AmeriServ Financial Reports Increased Earnings for 2007 and Implementation of a Stock...

AmeriServ Financial Reports Increased Earnings for 2007 and Implementation of
a Stock Repurchase Program

JOHNSTOWN, Pa., Jan. 22 /PRNewswire-FirstCall/ -- AmeriServ Financial,
Inc. (Nasdaq: ASRV) reported fourth quarter 2007 net income of $924,000 or
$0.04 per diluted share. This represents an increase of $343,000 or 59.0%
over the fourth quarter 2006 net income of $581,000 or $0.03 per diluted
share. For the year ended December 31, 2007, the Company reported net income
of $3.0 million or $0.14 per diluted share. This represents an increase of
$702,000 or 30.1% when compared to net income of $2.3 million or $0.11 per
diluted share for the full year 2006. The following table highlights the
Company's financial performance for both the quarters and years ended December
31, 2007 and 2006:

Year Ended Year Ended
Fourth Fourth December 31, December 31,
Quarter 2007 Quarter 2006 2007 2006

Net income $924,000 $581,000 $3,034,000 $2,332,000
Diluted earnings
per share $0.04 $0.03 $0.14 $0.11

Additionally, the Company also announced that its Board of Directors
approved a stock repurchase program which calls for AmeriServ Financial, Inc.
to buyback up to 5% or approximately 1.1 million of its outstanding common
shares. The shares may be purchased in open market, negotiated, or block
transactions. This stock repurchase program does not obligate the Company to
acquire any specific number of shares and may be suspended or discontinued at
any time. As of December 31, 2007, the Company had approximately 22.2 million
shares of its common stock outstanding.
ASRV had total assets of $905 million and shareholders' equity of $90.3
million or a book value of $4.07 per share at December 31, 2007. The
Company's asset leverage ratio remained strong at 10.47%.
Allan R. Dennison, President and Chief Executive Officer, commented on the
2007 results and stock repurchase program, "Our focus on executing our
strategic plan has caused AmeriServ Financial to report improved financial
performance in 2007. We enter 2008 with positive earnings momentum, a high
quality balance sheet, and a strong capital position. The announcement of
this stock repurchase program reflects our belief that the ASRV stock price
has been unfairly impacted by the recent credit concerns in the banking sector
and the return of capital to our shareholders through a stock buyback program
is an appropriate capital management strategy at this time."
The Company's net interest income in the fourth quarter of 2007 increased
by $337,000 from the prior year's fourth quarter and the net interest margin
is up by 15 basis points over the same comparative period. The increased net
interest income and margin in the fourth quarter of 2007 reflects the benefits
of solid loan growth experienced throughout 2007. Since year-end 2006, total
loans have grown by $46.7 million or 7.9% to $636.2 million at December 31,
2007. The loan growth was most evident in the commercial loan portfolio with
particularly strong performance during the second half of 2007. The Federal
Reserve reductions in short-term interest rates that began late in the third
quarter of 2007 also contributed to the increased net interest income in the
fourth quarter of 2007. On a quarterly basis the Company's net interest
margin has shown improvement throughout 2007 increasing from 2.97% in the
first quarter to 3.08% in the fourth quarter. This helped to reverse a trend
of four consecutive quarters of net interest income and margin contraction
experienced in 2006 where the margin declined from 3.20% to a low of 2.93% in
the fourth quarter. When the full year 2007 is compared to the full year
2006, the Company's net interest income decreased by $255,000 or 1.0% while
the net interest margin declined by six basis points. The full year decline
in both net interest income and net interest margin resulted from the
Company's cost of funds increasing at a faster pace than the earning asset
yield particularly during the first six months of 2007. This resulted from
deposit customer preference for higher yielding certificates of deposit and
money market accounts due to the inverted/flat yield curve with short-term
interest rates exceeding intermediate to longer term rates during that period.
As mentioned earlier, that trend changed during the second half of 2007 and
the Company believes it is well positioned for net interest income and margin
expansion in 2008.
The Company recorded a $150,000 provision for loan losses in the fourth
quarter of 2007 compared to a negative loan loss provision of $75,000 realized
in the fourth quarter of 2006. For the full year 2007, the provision for loan
losses amounted to $300,000 compared to a negative loan loss provision of
$125,000 for the full year 2006. The Company did experience higher net
charge-offs in 2007. For the full year 2007, net charge-offs have amounted to
$1.1 million or 0.19% of total loans compared to net charge-offs of $926,000
or 0.16% of total loans for the full year 2006. Note that the Company's 2007
net charge-offs were materially impacted by a third quarter $875,000 complete
charge-off of a commercial loan that resulted from fraud committed by the
borrower. Net charge-offs decreased to only $16,000 or 0.01% of total loans
in the fourth quarter of 2007; the Company's best quarterly performance of
2007. Non-performing assets totaled $5.3 million or 0.83% of total loans at
December 31, 2007 which represented an increase from the approximate $2.4
million non-performing asset total at both September 30, 2007 and December 31,
2006. The increase during the fourth quarter of 2007 resulted primarily from
the transfer of a $2.4 million commercial real-estate loan into non-accrual
status. The Company is pleased to report that this non-performing loan was
subsequently paid-off in January 2008 with no loss to the bank. The allowance
for loan losses provided 137% coverage of non-performing assets and was 1.14%
of total loans at December 31, 2007. Note also that the Company has no
exposure to sub-prime mortgage loans in either the loan or investment
portfolios.
The Company's non-interest income in the fourth quarter of 2007 increased
by $776,000 from the prior year's fourth quarter and for the full year 2007
increased by $1.9 million or 14.5% when compared to 2006. The increase for
both periods was due in part to the West Chester Capital Advisors acquisition,
which closed in early March of 2007. This accretive acquisition provided
$268,000 of investment advisory fees in the fourth quarter of 2007 and
$974,000 of fees for the full year 2007. Trust fees also increased by $79,000
for the fourth quarter 2007 and by $234,000 or 3.6% for the full year 2007 due
to continued successful new business development efforts and an increased
value for trust assets. The fair market value of trust assets totaled $1.9
billion at December 31, 2007. The Company also realized an increase on gains
realized on residential mortgage loan sales into the secondary market that
amounted to $51,000 for the fourth quarter of 2007 and $202,000 for the full
year 2007. These increases reflect improved residential mortgage production
from the Company's primary market as this has been an area of emphasis in the
strategic plan. Finally, other income increased by $326,000 in the fourth
quarter and $377,000 for the full year 2007 due in part to a $200,000 gain
realized on the sale of a bank owned operations facility that was no longer
being fully utilized. The Company also benefited from a $69,000 gain realized
on the sale of a closed branch facility in the third quarter of 2007.
Total non-interest expense in the fourth quarter of 2007 increased by
$211,000 from the prior year's fourth quarter but for the full year 2007
declined by $20,000 when compared to the full year 2006. The largest factor
responsible for the quarterly increase was the inclusion of $253,000 of non-
interest expenses from West Chester Capital Advisors; the largest component of
which was reflected in salaries and employee benefits. West Chester Capital
Advisors has contributed $820,000 in non-interest expenses for full year 2007.
The overall reduction in expenses for the full year 2007 reflects the
Company's continuing focus on containing and reducing non-interest expenses.
The largest expense reductions were experienced in equipment expense $304,000,
other expenses $355,000 and FDIC deposit insurance expense $104,000.
The Company recorded an income tax expense of $315,000 in the fourth
quarter of 2007 compared to an income tax benefit of $19,000 in the fourth
quarter of 2006. The tax benefit in the fourth quarter of 2006 resulted from
the elimination of a $100,000 income tax valuation allowance related to the
deductibility of charitable contributions that management determined was no
longer needed given the level of taxable income generated by the Company in
2006. For the full year 2007, the Company recorded an income tax expense of
$924,000, which reflects an estimated effective tax rate of 23.3%. This
compares to $420,000 of income tax expense or an effective tax rate of
approximately 15.3% in 2006. The higher effective tax rate in 2007 resulted
from the Company's improved profitability.
This news release may contain forward-looking statements that involve
risks and uncertainties, as defined in the Private Securities Litigation
Reform Act of 1995, including the risks detailed in the Company's Annual
Report and Form 10-K to the Securities and Exchange Commission. Actual
results may differ materially.

NASDAQ: ASRV
SUPPLEMENTAL FINANCIAL PERFORMANCE DATA
January 22, 2008
(In thousands, except per share and ratio data)
(All quarterly and 2007 data unaudited)

2007
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $428 $808 $874 $924 $3,034

PERFORMANCE PERCENTAGES
(annualized):
Return on average assets 0.20% 0.37% 0.39% 0.41% 0.34%
Return on average equity 2.05 3.79 4.00 4.12 3.51
Net interest margin 2.97 3.01 3.00 3.08 3.06
Net charge-offs as a percentage of
average loans 0.06 0.07 0.61 0.01 0.19
Loan loss provision as a
percentage of average loans - - 0.10 0.09 0.05
Efficiency ratio 94.16 88.52 87.15 86.04 88.85

PER COMMON SHARE:
Net income:
Basic $0.02 $0.04 $0.04 $0.04 $0.14
Average number of common shares
outstanding 22,159 22,164 22,175 22,184 22,171
Diluted 0.02 0.04 0.04 0.04 0.14
Average number of common shares
outstanding 22,166 22,171 22,177 22,186 22,173

2006
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
PERFORMANCE DATA FOR THE PERIOD:
Net income $540 $568 $643 $581 $2,332

PERFORMANCE PERCENTAGES
(annualized):
Return on average assets 0.25% 0.26% 0.29% 0.26% 0.27%
Return on average equity 2.59 2.71 3.00 2.66 2.74
Net interest margin 3.20 3.16 3.06 2.93 3.12
Net charge-offs as a percentage of
average loans 0.09 0.07 0.39 0.09 0.16
Loan loss provision as a
percentage of average loans - (0.04) - (0.05) (0.02)
Efficiency ratio 92.68 92.08 91.38 94.34 92.60

PER COMMON SHARE:
Net income:
Basic $0.02 $0.03 $0.03 $0.03 $0.11
Average number of common shares
outstanding 22,119 22,143 22,148 22,154 22,141
Diluted 0.02 0.03 0.03 0.03 0.11
Average number of common shares
outstanding 22,127 22,153 22,156 22,161 22,149

AMERISERV FINANCIAL, INC.
(In thousands, except per share, statistical, and ratio data)
(All quarterly and 2007 data unaudited)

2007
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT
PERIOD END:
Assets $891,559 $876,160 $897,940 $904,878
Investment securities 185,338 174,508 170,765 163,474
Loans 603,834 604,639 629,564 636,155
Allowance for loan losses 8,010 7,911 7,119 7,252
Goodwill and core deposit
intangibles 15,119 14,903 14,687 14,470
Deposits 768,947 762,902 763,771 710,439
FHLB borrowings 15,170 4,258 23,482 82,115
Stockholders' equity 85,693 86,226 88,517 90,294
Trust assets - fair market
value (B) 1,828,475 1,872,366 1,846,240 1,883,307
Non-performing assets 2,706 2,825 2,463 5,280
Asset leverage ratio 10.23% 10.36% 10.44% 10.47%
PER COMMON SHARE:
Book value (A) $3.87 $3.89 $3.99 $4.07
Market value 4.79 4.40 3.33 2.77
Market price to book value 123.88% 113.12% 83.44% 68.07%

STATISTICAL DATA AT
PERIOD END:
Full-time equivalent
employees 375 376 358 351
Branch locations 21 21 20 20
Common shares outstanding 22,161,445 22,167,235 22,180,650 22,188,997

2006
1QTR 2QTR 3QTR 4QTR
PERFORMANCE DATA AT
PERIOD END:
Assets $876,393 $887,608 $882,837 $895,992
Investment securities 223,658 210,230 209,046 196,200
Loans 548,466 573,884 580,560 589,435
Allowance for loan losses 9,026 8,874 8,302 8,092
Goodwill and core deposit
intangibles 12,031 11,815 11,599 11,382
Deposits 727,987 740,979 743,687 741,755
FHLB borrowings 45,223 43,031 31,949 50,037
Stockholders' equity 84,336 84,231 86,788 84,684
Trust assets - fair market
value (B) 1,669,525 1,679,634 1,702,210 1,778,652
Non-performing assets 4,193 4,625 2,978 2,292
Asset leverage ratio 10.36% 10.54% 10.52% 10.54%
PER COMMON SHARE:
Book value $3.81 $3.80 $3.92 $3.82
Market value 5.00 4.91 4.43 4.93
Market price to book value 131.26% 129.09% 113.07% 128.98%

STATISTICAL DATA AT
PERIOD END:
Full-time equivalent
employees 375 367 364 369
Branch locations 22 22 21 21
Common shares outstanding 22,140,172 22,145,639 22,150,767 22,156,094

Note:
(A) Other comprehensive income had a negative impact of $0.18 on book
value per share at December 31, 2007.
(B) Not recognized on the balance sheet

AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2007 data unaudited)

2007
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
INTEREST INCOME

Interest and fees on loans $10,061 $10,303 $10,591 $10,608 $41,563
Total investment portfolio 2,114 2,005 1,863 1,834 7,816
Total Interest Income 12,175 12,308 12,454 12,442 49,379

INTEREST EXPENSE
Deposits 5,699 5,931 5,994 5,187 22,811
All borrowings 521 364 438 1,022 2,345
Total Interest Expense 6,220 6,295 6,432 6,209 25,156

NET INTEREST INCOME 5,955 6,013 6,022 6,233 24,223
Provision for loan losses - - 150 150 300

NET INTEREST INCOME AFTER
PROVISION
FOR LOAN LOSSES 5,955 6,013 5,872 6,083 23,923

NON-INTEREST INCOME
Trust fees 1,704 1,689 1,677 1,683 6,753
Net realized gains on loans
held for sale 25 79 116 87 307
Service charges on deposit
accounts 585 636 671 687 2,579
Investment advisory fees 102 329 275 268 974
Bank owned life insurance 258 265 479 266 1,268
Other income 559 594 804 869 2,826
Total Non-Interest Income 3,233 3,592 4,022 3,860 14,707

NON-INTEREST EXPENSE
Salaries and employee benefits 4,885 4,930 4,813 4,711 19,339
Net occupancy expense 664 615 618 597 2,494
Equipment expense 546 564 466 469 2,045
Professional fees 695 818 814 870 3,197
FDIC deposit insurance expense 22 22 22 22 88
Amortization of core deposit
intangibles 216 216 216 217 865
Other expenses 1,645 1,357 1,824 1,818 6,644
Total Non-Interest Expense 8,673 8,522 8,773 8,704 34,672

PRETAX INCOME 515 1,083 1,121 1,239 3,958
Income tax expense 87 275 247 315 924
NET INCOME $428 $808 $874 $924 $3,034

AMERISERV FINANCIAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands)
(All quarterly and 2007 data unaudited)

2006
1QTR 2QTR 3QTR 4QTR YEAR
TO DATE
INTEREST INCOME

Interest and fees on loans $8,900 $9,155 $9,677 $9,865 $37,597
Total investment portfolio 2,279 2,259 2,218 2,212 8,968
Total Interest Income 11,179 11,414 11,895 12,077 46,565

INTEREST EXPENSE
Deposits 4,026 4,563 5,143 5,500 19,232
All borrowings 861 660 653 681 2,855
Total Interest Expense 4,887 5,223 5,796 6,181 22,087

NET INTEREST INCOME 6,292 6,191 6,099 5,896 24,478
Provision for loan losses - (50) - (75) (125)

NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 6,292 6,241 6,099 5,971 24,603

NON-INTEREST INCOME
Trust fees 1,641 1,671 1,603 1,604 6,519
Net realized gains on loans held
for sale 23 20 26 36 105
Service charges on deposit accounts 627 651 645 638 2,561
Bank owned life insurance 256 260 428 263 1,207
Other income 695 666 545 543 2,449
Total Non-Interest Income 3,242 3,268 3,247 3,084 12,841

NON-INTEREST EXPENSE
Salaries and employee benefits 4,815 4,612 4,600 4,642 18,669
Net occupancy expense 655 591 573 591 2,410
Equipment expense 639 631 529 550 2,349
Professional fees 795 859 791 763 3,208
FDIC deposit insurance expense 73 74 22 23 192
Amortization of core deposit
intangibles 216 216 216 217 865
Other expenses 1,665 1,794 1,833 1,707 6,999
Total Non-Interest Expense 8,858 8,777 8,564 8,493 34,692

PRETAX INCOME 676 732 782 562 2,752
Income tax expense (benefit) 136 164 139 (19) 420
NET INCOME $540 $568 $643 $581 $2,332

AMERISERV FINANCIAL, INC.
AVERAGE BALANCE SHEET DATA
(In thousands)
(All quarterly and 2007 data unaudited)

Note: 2006 data appears before 2007.

2006 2007
TWELVE TWELVE
4QTR MONTHS 4QTR MONTHS

Interest earning assets:
Loans and loans held for sale,
net of unearned income $582,165 $564,173 $625,255 $607,507
Deposits with banks 688 706 603 500
Federal funds 248 62 85 2,278
Total investment securities 211,747 221,704 174,094 184,117
Total interest earning assets 794,848 786,645 800,037 794,402

Non-interest earning assets:
Cash and due from banks 18,439 18,841 17,797 17,750
Premises and equipment 8,285 8,324 8,328 8,623
Other assets 68,003 68,920 72,823 70,369
Allowance for loan losses (8,237) (8,750) (7,181) (7,755)

Total assets 881,338 873,980 891,804 883,389

Interest bearing liabilities:
Interest bearing deposits:
Interest bearing demand 59,280 57,817 55,853 56,383
Savings 75,150 81,964 68,354 71,922
Money market 173,538 172,029 132,141 169,696
Other time 336,089 319,220 352,074 346,134
Total interest bearing deposits 644,057 631,030 608,422 644,135
Borrowings:
Federal funds purchased, securities
sold under agreements to
repurchase, and other short-term
borrowings 27,910 32,821 54,051 19,844
Advanced from Federal Home Loan
Bank 951 967 8,585 4,852
Guaranteed junior subordinated
deferrable interest debentures 13,085 13,085 13,085 13,085
Total interest bearing liabilities 686,003 677,903 684,143 681,916

Non-interest bearing liabilities:
Demand deposits 101,188 104,266 108,214 105,306
Other liabilities 7,310 6,765 10,385 9,703
Stockholders' equity 86,837 85,046 89,062 86,464
Total liabilities and
stockholders' equity $881,338 $873,980 $891,804 $883,389

SOURCE AmeriServ Financial, Inc.

Jeffrey A. Stopko, Senior Vice President & Chief Financial Officer of
AmeriServ Financial, Inc., +1-814-533-5310