCOME ​ 1,295,074 ​ 66,531 5.18 ​ 1,263,313 ​ 60,875 4.84 ​ Non-interest earning assets: ​ ​ ​ ​ ​ Cash and due from banks ​ 14,333 ​ ​ ​ ​ 15,446 ​ ​ ​ ​ Premises and equipment ​ 18,610 ​ ​ ​ ​ 17,270 ​ ​ ​ ​ Other assets ​ 84,041 ​ ​ ​ ​ 75,111 ​ ​ ​ ​ Allowance for credit losses ​ (15,310) ​ ​ ​ ​ (13,066) ​ ​ ​ ​ TOTAL ASSETS ​ $ 1,396,748 ​ ​ ​ ​ ​ ​ $ 1,358,074 ​ ​ ​ ​ ​ ​ Interest bearing liabilities: ​ ​ ​ ​ ​ ​ ​ Interest bearing deposits: ​ ​ ​ ​ ​ ​ ​ Interest bearing demand ​ $ 225,741 ​ $ 4,246 ​ 1.88 % $ 225,713 ​ $ 4,058 ​ 1.80 % Savings ​ 120,231 ​ 117 ​ 0.10 ​ 127,539 ​ 124 ​ 0.10 ​ Money market ​ 314,138 ​ 8,701 ​ 2.77 ​ 302,964 ​ 7,457 ​ 2.46 ​ Time deposits ​ 330,013 ​ 12,384 ​ 3.75 ​ 306,044 ​ 9,375 ​ 3.06 ​ Total interest bearing deposits ​ 990,123 ​ 25,448 ​ 2.57 ​ 962,260 ​ 21,014 ​ 2.18 ​ Short-term borrowings ​ 27,963 ​ 1,582 ​ 5.66 ​ 35,755 ​ 1,944 ​ 5.44 ​ Advances from Federal Home Loan Bank ​ 51,590 ​ 2,265 ​ 4.39 ​ 22,167 ​ 731 ​ 3.30 ​ Subordinated debt ​ 27,000 ​ 1,054 ​ 3.90 ​ 27,000 ​ 1,054 ​ 3.90 ​ Lease liabilities ​ 4,337 ​ 108 ​ 2.48 ​ 3,238 ​ 97 ​ 3.00 ​ TOTAL INTEREST BEARING LIABILITIES/INTEREST EXPENSE ​ 1,101,013 ​ 30,457 ​ 2.77 ​ 1,050,420 ​ 24,840 ​ 2.36 ​ Non-interest bearing liabilities: ​ ​ ​ ​ ​ ​ ​ Demand deposits ​ 178,686 ​ ​ ​ ​ ​ 191,580 ​ ​ ​ ​ ​ Other liabilities ​ 12,973 ​ ​ ​ ​ ​ 12,507 ​ ​ ​ ​ ​ Shareholders’ equity ​ 104,076 ​ ​ ​ ​ ​ 103,567 ​ ​ ​ ​ ​ TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ​ $ 1,396,748 ​ ​ ​ ​ ​ ​ $ 1,358,074 ​ ​ ​ ​ ​ ​ Interest rate spread ​ ​ ​ ​ ​ 2.41 ​ ​ ​ ​ ​ 2.48 ​ Net interest income/net interest margin (non-GAAP) ​ ​ ​ 36,074 ​ 2.81 % ​ ​ 36,035 ​ 2.86 % Tax-equivalent adjustment ​ ​ ​ (26) ​ ​ ​ ​ ​ (15) ​ ​ ​ Net interest income (GAAP) ​ ​ ​ ​ $ 36,048 ​ ​ ​ ​ ​ $ 36,020 ​ ​ ​ ​ Net interest income may also be analyzed by segregating the volume and rate components of interest income and interest expense.
NON-INTEREST EXPENSE. Non-interest expense for 2023 totaled $49.4 million and increased by $1.4 million, or 2.8%, from 2022.
Non-interest expense for 2023 totaled $49.4 million and increased by $1.4 million, or 2.8%, from 2022.
Partially offsetting the higher level of salaries were lower incentive compensation and reduced pension expense as there are fewer employees in the defined benefit pension plan due to numerous retirements over the past few years; ● a $485,000, or 12.3%, increase in data processing and IT expenses due to increased software costs from our core data provider and additional expenses related to monitoring our computing and network environment; and ● a $200,000, or 38.8%, increase in FDIC insurance due to an increase in both the asset assessment base as well as the assessment rate.
Partially offsetting the higher level of salaries were lower incentive compensation and reduced pension expense as there were fewer employees in the defined benefit pension plan due to numerous retirements over the past few years; ● a $485,000, or 12.3%, increase in data processing and IT expenses due to increased software costs from our core data provider and additional expenses related to monitoring our computing and network environment; and ● a $200,000, or 38.8%, increase in FDIC insurance due to an increase in both the asset assessment base as well as the assessment rate.
We explore branch consolidation opportunities and further leverage union affiliated revenue streams, prudently manage the Company’s risk profile to improve asset yields and increase profitability and continue to identify and implement technological opportunities and advancements to drive efficiency for the holding company and its affiliates. 40 Table of Contents ● Customers — The Company expects to provide exceptional customer service, identifying opportunities to enhance the Banking for Life philosophy by providing products and services to meet the financial needs in every step through a customer’s life cycle, and further defining the role technology plays in anticipating and satisfying customer needs.
We explore branch consolidation opportunities and further leverage union affiliated revenue streams, prudently manage the Company’s risk profile to improve asset yields and increase profitability and continue to identify and implement technological opportunities and advancements to drive efficiency for the holding company and its affiliates. ● Customers — The Company expects to provide exceptional customer service, identifying opportunities to enhance the Banking for Life philosophy by providing products and services to meet the financial needs in 35 Table of Contents every step through a customer’s life cycle, and further defining the role technology plays in anticipating and satisfying customer needs.
This process also considers economic conditions, for 39 Table of Contents a reasonable and supportable forecast period of two years. All of these factors may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provision for credit losses may be required that would adversely impact earnings in future periods.
This process also considers economic conditions, for a reasonable and supportable forecast period of two years. All of these factors may be susceptible to significant change. 34 Table of Contents To the extent actual outcomes differ from management estimates, additional provision for credit losses may be required that would adversely impact earnings in future periods.
The variability of net interest income is slightly negative in the upward rate scenarios as the Company is marginally more exposed to liabilities repricing upward to a greater extent than assets. Specifically, the cost of funds is immediately impacted when short-term national interest rates increase because certain deposit products and overnight borrowed funds move with the market.
The variability of net interest income was slightly negative in the upward rate scenarios as the Company was marginally more exposed to liabilities repricing upward to a greater extent than assets. Specifically, the cost of funds was immediately impacted when short-term national interest rates increase because certain deposit products and overnight borrowed funds move with the market.
These assumptions include discount rates, benefits earned, interest costs, expected return on plan assets, mortality rates, and other factors. In accordance with GAAP, actual results that differ from the assumptions are accumulated and amortized over future 38 Table of Contents periods and, therefore, generally affect recognized expense and the recorded obligation of future periods.
These assumptions include discount rates, benefits earned, interest costs, expected return on plan assets, mortality rates, and other factors. In 33 Table of Contents accordance with GAAP, actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect recognized expense and the recorded obligation of future periods.
Factors contributing to the higher non-interest expense in 2023 included: ● the rise in total non-interest expense was primarily due to increased legal and professional fees related to the activities of an activist investor and a proxy contest relating to our 2023 annual meeting. These costs amounted to $2.2 million for the full year of 2023.
Factors contributing to the higher non-interest expense in 2023 included: ● the rise in total non-interest expense was primarily due to increased legal and professional fees related to the activities of an activist investor and a proxy contest relating to the Company’s 2023 annual meeting. These costs amounted to $2.2 million for the full year of 2023.
The Company estimates expected credit losses over the contractual period in which it is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.
The Company estimates expected credit losses over the contractual period in which it is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.
We try to return earnings to shareholders through a combination of dividends and share repurchases (none currently authorized) subject to maintaining sufficient capital to support balance sheet growth and economic uncertainty. We strive to educate our employee base as to the meaning/importance of earnings per share as a performance measure.
We try to return earnings to shareholders through a combination of dividends and share repurchases (though none are currently authorized) subject to maintaining sufficient capital to support balance sheet growth and economic uncertainty. We strive to educate our employee base as to the meaning/importance of earnings per share as a performance measure.
Loans, or portions thereof, are charged-off against the ACL when they are deemed uncollectible. ​ The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, that considers our historical loss experience, current conditions and forecasts of future economic conditions.
Loans, or portions thereof, are charged off against the ACL when they are deemed uncollectible. ​ The ACL is an estimate of expected credit losses, measured over the contractual life of a loan, which considers our historical loss experience, current conditions and forecasts of future economic conditions.
Non-interest income for 2023 totaled $16.4 million, a decrease of $303,000, or 1.8%, from 2022. Factors contributing to this lower level of non-interest income in 2023 included: ● AmeriServ Financial Bank sold all 7,859 shares of the Class B common stock of Visa, Inc. that it owned for a sale price of $1.7 million.
Non-interest income for 2023 totaled $16.4 million, a decrease of $303,000, or 1.8%, from 2022. Factors contributing to the lower level of non-interest income in 2023 included: ● AmeriServ Financial Bank sold all 7,859 shares of the Class B common stock of Visa, Inc., which it owned for a sale price of $1.7 million.
The simulation modeling incorporates assumptions about reinvestment and the repricing characteristics of certain assets and liabilities without stated contractual maturities; (ii) market value of portfolio equity sensitivity analysis; and (iii) static GAP analysis, which analyzes the extent to which interest rate sensitive assets and interest rate sensitive liabilities are matched at specific points in time.
The simulation modeling incorporates assumptions about reinvestment and the repricing characteristics of certain assets and liabilities without stated contractual maturities; (ii) market value of portfolio equity sensitivity analysis; and (iii) static GAP analysis, which analyzes the extent to which 29 Table of Contents interest rate sensitive assets and interest rate sensitive liabilities are matched at specific points in time.
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 35 Table of Contents points.
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.
The Company monitors the trends in market value of portfolio equity sensitivity analysis on a quarterly basis. The following table presents an analysis of the sensitivity inherent in the Company’s net interest income and market value of portfolio equity.
The Company monitors the trends in market value of portfolio equity sensitivity analysis on a quarterly basis. 30 Table of Contents The following table presents an analysis of the sensitivity inherent in the Company’s net interest income and market value of portfolio equity.
The Company’s interest rate sensitivity position shifts from being liability sensitive to an asset sensitive position over three months and beyond as more of our loans begin to reprice.
The Company’s interest rate sensitivity position shifts from being liability sensitive to an asset sensitive position over six months and beyond as more of our loans begin to reprice.
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. ​
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. ​ 36 Table of Contents
In addition, the Company has entered into three interest rate swaps with a total notional value of $70 million in order to hedge the interest rate risk associated with certain floating-rate time deposit accounts. At December 31, 2023, the hedges had a negative fair value of $446,000.
In addition, the Company has entered into three interest rate swaps with a total notional value of $70 million in order to hedge the interest rate risk associated with certain floating-rate time deposit accounts. At December 31, 2024, the hedges had a negative fair value of $169,000.
We also continue to closely monitor the loan portfolio given the number of relatively large-sized commercial and commercial real estate loans within the portfolio. As of December 31, 2023, the 25 largest credits represented 22.7% of total loans outstanding, which represents an increase from December 31, 2022 when it was 21.7%. ALLOWANCE AND PROVISION FOR CREDIT LOSSES.
We also continue to closely monitor the loan portfolio given the number of relatively large-sized commercial and commercial real estate loans within the portfolio. As of December 31, 2024, the 25 largest credits represented 24.0% of total loans outstanding, which represents an increase from December 31, 2023 when it was 22.7%. ALLOWANCE AND PROVISION FOR CREDIT LOSSES.
Net interest income is a primary source of the Company’s earnings; it is affected by interest rate fluctuations as well as changes in the amount 19 Table of Contents and mix of earning assets and interest bearing liabilities.
Net interest income is a primary source of the Company’s earnings, and it is affected by interest rate fluctuations as well as changes in the amount and mix of earning assets and interest bearing liabilities.
The Company believes it has ample liquidity available to fund outstanding loan commitments if they were fully drawn upon. 33 Table of Contents CAPITAL RESOURCES. The Bank meaningfully exceeds all regulatory capital ratios for each of the periods presented and is considered well capitalized.
The Company believes it has ample liquidity available to fund outstanding loan commitments if they were fully drawn upon. CAPITAL RESOURCES. The Bank exceeds all regulatory capital ratios for each of the periods presented and is considered well capitalized.
The holding company had $8.2 million of cash, short-term investments, and investment securities at December 31, 2023, which represents a $1.4 million decrease from the holding company’s cash position since December 31, 2022. Dividend payments from our subsidiaries provided ongoing cash to the holding company.
The holding company had $6.8 million of cash, short-term investments, and investment securities at December 31, 2024, which represents a $1.4 million decrease from the holding company’s cash position since December 31, 2023. Dividend payments from our subsidiaries provided ongoing cash to the holding company.
Each rate scenario contains unique prepayment and repricing assumptions that are applied to the Company’s existing balance sheet that was developed under the flat interest rate scenario. ​ ​ ​ ​ ​ ​ ​ INTEREST RATE SCENARIO VARIABILITY OF NET INTEREST INCOME CHANGE IN MARKET VALUE OF PORTFOLIO EQUITY ​ 200 bp increase ​ (1.2) % 3.2 % 100 bp increase (0.6) 2.6 ​ 100 bp decrease 0.2 (6.0) ​ 200 bp decrease (0.2) (13.9) ​ ​ The Company believes that its overall interest rate risk position is well controlled.
Each rate scenario contains unique prepayment and repricing assumptions that are applied to the Company’s existing balance sheet that was developed under the flat interest rate scenario. ​ ​ ​ ​ ​ ​ ​ INTEREST RATE SCENARIO VARIABILITY OF NET INTEREST INCOME CHANGE IN MARKET VALUE OF PORTFOLIO EQUITY ​ 200 bp increase ​ (0.7) % 2.1 % 100 bp increase (0.3) 2.1 ​ 100 bp decrease (0.1) (4.4) ​ 200 bp decrease (0.6) (11.8) ​ ​ The Company believes that its overall interest rate risk position is well controlled.
We will employ a work force succession plan to manage anticipated staff attrition while identifying and grooming high performing staff members to assume positions with greater responsibility within the organization.
We will employ a workforce succession plan to manage anticipated staff attrition while identifying and grooming high performing staff members to assume positions with greater responsibility within the organization.
There is a particular emphasis on ensuring that the subsidiary bank has appropriate levels of capital to support its non-owner occupied commercial real estate loan concentration, which stood at 375% of regulatory capital at December 31, 2023.
There is a particular emphasis on ensuring that the subsidiary bank has appropriate levels of capital to support its non-owner occupied commercial real estate loan concentration, which stood at 379% of regulatory capital at December 31, 2024.
In addition, ASU 2016-13 requires credit losses on available for sale (AFS) debt securities to be presented as an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not they will be required to sell the security.
In addition, ASC 326 requires credit losses on available for sale (AFS) debt securities to be presented as an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not they will be required to sell the security.
As of December 31, 2023 and 2022, municipal deposit letters of credit issued by the Federal Home Loan Bank of Pittsburgh on behalf of AmeriServ Financial Bank naming applicable municipalities as beneficiaries totaled $121.4 million and $72.9 million, respectively. The letters of credit serve as collateral, in place of pledged securities, for municipal deposits maintained at AmeriServ Financial Bank.
As of December 31, 2024 and 2023, municipal deposit letters of credit issued by the Federal Home Loan Bank of Pittsburgh on behalf of AmeriServ Financial Bank naming applicable municipalities as beneficiaries totaled $174.4 million and $121.4 million, respectively. The letters of credit serve as collateral, in place of pledged securities, for municipal deposits maintained at AmeriServ Financial Bank.
In addition, ASU 2016-13 requires credit losses on available for sale (AFS) debt securities to be presented as an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not they will be required to sell the security.
In addition, ASC 326 requires credit losses on available for sale (AFS) debt securities to be presented as an allowance rather than as a write-down when management does not intend to sell or believes that it is not more likely than not, they will be required to sell the security.
Capital generated from earnings will be utilized to pay the common stock cash dividend and will support controlled balance sheet growth. Total Parent Company cash was $8.2 million at December 31, 2023.
Capital generated from earnings will be utilized to pay the common stock cash dividend and will support controlled balance sheet growth. Total Parent Company cash was $6.8 million at December 31, 2024.
The increase is attributable to management restructuring costs within the wealth management division, annual employee merit increases, a greater level of full-time equivalent employees as the Company filled certain open positions that were vacant last year, and the impact that inflationary pressures are having on the cost of new hires.
The increase was attributable to management restructuring costs within the wealth and capital management division, annual employee merit increases, a greater level of full-time equivalent employees as the Company filled certain open positions that were vacant, and the impact that inflationary pressures were having on the cost of new hires.
The entire allowance for credit losses is available to absorb future loan losses in any loan category. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, ​ ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ 2019 ​ ​ ​ ​ ​ PERCENT ​ ​ ​ ​ PERCENT ​ ​ ​ ​ PERCENT ​ ​ ​ ​ PERCENT ​ ​ ​ ​ PERCENT ​ ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ IN EACH ​ ​ ​ IN EACH ​ ​ ​ ​ IN EACH ​ ​ ​ IN EACH ​ ​ ​ IN EACH ​ ​ ​ ​ ​ CATEGORY ​ ​ ​ ​ CATEGORY ​ ​ ​ CATEGORY ​ ​ ​ ​ CATEGORY ​ ​ ​ ​ CATEGORY ​ ​ ​ ​ ​ ​ TO TOTAL ​ ​ ​ TO TOTAL ​ ​ ​ ​ TO TOTAL ​ ​ ​ TO TOTAL ​ ​ ​ TO TOTAL ​ ​ AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS ​ ​ (IN THOUSANDS, EXCEPT PERCENTAGES) ​ Commercial real estate (owner occupied) $ 1,529 ​ 8.6 % $ — ​ — % $ — ​ — % $ — ​ — % $ — ​ — % Other commercial and industrial ​ ​ 3,030 ​ 15.4 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ Commercial (owner occupied real estate and other) ​ ​ — ​ — ​ ​ 2,653 ​ 23.1 ​ ​ 3,071 ​ 25.5 ​ ​ 3,472 ​ 31.4 ​ ​ 3,951 ​ 30.1 ​ Commercial real estate (non-owner occupied) - retail ​ ​ 3,488 ​ 15.6 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ Commercial real estate (non-owner occupied) - multi-family ​ ​ 1,430 ​ 10.6 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ Other commercial real estate (non-owner occupied) ​ 3,428 23.1 ​ 5,972 45.5 ​ 6,392 43.8 ​ 5,373 41.2 ​ 3,119 41.2 ​ Residential mortgages ​ 1,021 16.8 ​ 1,380 30.1 ​ 1,590 29.2 ​ 1,292 25.7 ​ 1,159 26.6 ​ Consumer ​ 1,127 9.9 ​ 85 1.3 ​ 113 1.5 ​ 115 1.7 ​ 126 2.1 ​ Allocation to general risk ​ — — ​ 653 — ​ 1,232 — ​ 1,093 — ​ 924 — ​ Total ​ $ 15,053 100.0 % $ 10,743 100.0 % $ 12,398 100.0 % $ 11,345 100.0 % $ 9,279 100.0 % ​ The disproportionately higher allocations for commercial loans, including commercial loans secured by owner occupied real estate and commercial & industrial loans, and commercial loans secured by non-owner occupied real estate reflect the increased credit risk associated with those types of lending, the Company’s historical loss experience in these categories, and other qualitative factors.
The entire allowance for loan credit losses is available to absorb future losses in any loan category. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, ​ ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ ​ ​ ​ ​ PERCENT ​ ​ ​ ​ PERCENT ​ ​ ​ ​ PERCENT ​ ​ ​ ​ PERCENT ​ ​ ​ ​ PERCENT ​ ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ OF LOANS ​ ​ ​ ​ IN EACH ​ ​ ​ IN EACH ​ ​ ​ ​ IN EACH ​ ​ ​ IN EACH ​ ​ ​ IN EACH ​ ​ ​ ​ ​ CATEGORY ​ ​ ​ ​ CATEGORY ​ ​ ​ CATEGORY ​ ​ ​ ​ CATEGORY ​ ​ ​ ​ CATEGORY ​ ​ ​ ​ ​ ​ TO TOTAL ​ ​ ​ TO TOTAL ​ ​ ​ ​ TO TOTAL ​ ​ ​ TO TOTAL ​ ​ ​ TO TOTAL ​ ​ AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS AMOUNT LOANS ​ ​ (IN THOUSANDS, EXCEPT PERCENTAGES) ​ Commercial real estate (owner occupied) $ 398 ​ 8.1 % $ 1,529 ​ 8.6 % $ — ​ — % $ — ​ — % $ — ​ — % Other commercial and industrial ​ ​ 2,860 ​ 13.8 ​ ​ 3,030 ​ 15.4 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ Commercial (owner occupied real estate and other) ​ ​ — ​ — ​ ​ — ​ — ​ ​ 2,653 ​ 23.1 ​ ​ 3,071 ​ 25.5 ​ ​ 3,472 ​ 31.4 ​ Commercial real estate (non-owner occupied) - retail ​ ​ 3,695 ​ 17.0 ​ ​ 3,488 ​ 15.6 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ Commercial real estate (non-owner occupied) - multi-family ​ ​ 1,478 ​ 12.4 ​ ​ 1,430 ​ 10.6 ​ ​ — ​ — ​ ​ — ​ — ​ ​ — ​ — ​ Other commercial real estate (non-owner occupied) ​ 3,451 21.9 ​ 3,428 23.1 ​ 5,972 45.5 ​ 6,392 43.8 ​ 5,373 41.2 ​ Residential mortgages ​ 839 16.6 ​ 1,021 16.8 ​ 1,380 30.1 ​ 1,590 29.2 ​ 1,292 25.7 ​ Consumer ​ 1,191 10.2 ​ 1,127 9.9 ​ 85 1.3 ​ 113 1.5 ​ 115 1.7 ​ Allocation to general risk ​ — — ​ — — ​ 653 — ​ 1,232 — ​ 1,093 — ​ Total ​ $ 13,912 100.0 % $ 15,053 100.0 % $ 10,743 100.0 % $ 12,398 100.0 % $ 11,345 100.0 % ​ The disproportionately higher allocations for commercial loans, including commercial loans secured by owner occupied real estate and commercial & industrial loans, and commercial loans secured by non-owner occupied real estate reflect the increased credit risk associated with those types of lending, the Company’s historical loss experience in these categories, and other qualitative factors.
This compares to net income of $7,448,000, or $0.43 per diluted common share, for 2022. The net loss was caused primarily by an increased provision for credit losses related to certain commercial real estate loans as well as management’s decision to execute an investment portfolio repositioning strategy.
This compared to net income of $7.4 million, or $0.43 per diluted common share in 2022. The net loss was caused primarily by an increased provision for credit losses related to certain commercial real estate loans as well as management’s decision to execute an investment portfolio repositioning strategy.
It should be noted that approximately 50% of these uninsured deposits relate to public funds from municipalities, government entities, and school districts which by law are required to be collateralized with investment securities or FHLB letters of credit to protect these depositor funds. Total borrowings have decreased by $22.8 million, or 16.5%, since year-end 2022.
It should be noted that approximately 50% of these uninsured deposits relate to public funds from municipalities, government entities, and school districts which by law are required to be collateralized with investment securities or FHLB letters of credit to protect these depositor funds. Total borrowings have decreased by $14.8 million, or 17.3%, since year-end 2023.
In addition to its loyal core deposit base, the Company has several other sources of liquidity, including a significant unused borrowing capacity at the Federal Home Loan Bank (FHLB), overnight lines of credit at correspondent banks and access to the Federal Reserve Discount Window.
In addition to its strong, loyal core deposit base, the Company has several other sources of liquidity, including a significant unused borrowing capacity at the Federal Home Loan Bank (FHLB), overnight lines of credit at correspondent banks and access to the Federal Reserve Discount Window. Overall, the core deposit base is adequate to fund the Company’s operations.
As of December 31, 2023, the Company had $76.5 million in the notional amount of interest rate swap assets outstanding, with a fair value of $4.6 million. Simultaneously, the Company had $76.5 million in the notional amount of interest rate swap liabilities outstanding, with a negative fair value of $4.7 million.
As of December 31, 2024, the Company had $66.5 million in the notional amount of interest rate swap assets outstanding, with a fair value of $4.7 million. Simultaneously, the Company had $66.5 million in the notional amount of interest rate swap liabilities outstanding, with a negative fair value of $4.7 million.
The Company had various outstanding commitments to extend credit approximating $236.6 million and standby letters of credit of $8.2 million as of December 31, 2023. 37 Table of Contents The Company can also use various interest rate contracts, such as interest rate swaps, caps, floors and swaptions to help manage interest rate and market valuation risk exposure, which is incurred in normal recurrent banking activities.
The Company had various outstanding commitments to extend credit approximating $233.2 million and standby letters of credit of $8.7 million as of December 31, 2024. 32 Table of Contents The Company can also use various interest rate contracts, such as interest rate swaps, caps, and floors to help manage interest rate and market valuation risk exposure, which is incurred in normal recurrent banking activities.
Based on the Company’s current allowance for credit losses methodology and the related assessment of the inherent risk factors contained within the Company’s investment securities and loan portfolios, we believe that the allowance for 28 Table of Contents credit losses is adequate at December 31, 2023 to cover losses within the Company’s investment securities and loan portfolios. NON-INTEREST INCOME.
Based on the Company’s current allowance for credit losses methodology and the related assessment of the inherent risk factors contained within the Company’s investment securities and loan portfolios, we believe that the allowance for credit losses was adequate at December 31, 2024 to cover losses within the Company’s investment securities and loan portfolios. NON-INTEREST INCOME.
This change was driven by a decrease in short-term borrowings which was partially offset by an increase in FHLB term advances. Specifically, short-term borrowings decreased by $47.7 million, or 53.8%. Given the high cost of overnight borrowed funds, management has been effectively controlling the usage of this funding source.
This change was driven by a decrease in short-term borrowings which was partially offset by an increase in FHLB term advances. Specifically, short-term borrowings decreased by $26.3 million, or 64.2%. Given the high cost of overnight borrowed funds, management has been effectively controlling the usage of this funding source.
The Company utilizes a variety of these methods of liability liquidity. Additionally, the Company’s subsidiary bank is a member of the FHLB, which provides the opportunity to obtain short-term to longer-term advances based upon the Company’s investment in certain residential mortgage, commercial real estate, and commercial and industrial loans.
Additionally, the Company’s subsidiary bank is a member of the FHLB, which provides the opportunity to obtain short-term to longer-term advances based upon the Company’s investment in certain residential mortgage, commercial real estate, and commercial and industrial loans.
SELECTED FIVE-YEAR CONSOLIDATED FINANCIAL DATA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT OR FOR THE YEAR ENDED DECEMBER 31, ​ ​ 2023 2022 2021 2020 2019 ​ ​ ​ (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS) ​ SUMMARY OF INCOME STATEMENT DATA: ​ ​ ​ ​ ​ ​ Total interest income ​ $ 60,860 ​ $ 49,058 ​ $ 46,669 ​ $ 46,882 ​ $ 49,767 ​ Total interest expense ​ 24,840 ​ 8,495 ​ 7,586 ​ 10,515 ​ 14,325 ​ Net interest income ​ 36,020 ​ 40,563 ​ 39,083 ​ 36,367 ​ 35,442 ​ Provision for credit losses ​ 7,429 ​ 50 ​ 1,100 ​ 2,375 ​ 800 ​ Net interest income after provision for credit losses ​ 28,591 ​ 40,513 ​ 37,983 ​ 33,992 ​ 34,642 ​ Total non-interest income ​ 16,389 ​ 16,692 ​ 17,761 ​ 16,275 ​ 14,773 ​ Total non-interest expense ​ 49,368 ​ 48,004 ​ 46,970 ​ 44,455 ​ 41,815 ​ Income (loss) before income taxes ​ (4,388) ​ 9,201 ​ 8,774 ​ 5,812 ​ 7,600 ​ Provision (benefit) for income taxes ​ (1,042) ​ 1,753 ​ 1,702 ​ 1,214 ​ 1,572 ​ Net income (loss) ​ $ (3,346) ​ $ 7,448 ​ $ 7,072 ​ $ 4,598 ​ $ 6,028 ​ PER COMMON SHARE DATA: ​ ​ ​ ​ ​ ​ Basic earnings per share ​ $ (0.20) ​ $ 0.44 ​ $ 0.41 ​ $ 0.27 ​ $ 0.35 ​ Diluted earnings per share ​ (0.20) ​ 0.43 ​ 0.41 ​ 0.27 ​ 0.35 ​ Cash dividends declared ​ 0.120 ​ 0.115 ​ 0.100 ​ 0.100 ​ 0.095 ​ Book value at period end ​ 5.96 ​ 6.20 ​ 6.82 ​ 6.12 ​ 5.78 ​ BALANCE SHEET AND OTHER DATA: ​ ​ ​ ​ ​ ​ Total assets ​ $ 1,389,638 ​ $ 1,363,874 ​ $ 1,335,560 ​ $ 1,282,733 ​ $ 1,171,184 ​ Loans and loans held for sale, net of unearned income ​ 1,038,401 ​ 990,825 ​ 986,037 ​ 978,345 ​ 887,574 ​ Allowance for credit losses - loans ​ 15,053 ​ 10,743 ​ 12,398 ​ 11,345 ​ 9,279 ​ Investment securities, net of allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for sale ​ 165,711 ​ 179,508 ​ 163,171 ​ 144,165 ​ 141,749 ​ Held to maturity ​ 63,979 ​ 61,878 ​ 53,751 ​ 44,222 ​ 39,936 ​ Deposits ​ 1,158,360 ​ 1,108,537 ​ 1,139,378 ​ 1,054,920 ​ 960,513 ​ Total borrowed funds ​ 115,556 ​ 138,373 ​ 72,837 ​ 114,080 ​ 100,574 ​ Shareholders’ equity ​ 102,277 ​ 106,178 ​ 116,549 ​ 104,399 ​ 98,614 ​ Full-time equivalent employees ​ 307 ​ 315 ​ 304 ​ 299 ​ 309 ​ SELECTED FINANCIAL RATIOS: ​ ​ ​ ​ ​ ​ Return on average assets ​ (0.25) % 0.55 % 0.52 % 0.37 % 0.51 % Return on average total equity ​ (3.23) ​ 6.83 ​ 6.48 ​ 4.52 ​ 6.02 ​ Loans and loans held for sale, net of unearned income, as a percent of deposits, at period end ​ 89.64 ​ 89.38 ​ 86.54 ​ 92.74 ​ 92.41 ​ Common stock cash dividends as a percent of net income (loss) ​ (61.48) ​ 26.41 ​ 24.14 ​ 37.09 ​ 27.36 ​ Interest rate spread ​ 2.47 ​ 3.11 ​ 3.01 ​ 3.01 ​ 3.05 ​ Net interest margin ​ 2.86 ​ 3.27 ​ 3.15 ​ 3.19 ​ 3.29 ​ Allowance for credit losses - loans as a percentage of loans, net of unearned income, at period end ​ 1.45 ​ 1.08 ​ 1.26 ​ 1.16 ​ 1.05 ​ Non-performing assets as a percentage of loans and other real estate owned, at period end ​ 1.19 ​ 0.52 ​ 0.34 ​ 0.34 ​ 0.26 ​ Net charge-offs as a percentage of average loans ​ 0.35 ​ 0.17 ​ — ​ 0.03 ​ 0.02 ​ ​ 18 Table of Contents RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2023, 2022, AND 2021 PERFORMANCE OVERVIEW.
SELECTED FIVE-YEAR CONSOLIDATED FINANCIAL DATA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT OR FOR THE YEAR ENDED DECEMBER 31, ​ ​ 2024 2023 2022 2021 2020 ​ ​ ​ (IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS) ​ SUMMARY OF INCOME STATEMENT DATA: ​ ​ ​ ​ ​ ​ Total interest income ​ $ 66,505 ​ $ 60,860 ​ $ 49,058 ​ $ 46,669 ​ $ 46,882 ​ Total interest expense ​ 30,457 ​ 24,840 ​ 8,495 ​ 7,586 ​ 10,515 ​ Net interest income ​ 36,048 ​ 36,020 ​ 40,563 ​ 39,083 ​ 36,367 ​ Provision for credit losses ​ 884 ​ 7,429 ​ 50 ​ 1,100 ​ 2,375 ​ Net interest income after provision for credit losses ​ 35,164 ​ 28,591 ​ 40,513 ​ 37,983 ​ 33,992 ​ Total non-interest income ​ 17,975 ​ 16,389 ​ 16,692 ​ 17,761 ​ 16,275 ​ Total non-interest expense ​ 48,740 ​ 49,368 ​ 48,004 ​ 46,970 ​ 44,455 ​ Income (loss) before income taxes ​ 4,399 ​ (4,388) ​ 9,201 ​ 8,774 ​ 5,812 ​ Provision (benefit) for income taxes ​ 798 ​ (1,042) ​ 1,753 ​ 1,702 ​ 1,214 ​ Net income (loss) ​ $ 3,601 ​ $ (3,346) ​ $ 7,448 ​ $ 7,072 ​ $ 4,598 ​ PER COMMON SHARE DATA: ​ ​ ​ ​ ​ ​ Basic earnings per share ​ $ 0.21 ​ $ (0.20) ​ $ 0.44 ​ $ 0.41 ​ $ 0.27 ​ Diluted earnings per share ​ 0.21 ​ (0.20) ​ 0.43 ​ 0.41 ​ 0.27 ​ Cash dividends declared ​ 0.120 ​ 0.120 ​ 0.115 ​ 0.100 ​ 0.100 ​ Book value at period end ​ 6.49 ​ 5.96 ​ 6.20 ​ 6.82 ​ 6.12 ​ BALANCE SHEET AND OTHER DATA: ​ ​ ​ ​ ​ ​ Total assets ​ $ 1,422,362 ​ $ 1,389,638 ​ $ 1,363,874 ​ $ 1,335,560 ​ $ 1,282,733 ​ Loans and loans held for sale, net of unearned income ​ 1,068,409 ​ 1,038,401 ​ 990,825 ​ 986,037 ​ 978,345 ​ Allowance for credit losses - loans ​ 13,912 ​ 15,053 ​ 10,743 ​ 12,398 ​ 11,345 ​ Investment securities, net of allowance for credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for sale ​ 155,620 ​ 165,711 ​ 179,508 ​ 163,171 ​ 144,165 ​ Held to maturity ​ 63,837 ​ 63,979 ​ 61,878 ​ 53,751 ​ 44,222 ​ Deposits ​ 1,200,995 ​ 1,158,360 ​ 1,108,537 ​ 1,139,378 ​ 1,054,920 ​ Total borrowed funds ​ 101,687 ​ 115,556 ​ 138,373 ​ 72,837 ​ 114,080 ​ Shareholders’ equity ​ 107,248 ​ 102,277 ​ 106,178 ​ 116,549 ​ 104,399 ​ Full-time equivalent employees ​ 302 ​ 307 ​ 315 ​ 304 ​ 299 ​ SELECTED FINANCIAL RATIOS: ​ ​ ​ ​ ​ ​ Return on average assets ​ 0.26 % (0.25) % 0.55 % 0.52 % 0.37 % Return on average total equity ​ 3.46 ​ (3.23) ​ 6.83 ​ 6.48 ​ 4.52 ​ Loans and loans held for sale, net of unearned income, as a percentage of deposits, at period end ​ 88.96 ​ 89.64 ​ 89.38 ​ 86.54 ​ 92.74 ​ Common stock cash dividends as a percentage of net income (loss) ​ 55.99 ​ (61.48) ​ 26.41 ​ 24.14 ​ 37.09 ​ Interest rate spread ​ 2.41 ​ 2.47 ​ 3.11 ​ 3.01 ​ 3.01 ​ Net interest margin ​ 2.81 ​ 2.86 ​ 3.27 ​ 3.15 ​ 3.19 ​ Allowance for credit losses - loans as a percentage of loans, net of unearned income, at period end ​ 1.30 ​ 1.45 ​ 1.08 ​ 1.26 ​ 1.16 ​ Non-performing loans as a percentage of loans, at period end ​ 1.02 ​ 1.19 ​ 0.52 ​ 0.34 ​ 0.34 ​ Net charge-offs as a percentage of average loans ​ 0.19 ​ 0.35 ​ 0.17 ​ — ​ 0.03 ​ ​ 17 Table of Contents RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 PERFORMANCE OVERVIEW.
It should be noted that this ratio increased from 350% at December 31, 2022 due to growth in non-owner occupied commercial real estate loan balances as well as a slight decrease in total regulatory capital between years. Our focus is on preserving capital to support customer lending and allow the Company to take advantage of business opportunities as they arise.
It should be noted that this ratio increased from 375% at December 31, 2023 due to growth in non-owner occupied commercial real estate loan balances which more than offset the increase in total regulatory capital between years. Our focus is on preserving capital to support customer lending and allow the Company to take advantage of business opportunities as they arise.
The tax equivalent adjustments to interest income on loans and municipal securities for the years ended December 31, 2023, 2022, and 2021 was $15,000, $13,000, and $18,000, respectively, which is reconciled to the corresponding GAAP measure at the bottom of the table.
The tax equivalent adjustments to interest income on loans for the years ended December 31, 2024 and 2023 was $26,000 and $15,000, respectively, which is reconciled to the corresponding GAAP measure at the bottom of the table.
Such factors include the following: (i) the effect of changing regional and national economic conditions; (ii) the effects of trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve; (iii) significant changes in interest rates and prepayment speeds; (iv) inflation, stock and bond market, and monetary fluctuations; (v) credit risks of commercial, real estate, consumer, and other lending activities; (vi) changes in federal and state banking and financial services laws and regulations and supervisory actions by such regulators, including bank failures; (vii) the presence in the Company’s market area of competitors with greater financial resources than the Company; (viii) the timely development of competitive new products and services by the Company and the acceptance of those products and services by customers and regulators (when required); (ix) the willingness of customers to substitute competitors’ products and services for those of the Company and vice versa; (x) changes in consumer spending and savings habits; (xi) unanticipated regulatory or judicial proceedings; (xii) the ability to attract new or retain existing deposits or to retain or grow loans, including growth from unfunded closed loans; (xiii) the ability to generate future revenue growth or to control future growth in non-interest expense, including, but not limited to, those related to technological changes, including changes regarding artificial intelligence and cybersecurity, changes affecting oversight of the financial services industry, and changes intended to manage or mitigate climate and related environmental risks; (xiv) the impact of failure in, or breach of, our operational or security systems or those of third parties with whom we do business, including as a result of cyberattacks or an increase in the incidence of fraud, illegal payments, security breaches or other illegal acts impacting us or our customers; (xv) expense and reputational impact on the Company as a result of litigation and other expenses related to the continuing activities of an activist shareholder; (xvi) legal, reputational, and financial risks resulting from the MOVEit cyber incident, our ongoing investigation of the incident, including the Company’s potential discovery of additional information related to the incident in connection with this investigation, any potential regulatory inquiries and/or litigation to which the Company may become subject in 41 Table of Contents connection with this incident, the extent of remediation and other additional costs that may be incurred by the Company in connection with this incident, the extent of insurance coverage and contractual indemnification, the potential that other third-party vendors may have been affected by the MOVEit vulnerability in a manner that may compromise client data, including personally identifiable information; and (xvii) other external developments which could materially impact the Company’s operational and financial performance.
Such factors include the following: (i) the effect of changing regional and national economic conditions; (ii) the effects of trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve; (iii) significant changes in interest rates and prepayment speeds; (iv) inflation, stock and bond market, and monetary fluctuations; (v) credit risks of commercial, real estate, consumer, and other lending activities; (vi) changes in federal and state banking and financial services laws and regulations and supervisory actions by such regulators, including bank failures; (vii) the presence in the Company’s market area of competitors with greater financial resources than the Company; (viii) the timely development of competitive new products and services by the Company and the acceptance of those products and services by customers and regulators (when required); (ix) the willingness of customers to substitute competitors’ products and services for those of the Company and vice versa; (x) changes in consumer spending and savings habits; (xi) unanticipated regulatory or judicial proceedings; (xii) the ability to attract new or retain existing deposits or to retain or grow loans, including growth from unfunded closed loans; (xiii) the ability to generate future revenue growth or to control future growth in non-interest expense, including, but not limited to, those related to technological changes, including changes regarding artificial intelligence and cybersecurity, changes affecting oversight of the financial services industry, and changes intended to manage or mitigate climate and related environmental risks; (xiv) the impact of failure in, or breach of, our operational or security systems or those of third parties with whom we do business, including as a result of cyberattacks or an increase in the incidence of fraud, illegal payments, security breaches or other illegal acts impacting us or our customers; and (xv) other external developments which could materially impact the Company’s operational and financial performance.
While the Company has frequently executed common stock buyback programs in the past, we presently do not have one in place due to the drop in our tangible common equity ratio to 6.44% (1) . At December 31, 2023, the Company had approximately 17.1 million common shares outstanding.
While the Company has frequently executed common stock buyback programs in the past, we presently do not have one in place due to the reduced level of our tangible common equity ratio at 6.64% (1) . At December 31, 2024, the Company had approximately 16.5 million common shares outstanding.
In addition to its strong, loyal core deposit base, the Company has several 32 Table of Contents other sources of liquidity, including a significant unused borrowing capacity at the Federal Home Loan Bank (FHLB), overnight lines of credit at correspondent banks and access to the Federal Reserve Discount Window.
The Company does not utilize brokered deposits as a funding source. In addition to its loyal core deposit base, the Company has several other sources of liquidity, including a significant unused borrowing capacity at the Federal Home Loan Bank (FHLB), overnight lines of credit at correspondent banks and access to the Federal Reserve Discount Window.
The loan to deposit ratio averaged 88.1% in the fourth quarter of 2023, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support our customers and our community during times of economic volatility. ​ Total interest expense increased by $16.3 million, or 192.4%, for the full year of 2023 when compared to last year, due to higher deposit and borrowings interest expense.
The loan to deposit ratio averaged 89.1% in the fourth quarter of 2024, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support its customers and community during times of economic volatility. ​ Total interest expense increased by $5.6 million, or 22.6%, for the full year of 2024 when compared to last year.
The Company’s deferred tax asset was $2.7 million at December 31, 2023 compared to $2.8 million at December 31, 2022, resulting primarily from the change in the allowance for credit losses which was offset by the change in the the fair value of the available for sale investment securities portfolio and the pension liability. 30 Table of Contents SEGMENT RESULTS.
The Company’s deferred tax asset was $1.4 million at December 31, 2024 compared to $2.7 million at December 31, 2023, resulting primarily from the change in the allowance for credit losses, the fair value of the available for sale investment securities portfolio, and the pension liability, which were partially offset by the net operating loss. 26 Table of Contents SEGMENT REPORTING.
This standard replaces the incurred loss methodology for recognizing credit losses and requires the Company to measure the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans and held to maturity (HTM) securities, and off-balance sheet credit exposures such as unfunded commitments.
ASC 326, Financial Instruments - Credit Losses , requires the Company to measure the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans and held to maturity (HTM) securities, and off-balance sheet credit exposures such as unfunded commitments.
At December 31, 2023, the Company had $294 million of overnight borrowing availability at the FHLB, $40 million of short-term borrowing availability at the Federal Reserve Bank and $35 million of unsecured federal funds lines with correspondent banks.
At December 31, 2024, the Company 28 Table of Contents had $277 million of overnight borrowing availability at the FHLB, $41 million of short-term borrowing availability at the Federal Reserve Bank and $35 million of unsecured federal funds lines with correspondent banks.
The Company’s common equity tier 1 capital ratio was 9.46%, the tier 1 capital ratio was 9.46%, and the total capital ratio was 13.03% at December 31, 2023. The Company’s tier 1 leverage ratio was 7.80% at December 31, 2023. We anticipate that we will maintain our strong capital ratios throughout 2024.
The Company’s common equity tier 1 capital ratio was 9.19%, the tier 1 capital ratio was 9.19%, and the total capital ratio was 12.70% at December 31, 2024. The Company’s tier 1 leverage ratio was 7.68% at December 31, 2024. We anticipate that we will maintain our strong capital ratios throughout 2025.
The Company expects to recover this loss in 3.7 years and to generate additional interest income from this transaction of approximately $325,000 in 2024; ● a $765,000, or 30.0%, decrease in other income due primarily to the recognition of an unfavorable adjustment to the fair market value of a risk participation agreement as well as the recognition of a credit valuation adjustment to the market value of the interest rate swap contracts that the Company executed to accommodate the needs of certain borrowers while managing our interest rate risk position; and ● a $354,000, or 3.0%, decrease in wealth management fees due to the unfavorable market conditions for both equity securities and particularly bonds which existed for the majority of the 2023 year that more than offset the positive impact of new customer business growth.
The proceeds from this sale were used to purchase new government agency mortgage-backed securities that have a yield of 5.2% and an effective duration of 3.6 years; ● a $765,000, or 30.0%, decrease in other income due primarily to the recognition of an unfavorable adjustment to the fair market value of a risk participation agreement as well as the recognition of a credit valuation adjustment to the market value of the interest rate swap contracts that the Company executed to accommodate the needs of certain borrowers while managing its interest rate risk position; and ● a $354,000, or 3.0%, decrease in wealth management fees due to the unfavorable market conditions for both equity securities and particularly bonds which existed for the majority of the 2023 year that more than offset the positive impact of new customer business growth.
Despite the net loss recognized during 2023, the Company’s Board of Directors expects to continue the common stock dividend at its current level of $0.03 per quarter given the Company’s strong capital position and projected earnings improvement in 2024.
The Company’s Board of Directors expects to continue the common stock dividend at its current level of $0.03 per quarter given the Company’s strong capital position and projected earnings power.
The Company entered into risk participation agreements (RPAs) with the lead bank of two commercial real estate loan arrangements. As a participating bank, the Company guarantees the performance on a borrower-related interest rate swap contract. The notional amount of the RPAs outstanding at December 31, 2023 was $6.8 million, with a negative fair value of $410,000.
The Company entered into a risk participation agreement (RPA) with the lead bank of a commercial real estate loan arrangement. As a participating bank, the Company guarantees the performance on a borrower-related interest rate swap contract. The notional amount of the RPA outstanding at December 31, 2024 was $4.9 million, with a negative fair value of $207,000.
The table that follows provides an analysis of net interest income on a tax-equivalent basis (non-GAAP) setting forth (i) average assets, liabilities, and shareholders’ equity, (ii) interest income earned on interest earning assets and interest expense paid on interest bearing liabilities, (iii) average yields earned on interest earning assets and average rates paid on interest bearing liabilities, (iv) 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) net interest margin (net interest income as a percentage of average total interest earning assets).
The Company’s strategy to increase term advances to lock in lower rates than overnight borrowings due to the inversion in the short end of the yield curve has favorably impacted net interest income. ​ The table that follows provides an analysis of net interest income on a tax-equivalent basis (non-GAAP) setting forth (i) average assets, liabilities, and shareholders’ equity, (ii) interest income earned on interest earning assets and interest expense paid on interest bearing liabilities, (iii) average yields earned on interest earning assets and average rates paid on interest bearing liabilities, (iv) 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) net interest margin (net interest income as a percentage of average total interest earning assets).
Banking institutions that fail to meet the effective minimum ratios once the CCB is taken into account will be subject to constraints on capital distributions, including dividends and share repurchases, and certain discretionary executive compensation.
The capital rules also impose a 2.5% capital conservation buffer (CCB) on top of the three minimum risk-weighted asset ratios. Banking institutions that fail to meet the effective minimum ratios once the CCB is taken into account will be subject to constraints on capital distributions, including dividends and share repurchases, and certain discretionary executive compensation.
Overall, the 2023 full year average balance of total interest earning assets increased over last year’s full year average by $17.3 million, or 1.4% as there was an increased level of average total loans and average total investment securities which were partially offset by a decreased level of short-term investments.
Overall, the 2024 full year average balance of total interest earning assets increased over last year’s full year average by $31.8 million, or 2.5%, as there was an increased level of average total loans which was partially offset by decreased levels of short-term investments and bank deposits and total investment securities.
The average total loan portfolio yield increased by 93 basis points from 4.25% to 5.18% in 2023 while the average yield on total investment securities increased by 43 basis points from 3.00% to 3.43%. Total average loans for the full year of 2023 were $19.7 million, or 2.0%, higher than the 2022 full year average.
The average total loan portfolio yield increased by 29-basis points from 5.18% to 5.47% in 2024 while the average yield on total investment securities increased by 32-basis points from 3.43% to 3.75%. Total average loans for the full year of 2024 were higher than the 2023 average by $40.5 million, or 4.1%.
The fed funds rate is currently at a targeted range of 5.25% to 5.50% as the Federal Reserve took action during 2023 to increase the rate a total of 100 basis points. Overall, the Company’s interest rate risk position is relatively neutral.
The fed funds rate is currently at a targeted range of 4.25% to 4.50% as the Federal Reserve took action during the third and fourth quarters of 2024 to ease monetary policy and decrease the rate a total of 100 basis points. The Company’s interest rate risk position is relatively neutral.
The rising national interest rates resulted in certain deposit products, particularly public funds, which are tied to a market index, repricing upward with the move in short-term national interest rates causing interest expense to increase. Additionally, increased market competition resulted in the Company increasing rates on certain shorter-term certificates of deposit to retain funds.
The year-over-year increase in total interest expense was primarily due to the impact of the rising national interest rates experienced during 2023, which resulted in certain deposit products, particularly public funds, which are tied to a market index, repricing upward. Additionally, increased market competition resulted in the Company raising rates on certain shorter-term certificates of deposit to retain funds.
The following table summarizes some of the Company’s key profitability performance indicators for each of the past three years. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED DECEMBER 31, ​ 2023 2022 2021 ​ ​ (IN THOUSANDS, EXCEPT ​ ​ PER SHARE DATA AND RATIOS) ​ Net income (loss) ​ $ (3,346) ​ $ 7,448 ​ $ 7,072 ​ Diluted earnings per share ​ (0.20) ​ 0.43 ​ 0.41 ​ Return on average assets ​ (0.25) % 0.55 % 0.52 % Return on average equity ​ (3.23) ​ 6.83 ​ 6.48 ​ ​ The Company reported a net loss of $3,346,000, or $0.20 per diluted common share, in 2023.
The following table summarizes some of the Company’s key profitability performance indicators. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED DECEMBER 31, ​ 2024 2023 ​ ​ (IN THOUSANDS, EXCEPT ​ ​ PER SHARE DATA AND RATIOS) Net income (loss) ​ $ 3,601 ​ $ (3,346) ​ Diluted earnings per share ​ 0.21 ​ (0.20) ​ Return on average assets ​ 0.26 % (0.25) % Return on average equity ​ 3.46 ​ (3.23) ​ ​ The Company reported net income of $3,601,000, or $0.21 per diluted common share, for 2024.
The Company’s loan to deposit ratio averaged 86.4% in 2023, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is strongly positioned to support our customers and our community during times of economic volatility.
We strive to operate our loan to deposit ratio in a range of 80% to 100%. The Company’s loan to deposit ratio averaged 88.8% in 2024, which indicates that the Company has ample capacity to continue to grow its loan portfolio and is well positioned to support its customers and community during times of economic volatility.
Total deposits, including non-interest bearing demand deposits, averaged $1.154 billion for the full year of 2023, which was $2.5 million, or 0.2%, lower than the $1.156 billion average for the full year of 2022. The 2023 full year average of short-term and FHLB borrowed funds was $57.9 million, which represented an increase of $15.4 million, or 36.2%.
Total deposits, including non-interest bearing demand deposits, averaged $1.169 billion for the full year of 2024, which was $15.0 million, or 1.3%, higher than the $1.154 billion average for the full year of 2023. The 2024 full year average of short-term and FHLB borrowed funds was $79.6 million, which represented an increase of $21.6 million, or 37.3%.
Within investing activities, cash advanced for new loans originated totaled $200.8 million and was $50.9 million higher than the $149.9 million of cash received from loan principal payments. Within financing activities, total short-term borrowings decreased by $47.7 million, total FHLB borrowings increased by $24.8 million while total deposits increased by $49.9 million.
Within investing activities, cash advanced for new loans originated totaled $183.0 million and was $33.5 million higher than the $149.5 million of cash received from loan principal payments. Within financing activities, total short-term borrowings decreased by $26.3 million, total FHLB borrowings increased by $11.5 million while total deposits increased by $42.6 million.
The following table sets forth the calculation of the Company’s tangible common equity ratio and tangible book value per share at December 31, 2023 and 2022 (in thousands, except share and ratio data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, ​ ​ 2023 2022 Total shareholders’ equity ​ $ 102,277 ​ $ 106,178 ​ Less: Intangible assets ​ 13,712 ​ 13,739 ​ Tangible common equity ​ 88,565 ​ 92,439 ​ Total assets ​ 1,389,638 ​ 1,363,874 ​ Less: Intangible assets ​ 13,712 ​ 13,739 ​ Tangible assets ​ 1,375,926 ​ 1,350,135 ​ Tangible common equity ratio (non-GAAP) ​ 6.44 % 6.85 % Total shares outstanding ​ 17,147,270 ​ 17,117,617 ​ Tangible book value per share (non-GAAP) ​ $ 5.16 ​ $ 5.40 ​ ​ CRITICAL ACCOUNTING POLICIES AND ESTIMATES.
The following table sets forth the calculation of the Company’s tangible common equity ratio and tangible book value per share at December 31, 2024 and 2023 (in thousands, except share and ratio data): ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, ​ ​ 2024 ​ 2023 ​ Total shareholders’ equity $ 107,248 $ 102,277 Less: Intangible assets 13,688 13,712 Tangible common equity 93,560 88,565 Total assets 1,422,362 1,389,638 Less: Intangible assets 13,688 13,712 Tangible assets 1,408,674 ​ 1,375,926 ​ Tangible common equity ratio (non-GAAP) 6.64 % 6.44 % Total shares outstanding 16,519,267 ​ 17,147,270 ​ Tangible book value per share (non-GAAP) $ 5.66 ​ $ 5.16 ​ ​ CRITICAL ACCOUNTING POLICIES AND ESTIMATES.
Interest income was favorably impacted by an increase in the earning asset yield which improved by 89 basis points from 3.95% to 4.84%. All categories within the earning asset base demonstrated an interest income increase between years.
In addition, interest income was favorably impacted by an increase in the earning asset yield which improved by 34-basis points from 4.84% to 5.18%. Most categories within the earning asset base, particularly loans and investment securities, demonstrated an interest income increase between years.
However, given continued activity by the activist investor, the Company cannot estimate, at this time, costs related to this issue in 2024; ● a $2.5 million, or 47.7%, reduction in other expense as the Company did not have to recognize a pension settlement charge in 2023; ● a $1.1 million, or 4.0%, increase in salaries and employee benefits expense.
As expected, costs related to the activist shareholder declined as the year progressed; ● a $2.5 million, or 47.7%, reduction in other expense as the Company did not have to recognize a pension settlement charge in 2023; ● a $1.1 million, or 4.0%, increase in salaries and employee benefits expense.
Finally, the full year 2023 total average balance of short-term investments and bank deposits decreased since last year by $19.3 million, or 83.0%, as the Company re-deployed its excess liquidity into higher yield loans and securities. ​ On the liability side of the balance sheet, for the full year of 2023, total average deposits were relatively consistent with the 2022 full year average, decreasing by only $2.5 million, or 0.2%.
Finally, the full year of 2024 total average balance of short-term investments and bank deposits remained relatively consistent with last year totaling $3.9 million, as the Company re-deployed its excess liquidity into higher yield loans. ​ On the liability side of the balance sheet, the full year of 2024 total average deposits were $15.0 million, or 1.3%, higher when compared to 2023.
As of December 31, 2023 and 2022, the estimated amount of uninsured deposits was $384.5 million and $316.5 million, respectively. The estimate of uninsured deposits was done at a single account level and does not take into account total customer balances in the Bank.
The estimate of uninsured deposits was done at a single account level and does not take into account total customer balances in the Bank.
Additionally, the Asset Quality Task Force, which is a group comprised of senior level personnel, meets monthly to monitor the status of problem loans. 25 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, ​ 2023 2022 2021 ​ ​ ​ (IN THOUSANDS, ​ ​ EXCEPT PERCENTAGES) Total accruing loan delinquency (past due 30 to 89 days) ​ $ 1,818 ​ $ 6,296 ​ $ 6,336 ​ Total non-accrual loans ​ 12,167 ​ 5,161 ​ 3,323 ​ Total non-performing assets (1) ​ 12,393 ​ 5,200 ​ 3,323 ​ Accruing loan delinquency, as a percentage of total loans, net of unearned income ​ 0.18 % 0.64 % 0.64 % Non-accrual loans, as a percentage of total loans, net of unearned income ​ 1.17 ​ 0.52 ​ 0.34 ​ Non-performing assets, as a percentage of total loans, net of unearned income, and other real estate owned and repossessed assets (1) ​ 1.19 ​ 0.52 ​ 0.34 ​ Non-performing assets, as a percentage of total assets (1) ​ 0.89 ​ 0.38 ​ 0.25 ​ Total classified loans (loans rated substandard or doubtful) (2) ​ $ 24,996 ​ $ 23,837 ​ $ 17,009 ​ (1) 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, and (iii) other real estate owned and repossessed assets.
Additionally, the Asset Quality Task Force, which is a group comprised of senior level personnel, meets monthly to monitor the status of problem loans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AT DECEMBER 31, ​ 2024 2023 ​ ​ (IN THOUSANDS, ​ ​ EXCEPT PERCENTAGES) Total accruing loan delinquency ​ $ 4,475 ​ $ 1,818 ​ Total non-accrual loans ​ 10,810 ​ 12,167 ​ Total non-performing loans (1) ​ 10,933 ​ 12,378 ​ Accruing loan delinquency, as a percentage of total loans, net of unearned income ​ 0.42 % 0.18 % Non-accrual loans, as a percentage of total loans, net of unearned income ​ 1.01 ​ 1.17 ​ Non-performing loans, as a percentage of total loans, net of unearned income (1) ​ 1.02 ​ 1.19 ​ Non-performing loans, as a percentage of total assets (1) ​ 0.77 ​ 0.89 ​ Total classified loans (loans rated substandard or doubtful) (2) ​ $ 23,552 ​ $ 24,996 ​ (1) Non-performing loans are comprised of loans that are on a non-accrual basis and loans that are contractually past due 90 days or more as to interest and principal payments.
Deposit interest expense was higher by $14.6 million, or 227.1%, while the full year 2023 average volume of total interest-bearing deposits grew from the 2022 full year average by $21.1 million, or 2.2%.
Deposit interest expense was higher by $4.4 million, or 21.1%, for the full year as the average volume of total interest-bearing deposits grew by $27.9 million, or 2.9%, for the year.
Cash and cash equivalents decreased by $8.9 million from December 31, 2022, to $14.0 million at December 31, 2023, due to $40.0 million of net cash used in investing activities more than offsetting $24.8 million of net cash provided in financing activities and $6.3 million of net cash provided by operating activities.
Cash and cash equivalents increased by $3.7 million from December 31, 2023 to $17.7 million at December 31, 2024 due to $24.1 million of net cash provided in financing activities and $2.7 million of net cash provided by operating activities more than offsetting $23.1 million of net cash used in investing activities.
Finally, the balance of FHLB term advances at December 31, 2023 increased $24.8 million, or 125.5%, from the prior year, due to the inversion in the yield curve resulting in FHLB term advances having interest rates that are lower than the cost of overnight borrowings. Management places primary emphasis on simulation modeling to manage and measure interest rate risk.
Finally, the balance of FHLB term advances at December 31, 2024 increased $11.5 million, or 25.8%, from the prior year, due to the modest inversion in the short end of the yield curve resulting in FHLB term advances having interest rates that are lower than the cost of overnight borrowings.
BALANCE SHEET. The Company’s total consolidated assets of $1.390 billion at December 31, 2023 increased by $25.8 million, or 1.9%, from the $1.364 billion level at December 31, 2022.
The Company’s total consolidated assets of $1.422 billion at December 31, 2024 increased by $32.7 million, or 2.4%, from the $1.390 billion level at December 31, 2023.
In summary, the allowance for loan losses provided 207% coverage of non-performing assets, and 1.08% of total loans, on December 31, 2022, compared to 373% coverage of non-performing assets, and 1.26% of total loans, on December 31, 2021. 27 Table of Contents The following table sets forth changes specific to the allowance for credit losses on the loan portfolio and certain ratios for the periods ended. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED DECEMBER 31, ​ ​ ​ 2023 ​ 2022 ​ 2021 ​ ​ ​ (IN THOUSANDS, EXCEPT RATIOS AND PERCENTAGES) ​ Loans and loans held for sale, net of unearned income: ​ ​ ​ ​ Average for the year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate (owner occupied) ​ $ 85,590 ​ $ — ​ $ — ​ Other commercial and industrial ​ ​ 151,378 ​ ​ — ​ ​ — ​ Commercial (owner occupied real estate and other) ​ ​ — ​ ​ 225,487 ​ ​ 275,795 ​ Commercial real estate (non-owner occupied) - retail ​ ​ 157,054 ​ ​ — ​ ​ — ​ Commercial real estate (non-owner occupied) - multi-family ​ ​ 103,468 ​ ​ — ​ ​ — ​ Other commercial real estate (non-owner occupied) ​ ​ 228,314 ​ ​ 443,406 ​ ​ 424,765 ​ Residential mortgages ​ ​ 175,299 ​ ​ 295,528 ​ ​ 274,016 ​ Consumer ​ ​ 101,350 ​ ​ 14,218 ​ ​ 15,796 ​ Total loans and loans held for sale, net of unearned income ​ ​ 997,204 ​ ​ 977,541 ​ ​ 988,761 ​ At December 31, ​ 1,038,401 ​ 990,825 ​ 986,037 ​ As a percent of average loans: ​ ​ ​ ​ Net charge-offs (recoveries): ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate (owner occupied) ​ ​ (0.03) % ​ — % ​ — % Other commercial and industrial ​ ​ 0.32 ​ ​ — ​ ​ — ​ Commercial (owner occupied real estate and other) ​ ​ — ​ 0.04 ​ 0.02 ​ Commercial real estate (non-owner occupied) - retail ​ ​ 1.29 ​ ​ — ​ ​ — ​ Commercial real estate (non-owner occupied) - multi-family ​ ​ (0.01) ​ ​ — ​ ​ — ​ Other commercial real estate (non-owner occupied) ​ ​ 0.35 ​ ​ 0.30 ​ ​ (0.01) ​ Residential mortgages ​ ​ 0.02 ​ ​ — ​ ​ (0.01) ​ Consumer ​ ​ 0.15 ​ ​ 1.88 ​ ​ 0.46 ​ Total loans and loans held for sale, net of unearned income ​ ​ 0.35 ​ ​ 0.17 ​ ​ — ​ Provision for credit losses ​ 0.66 ​ 0.01 ​ 0.11 ​ Allowance, as a multiple of net charge-offs ​ 4.35x ​ 6.30x ​ 263.79x ​ ​ The following schedule sets forth the allocation of the allowance for credit losses among the various loan categories.
This compares to allowance coverage of non-performing loans of 122% and total loans of 1.45% as of December 31, 2023. 23 Table of Contents The following table sets forth changes specific to the allowance for loan credit losses and certain ratios for the periods ended. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ YEAR ENDED DECEMBER 31, ​ ​ 2024 ​ 2023 ​ ​ ​ (IN THOUSANDS, EXCEPT RATIOS AND PERCENTAGES) Loans and loans held for sale, net of unearned income: ​ ​ ​ Average for the year: ​ ​ ​ ​ ​ ​ ​ Commercial real estate (owner occupied) ​ $ 84,705 ​ $ 85,590 ​ Other commercial and industrial ​ ​ 147,358 ​ ​ 151,378 ​ Commercial real estate (non-owner occupied) - retail ​ ​ 172,347 ​ ​ 157,054 ​ Commercial real estate (non-owner occupied) - multi-family ​ ​ 119,860 ​ ​ 103,468 ​ Other commercial real estate (non-owner occupied) ​ ​ 235,125 ​ ​ 228,314 ​ Residential mortgages ​ ​ 178,582 ​ ​ 175,299 ​ Consumer ​ ​ 105,692 ​ ​ 101,350 ​ Total loans and loans held for sale, net of unearned income ​ ​ 1,037,734 ​ ​ 997,204 ​ At December 31, ​ 1,068,409 ​ 1,038,401 ​ As a percentage of average loans: ​ ​ ​ Net charge-offs (recoveries): ​ ​ ​ ​ ​ ​ Commercial real estate (owner occupied) ​ ​ (0.03) % ​ (0.03) % Other commercial and industrial ​ ​ 0.26 ​ ​ 0.32 ​ Commercial real estate (non-owner occupied) - retail ​ ​ — ​ ​ 1.29 ​ Commercial real estate (non-owner occupied) - multi-family ​ ​ — ​ ​ (0.01) ​ Other commercial real estate (non-owner occupied) ​ ​ 0.66 ​ ​ 0.35 ​ Residential mortgages ​ ​ (0.01) ​ ​ 0.02 ​ Consumer ​ ​ 0.12 ​ ​ 0.15 ​ Total loans and loans held for sale, net of unearned income ​ ​ 0.19 ​ ​ 0.35 ​ Provision for credit losses ​ 0.08 ​ 0.66 ​ Allowance, as a multiple of net charge-offs ​ 6.88x ​ 4.35x ​ ​ The following schedule sets forth the allocation of the allowance for loan credit losses among the various loan categories.
Overall, the Company’s 2023 net loss reflects the significantly higher provision for credit losses, decreased levels of both net interest income and non-interest income and increased total non-interest expense.
Additionally, total non-interest expense was higher for 2023, due to additional legal and professional services costs caused by litigation and responses to the actions of an activist investor. Overall, the Company’s 2023 net loss reflects the significantly higher provision for credit losses, decreased levels of both net interest income and non-interest income, and increased total non-interest expense.
This standard replaces the incurred loss methodology for recognizing credit losses and requires the Company to measure the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans and held to maturity (HTM) securities, and off-balance sheet credit exposures such as unfunded commitments.
ACCOUNT — Allowance for credit losses BALANCE SHEET REFERENCE — Investment securities, net of allowance for credit losses, Allowance for credit losses – loans, Other liabilities INCOME STATEMENT REFERENCE — Provision for credit losses DESCRIPTION The Company measures the current expected credit losses (CECL) on financial assets measured at amortized cost, including loans and held to maturity (HTM) securities, and off-balance sheet credit exposures such as unfunded commitments.
No gain or loss on the sale of investment securities was recognized in 2022. The sold securities had an average yield of 3.1% and an effective duration of 3.3 years. The proceeds from this sale were used to purchase new government agency mortgage-backed securities that have a yield of 5.2% and an effective duration of 3.6 years.
No gain or loss on the sale of investment securities was recognized in 2022. The sold securities had an average yield of 3.1% and an effective duration of 3.3 years.
Despite the balance of total average interest earning assets remaining relatively unchanged from 2021, total interest income increased by $2.4 million, or 5.1%, between years due to an increase in the yield on earning assets, which increased from 3.76% to 3.95%.
The increase in the average balance of total interest earning assets along with an improvement in the yield on earning assets, which increased from 4.84% to 5.18%, resulted in total interest income increasing by $5.6 million, or 9.3%, between years.
Changes in net interest income that could not be specifically identified as either a rate or volume change were allocated proportionately to changes in volume and changes in rate. 24 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 vs. 2022 ​ 2022 vs. 2021 ​ ​ INCREASE (DECREASE) ​ INCREASE (DECREASE) ​ ​ DUE TO CHANGE IN: ​ DUE TO CHANGE IN: ​ ​ AVERAGE ​ ​ ​ ​ ​ ​ ​ AVERAGE ​ ​ ​ ​ ​ ​ ​ VOLUME RATE TOTAL VOLUME RATE TOTAL ​ ​ (IN THOUSANDS) INTEREST EARNED ON: ​ ​ ​ ​ ​ ​ Loans, net of unearned income ​ $ 854 ​ $ 9,292 ​ $ 10,146 ​ $ (468) ​ $ 1,362 ​ $ 894 Short-term investments and bank deposits ​ (300) ​ 342 ​ 42 ​ (42) ​ 193 ​ 151 Commercial paper ​ — ​ — ​ — ​ (1) ​ (1) ​ (2) Investment securities: ​ ​ ​ ​ ​ ​ ​ ​ Available for sale ​ 489 ​ 960 ​ 1,449 ​ 783 ​ 284 ​ 1,067 Held to maturity ​ 47 ​ 120 ​ 167 ​ 269 ​ 5 ​ 274 Total investment securities ​ 536 ​ 1,080 ​ 1,616 ​ 1,052 ​ 289 ​ 1,341 Total interest income ​ 1,090 ​ 10,714 ​ 11,804 ​ 541 ​ 1,843 ​ 2,384 INTEREST PAID ON: ​ ​ ​ ​ ​ ​ Interest bearing demand deposits ​ (11) ​ 2,871 ​ 2,860 ​ 18 ​ 932 ​ 950 Savings deposits ​ (11) ​ — ​ (11) ​ 16 ​ (54) ​ (38) Money market ​ 96 ​ 5,353 ​ 5,449 ​ (19) ​ 1,354 ​ 1,335 Other time deposits ​ 235 ​ 6,057 ​ 6,292 ​ (225) ​ (404) ​ (629) Federal funds purchased and other short-term borrowings ​ 1,399 ​ 181 ​ 1,580 ​ 255 ​ 108 ​ 363 Advances from Federal Home Loan Bank ​ (230) ​ 408 ​ 178 ​ (270) ​ (52) ​ (322) Guaranteed junior subordinated deferrable interest debentures ​ — ​ — ​ — ​ (472) ​ (472) ​ (944) Subordinated debt ​ — ​ — ​ — ​ 524 ​ (324) ​ 200 Lease liabilities ​ (6) ​ 3 ​ (3) ​ (7) ​ 1 ​ (6) Total interest expense ​ 1,472 ​ 14,873 ​ 16,345 ​ (180) ​ 1,089 ​ 909 Change in net interest income ​ $ (382) ​ $ (4,159) ​ $ (4,541) ​ $ 721 ​ $ 754 ​ $ 1,475 ​ LOAN QUALITY.
Changes in net interest income that could not be specifically identified as either a rate or volume change were allocated proportionately to changes in volume and changes in rate. 21 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 vs. 2023 ​ 2023 vs. 2022 ​ ​ INCREASE (DECREASE) ​ INCREASE (DECREASE) ​ ​ DUE TO CHANGE IN: ​ DUE TO CHANGE IN: ​ ​ AVERAGE ​ ​ ​ ​ ​ ​ ​ AVERAGE ​ ​ ​ ​ ​ ​ ​ VOLUME RATE TOTAL VOLUME RATE TOTAL ​ ​ (IN THOUSANDS) INTEREST EARNED ON: ​ ​ ​ ​ ​ ​ Loans and loans held for sale, net of unearned income ​ $ 2,163 ​ $ 2,979 ​ $ 5,142 ​ $ 854 ​ $ 9,292 ​ $ 10,146 Short-term investments and bank deposits ​ (5) ​ 4 ​ (1) ​ (300) ​ 342 ​ 42 Investment securities: ​ ​ ​ ​ ​ ​ ​ ​ Available for sale ​ (472) ​ 622 ​ 150 ​ 489 ​ 960 ​ 1,449 Held to maturity ​ 142 ​ 223 ​ 365 ​ 47 ​ 120 ​ 167 Total investment securities ​ (330) ​ 845 ​ 515 ​ 536 ​ 1,080 ​ 1,616 Total interest income ​ 1,828 ​ 3,828 ​ 5,656 ​ 1,090 ​ 10,714 ​ 11,804 INTEREST PAID ON: ​ ​ ​ ​ ​ ​ Interest bearing demand deposits ​ 1 ​ 187 ​ 188 ​ (11) ​ 2,871 ​ 2,860 Savings deposits ​ (7) ​ — ​ (7) ​ (11) ​ — ​ (11) Money market deposits ​ 282 ​ 962 ​ 1,244 ​ 96 ​ 5,353 ​ 5,449 Time deposits ​ 776 ​ 2,233 ​ 3,009 ​ 235 ​ 6,057 ​ 6,292 Short-term borrowings ​ (438) ​ 76 ​ (362) ​ 1,399 ​ 181 ​ 1,580 Advances from Federal Home Loan Bank ​ 1,228 ​ 306 ​ 1,534 ​ (230) ​ 408 ​ 178 Lease liabilities ​ 30 ​ (19) ​ 11 ​ (6) ​ 3 ​ (3) Total interest expense ​ 1,872 ​ 3,745 ​ 5,617 ​ 1,472 ​ 14,873 ​ 16,345 Change in net interest income ​ $ (44) ​ $ 83 ​ $ 39 ​ $ (382) ​ $ (4,159) ​ $ (4,541) ​ LOAN QUALITY.
Another factor contributing to net interest margin compression was an unfavorable deposit mix shift as the full year average of non-interest bearing demand deposits declined by $23.6 million, or 11.0%, while, as mentioned above, total interest-bearing deposits increased by $21.1 million, or 2.2%.
Also, there was an unfavorable deposit mix shift as the 2024 average of non-interest-bearing demand deposits declined by $12.9 million, or 6.7%, for the full year while, as mentioned above, total interest-bearing deposits increased.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFor information regarding the effect of changing interest rates on the Company’s net interest income and market value of its investment portfolio, see “Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations — Interest Rate Sensitivity.” Liquidity risk represents the inability to generate cash or otherwise obtain funds at reasonable rates to satisfy commitments to borrowers, as well as, the obligations to depositors, debtholders and to fund operating expenses.
Biggest changeFor information regarding the effect of changing interest rates on the Company’s net interest income and market value of its portfolio equity, see “Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations — Interest Rate Sensitivity.” Liquidity risk represents the inability to generate cash or otherwise obtain funds at reasonable rates to satisfy commitments to borrowers, as well as the obligations to depositors, debtholders and to fund operating expenses.
For information regarding the market risk of the Company’s financial instruments, see “Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations — Interest Rate Sensitivity.” The Company’s principal market risk exposure is to interest rates. ​ ​ 42 Table of Contents
For information regarding the market risk of the Company’s financial instruments, see “Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations — Interest Rate Sensitivity.” The Company’s principal market risk exposure is to interest rates. ​ ​ 37 Table of Contents
Interest rate risk is the sensitivity of net interest income and the market value of financial instruments to the magnitude, direction, and frequency of changes in interest rates. Interest rate risk results from various repricing frequencies and the maturity structure of assets, liabilities, and hedges.
Interest rate risk is the sensitivity of net interest income and the market value of portfolio equity to the magnitude, direction, and frequency of changes in interest rates. Interest rate risk results from various repricing frequencies and the maturity structure of assets, liabilities, and hedges.

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